# Petition for Writ of Certiorari — Arapahoe County Public Airport Authority v. Federal Aviation Administration > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386014_2260%3A1 ## Record - **Collection:** Supreme Court brief - **Document type:** Petition for Writ of Certiorari - **Published:** January 1, 2001 - **Citation:** 534 U.S. 1064 ## Text ~ Supreme Court, U.S. (\ FILEN “01 230 AUG 6 - 2001 No. ___g €FICE OF THE CLERK In The Supreme Court of the United States + CITY OF GREENWOOD VILLAGE, COLORADO, Petitioner, FEDERAL AVIATION ADMINISTRATION, Respondent. e On Petition For Writ Of Certiorari To The United States Court Of Appeals For The Tenth Circuit + PETITION FOR WRIT OF CERTIORARI ¢ CONSTANCE E. BRooxs Counsel of Record MiIcHAEL B. MARINOVICH C.E. Brooxs & Associates, P.C. 999 18th Street, Suite 1605 Denver, CO 80202 (303) 297-9100 Counsel for Petitioner COCKLE LAW BRIEF PRINTING CO., (800) 225-6964 OR CALL COLLECT (402) 342-2831 QUESTIONS PRESENTED 1. Whether the Airline Deregulation Act’s preemp- tion of state laws relating to a “price, route, or service” of a properly certificated air carrier, while reserving to the airport proprietor its rights and powers, permits an air- port proprietor to exclude certain categories of aviation services to conform to regional airport planning, existing airport facilities, the safe operation of the airport, and the civil aviation needs of the public. 2. Whether a local airport proprietor’s ban on scheduled passenger service is a lawful exercise of the airport’s proprietary rights and powers under the Airline Deregulation Act, when authorized by state law and where the prohibited use has never been allowed, when it is deemed necessary to meet the airport’s role as a gen- eral aviation reliever airport within the regional and local aviation and land use plans, consistent with the existing facilities at the airport, and necessary for the safe opera- tion of the airport. il PARTIES TO THE PROCEEDING The following entities are parties in the court of appeals: The City of Greenwood Village; the Arapahoe County Public Airport Authority; and the Federal Avia- tion Administration. RULE 29.6 STATEMENT Petitioner Greenwood Village is a home-rule city and is not a corporation. TABLE OF CONTENTS Page QUESTIONS PRESENTED .........----0-0e++eeeeee i PARTIES TO THE PROCEEDING .........-----++++- ii RULE 29.6 STATEMENT.......------++++: ae ii TABLE OF AUTHORITIES ...........--000002+000 vi OPINIONS BELOW..........--00eeecceeeeeeeeeeees 1 JURISDICTION ... 2.2... 2s cece eee cece eee eee ee eees 2 STATUTORY PROVISIONS INVOLVED.........---. 2 STATEMENT OF THE CASE........-.---++++++++5> + A. Summary of Proceedings .......-. ; idaneseawae 5 B. Factual Background............---+++++ee++5: 7 1. Centennial Airport..........---++--++++- 7 2. Proposed Scheduled Service........---. 9 C. State Court Proceedings ...........---++++++ 12 D. FAA Proceedings............+.+++++eeeeeeees 14 E. The Tenth Circuit’s Decision ........---.---+-- 16 REASONS FOR GRANTING THE PETITION ....... 18 I. The Court Should Grant Review on the Important Question of the ADA’s Preemption Provision and the Scope of an Airport Proprietor’s Powers In Light of the Diametrically Opposite Decisions of the Tenth Circuit and the Colorado Supreme iv TABLE OF CONTENTS —- Continued Page II. This Court Should Grant Review To Resolve The Inconsistency Between Two 1995 Decisions of This Court: American Airlines v. Wolens and Trav- c7. an Ill. This Court Needs to Clarify the Scope of An Airport Proprietor’s Powers Given the Contra- dictory Decisions of The State and Federal RR I AR Oe Ape tere er eRe Riad ale oh ll APPENDIX A: Opinion, Arapahoe County Public Airport Authority v. FAA, 242 F.3d 1213 (10th Cir. 2001).......... APPENDIX B: Final Agency Decision and Order, Centennial Express Airlines et al. v. Arapahoe County Public Airport Authority, FAA Order No. 1999-1, 1999 Pen, SORT GO By SON ccc ccncerasscvesbanss APPENDIX C: Initial Decision of the Hearing Officer, Centennial Express Airlines et al. v. Arapahoe County Public Airport Authority, Docket Nos. 16-98-05, 13-94-03, 13-94-25, 1999 WL 500027 (F.A.A. SE CU, SOS bh cess ckbcakbduwcseconedeads APPENDIX D: Director’s Determination, Centennial Express Air- lines et al. v. Arapahoe County Public Airport Authority, Docket Nos. 16-98-05, 13-95-03, 13-94-25, 1998 WL 1083382 (F.A.A. August 21, RAE aie Rakes ay Natal einri tke anpey Oe. TABLE OF CONTENTS - Continued Page APPENDIX E: Opinion, Arapahoe County Public Airport Authority v. Centennial Express Airlines, Inc., 956 P.2d 587 GEO. TP oc kcasns cansdsapoevinheseussoasaeess 173a APPENDIX F: Order of the Tenth Circuit denying Petitioner’s and Intervenor’s Petitions for Rehearing and Requests for Rehearing En Banc, Case No. SD-S508 Chay 7, BOGE) 6. isacsacvivcdecenaavesaess 224a vi TABLE OF AUTHORITIES Page FeperRat Cases Air Transport Ass'n of America v. City and County of San Francisco, 992 F. Supp. 1149 (N.D. Cal. 1998) .... 28 Air Transportation Ass'n of America v. Crotti, 389 F Supp. 5B (N.D. Cal. 1975) .....cccccccccccccccss 24 Aircraft Owners and Pilots Ass'n v. Hinson, 102 F.3d Pout, Ya B. | Mreerrr e 29 American Airlines, Inc. v. Dept. of Transp., 202 F.3d 788 (5th Cir.), cert. denied, 530 U.S. 1274 (2000) .... 26 American Airlines, Inc. v. Wolens, 513 U.S. 219 CR < 60caksenscecsehecnsaniee 17, 20, 21, 22, 23, 25 British Airways Bd. v. Port Auth. of N.Y. & N.J., 564 Rae SOG5 Ch Gin Bere cconcevctééanscenssee 28 City of Burbank v. Lockheed Air Terminal, Inc., 411 UG, G6 (26S) oo ccccceutvnssececidiveseveuuuces 4, 25 City & County of San Francisco v. FAA, 942 F.2d 1391 (9th Cir. 1991), cert. denied, 503 U.S. 983 CIOTE) . oe ccnncccccccccccsvcsdsctacctsnuasseneeeeens 28 Duncan v. Northwest Airlines, Inc., 208 F.3d 1112 (9th Cir. 2000), cert. denied sub nom. Northwest Airlines, Inc. v. Duncan, 121 S.Ct. 650, ____~ U.S. means CHEMO « oc cccdavevccnesnbansnaéseuhbieneuaeeen 21 Gustafson v. City of Lake Angelus, 76 F.3d 778 (6th Che, BODE) «cc vcccscocecccscencasenensaesunaeeuueas 28 Hodges v. Delta Airlines, Inc., 44 F.3d 334 (5th Cir. BOD «wc cncccccaécusessenenteadceesusweeeneeeaane 21 Midway Airlines, Inc. v. County of Westchester, N.Y., 584 F. Supp. 436 (S.D. N.Y 1984)............... 24, 27 Vii TABLE OF AUTHORITIES - Continued Page Montauk-Caribbean Airways, Inc. v. Hope, 784 F.2d DE GOR GO, TOD ese cccncccccccescaccectdcacssases 26 Morales v. Trans-World Airlines, Inc., 504 U.S. 374 Cb kapate eens skectiers ceeds auerelneement passim New England Legal Found. v. Massachusetts Port Auth., 883 F.2d 157 (1st Cir. 1989)................. 28 New York State Conference of Blue Cross & Blue Shield Plans v. Travelers Insurance Co., 514 U.S. ip ee cbccnacudedudacad suneuddusadaaueaean passim Sea Air Shuttle Corp. v. Virgin Islands Port Author- ity, 800 F. Supp. 293 (D. V.I. 1992)................ 27 Western Airlines, Inc. v. Port Auth. of N.Y. & N.J., 658 F. Supp. 952 (S.D. N.Y. 1986), aff'd, 817 F.2d 222 (2d Cir. 1987), cert. denied sub nom. Delta Airlines, Inc. v. Port Auth. of N.Y. & N.J. , 485 CB, BEES CHOU hc ecccctisvcunnedhectetsccosvas 27, 28 State Cases City of Burbank v. Burbank Glendale-Pasadena Air- port Auth., 85 Cal. Rptr.2d 28 (Cal. Ct. App. BOs ankdnccnnsscecstassdcedasnteswardeseatewneas 28 State by Minnesota Public Lobby v. Metropolitan Air- ports, 520 N.W.2d 388 (Minn. 1994) .......-....... 28 FEDERAL STATUTES Be Wes IEE Hh 6. 6S bcc cnsc vduces éineesseecezenecs 2 Be SE iis ID bdo dnc bin bic d dens bens dascaescesa 19 es Se 0 ov td nnddncceceessandenndenseedse 15 DD UU. Br otk on boc ncnnnddsssecddeencccecn 2, 17 | viii TABLE OF AUTHORITIES - Continued Page 49 U.S.C. §41713(b)(1)......-c.ccccccececeeeeeee. passim OP Wes ET ES cbdccnundcesenceneecniaaes passim i en EE 5 Nh Gid as ba bsnnssccavnrdnasacaned 10 ee es I dbtidhenksedesGbuend susased cae ues 16 49 U.S.C. §§47101-47113........... insddaheduaan anes 4,8 Ss oe iene eau eas 2 ep as ED 060 8655 64 66 dkdead sees abees ee eeanes 5 ee ee a Ss one pdkcuyastewneomenee bea0%s 5 ee ts I os shed a cln snes pnp eacdeeee dmns 16 el I rrr 3, 8, 15 a EE cwavevsssasyecxsnvavenane acces 15 ees ES Sc vuckads couaedecbanaueesuessaae 5 STATE STATUTES Rees Ce Ge I gc wa dee dudctwncasweaseabeads 1 as Ss Sy SOND bab kcdcdackdccnedinacsoause 1 Colo. Rev. Stat. §§41-3-101 to 41-3-108 (1997)......... 7 Colo. Rev. Stat. §41-3-106(1)(h)............ 3, 13, 19, 26 FEDERAL REGULATIONS pt POST T YT PTET TTT OTe eT e reer rer es 14 14 C.FR. Part 152, §152, Appdx. D, 418............ a ie Gee Is sax cccexasivedsccbudusuaseeaes 6, 15 a ae es ee 10 ix TABLE OF AUTHORITIES - Continued Page LEGISLATIVE MATERIALS Bae Ge. GN. Br eee COT hh 50:60 06 eo 0s vk Kos 0n 8s 24 BAG Cones. Tee. Bee COGTO) so ncsc ccadeasasassisares 24 S. Rep. No. 95-631, 95th Cona., 2nd Sess. 39 (1978) .... 24 PETITION FOR WRIT OF CERTIORARI The City of Greenwood Village respectfully petitions for writ of certiorari to review the judgment of the United States Court of Appeals for the Tenth Circuit in this case.! The Arapahoe County Public Airport Authority (“Authority”) filed its own petition for writ of certiorari on August 2, 2001. OPINIONS BELOW The opinion of the court of appeals is reported at 242 F.3d 1213, and is reprinted in the Petitioner’s Appendix (“App.”). (App. la-22a). The FAA Director’s Determina- tion, Initiai Decision, and Final Agency Decision and Order are publicly available at 1998 WL 1083382 (F.A.A.), 1999 WL 500027 (F.A.A.), and 1999 WL 499647 (F.A.A.), and are reprinted in the Appendix at (App. 106a, App. 60a, and App. 23a, respectively). ¢ 1 The City of Greenwood Village is a home-rule city incorporated in 1950 pursuant to the Colorado Constitution, Art. 20, §1, and Colo. Rev. Stat. §31-1-201. Greenwood Village is located in Arapahoe County, Colorado, one of the four counties comprising the metropolitan area of Denver, Colorado. Greenwood Village is adjacent to Centennial Airport, whose operations directly affect the City’s interests. Greenwood Village intervened in the Federal Aviation Administration (“FAA”) proceeding and the petition for review before the Tenth Circuit Court of Appeals. C.A. Vol. VII.64 at 3-12; C.A. Vol. VII.69. JURISDICTION The court of appeals entered its judgment on March 9, 2001. The court of appeals denied a timely request for rehearing en banc and petition for panel rehearing on May 7, 2001. (App. 224a-225a). The jurisdiction of this Court is invoked pursuant to 28 U.S.C. §1254(1). * STATUTORY PROVISIONS INVOLVED This case involves the following provisions of the federal aviation laws: Section 4(a) of the Airline Dereg- ulation Act of 1978, Pub. L. No. 95-504, 92 Stat. 1707 (1978), now codified at 49 U.S.C. §41713(b), states in pertinent part: (1) Except as provided in this subsection, a State, political subdivision of a State, or political authority of at least 2 States may not enact or enforce a law, regulation, or other provision having the force and effect of law related to a price, route, or service of an air carrier that may provide air transportation under this subpart. * * * (3) This subsection does not limit a State, polit- ical subdivision of a State, or political authority of at least 2 States that owns or operates an airport served by an air carrier holding a certifi- cate issued by the Secretary of Transportation from carrying out its proprietary powers and rights. Section 502(b) of the Airport and Airway Improve- ment Act, Pub. L. No. 97-248, 96 Stat. 673, now codified at 49 U.S.C. §47101(g), requires the Secretary of Transporta- tion to: . cooperate with State and local officials in developing airport plans and programs that are based on overall transportation needs. The air- port plans and programs shall be developed in coordination with other transportation planning and considering comprehensive long-range land use plans and overall social, economic, environ- mental, system performance, and energy conser- vation objectives. The process of developing airport plans and programs shall be continuing, cooperative, and comprehensive to the degree appropriate to the complexity of the transporta- tion problems. _ Section 511(a)(1) of the Airport and Airway Improve- ment Act, now codified at 49 U.S.C. §47107(a)(1), pro- vides that the Secretary of Transportation must receive written assurances that an “airport will be available for public use on reasonable conditions and without unjust discrimination.” See also 14 C.F.R. Part 152, §152, Appdx. D, 118. The Colorado Public Airport Authority Law, Colo. Rev. Stat. §41-3-106(1)(h), grants enumerated powers to the Authority, including the power to: . .. provide rules and regulations governing the use of such airport and facilities and the use of other property and means of transportation within or over said airport, landing field, and navigation facilities; to perform any duties, nec- essary or consistent with the regulation of air traffic ... and to exercise such powers as may be required or consistent with the promotion of aeronautics and the furtherance of commerce and navigation by air. STATEMENT OF THE CASE This case presents a direct conflict between the deci- sion of the Tenth Circuit Court of Appeals and the Supreme Court of the State of Colorado regarding whether the Arapahoe County Public Airport Authority (“Authority”) may exclude scheduled passenger service pursuant to its powers and rights as an airport proprietor or whether such regulation is preempted by the Airline Deregulation Act (“ADA”). This case involves the impor- tant question regarding the scope of federal preemption under the Airline Deregulation Act (“ADA”), 49 U.S.C. §41713(b)(1), and the exception for the rights and powers of an airport proprietor exercising state authority. 49 U.S.C. §41713(b)(3). The ADA does not define proprietor powers and this Court has never ruled on the precise scope. City of Burbank v. Lockheed Air Terminal, Inc., 411 U.S. 624, 635-36 n.14 (1973). The resulting extensive and contradictory litigation between the Federal Aviation Administration (“FAA”) and airports or between airports and local communities regarding what powers are pre- empted and what are not demonstrates that there is a compelling need for this Court to grant review. The Colorado Supreme Court has ruled that the Authority has the power to ban scheduled passenger service on the grounds that it would interfere with the safe operation of the airport and the civil aviation needs of the public. (App. 195a). The Tenth Circuit disagreed and ruled that the FAA was correct in concluding that the Authority does not have that power. (App. 19a-21a). At issue is whether the FAA or the Authority can decide that the airport must add scheduled passenger service, even if that would change the essential character of the airport as a general aviation-reliever facility.? A. Summary of Proceedings For almost seven years, the Authority has defended in state and federal courts its power to exclude scheduled passenger service based on the classification of the air- port as a general aviation-reliever facility in the Denver regional aviation system plan, the limitations of the exis- ting airport facilities, and the Authority’s determination that Centennial Airport should not become a full-service commercial airport, in part because it could not provide for passenger safety in the event of a crash or fire. When Centennial Express Airlines (“Centennial Express”) first sought to begin scheduled passenger service, the Author- ity adopted a moratorium on its review of applications and sought direction from the FAA.3 (App. 177a). When Centennial Express began scheduled passenger service at Centennial Airport without any operating approval, the 2 A general aviation airport “means an airport that is not a commercial service airport.” 49 U.S.C. §47134(m). A commercial service airport “means a public airport in a State that the Secretary determines has at least 2500 passengers boarding a year and is receiving scheduled passenger service.” Id. §47102(7). A reliever airport is intended “to relieve congestion at a commercial service airport and to provide more general aviation access to the overall community.” Id. §47102(18). 3 Centennial Express was originally incorporated as Centennial Express Airlines, Inc. but its operations were under the corporate name of Golden Eagle Charters, Inc. d/b/a Centennial Express Airways. C.A. Vol. IX.86. The companies were owned by the same individual and will be referred to as Centennial Express. Authority secured an injunction barring Centennial Express from flying. (App. 181a). Centennial Express suc- cessfully appealed to the state court of appeals arguing that scheduled passenger service was governed by fed- eral law which preempted any state or local rule and that FAA had primary jurisdiction. (App. 181a). The Colorado Supreme Court reversed, finding that federal law did not preempt the Authority’s proprietary powers and that the Authority correctly exercised such powers in this case. (App. 188a-189a). When the Colorado Supreme Court issued its deci- sion in April, 1998, the FAA had not taken any action on the pending discrimination complaints filed by a Centen- nial Express shareholder in August, 1994 and by Centen- nial Express in January, 1995, or intervened in the state court proceedings. On August 21, 1998, the FAA declared that the Authority was ineligible for federal grants on the basis that it had violated federal law and the terms of its grant assurances not to unjustly discriminate among rates, route or class of service. (App. 29a.) The Authority appealed the FAA Director’s Determination and Green- wood Village intervened in the administrative proceed- ings under 14 C.F.R. §16.207(b). (App. 29a). After a hearing and initial appeal, the FAA Administrator affirmed on the same grounds and for the same reasons as stated in the Director’s Determination. (App. 41a-58a). The Authority sought review in the Tenth Circuit and Greenwood Village joined as an intervenor. (App. 1a, 6a). In affirming the FAA’s order, the Tenth Circuit rejected the earlier decision of the Colorado Supreme Court, which upheld the Authority’s ban. (App. 13a-22a). B. Factual Background 1. Centennial Airport Centennial Airport was built in 1967 to serve the growing general aviation needs of the Denver metro- politan region and to relieve Stapleton International Air- port of its general aviation traffic. (App. 174a-175a). Newspaper accounts of open meetings confirm that in 1966 the Arapahoe County approved funding for the construction of Centennial Airport in order to “serve general aviation, not scheduled carriers or military planes.” (App. 175a-176a). At the time, the FAA area director explained that Centennial was a “much needed reliever terminal for general aviation.”* (App. 176a). Arapahoe County established the Authority in 1975 pursuant to the Colorado Public Airport Authority Law (“CPAAL”), Colo. Rev. Stat. §§41-3-101 to 41-3-108 (1997), to own and operate Centennial as a political subdivision of the State. (App. 175a). The Authority owns all of the land and facilities at Centennial except for two runways which it leases from Arapahoe County. (App. 175a). Since 1983, the Authority has received $18.5 million in federal grants from the FAA to fund airport land purchases, construction and rehabilitation of runways, taxiways, navigation aids, buildings, and even signs, (App. 64a-65a). Funds granted to general aviation- 4 In addition to the statutory definitions, the FAA classifies airports in terms of their respective transportation roles, including commercial passenger service, cargo-transport, transport-reliever, general aviation, and military for funding purposes. C.A. Vol. IX.82. reliever airports are discretionary and are administered under the Airport Improvement Program (“AIP”) estab- lished by the Airport and Airway Improvement Act of 1982 (the “AAIA”), 49 U.S.C. §§47101-47113. In exchange for these grants, the Authority has given its assurance that “it will make its airport available as an airport for public use on fair and reasonable terms and without unjust discrimination, to all types, kinds, and classes of aeronautical uses,” as required by the AAIA, 49 U.S.C. §47107(a)(1). FAA regulations allow the Authority to “limit any given type, kind, or class of aeronautical use of the airport, if such action is necessary for the safe opera- tion of the airport or necessary to serve the civil aviation needs of the public.” 14 C.F.R. Part 152, §152, Appdx. D, 718. Local, regional, and national airport plans all desig- nate Centennial Airport as a reliever airport for Denver International Airport (“DIA”), which replaced Stapleton International in 1995, and not as a commercial passenger airport. (App. 175a-176a). The Denver Regional Council of Governments (“DRCOG”), a planning organization of 50 county and municipal governments in the Denver metropolitan area, designates Centennial as a “non-com- mercial passenger, transport-category, general aviation reliever airport.” (App. 73a-74a; 176a). The National Plan of Integrated Airport Systems (“NPIAS”), and the 1991 and 1999 Secretary of Transportation congressional reports also list Centennial Airport as a reliever airport intended to alleviate general aviation congestion at Denver’s primary commercial airport, not as a commer- cial service airport. DIA is the only commercial service eee emg eRe Fabiani se 6 er airport which has scheduled passenger service in the Denver metropolitan area. (App. 176a-177a). Centennial Airport is one of several hundred general aviation reliever airports in the United States and most general aviation-reliever airports do not have commercial passenger service.° Due to its planned role as a general aviation reliever airport and based on the strong opposi- tion from citizens who live near the airport, including the residents of Greenwood Village, scheduled passenger operations have never been permitted at Centennial Air- port; the airport also lacks a terminal, baggage facilities, a passenger security system, and fire on emergency medi- cal facilities to deal with passenger plane accidents. (App. 177a). 2. Proposed Scheduled Service Beginning in 1985, Centennial Express contacted the Authority about starting scheduled passenger service at Centennial Airport. (App. 24a). On April 8, 1993, the Authority imposed a moratorium on the review of appli- cations for scheduled passenger service while the issue of whether the Authority may prohibit such operations was resolved. (App. 3a-4a, 26a). One month later, undaunted by the moratorium, Centennial Express filed an applica- tion with the Authority to conduct scheduled passenger service at Centennial. Centennial Express’ application > The 1996 National Plan of Integrated Systems (“NPIAS”) report indicates that there are 285 reliever airports. C.A. Vol. XIX(21)(r). The 1999 NPIAS report states that there are 334 reliever airports. 10 proposed to operate 30-seat aircraft directly to eight cities with up to six flights a day to each city.® (App. 69a-70a). Centennial Express’ proposed operation, assuming a sixty-percent load factor, would have resulted in approxi- mately 630,000 passengers a year at Centennial and 36,000 additional flight operations a year. (App. 67a); C.A. Vol. X-XIII Tr. pp. 325-330. In July, 1993, the Authority sent a letter to the United States Department of Transportation (“DOT”) requesting policy guidance on the issue, and arguing that federal airport grant obligations should not be construed to require Centennial Airport to accept scheduled passenger service. (App. 126a, 177a). The Authority pointed to the original, and continued, purpose of the airport as a reliever to Denver’s passenger airport, the lack of on-the- ground facilities to safely support passenger operations, and the impacts of scheduled passenger service would have on the airport’s capacity. (App. 177a-178a). Before DOT responded, but more than one year after the Authority had requested guidance, on September 8, 1994, the Authority adopted a policy barring scheduled passenger service at Centennial Airport. (App. 4a, 68a-69a, 177a). The policy explains the need to preserve the airport’s funding category as a “Reliever Airport” 6 14 C.FR. §139.1 limits scheduled passenger service at uncertificated airports, such as Centennial Airport, to aircraft with less than 31 seats. In 1996, after several commuter air carrier accidents, Congress amended the aviation laws to prohibit scheduled passenger service at uncertificated airports, except for service in aircraft with less than 10 passenger seats. 49 U.S.C. §44706(b). FAA did not issue rules under this subsection until Congress required it in 2000. allel 11 serving general aviation, and provides in part, “[u]nder no circumstances shall the Airport Purpose include scheduled passenger service.” The Authority also adopted minimum standards, which state that scheduled passenger service is inconsistent with the “Airport Pur- pose and will not be allowed to operate at the airport unless required by final court order.” (App. 68a-69a). The policy and standards reflected the Authority’s conclusions that scheduled operations would create ground congestion at the Airport, would require substan- tial construction and investment in Centennial’s infra- structure, including parking, passenger terminal, and baggage handling facilities, and would exceed the air- port's capacity. (App. 191a, 194a). Centennial Airport has a maximum operational capacity of 525,000 annual opera- tions, and in 1994, its annual operations were about 402,325.7 Centennial Express’ proposed scheduled ser- vices would have added at least 36,000 operations and 630,000 passengers, and the resulting mix of small, low- speed private aircraft and large, high-speed commercial planes would have created unsafe conditions. (App. 67a, 79a); C.A. Vol. X-XIII.91 Tr. pp. 325-330. The Authority also recognized that Centennial Airport does not have on-site Air Rescue and Fire team to deal with a passenger plane crash. (App. 75a).8 Centennial Airport’s role as a 7 C.A. Vol. XVII(14). By 1998, Centennial Airport's operations increased significantly. In only the first seven months of 1998, Centennial Airport reported 275,000 operations. (App. 71a). 8 Centennial Airport is served by the South Metro (formerly Castlewood) Fire District. The station house near the airport also serves several thousand homes and businesses and 12 general aviation reliever airport and the above consider- ations prompted the Authority to conclude that the exclu- sion of scheduled passenger service was necessary for the safe operation of the airport and necessary to serve the civil aviation needs of the public. (App. 49a-52a). The DOT did not respond to the Authority’s request for guidance until 17 months later, a few days after Centennial Express began its short-lived passenger oper- ation. The DOT letter stated that it was arbitrary to exclude a particular class of service due to factors not reasonably related to the impacts of the service, and that the Authority had not provided sufficient information to support such a restriction. (App. 178a-179a). C. State Court Proceedings 1. Two days after Centennial Express’ unauthorized maiden flight, the Authority obtained a temporary restraining order in Colorado state court prohibiting Cen- tennial Express from conducting scheduled passenger service operations at Centennial Airport. A permanent injunction was entered against the airline on January 10, a fire truck would require at least six minutes io reach the runway in event of a crash or fire. C.A. Vol. VIII.80; C.A. Vol. XV.3(c). This situation does not meet the National Transportation Board’s (“NTSB”) recommended three-minute response time for fire safety, and, therefore, the chance of survivable crash victims was zero. (App. 75a). While the NTSB report came out in 1996, it confirmed the concerns voiced by the Castlewood Fire Chief that passenger deaths were unavoidable in the event of a fire or crash. (App. 75a). OO 13 1995. (App. 4a, 178a, 181a). Centennial Express suc- cessfully appealed the injunction to the Colorado Court of Appeals, but a plurality of the Colorado Supreme Court reversed and reinstated the permanent injunction on April 13, 1998. (App. at 174a). 2. In the state court, Centennial Express argued that the FAA had primary jurisdiction and that the ADA preempted the Authority’s ban on scheduled passenger service. The Colorado Supreme Court held that the ban was not preempted, relying on this Court’s direction in New York State Conference of Blue Cross & Blue Shield Plans v. Travelers Insurance Co., 514 U.S. 645 (1995) (“Travelers”), - that a court should first presume “that Congress does not intend to supplant state law,” id. at 654, and then review the objectives of the statute to define “the scope of the state law that Congress understood would survive.” Id. at 656. In applying this analysis, the Colorado Supreme Court found that the purpose of the ADA preemption clause was to prevent inconsistent or conflicting state regulations from interfering with the national air travel system and ruled that the Authority’s ban on scheduled passenger service concerns only an area of local and regional planning, and thus, was not within the intended scope of the congressional preemption. (App. 188a-189a). The Colorado Supreme Court also held that the Authority’s ban fell squarely within the proprietor’s exception to preemption under the ADA, 49 U.S.C. §41713(b)(3), which does not prohibit a political subdivi- sion from “carrying out its proprietary powers and rights.” (App. 191a). The court reasoned that the CPAAL, C.R.S. §41-3-106(1)(h), clearly gave the Authority the 14 power to define and limit the scope of permissible opera- tions at Centennial Airport. The court held that the ban on scheduled passenger service was reasonable, because, inter alia, the prohibited use had never been previously allowed. (App. 191a-192a). Lastly, the court held that the Authority was in com- pliance with its federal grant assurance to make the air- port available on “fair and reasonable terms and without unjust discrimination.” (App. 192a-195a). The court agreed with the Authority’s concerns over the safe opera- tion of the airport, increased congestion, and insufficient airport facilities. (App. 194a). The court also emphasized the importance of Centennial’s status as a general avia- tion-reliever airport, and agreed that the imposition of scheduled service would result in increased commercial operations and force general aviation operators out of the airport. The court also concluded that the Authority was not unjustly discriminating against a particular operator because the ban on scheduled passenger service applied to all airport users equally. (App. 194a-195a). D. FAA Proceedings FAA received two complaints alleging discrimination and violation of Centennial Airport’s grant assurances, from Thomas Kehmeier, a shareholder of Centennial Express in August, 1994, and Centennial Express in Janu- ary, 1995, respectively. (App. 27a). After FAA adopted 14 C.F.R. Part 16, which established simpler complaint pro- cedures for enforcement proceedings against federally funded airports, Centennial Express filed a second com- plaint under this Part 16 in 1998. (App. 27a). The FAA 15 consolidated the previous complaints and their adminis- trative records into a single Part 16 proceeding. (App. 27a). Notwithstanding the existence of administrative complaints against Centennial Airport since 1994 and FAA’s knowledge of the permanent injunction order, the FAA took no action until after the Colorado Supreme Court announced its decision in April, 1998. On August 21, 1998, the Director of FAA’s Office of Airport Safety and Standards issued a determination, finding that: (1) the FAA was not bound by the Colorado Supreme Court's decision, because FAA was not a party; (2) the Author- ity’s ban was contrary to the prohibition on state and local regulations relating to a price, route or service of an air carrier, 49 U.S.C. §41713(b)(1); and (3) the Authority violated the terms of the grant assurance regarding eco- nomic nondiscrimination, as provided for in 49 U.S.C. §47107(a)(1), as well as the grant assurance regarding exclusive rights, as set forth in 49 U.S.C. §§47107(a)(4) and 40103(e). (App. 139a-161a). The Authority requested a formal evidentiary hearing in September, 1998. (App. 29a). Greenwood Village intervened as a party under 14 C.F.R. §16.207(b), over FAA’s objections. (App. 29a). The hearing officer issued his initial decision on December 23, 1998, and affirmed the Director’s determination on all findings of fact and law. (App. 83a-105a). The Hearing Officer and later the FAA Administrator rejected the Authority’s determination of adverse safety, efficiency, and environmental effects from scheduled ser- vice on the assumption there was no difference between charter or air taxi and private non-scheduled operations i ll els 16 and scheduled passenger service using the same or simi- lar aircraft. (App. 93a-95a). The FAA concluded that there was no evidence that increased operations would result in safety problems, especially since the Authority had not banned non-scheduled air taxi or private jet service using the same type of aircraft. Initial Decision (App. 94a). FAA also summarily dismissed the Authority’s and Green- wood Village’s concerns with increased air and ground traffic and congestion as speculative. (App. 94a). Nor was the lack of passenger facilities like a public terminal, baggage handling and security, sufficient to justify the ban, since on-demand air taxi operations had been pro- viding services without those facilities. (App. 94a-95a). E. The Tenth Circuit’s Decision The Authority petitioned the Tenth Circuit for review of the FAA’s final agency order. As a party to the pro- ceeding below, Greenwood Village filed a notice of inter- vention pursuant to Tenth Circuit Local Rule 15.1. The jurisdiction of the Tenth Circuit as the court of first instance was invoked under 49 U.S.C. §§46110 and 47106(d)(3). In denying the Authority’s petition for review and affirming the FAA’s order, the Tenth Circuit held that “the strong policy of federal supremacy in the field of aviation prevails over full faith and credit principles in this case.” (App.14a). The Tenth Circuit bluntly stated that the Colo- rado Supreme Court decision “has no bearing on the FAA decision before us.” (App. 14a-15a). In direct conflict with the Colorado Supreme Court’s decision, the Tenth Circuit “easily” concluded that the ADA, 49 U.S.C. §41713(b)(1), \ 17 expressly preempted the Authority’s ban on scheduled passenger service because it related to a “service” and “route” of an air carrier. The court relied on precedent in Morales v. Trans-World Airlines, Inc., 504 U.S. 374, 384 (1992), and American Airlines, Inc. v. Wolens, 513 U.S. 219, 222 (1995), concluding that the ADA preempts all state enforcement actions having a connection with or refer- ence to airline rates, routes, or services. (App. 16a-17a). With regard to the ADA’s proprietor exception, 49 U.S.C. §41713(b)(3), and in stark contrast with the deci- sion of the Colorado Supreme Court, the Tenth Circuit took the position that local proprietors play an extremely limited role in the regulation of aviation. (App. 18a). The court then concluded that a proprietor can only issue reasonable, nonarbitrary, and nondiscriminatory rules that advance the local interest. (App. 18a-19a). The Tenth Circuit also concluded that the administra- tive record did not support the Authority’s claim that the ban on scheduled service was necessary for the safe oper- ation of the airport or necessary to serve the civil aviation needs of the public, notwithstanding the Colorado Supreme Court decision to the contrary. (App. 20a-21a). In applying a “substantial evidence” standard of review, the court upheld the FAA’s finding that the Authority unreasonably exercised its proprietary powers in banning scheduled passenger service, and held that the Authority exceeded the legitimate scope of power as an airport proprietor under 49 U.S.C. §41713(b) and the Supremacy Clause of the United States Constitution, U.S. Const. art. V1, cl. 2, and therefore, the ban was preempted by federal law. (App. 21a). 18 REASONS FOR GRANTING THE PETITION I. The Court Should Grant Review on the Important Question of the ADA’s Preemption Provision and the Scope of an Airport Proprietor’s Powers In Light of the Diametrically Opposite Decisions of the Tenth Circuit and the Colorado Supreme Court 1. The Tenth Circuit’s ruling is in fundamental dis- agreement with the decision of the Colorado Supreme Court over the breadth of express or implied preemption under the ADA and the permissible scope of an airport proprietor’s powers and rights. This conflict is well suited for resolution as the underlying facts arise from the same events and legal controversy and resolution turns on the legal questions of whether the ADA pre- empts the airport proprietor’s authority and whether the Authority’s scheduled passenger service ban is unjust discrimination. The ADA preemption clause provides that no state or political subdivision may “enact or enforce a law, regula- tion, or other provision having the force and effect of law related to a price, route, or service of an air carrier that may provide air transportation under this subpart.” 49 U.S.C. §41713(b)(1). The ADA qualifies this preemption by stating: “This subsection does not limit a State, politi- cal subdivision of a State, or political authority . . . that owns or operates an airport served by an air carrier holding a certificate issued by the Secretary of Transpor- tation from carrying out its proprietary powers and rights.” 49 U.S.C. §41713(b)(3). Colorado law grants the Authority broad powers to regulate the use of airport 19 land and facilities, as well as air traffic. C.R.S. §41-3-106(h). 2. The Colorado Supreme Court began its analysis of the preemption issue with this Court’s decision in Morales, which held, relying on an earlier interpretation of similar language in the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. §1144(a), that “state enforcement actions having a connection with or reference to airline rates, routes and services” were pre- empted by the ADA. (App. 186a-188a citing Morales, 504 U.S. at 384). In ruling that the Authority’s ban was not preempted, however, the Colorado Supreme Court turned to the more recent Travelers decision in which this Court explained that it may have interpreted the “relating to” language in prior ERISA cases, too broadly and that ERISA’s preemption provision should be applied in a more limited fashion. The Colorado Supreme Court applied the Travelers decision to analyze the preemption question “with the starting presumption that Congress does not intend to supplant state law,” 514 U.S. at 654, and to examine the statutory objectives as a guide to determine “the scope of the state law that Congress understood would survive.” Id. at 656. The Colorado Supreme Court found that the ADA preemption clause reflected Congress’ concern that individual states would pass inconsistent and conflicting laws regulating the airline industry. (App. 188a-189a). The court then held that the Authority’s ban did not undermine the purpose of the ADA because it concerned an area of local and regional planning which would not lead to inconsistent or conflicting state regulation. (App. 188a-189a). It only applied to Centennial’s regional role 20 as a general aviation reliever for DIA, Denver’s primary commercial airport. (App. 188a-189a). 3. In contrast, the Tenth Circuit’s preemption anal- ysis begins and ends with Morales and American Airlines v. Wolens, and does not use the analysis required under the Travelers decision. (App. 16a-17a). Thus, the Tenth Circuit did not recognize the presumption against preemption established in Travelers, and failed to consider whether the Authority’s ban contradicted the ADA’s objectives and purposes. Instead, the Tenth Circuit summarily con- cluded that the Authority’s ban is connected with and relates to both services and routes and, thus, was pre- empted. (App. 17a). 4. The Tenth Circuit and the Colorado Supreme Court also fundamentally disagree on the permissible scope of an airport proprietor’s rights and powers. The Colorado Supreme Court held that the Authority’s ban on scheduled passenger service did not relate to “a price, route, or service of an air carrier” under 49 U.S.C. §41713(b)(1), because it did not concern typical service- oriented tasks, such as ticketing, boarding procedures, providing meals and drinks to passengers, and baggage handling. (App. 189a). Similarly, the court concluded, the Authority was not regulating fares or routes because the ban on scheduled service did not “delineate what airlines can charge or where they can fly.” (App. 189a). The Tenth Circuit disagreed, holding that a prohibi- tion on all commercial passenger service was a regulation of routes. The Tenth Circuit held that the Authority affir- matively curtailed an air carrier’s business decision to offer a particular service in a particular market (i.e., 21 route), and that the ban also “significantly impacts the scope of services available to public citizens desiring to travel by air from Centennial Airport.” (App. 17a). Iron- ically, both courts cite to the same case, Hodges v. Delta Airlines, Inc., 44 F.3d 334, 340 (5th Cir. 1995), in reaching opposite conclusions. (App. 17a, 189a, respectively). These different outcomes only underscore the significant confusion and inconsistent interpretations on this ques- tion. 5. This case also raises the legal question of the meaning and scope of the term “service” in the ADA. Three justices would have granted certiorari in Duncan v. Northwest Airlines, Inc., 208 F.3d 1112 (9th Cir. 2000), cert. denied sub nom. Northwest Airlines v. Duncan, 121 S.Ct. 650, __ U.S. __ (2000), because the Courts of Appeals are divided on the meaning of the term “service” in 49 U.S.C. §41713(b)(1), and this is an important issue, which has broad ramifications. Id. Il. This Court Should Grant Review To Resolve The Inconsistency Between Two 1995 Decisions of This Court: American Airlines v. Wolens and Travelers 1. In American Airlines v. Wolens, this Court applied the Morales decision to hold that the ADA preempted consumer litigation against the airline in state court on _ fraud, because the plaintiffs’ claims related to “ ‘rates’, i.e., American’s charges in the form of mileage credits for free tickets and upgrades, and to ‘services,’ 1.e., access to flights and class-of-service upgrades” charged by the defendant airline. American Airlines, Inc. v. Wolens, 513 U.S. at 223, citing Morales, 504 U.S. at 378-379. Several 22 months later, this Court in Travelers held that the previous decisions went too far in finding preemption based on the “relating to” language and adopted a different analysis, which recognized a presumption against preemption. Travelers, 514 U.S. at 656. This Court in Travelers further held that preemption issues must be analyzed by deter- mining whether the state law contradicted the congres- sional objectives in enacting the preemption provision. Id. The Travelers decision did not directly discuss the Ameri- can Airlines v. Wolens or Morales decisions but narrowed the analysis used in Morales, upon which the decision rested. 2. The different approaches taken by the Tenth Cir- cuit and the Colorado Supreme Court in attempting to define the scope of preemption under the ADA clearly illustrate the potential contradiction between American Airlines v. Wolens and Travelers, when construing ADA preemption. In holding that the Authority’s ban on scheduled passenger service was not preempted by the ADA, the Colorado Supreme Court began its analysis with the broad test under Morales but then turned directly to Travelers’ more narrow approach based on an examina- tion of Congress’ purpose in enacting the ADA preemp- tion provision. (App. 186a-188a). The Colorado Supreme Court found that Congress adopted the ADA preemption clause out of concern over the potential for conflicting state laws attempting to regulate the airline business. (App. 185a). It then wrote: “Because the regulation con- cerns an area of local and regional planning, it will not lead to inconsistent or conflicting state regulations. Therefore, the regulation does not undermine the pur- pose of the ADA preemption provision.” (App. 23 188a-189a). The Colorado Supreme Court did not discuss the American Airlines v. Wolens decision in its opinion. The Tenth Circuit, on the other hand, found that the ADA preempted the Authority’s ban on scheduled pas- senger service flights. (App. 16a-17a). In its opinion, the Tenth Circuit applied the broad Morales test in the ADA context, citing-American Airlines v. Wolens. The Tenth Cir- cuit wrote: “The Supreme Court has interpreted this pro- vision broadly to preempt all ‘State enforcement actions having a connection with or reference to airline “rates, routes, or services.” ’ .. . We easily conclude the Author- ity’s ban is connected with and relates to both services and routes. By banning scheduled passenger service, the Authority has affirmatively curtailed an air carrier’s busi- ness decision to offer a particular service in a particular market. The ban also significantly impacts the scope of services available to public citizens desiring to travel by air from Centennial Airport.” (App. 16a-17a). The Tenth Circuit does not discuss the Travelers decision in its opin- ion. Thus, the Tenth Circuit and the Colorado Supreme Court reached separate, contradictory and diametrically opposed decisions employing the standards set by this Court. Given the importance of the ADA and preemption issues generally, the Court needs to resolve this question. 3. The Tenth Circuit could not have found preemp- tion had it followed the analytical process required under Travelers. 514 U.S. at 655. While Congress intended the ADA’s preemption provision to ensure that States would not undo federal deregulation by adopting their own regulations, 49 U.S.C. §41713(b)(1); Morales, 504 U.S. at - 378, the ADA “does not limit” a state or local government 24 from “carrying out its proprietary powers and rights.” 49 U.S.C. §41713(b)(3). Congress did not intend “to limit in any way the normal exercise of a proprietor’s powers to determine the level and nature of service to be provided at airports, subject to constitutional and statutory limita- tions... ” 124 Cone. Rec. 38,526 (1978) (statement of Cong. Anderson). See also Midway Airlines, Inc. v. County of Westchester, N.Y., 584 F. Supp. 436, 440 n.18 (S.D. N.Y 1984), quoting 124 Conc. Rec. 37,419 (1978) (remarks of Sen. Kennedy) (“The legislative history is unmistakably clear” that Congress did not intend to “interfere with ‘long recognized powers of the airport operators to deal with noise and other environmental problems at the local level’ ”). Congress also intended to preserve proprietary powers as they existed before the enactment of the ADA. A Senate Report, for example, states that the preemption provision “should not be construed to affect or limit existing proprietary rights of airport operators to man- age, operate, or regulate airports.” Air Transportation Ass'n of America v. Crotti, 389 F. Supp. 58, 64 (N.D. Cal. 1975), citing S. Rep. No. 95-631, 95th Conc., 2nd Sess. 39, 99 (1978). In this context, a pre-ADA case explains that “such proprietary control necessarily includes the basic right to determine the type of air service a given airport proprietor wants its facilities to provide, as well as the type of aircraft to utilize those facilities.” Id. 25 III. This Court Needs to Clarify the Scope of An Air- port Proprietor’s Powers Given the Contradictory Decisions of the State and Federal Courts There is a compelling need for this Court to more precisely define the scope of the airport proprietor’s exception to preemption under the ADA to resolve the conflict in the case law, to guide the FAA and regional and local authorities when planning for and operating the nation’s airports. 1. This is an important question, which should be resolved by this Court. None of the preemption cases, Morales, American Airlines v. Wolens, or Travelers con- cerned the scope of an airport proprietor’s rights and powers under the ADA. This Court has never defined the scope of the airport proprietor’s exception, City of Bur- bank v. Lockheed Air Terminal, Inc., 411 U.S. at 635-36 n.14. (“We do not consider here what limits, if any, apply to a municipality as a proprietor”). When Congress adopted the ADA in 1978, it did not define the proprietor’s rights and powers. The lack of a clear definition has led to widely disparate decisions by the federal and state courts. 2. This case illustrates the conflict. The Colorado Supreme Court’s held: [We] believe that an airport proprietor’s ban on scheduled passenger service falls squarely within the proprietor’s exception. While regula- tions concerning aircraft noise and ground con- gestion restrict the manner in which airport users conduct their operations, a ban on sched- uled service seeks to accomplish a more funda- mental goal in setting the boundaries of 26 permissible operations at the airport. The power to control an airport's size exists at the core of the proprietor’s function and is especially strong where, as here, the prohibited use has never been allowed. ... (App. 191a-192a) (emphasis added). The Colorado Supreme Court looked to the delega- tion of an airport authority’s powers as delineated by state law in holding that the Authority has the power to define and limit the scope of permissible operations at Centennial Airport. (App. 192a). Under the CPAAL, the Authority is empowered to “provide rules and regula- tions governing the use of such airport and facilities,” to “perform any duties, necessary or consistent with the regulation of air traffic,” and to “exercise such powers as may be required or consistent with the promotion of aeronautics and the furtherance of commerce and naviga- tion by air.” C.R.S. §41-3-106(1)(h). In contrast, the Tenth Circuit “recognized that local proprietors play an extremely limited role in the regulation of aviation,” (App. 18a quoting American Airlines, Inc. v. Dept. of Transp., 202 F.3d 788, 806 (5th Cir.), cert. denied, 530 U.S. 1274 (2000)). 3. Nor is this an isolated issue. State and federal courts reach very different conclusions when reviewing the exercise of an airport’s proprietary powers under 49 U.S.C. §41713(b)(3). While the Tenth Circuit held that the Authority could not ban scheduled passenger service, other courts have held that an airport can deny year-long operating authority, Montauk-Caribbean Airways, Inc. v. Hope, 784 F.2d 91, 97 (2d Cir. 1986), or allow wid one Ee gate & See See ae 0 ae 27 carrier to serve the airport, Sea Air Shuttle Corp. v. Virgin Islands Port Authority, 800 F. Supp. 293, 304 (D. V.I. 1992). The Tenth Circuit rejected the Authority’s rationale that scheduled passenger service contradicted Centennial Airport’s general aviation-reliever role in regional and local plans and that the lack of on-the-ground facilities for passengers made such service unsafe or unsuited to Centennial Airport. However, several other courts recog- nize that these functions which roughly correlate to “on- the-ground” facilities and activities, such as fire and res- cue, land use, environmental permits, and airport facili- ties, like hangars, parking lots, and taxiways, are uniquely those of the airport proprietor. Midway Airlines, Inc. v. County of Westchester, 584 F. Supp. at 440 n.18 (airport proprietor has a legitimate need to ensure the safety of passengers while on the ground). While the Tenth Circuit also rejected the Authority’s decision that Centennial Airport’s capacity, traffic and congestion, and ground facilities made scheduled pas- senger service inappropriate, other courts have upheld similar exclusions. For example, LaGuardia Airport's perimeter rule, which prohibited airlines from using the airport for nonstop flights beyond a set distance, is valid. Western Airlines, Inc. v. Port Auth. of N.Y. & N.J., 658 F. Supp. 952, 956-57 (S.D. N.Y. 1986), aff'd, 817 F.2d 222 (2d Cir. 1987), cert. denied sub nom. Delta Airlines, Inc. v. Port Auth. of N.Y. & N.J., 485 U.S. 1006 (1988). The stated purpose of the rule was to reduce ground congestion and to maintain LaGuardia as a short and medium haul air- port (its role in New York’s regional plan) by diverting longer haul air traffic to other airports. Id. at 953. In upholding the rule as a valid exercise of an airport's 28 proprietary powers, the court noted that the scope of proprietary powers often arose in the context of noise regulations, but that the ADA “does not expressly limit proprietary powers to the regulation of noise, although presumably Congress would have so limited the section if that is what it had in mind.” Id. at 957. The court added, “A proprietor’s interest in regulating ground congestion at its airports would appear to be at the core of the proprietor’s function as airport manager, perhaps even more so than the regulation of noise.” Id. See also Air Transport Ass'n of America v. City and County of San Fran- cisco, 992 F. Supp. 1149, 1188 (N.D. Cal. 1998). Some courts take a contrary view, reflecting FAA’s narrow viewpoint of a proprietor’s powers. City and County of San Francisco v. FAA, 942 F.2d 1391, 1394-1397 (9th Cir. 1991), cert. denied, 503 U.S. 983 (1992) (airport could not exclude certain types of air cargo jets); New England Legal Found. v. Massachusetts Port Auth., 883 F. 2d 157, 170 (1st Cir. 1989) (setting aside landing fees as discriminatory); and British Airways Bd. v. Port Auth. of N.Y. & N.J., 564 F.2d 1002, 1011 (2d Cir. 1977) (proprietary powers very limited). However, other decisions show that an airport proprietor has broad authority over land use planning at the airport, law enforcement, approval of tenants and leases, and fire fighting. See, e.g., City of Burbank v. Burbank Glendale-Pasadena Airport Auth., 85 Cal. Rptr.2d 28, 36 (Cal. Ct. App. 1999); State by Minnesota Public Lobby v. Metropolitan Airports, 520 N.W.2d 388, 392 (Minn. 1994) (distinguishing between noise rules adopted by the state versus those by the airport proprietor); Gustafson v. City of Lake Angelus, 76 F.3d 778, 786-87 (6th Cir. 1996). 29 Even the FAA can be inconsistent. In Aircraft Owners and Pilots Ass’n v. Hinson, 102 F.3d 1421, 1425 (7th Cir. 1996), the FAA withdrew its opposition to Chicago’s deci- sion to close Meigs Field and decided not to compel the city to operate the airport pursuant to its grant agree- ment. 4. Whether the proprietor’s exception allows a local airport proprietor to regulate the scope of permissible operations based on regional planning objectives is a fundamentally important issue that directly affects the 334 general aviation reliever airports listed in the NPIAS. FAA approves and funds regional and national aviation plans which assign specific transportation roles to the public airports within a given community or region. The Denver regional plan limits commercial passenger service to DIA and classifies all regional airports, including Cen- tennial Airport, as reliever airports. This is typical of aviation plans throughout the country where other gen- eral aviation airports are assigned reliever-non-passenger roles. If FAA can unilaterally require an airport to change its role without regard to the regional and local aviation transportation plans (which ironically are funded and approved by FAA), then the airport proprietor who par- ticipates in and relies on the plan has lost powers clearly provided to it under federal and state law. The implications also extend far beyond local airport proprietors and their users. Communities like the City of Greenwood Village, which surround or are near these airports, rely on regional transportation decisions and the allocation of air service in making comprehensive plan- ning and zoning decisions which include the location of residential development and the construction of schools. 30 These communities need certainty regarding both the location and purpose of transportation facilities and need to be able to rely on those decisions in making their own governmental decisions. CONCLUSION For the foregoing reasons, the petition for writ of certiorari should be granted. Respectfully submitted, CONSTANCE E. - BROOKS Counsel of Record MICHAEL B. MARINOVICH C.E. Brooxs & Associates, P.C. 999 18th Street, Suite 1605 Denver, Colorado 80202 (303) 297-9100 Counsel for Petitioner August 6, 2000. la PUBLISH UNITED STATES COURT OF APPEALS TENTH CIRCUIT ARAPAHOE COUNTY PUBLIC AIRPORT AUTHORITY, a political subdivision of the State of Colorado, No. 99-9508 Petitioner, V. FEDERAL AVIATION ADMINISTRATION, Respondent, CITY OF GREENWOOD VILLAGE, Intervenor. REGIONAL AIRLINE ASSOCIATION, Amicus Curiae. Appeal from the Federal Aviation Administration (Filed March 9, 2001) Brian A. Magoon (Ronald S. Loser with him on the briefs) of Brega & Winters, P.C., Denver, Colorado, for Petitioner. Christine N. Kohl (David W. Ogden, Acting Assistant Attorney General, and Michael Jay Singer, Department of I Coutinho? Mie beet PP PNR eS alte eh 2a Justice, with her on the brief), Department of Justice, Washington, DC, for Respondent. -Constance E. Brooks (Michael B. Marinovich and Chris- tine A. Longhitano with her on the briefs) of C.E. Brooks & Associates, P.C., Denver, Colorado, for Intervenor. Before BRORBY and McWILLIAMS, Circuit Judges, and ELLISON,” District Judge. | BRORBY, Circuit Judge. This case involves the Federal Aviation Administra- tion’s (FAA) decision to suspend petitioner’s eligibility for discretionary federal grants, based on claimed viola- tions of federal statutes and existing grant provisions. Petitioner Arapahoe County Public Airport Authority (Authority) and Intervenor City of Greenwood Village (City) urge us to set aside the decision for various rea- sons, not the least of which is the decision is incompatible with an earlier opinion issued by the Colorado Supreme Court. We exercise jurisdiction pursuant to 49 U.S.C. §§ 46110 and 47106(d)(3). For the reasons set forth below, we deny the Petition for Review and affirm the FAA’s order. * The Honorable James O. Ellison, Senior United States District Judge for the Northern District of Oklahoma, sitting by designation. 3a BACKGROUND! The Authority owns and operates Centennial Air- port, which is located just south of Denver, Colorado. Operations at the airport historically have consisted of “unscheduled” commercial passenger and cargo service. In the course of operating the airport, the Authority has accepted millions of dollars in discretionary grants from the FAA. As part of the grant process, the Authority made assurances the airport would be “available . . . for public use on reasonable terms and without unjust dis- crimination, to any person, firm, or corporation to con- duct or to engage in any aeronautical activity for furnishing services to the public at the airport.” However, within the same grant assurance, the FAA also recognized the Authority “may prohibit or limit any given type, kind or class of aeronautical use . . . if such action is necessary for the safe operation of the airport or necessary to serve the civil aviation needs of the public.” Over the course of several years, Centennial Express Airlines (Centennial Express) divulged an interest in pro- viding scheduled passenger service at Centennial Air- port, culminating in an official application in May 1993. Centennial Express submitted its application despite the Authority’s actions one month earlier placing a mor- atorium on the consideration of applications for sched- uled passenger service. The moratorium was designed to 1 The Authority states in its brief the only issues on appeal are legal in nature. Therefore, the facts presented in the background section of this opinion draw extensively from the FAA’s decision. 4a provide the Authority time to determine whether it could legally prohibit scheduled serwice. While the Authority asked for guidance from the FAA on the question, it ultimately decided to completely ban all scheduled air carrier service without waiting to hear from the FAA.? In contravention of the Authority’s ban, Centennial Express initiated scheduled passenger service between Centennial Airport and Dalhart, Texas on December 20, 1994. The Authority immediately sought and obtained a temporary injunction in state district court to prevent Centennial Express from offering scheduled passenger service. The state district court eventually granted the Authority a permanent injunction. Centennial Express successfully appealed the injunction to the Colorado Court of Appeals, but a plurality of the Colorado Supreme Court reversed the state court of appeals and reinstated the permanent injunction. See Arapahoe County Pub. Airport Auth. v. Centennial Express Airlines, Inc., 956 P.2d 587 (Colo. 1998) (en banc). The Colorado Supreme Court issued its opinion despite concurrent complaints on file with the FAA, and in so doing decided federal law 2 The Authority wrote the FAA in July 1993, and adopted the ban in September 1994. The FAA responded in December 1994. The FAA response was not favorable to the ba.., stating: “In addressing similar cases in the past, [the] FAA has found it arbitrary to exclude any particular class of service due to factors that are not reasonably related to the impacts of that service.” The FAA also found the Authority submitted insufficient information “to demonstrate that a restriction of any particular category of operation could be adequately supported,” and concluded “existing policy on airport access must be complied with.” 5a did not preempt the Authority’s ban on scheduled pas- senger service and the ban dic not violate the terms of ‘the non-discrimination grant assurances. See id. at 592-97. The FAA was not a party to this state litigation. As alluded to in the previous paragraph, the agency decision-making process under review here got its start at the same time as the state litigation, and involves the same basic facts. Thomas Kehmeier, a Centennial Express stockholder, filed the first complaint with the FAA in August 1994, claiming the Authority’s ban violated fed- eral law and the grant assurances. Centennial Express filed its own complaint in January 1995. As the Colorado Supreme Court noted, the FAA had yet to rule on either complaint in 1998 when the court issued its opinion. Arapahoe County Pub. Airport Auth., 956 P.2d at 592. These initial complaints were filed pursuant to 14 C.FR. Part 13. New rules, found at 14 C.FR. Part 16, and entitled “Rules of Practice for Federally-Assisted Airport Enforcement Proceedings,” went into effect December 16, 1996. Cen- tennial Express filed a second complaint under the new part 16 rules on February 23, 1998, just two months prior to the Colorado Supreme Court’s decision. Centennial Express filed the second complaint even though the com- pany had voluntarily surrendered its FAA operating cer- 7 tificate in January 1996. After consolidating the three complaints, and despite the then-existing Colorado Supreme Court decision to the contrary, FAA’s Director of the Office of Airport Safety and Standards issued an initial determination on August 6a 21, 1998, concluding the ban violated the grant assur- ances and federal law. The Authority requested a hear- ing,* which was held over two days in November 1998, and resulted in an affirmance of the director’s initial decision. The Authority and the City subsequently appealed the hearing officer’s decision to the FAA Asso- ciate Administrator for Airports, who issued the FAA’s Final Agency Decision and Order affirming the previous decisions. The Authority then filed the current petition for review, and the City filed a Notice of Intervention pursuant to 10th Circuit Rule 15.2(A).4 > The hearing officer granted the City’s motion to intervene; therefore, the City also participated in the hearing. 4 The FAA argues the City is without statutory authority to intervene in this review. We assume for purposes of this opinion, but do not decide, that the City’s intervention is proper. However, as an intervening party, the City may join issue only on matters brought before the court by the Authority as petitioner. See Illinois Bell Tel. Co. v. FCC, 911 F.2d 776, 786 (D.C. Cir. 1990) (citing Vinson v. Washington Gas Light Co., 321 U.S. 489, 498 (1944) (“an intervenor is admitted to the proceeding as it stands, and in respect of the pending issues, but is not permitted to enlarge those issues”)). We acknowledge this limitation is a prudential determination as opposed to a mandate of rule or statute, see Synovus Fin. Corp. v. Board of Governors, 952 F.2d 426, 433-34 (D.C. Cir. 1991); nonetheless, we agree it should be avoided only in “extraordinary cases.” New York v. Reilly, 969 F.2d 1147, 1154.n.11 (D.C. Cir. 1992). This is not an extraordinary case. The City’s issues, as a whole, are directed toward the complainants’ standing, alleged due process deficiencies, mootness and laches. Although the City summarily characterizes these issues as related to “prudential jurisdictional deficiencies,” after careful examination we conclude the City’s issues are not “essential predicates” or substantively connected to the issues the Authority presented in its brief and Petition for Review. See United States Tel. Ass'n v. 7a STANDARD OF REVIEW Our review of the FAA’s final decision and order suspending the Authority’s eligibility for discretionary federal grants is governed by the Administrative Pro- cedure Act, 5 U.S.C. § 706.5 Within this context, we review matters of law de novo. See Wyoming Farm Bureau Fed'n v. Babbitt, 199 F.3d 1224, 1231 (10th Cir. 2000). How- ever, the FAA’s findings of fact are conclusive if sup- ported by substantial evidence. See id; 49 U.S.C. § 46110(c). The substantial-evidence standard does not allow us to displace the FAA’s “choice between two fairly conflicting views, even though the court would justifiably have made a different choice had the matter been before it de novo.” Babbitt, 199 F.3d at 1231 (quotation marks and citation omitted); see also Trimmer v. United States Dep't of Labor, 174 F.3d 1098, 1102 (10th Cir. 1999) (same). FCC, 188 F.3d 521, 530-31 (D.C. Cir. 1999). Moreover, the City presents no reason why it could not have petitioned tor review in its own right. See id. at 531. We therefore decline to consider issues raised by the City but not the Authority. 5 A reviewing court may set aside an agency determination pursuant to 5 U.S.C. § 706(2) if it is (a) arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law; (b) contrary to constitutional right, power, privilege, or immunity; (c) in excess of statutory jurisdiction, authority, or limitations, or short of statutory right; (d) without observance of procedure required by law; (e) unsupported by substantial evidence; or (f) unwarranted by the facts to the extent they are subject to de novo review. 5 U.S.C. § 706(2); see Lewis v. Babbitt, 998 F.2d 880, 881-82 (10th Cir. 1993). 8a ANALYSIS The Authority contends the final FAA decision and order should be set aside for the following three “errors of law:” (1) the Colorado Supreme Court opinion reinstat- ing the permanent injunction against Centennial Express “is final, preclusive and dispositive;” (2) the Authority and not the FAA determines whether scheduled pas- senger service will be prohibited as necessary for the safe operation of the airport and to serve the public’s civil aviation needs; and (3) any allowable scheduled pas- senger service must be limited to aircraft designed for nine or fewer passenger seats.© We address each alleged error in turn. The Colorado Supreme Court Decision The Authority argues, pursuant to the Full Faith and Credit Act, 28 U.S.C. § 1738, that Arapahoe County Public Airport Authority v. Centennial Express Airlines, 956 P.2d 587, “is final, preclusive and dispositive” of the issues resolved in the FAA’s final order. The Full Faith and Credit Act provides that the “judicial proceedings of any court of any such State . . . shall have the same full faith and credit in every court within the United States . . . as 6 The City, as Intervenor, joins in this third issue, contending “FAA acted outside or abused its authority when it prosecuted [the Authority] for banning scheduled passenger service after Congress amended the federal aviation laws to prohibit scheduled passenger service of more than 10 seats at uncertified airports and to further provide that no airport can be compelled to secure a certificate.” 9a they have by law or usage in the courts of such State .. . from which they are taken.” 28 U.S.C. § 1738. The FAA asserts 28 U.S.C. § 1738 is not technically implicated here because it is an agency rather than a court, see American Airlines, Inc. v. Dep’t of Transp., 202 F.3d 788, 799 (Sth Cir.), cert. denied, 120 S.Ct. 2762 (2000); however, “[b]ecause most agency decisions may be reviewed in federal courts, and those courts must follow section 1738, [the FAA] therefore assume[s] that a com- mon law rule of preclusion, like that embodied in section 1738, governs federal agency proceedings.” We agree with the FAA and the Fifth Circuit that the preclusive effect, if any, of the Colorado Supreme Court decision derives from the common law doctrines of res judicata and issue preclusion (collateral estoppel), not § 1738. See id. at 799-800 & n.6. We further agree these common law doctrines extending full faith and credit to state court determinations are trumped by the Supremacy Clause if the effect of the state court judgment or decree is to restrain the exercise of the United States’ sovereign power by imposing requirements that are contrary to important and established federal policy. See id. at 800; see also Midgett v. United States, 603 F.2d 835, 845 (Ct.Cl. 1979). Balancing, de novo,” the common law justification a ne ee ied 7 See American Airlines, 202 F.3d at 799 (declining to defer to agency’s ruling on full faith and credit issue); see also Adams Fruit Co., Inc. v. Barrett, 494 U.S. 638, 650 (1990) (acknowledging a reviewing court need not afford deference to agency interpretation of statute or law it is not charged with administering); American Forest & Paper Ass'n v. EPA, 137 F.3d . 291, 297 (5th Cir. 1998) (same). 10a for full faith and credit with the competing policy sup- porting the Supremacy Clause, we conclude the FAA is not required to give preclusive effect to the Colorado Supreme Court’s decision in Arapahoe County Public Air- port Authority v. Centennial Express Airlines. We begin our analysis on the full faith and credit side of the equation. A close look at the Colorado Supreme Court decision reveals the primary issue before that court was the propriety of a permanent injunction enjoining Centennial Express from conducting scheduled air carrier service in and out of Centennial Airport. As such, the Colorado Supreme Court focused from the outset on Cen- tennial Express’ conduct in contravention of state regula- tions. Arapahoe County Pub. Airport Auth., 956 P.2d at 593, 596 (stating that to defer to federal agency jurisdiction would be to “allow future airport users to unilaterally conduct and continue operations in violation of airport rules so long as they implicate federal jurisdiction in some way”). To the extent the Colorado Supreme Court addressed federal preemption issues and the Authority’s obligations under the federal grant assurances, it did so in the narrow context of rejecting Centennial Express’ defenses. Id. at 593-97. Further examination reveals that the court’s conclusion the Authority did not violate the terms of the federal grant assurances lacks the depth and breadth of analysis given to those same issues by the Director of the FAA’s Office of Airport Safety and Stan- dards, the Hearing Officer, and ultimately, the Final Agency Decision and Order issued by the Associate Administrator for Airports. Id. at 596-97. The credit to be given to the state court opinion is further influenced by the fact the Colorado Supreme lla Court was seriously divided in this case, as evidenced by its plurality opinion — three of seven justices participated in the majority, one justice concurred, two justices dissen- ted, and one justice abstained. Id. at 597. Of particular note here, Justice Scott, while concurring in the result, considered it “inappropriate” to address preemption in light of the fact the FAA had not yet acted under its authority. Id. at 597-98 (Scott, J. concurring). He justified the Colorado Supreme Court’s holding based on its inher- ent authority to “issue an injunction to preserve the sta- tus quo pending resolution of the dispute in an appropriate forum.” Id. at 599. Given Justice Scott’s posi- tion, and the additional fact the two dissenting justices concluded that “in keeping with the doctrine of primary jurisdiction” the FAA is the appropriate forum to deter- mine issues pertaining to preemption and grant compli- ance under federal statute, id. at 599 (Bender, J. and Martinez, J. dissenting), only half the participating court (three of six) ostensibly precluded the FAA from issuing a contrary ruling. Last, but certainly not least, the FAA was not a party to, nor in privity with a party to, the state court proceed- ings. The FAA’s interest in fulfilling its statutory respon- sibility to ensure airport compliance with federal aviation laws and grant assurances, and to protect the public interest, is obviously independent of the interests of any particular air carrier (e.g., Centennial). Mere knowledge of the state court proceedings did not oblige the FAA to participate in those proceedings. See Martin v. Wilks, 490 U.S. 755, 762-65 (1989). Without the FAA as a party, the Colorado Supreme Court decision does not satisfy a fun- damental requirement of issue preclusion under federal 12a or Colorado law. See, e.g., Baker v. General Motors Corp., 522 U.S. 222, 237 n.11 (1998) (“In no event. . . can issue preclusion be invoked against one who did not partici- pate in the prior adjudication.”); Meredith v. Beech Aircraft Corp., 18 F.3d 890, 895 (10th Cir. 1994) (“collateral estop- pel fails here simply because [plaintiff] was not a party to the first suit”); O’Neill v. Simpson, 958 P.2d 1121, 1123 n.5 (Colo. 1998) (en banc) (“party against whom estoppel is asserted [must have] been a party to or... in privity with a party in the prior proceeding”). This, together with the other circumstances discussed above, weighs heavily against extending full faith and credit to Arapahoe County Public Airport Authority v. Centennial Express Airlines.® See, 8 The Authority’s reliance on Town of Deerfield v. FCC, 992 F.2d 420 (2d Cir. 1993), is misplaced. In Deerfield, the FCC was not a party in the state or federal court proceedings initiated by Mr. Joseph Carino to challenge municipal zoning regulations prohibiting the installation of a satellite dish in his backyard. Because the FCC did not want to become “a national zoning board,” it required complainants like Mr. Carino to pursue other legal remedies before filing administrative complaints. Id. at 423. Only after the federal district court gave preclusive effect to the state court ruling in favor of the town, did the FCC “review” the federal district court’s decision and issue an order, which, contrary to the federal district court, ruled that FCC regulations preempted the town’s zoning regulation. Id. at 426. The Second Circuit Court of Appeals held the FCC impermissibly rendered the federal Article III court’s decision a mere advisory opinion. Id. at 428-30. The complexion of this case obviously is very different from Deerfield. In Deerfield, the FCC acted as a disinterested adjudicator to resolve a zoning dispute between two outside parties; the FCC never disputed state or federal jurisdiction over Mr. Carino’s lawsuits. In this case, the FAA became an interested party in the administrative proceedings to determine 13a e.g., Acacia Villa v. United States, 24 Cl. Ct. 445, 448 (1991) (acknowledging the doctrine of issue preclusion is “based on a court’s exercise of its equitable powers,” and “is not mandated in the Constitution or by statute”); United States v. Kaytso, 868 F.2d 1020, 1022 (9th Cir. 1989) (stating “[e]ven when the elements of collateral estoppel are pre- sent, the decision whether to apply the doctrine is within the [court’s] discretion”); Western Group Nurseries, Inc. v. Pomeranz, 867 P.2d 12, 15 (Colo. Ct. App. 1993) (ruling collateral estoppel is an equitable doctrine applied at the court’s discretion). Turning to supremacy principles, we reiterate that the issue before the FAA was whether the Authority complied with the conditions imposed on it by federal law and agreement with a federal administrative agency, in return for the Authority’s receipt of federal funds. This federal scheme regulating airport grant compliance is “designed in part to insure the maintenance of conditions essential to an efficient national air transport system, including access to airports on a reasonable and non- discriminatory basis.” City, & County of San Francisco v. FAA, 942 F.2d 1391, 1395 (9th Cir. 1991), cert. denied, 503 U.S. 983 (1992). On this point, we must agree with the Fifth Circuit that in the arena of aviation regulation “fed- eral concerns are preeminent,” and the Department of the Authority’s compliance with the grant assurances, and never deferred its right to determine compliance issues in the first instance. Moreover, although the FAA issued its decision after the Colorado Supreme Court ruled on the propriety of the permanent injunction against Centennial Express, the agency’s decision in no way purported to “review, alter, or prevent enforcement of the judgment of an Article III court.” Id. at 430. 14a Transportation, through the FAA, is statutorily mandated to represent those concerns. American Airlines, Inc., 202 F.3d at 800-01. Indeed, it is “difficult to visualize a more comprehensive scheme of combined regulation, subsidiz- ation, and operational participation than that which Con- gress has provided in the field of aviation.” New England Legal Found. v. Massachusetts Port Auth., 883 F.2d 157, 172-73 (1st Cir. 1989) (discussing the FAA’s primary role in administering and ensuring compliance with grant assurances) (quotation marks and citation omitted). This certainly tilts the balance toward the application of supremacy principles to protect against state courts trumping the federal interests and concerns embodied within the airport grant program. As to the potential impact of the Colorado Supreme Court’s ruling in Arapahoe County Public Airport Authority v. Centennial Express Airlines on federal regulation of the airport grant program, we perceive a direct and signifi- cant conflict inasmuch as this and similar state court rulings, if deemed preclusive, would frustrate the FAA’s ability to discharge its statutory duty to interpret and implement federal aviation statutes governing the enforcement of grant assurances. See 49 U.S.C. § 47122. If given preclusive effect, state court rulings favoring local airport authorities in actions tangentially involving fed- eral grant assurances would further lead to inconsistent enforcement of the federally mandated assurances, poten- tially jeopardizing the efficiency and equality of access to our Nation’s air transportation system. For these reasons, we hold the strong policy of federal supremacy in the field of aviation prevails over full faith and credit princi- ples in this case. The Colorado Supreme Court’s decision I las ee ee eee 15a in Arapahoe County Public Airport Authority v. Centennial Express Airlines therefore has no bearing on the FAA decision before us. 7 Determinations based on Safety and Other Civil Aviation Needs The Authority argues that as the proprietor of Cen- tennial Airport responsible for local and regional aviation planning, it, and not the FAA, determines whether sched- uled passenger service will be prohibited at the Airport as necessary for the safe operation of the airport and to serve the civil aviation needs of the public. In support of this argument, the Authority relies largely on the Colo- rado Supreme Court’s conclusion the ban on scheduled passenger service was, indeed, necessary for the safe operation of Centennial Airport and to serve the public’s civil aviation needs. As discussed above, that state court conclusion has no bearing on our decision. Aside from its reliance on the state court decision, the Authority attempts to retry its case here by convincing us it has good reasons for imposing the ban (including, but not necessarily limited to, the design of and lack of facilities at Centennial Airport; local and regional plan- ning objectives; and the recommendations incorporated in the National Transportation Safety Board’s Commuter Airline Safety Study). Our job, however, is not that of fact-finder. We are called on here to review the decision of a federal administrative agency, and we will adhere to the appropriate standards governing such review, as pre- viously articulated in this opinion. See 49 U.S.C. § 46110(c); Wyoming Farm Bureau Fed’n, 199 F.3d at 1231. l6a We begin by addressing what we consider the thresh- old legal issue —- whether the Authority is preempted by federal statute from imposing such a ban. The Airline Deregulation Act of 1978 expressly provides that a politi- cal subdivision of a state “may not enact or enforce a law, regulation, or other provision having the force and effect of law related to a price, route, or service of an air carrier.” 49 U.S.C. § 41713(b)(1). The Supreme Court has interpreted this provision broadly to preempt all “State enforcement actions having a connection with or refer- ence to airline ‘rates, routes, or services.’ ” Morales v. Trans World Airlines, Inc., 504 U.S. 374, 383-84 (1992) (interpreting 49 U.S.C. § 1305(a)(1), the substantively identical, pre-1994 version of the Airline Deregulation Act preemption provision); see also American Airlines, Inc. v. Wolens, 513 U.S. 219, 223 & n.1 (1995). The preemption provision does not, however, prevent a state or political subdivision of a state from carrying out its “proprietary powers,” 49 U.S.C. § 41713(b)(3), so long as the exercise of proprietary powers is reasonable, nondiscriminatory, nonburdensome to interstate commerce, and designed not to conflict with the Airline Deregulation Act and its policies. See 14 C.F.R. § 399.110(f). The validity of the Authority’s ban therefore depends on (1) whether the Authority’s ban “is related to a price, route, or service of an air carrier” implicated by 49 U.S.C. § 41713(b)(1); (2) if so, whether the Authority’s ban amounts to an exercise of its propriety powers; and (3) if it is an exercise of propri- etary powers, whether such exercise is reasonable, non- discriminatory, nonburdensome and not in conflict with the Airline Deregulation Act, and thus exempted from preemption by 49 U.S.C. § 41713(b)(3). BI eae ie in ar i i ee Sea Cina sist aati aed tae: 17a We easily conclude the Authority’s ban is connected with and relates to both services and routes. See Morales, 504 U.S. at 384. By banning scheduled passenger service, the Authority has affirmatively curtailed an air carrier’s business decision to offer a particular service in a particu- lar market. The ban also significantly impacts the scope of services available to public citizens desiring to travel by air from Centennial Airport. We reject any contention that “service” as used in 49 U.S.C. § 41713(b)(1) is not intended to include transportation itself, considering the Airline Deregulation Act’s objective to enhance “the availability of a variety of adequate, economic, efficient, and low-priced services,” 49 U.S.C. § 40101(4), and to— “encourag[e] entry into air transportation markets by new and existing air carriers and the continued strength- ening of small air carriers to ensure a more effective and competitive airline industry.” 49 U.S.C. § 40101(13); see also Hodges v. Delta Airlines, Inc., 44 F.3d 334, 336 (Sth Cir. 1995) (en banc) (“Elements of the air carrier service ... include items such as ticketing, boarding procedures, provision of food and drink, and baggage handling, in addition to the transportation itself.”). The effect of such a ban further extends to route determinations because the carrier cannot conduct regu- lar operations over any route involving the banned air- port. We agree with the FAA that a prohibition on operating over any route is no less a regulation of routes than a restriction on the number of routes a carrier can © operate from an airport. Having determined the Authority’s ban on scheduled passenger service constitutes a state regulation of air carrier service and routes, the ban is permissible only if it 18a constitutes an exercise of the Authority’s propriety power. Although the Authority largely evades a direct discussion of the preernption issue in its briefs to this court, it suggests the scheduled passenger service ban is per se an exercise of its propriety power, because Grant Assurance 22i (patterned after Standard Assurance 22i, see 62 Fed. Reg. 29761, 29766 (1997)) permits the Author- ity to “prohibit or limit any given type, kind or class of aeronautical use of the airport if such action is necessary for the safe operation of the airport or necessary to serve the civil aviation needs of the public.” Thus, because the Authority determined “the ban was necessary for the safe operation of Centennial [Airport] and to serve the civil aviation needs of the public,” it argues the proprietary powers exception to the statutory preemption provision applies. “The precise scope of an airport owner’s proprietary powers has not been clearly articulated by any court.” American Airlines, Inc., 202 F.3d at 806. Courts have, how- ever, “recognized that local proprietors play an extremely limited role in the regulation of aviation.” Id. (quotation marks and citation omitted). This acknowledgment alone undermines the Authority’s apparent assertion that so long as they declare their regulatory action necessary for safety or to satisfy aviation needs, they enjoy carte blanche power. For purposes of this review, however, we will assume, without deciding, that regulatory conduct related to safety and civil aviation needs may fall under the “proprietary powers” umbrella, because under any circumstances, grant assurance language notwithstand- ing, “[i]n defining the permissible scope of a proprietor’s power to regulate under § 14713(b)(3) . . . an airport 0 OL PO ata sed 4 Seis AS Sb A eR Bo ve 3 “i s 5 i 19a proprietor can issue only ‘reasonable, nonarbitrary, and nondiscriminatory rules that advance the local interest.’ ” Id. (quoting Western Air Lines v. Port Auth. of New York & New Jersey, 658 F.Supp. 952, 958 (S.D.N.Y. 1986)). We therefore proceed to the third and final preemption inquiry. At this point, we focus on whether the Authority’s proclaimed “safety” and “civil aviation needs” justifica- tion is reasonable or nonarbitrary. We agree with the FAA this determination is a factual one for which the Author- ity, as the party asserting the justification, bears the bur- den of proving before the agency. See 14 C.F.R. § 16.229(c). Because of the fact-based nature of this inquiry, we must defer to the FAA’s findings (1) the Authority failed to demonstrate the ban is necessary for the safe operation of the airport, and (2) the Authority failed to demonstrate the ban is necessary to satisfy the public’s civil aviation needs, so long as those findings are supported by substantial evidence in the record.’ 49 U.S.C. § 46110(c); Wyoming Farm Bureau Fed’n, 199 F.3d at 1231. We conclude they are. Our careful review of the administrative record con- firms a dearth of evidence to support the Authority's claim that the ban on scheduled service is necessary due 9 Although the Authority did not directly challenge the reasonableness of the FAA’s findings on economic discrimination and exclusive rights, having carefully reviewed the administrative record, we conclude those findings are supported by substantial evidence, and therefore deem them conclusive. 20a to ground congestion, operational safety and environ- mental impact concerns. As noted by the FAA hearing officer, the testimony of individuals representing both the Authority and the City was largely speculative. The Authority and City submitted no quantitative analysis of the probable impacts of scheduled passenger airline ser- vice at Centennial airport. Conversely, the testimony of Mr. Barry Molar, Manager of FAA’s Office of Airport Compliance, and other FAA representatives effectively rebutted the Authority’s and City’s evidence,!° demon- strating that the Authority’s concerns pertain to impacts that are “largely a function of the total number of opera- tions at the airport,” and are not particularized to sched- uled passenger service. In other words, the record 10 For example, the Authority relies heavily on a general National Transportation Safety Board (NTSB) recommendation, derived from a Commuter Airline Safety Study (and Quincy Aircraft Accident Report), that scheduled passenger service be > permitted only at airports certified pursuant to 14 C.F.R. Part 139. According to the Authority, it is not certified under Part 139 and has no intent to become certified. Moreover, the Authority claims it must rely on off-the-airport and non-exclusive fire protection services, which cannot respond to an airport emergency within three minutes. The Authority further claims it does not have the financial resources to provide exclusive, on- the-airport fire and rescue services. In rebuttal, the FAA put into evidence proof the NTSB recommendation is a nonbinding recommendation which neither the Authority nor the FAA must follow, and Centennial Airport is not subject to a three-minute fire response time requirement. The FAA also elicited testimony the fire safety concern is no different for scheduled passenger service than it is for unscheduled, charter passenger service. Finally, the FAA demonstrated the Authority imposed the ban on scheduled passenger service prior to publication of the NTSB report. 2la substantiates the FAA’s ruling that “[iJnasmuch as the Authority permits unscheduled passenger services using similar airplanes, flight patterns, making the same amount or more of noise, and does not limit the number of operations at the airport,” the Authority fails to dem- onstrate how the ban on scheduled passenger service will alleviate the safety concerns and civil aviation needs the Authority and the City raise. Because the record supports the FAA’s findings that the Authority unreasonably exercised its proprietary powers to ban scheduled passenger service at Centennial Airport, we hold the Authority has exceeded its legiti- mate scope of power as a state or local government-under 49 U.S.C. § 41731(b) and the Supremacy Clause of the United States Constitution. See U.S. Const. art. VI, cl. 2. The Authority’s ban therefore is preempted by federal law. Limitations on Scheduled Passenger Service The Authority and the City assert that even if the ban on scheduled passenger service is unlawful, we should require the FAA to rule that passenger operations at Centennial Airport must be limited to nine-passenger aircraft in light of 1996 legislative amendments requiring airports to have a Part 139 certificate for scheduled pas- senger operations involving aircraft of more than nine passenger seats. See 49 U.S.C. § 44706(a)(2). Centennial Airport does not have such a certificate. Furthermore, the statute provides that the FAA cannot force the Authority to obtain a certificate. See id. at § 44706(f). 22a The FAA concluded it was unnecessary to resolve this issue because (1) the amended statute had not taken effect; and (2) the ban on scheduled passenger service at issue is total, providing no exception for aircraft with nine or fewer passenger seats, as evidenced by the fact the Authority sought and obtained an injunction against Centennial Express’s six-passenger aircraft. We likewise decline to resolve this issue as it is not presented by the facts in this case. The Authority does not dispute that its ban on passenger service, as considered by the FAA, is indeed a total ban; nor does the Authority claim it has a pending request to provide service which would justify further consideration of the amended statute. CONCLUSION Because we hold (1) the Colorado Supreme Court’s decision in Arapahoe County Public Airport Authority v. Centennial Express Airlines is not final, preclusive or dis- positive of the issues resolved in the FAA’s final order; (2) the Authority’s ban on scheduled passenger service is preempted by statute and the Supremacy Clause; and (3) the present facts do not warrant prospective consider- ation of how 49 U.S.C. § 44706, as amended in 1996, might apply, we DENY the Authority’s Petition for Review and AFFIRM the FAA’s final Order. 23a UNITED STATES DEPARTMENT OF TRANSPORTATION FEDERAL AVIATION ADMINISTRATION WASHINGTON, DC CENTENNIAL EXPRESS -~ FAA Order No. 1999-1 AIRLINES, GOLDEN (Part 16, Subpart G) EAGLE CHARTERS d/b/a CENTENNIAL EXPRESS 2°* AIRLINES Docket Nos. 16-98-05, 13-94-03 V. ARAPAHOE COUNTY PUBLIC AIRPORT AUTHORITY THOMAS KEHMEIER Docket No. 13-94-25 Vv. ARAPAHOE COUNTY PUBLIC AIRPORT AUTHORITY : No Separate Docket FEDERAL AVIATION Number! ADMINISTRATION Vv. ARAPAHOE COUNTY PUBLIC AIRPORT AUTHORITY FINAL AGENCY DECISION AND ORDER 1 Under 14 C.FR. § 16.203(b)(1), the agency became a party when the Director of the FAA Office of Airport Safety and Standards issued his determination providing the Airport Authority the right to a hearing. : 3 24a I. Introduction The question at the heart of this appeal is the lawful- ness of a Federally-assisted airport operator’s ban on all scheduled passenger service. At stake is the airport oper- ator’s eligibility for additional Federal grants. Il. Background Arapahoe County Public Airport Authority (the Air- port Authority) owns and operates Centennial Airport, which is outside of Denver, Colorado. Over the years, the Airport Authority has received millions of dollars in air- port improvement grants from the Federal Aviation Administration (FAA). In exchange for the funds, the Airport Authority signed a grant assurance promising not to grant any person or persons exclusive rights, and another promising to make the airport “available for pub- lic use on reasonable conditions and without unjust dis- crimination.” Under the latter assurance, however, the airport operator may “prohibit or limit any given type, kind, or class of aeronautical use .. . if such action [is] necessary for the safe operation of the airport or neces- sary to serve the civil aviation needs of the public.” Beginning in 1985, Centennial Express contacted the Airport Authority about starting scheduled 14 C.F.R. Part 135 passenger service at Centennial Airport. On February 20, 1989, the Airport Authority published the following statement in its newsletter: . . . [C]Jommercial service has always existed at Centennial in the form of Part 135 charter/air 25a taxi certification, which permits “for hire” pas- senger and freight service, whether scheduled or unscheduled Such activity may not be prohibited but is limited to aircraft with 30 seats or less. (Director’s Determination at 12; emphasis added.) On October 3, 1989, the Airport Authority’s newsletter con- tained the following statement: No scheduled air carrier, either large or small, has applied to the Authority to operate at the airport. Should any apply, the Authority will consider only the smaller, regional air service applications. No action will be taken by the Authority to consider such applications, how- ever, without extensive community input and public hearing. Id. On December 12, 1991, Centennial Express sent the Airport Authority a letter asking the Airport Authority to set standards that would allow Centennial Express to operate scheduled passenger service. Centennial Express alleges that the. Airport Authority notified Centennial Express that it was revising its airport policy statement and needed to complete the revision before it would enact minimum standards for scheduled passenger ser- ; vice under Part 135. : On March 12, 1992, the Airport Authority adopted a policy statement that stated as follows: The Authority reaffirms the original intent of the airport to service the general aviation com- munity. To this end, Centennial will continue to accommodate aircraft operating under Federal 26a Aviation Regulations Part 135/Operations Spec- ifications 135 (30 or fewer seats). Requests for scheduled air service shall be reviewed for com- pliance with this policy, the established weight limit, and the application minimum standards. (Director’s Determination at 13.) On April 8, 1993, the Airport Authority imposed a moratorium on considering applications for scheduled passenger service. Nevertheless, on May 7, 1993, Centen- nial Express Airlines (Centennial Express) - having acquired Golden Eagle Charters and its operating certifi- cate, aircraft, and organization - applied to the Airport Authority to conduct scheduled passenger service at Cen- tennial Airport. The Airport Authority did not approve Centennial Express’s application. On September 8, 1994, the Airport Authority issued a policy statement banning scheduled passenger service at Centennial Airport. On December 20, 1994, Centennial Express initiated scheduled passenger service between Centennial Airport and Dalhart, Texas with one six-passenger Beechcraft air- craft.2 At the time, Centennial Express possessed both Federal safety and Federal economic authority to conduct scheduled passenger service operations at Centennial Airport. Two days later, the Airport Authority obtained a temporary restraining order from the District Court, County of Arapahoe, State of Colorado, prohibiting Cen- tennial Express from providing scheduled service at Cen- tennial Airport. On December 23, 1994, the U.S. Department of Transportation sent the Airport Authority an opinion letter stating that it was arbitrary to exclude a 2 FAA Exhibit 1, Item 6. ANEW RR Ratan beens z8 27a particular class of service for factors not reasonably related to the impacts of that service. On January 10, 1995, the Airport Authority obtained a permanent injunc- tion from the same court. In January 1995, Centennial Express voluntarily surrendered its Part 135 operating certificate to the FAA. On August 7, 1994, Thomas Kehmeier, a shareholder of Centennial Express, filed a formal complaint with the FAA, in Docket No. 13-94-25, as a private citizen, alleging that the Airport Authority violated Federal law and its grant assurances by imposing a moratorium on consider- ing applications for scheduled passenger service at Cen- tennial Airport. On January 30, 1995, Centennial Express also filed a formal complaint with the FAA, in Docket No. 13-95-03, alleging that the Airport Authority had improp- erly prohibited scheduled passenger service at Centennial Airport. Both complaints were filed under 14 C.FR. Part 13, entitled “FAA Investigative and Enforcement Pro- cedures.” 14 C.E.R. Part 13, Subpart D. After the Rules of Practice for Federally-Assisted Airport Proceedings con- tained in 14 C.F.R. Part 16 went into effect,3 Centennial Express filed a second complaint under Part 16 on Febru- ary 23, 1998 (Docket No. 16-98-05). Centennial Expiess’s Part 16 complaint contained the same allegations as its Part 13 complaint. The FAA consolidated the Part 13 dockets and their administrative records into the Part 16 proceeding to avoid duplicative proceedings and to assure that the agency met the Part 16 time requirements for the Part 16 complaint. 3 The Rules of Practice contained in Part 16 went into effect on December 16, 1996. 61 Fed. Reg. 53,998 (October 16, 1996). 28a Meanwhile, Centennial Express was appealing the permanent injunction through the Colorado courts. On December 12, 1996, the Colorado Court of Appeals reversed the permanent injunction granted by the District Court. Arapahoe County Public Airport Authority v. Centen- nial Express Airlines, Inc., 942 P.2d 1270 (Colo. App. 1996). While the case was on appeal to the Colorado Supreme Court, the state of Colorado dissolved Golden Eagle Charters, the subsidiary of Centennial Express, in May 1997 after Golden Eagle-failed to file its 1997 corporate report. On April 13, 1998, the Colorado Supreme Court ruled that the Court of Appeals erred in reversing the perma- nent injunction. Arapahoe County Public Airport Authority v. Centennial Express Airlines, Inc., 956 P.2d 587 (Colo. 1997) (en banc). The FAA was not a party to the state court proceedings and did not participate in developing the state court record. The Colorado Supreme Court declined to defer to the FAA’s primary jurisdiction. It found that the issue was not Federally preempted under the 49 U.S.C. § 41713(b)(1) provision prohibiting state or local regulation of “price, route or service of an air car- rier” but rather fell within the proprietor exception in § 41713(b)(3). The majority also held that the ban did not violate the FAA grant assurance requiring the sponsor to “make its airport available as an airport for public use on fair and reasonable terms without unjust discrimination to all types, kinds, and classes of aeronautical users.” Additionally, the majority said that “the authority’s ban on scheduled service is necessary to ensure safe operation of the airport” and that “increased congestion is sure to have an impact on safety.” Id. at 596. oie SEL 29a After investigation, the Director of the FAA’s Office of Airport Safety and Standards rendered an initial deter- mination on August 21, 1998, under 14 C.FR. § 16.31 regarding the complaints filed by Centennial Express and Thomas Kehmeier. The Director found that the FAA was not bound by the Colorado Supreme Court’s decision. He determined that the Airport Authority violated Federal law and its grant assurances by banning scheduled ser- vice at Centennial Airport. The Airport Authority requested a hearing under 14 C.F.R. Part 16, Subpart F. On September 28, 1998, the Deputy Chief Counsel issued a Hearing Order identifying the parties and issues. Prior to the hearing, Greenwood Village moved to intervene as a party under 14 C.FR. § 16.207, and the hearing officer granted the motion. The hearing was held on November 12-13, 1998, in Denver, Colorado. The hearing officer’s initial decision affirmed the Director’s determination on all issues. The Airport Authority and Greenwood Village have filed the instant appeal of the hearing officer’s initial decision.4 4 Citing 14 C.F.R. § 16.19, the City of Greenwood Vitlage has filed a motion to strike a number of alleged factual misstatements in the reply brief of the FAA Office of Airport Safety and Standards. In response, counsel for the FAA Office of Airport Safety and Standards has filed a document in which it claims that Greenwood’s motion was actually an impermissible additional brief that should be stricken. The FAA Office of Airport Safety and Standards is correct that additional lega’ argument would be impermissible, because the rules of practice permit only one brief per party. 14 C.F.R. § -16.241(f)(2) (“parties may file one brief on review to the Associate Administrator”). Greenwood’s motion, however, 30a Under the Rules of Practice the Hearing Officer may “issue an initial decision or rule in a party’s favor only if the decision or ruling is supported by, and in accordance with, reliable, probative, and substantial evidence con- tained in the record and is in accordance with law.” 14 C.F.R. § 16.227. Otherwise, the Hearing Officer’s decision or ruling is subject to reversal. This standard of proof will guide the following discussion of the parties’ arguments on appeal.° III. Standing Greenwood Village argues that the Hearing Officer should have dismissed the complaints because Complain- ants Centennial Express/Golden Eagle Charters and Thomas Kehmeier lack standing under 14 C.F.R. Part 16. Greenwood points out that Centennial Express no longer holds a Part 135 air carrier certificate and Golden Eagle Charters has been dissolved. As for Kehmeier, Green- wood argues that he can no longer benefit from sched- uled service at Centennial Airport because he has moved away from Denver. Greenwood contends that as a share- holder of Centennial Express, Kehmeier is simply a proxy for Centennial Express and thus he lacks standing just as Centennial Express does.® briefly lists alleged factual misstatements. Thus, it does not constitute an improper additional brief and it has been considered in reaching this decision. 5 Any arguments not specifically addressed have been considered and found to be without merit. 6 Greenwood has several additional arguments relating to standing. Greenwood argues that the Hearing Officer erred in e Py * | 3la At the outset, it should be noted that standing requirements in administrative adjudications are less strict than in Federal court actions. As the court stated in ECEE, Inc. v. Federal Energy Regulatory Commission, 645 F.2d 339, 349 (5th Cir. 1981): Administrative adjudications ... are not... article III proceeding[s] to which either the “case or controversy” or prudential standing requirements apply; within their legislative mandates, agencies are free to hear actions brought by parties who might be without stand- ing if the same issues happened to be before a federal court. Gardner v. FCC, 530 F.2d 1086, 1090-91 (D.C. Cir. 1976). Accord, Koniag, Inc., Village of Uyak v. Andrus, 580 F.2d 601, 611-17 (D.C. Cir.) (Bazelon, J., concurring), cert. denied, 439 U.S. 1052 (1978). The Rules of Practice for Federally-Assisted Airport Enforcement Proceedings in 14 C.F.R. Part 16 provide that “[a] person directly and substantially affected by any allered non-compliance may file a complaint with the Administrator.” 14 C.F.R. § 16.23(a). Assuming, arguendo, suggesting that the Part 13, Subpart D complaints could cure the lack of standing under Part 16, and that it is unfair for the agency to apply only the sections of Part 16 that favor the agency. Moreover, Greenwood believes that the Hearing Officer erred in reasoning that because the FAA could have brought its own case under 14 C.F.R. § 16.101, it is irrelevant whether these particular Complainants lack standing. According to Greenwood, the agency chose not to bring a case of its own, and even if had it done so, it could not have based it on a live controversy, because there is currently no Part 135-certificated carrier seeking to offer scheduled service at Centennial Airport. 32a that the standing requirement of Part 16 applies,” it is difficult to imagine a stronger case for a direct and sub- stantial effect on Complainants. The Airport Authority obtained an injunction that immediately brought Centen- nial Express’s scheduled passenger operations at Centen- nial Airport to a halt, forcing it out of business there. Kehmeier is a shareholder of Centennial Express and therefore is directly and substantially affected by any prohibition on Centennial Express’s revenue operations. The very facts thai Greenwood points to — the surrender of the Part 135 cert:ficate and the dissolution of Golden Eagle Charters — are perhaps the most compelling evi- dence possible that the Airport Authority’s alleged non- compliance had a direct and substantial effect on Com- plainants.® As Kenneth Culp Davis states in § 24.1 of the 7 Arguably, the less stringent standing requirements of Part 13, Subpart D apply because Centennial Express and Thomas Kehmeier filed their complaints under Part 13, Subpart D before Part 16 came into existence. (Part 16 applies to complaints filed and investigation initiated by the FAA on or after December 16, 1996. 14 C.F.R. § 16.1(d). For complaints filed earlier, Part 13, Subpart D continues to apply.) Part 13, Subpart D permits any person to file a complaint with the Administrator with respect to anything done or omitted to be done by any person in contravention of any provision of any Act or any regulation or order issued under it, as to matters within the jurisdiction of the Administrator. 14 C.F.R. § 13.5. For the agency to apply the stricter Part 16 rules for standing and pleading to the complaints already accepted and pleaded under more lenient rules in Part 13, Subpart D arguably would have violated Complainants’ due process rights. 8 Section 16.23(a) does not state that the person directly and substantially affected must hold a Part 135 certificate. Note that the Airport Authority has admitted that it has the discretion to : ‘ | : 7 j ‘ & % PAR Ries RTS RO Bein 33a Administrative Law Treatise (2nd ed. 1983), “A main objective in reforming the law of standing should be to strip down the law to one simple proposition: one who is adversely affected in fact should never be denied stand- ing.”? Even if Complainants lacked standing, dismissal of the proceeding would be inappropriate at this point because the FAA, with its statutory mandate to ersure that Federally-funded airports comply with their grant assurances, would remain as party and as prosecutor. The FAA became a party after the Director of the FAA’s Office consider an application for scheduled passenger service even where the applicant does not possess an FAA operating certificate at the time of application, Exhibit 20e. 9 Greenwood argues that the Airport Authority’s ban on scheduled passenger service caused neither the surrender of Centennial Express’s Part 135 certificate nor the dissolution of Golden Eagle Charters. It is hard to believe that no causal connection exists, given the timing of the surrender (immediately after the Airport Authority obtained an injunction again [sic] Centennial Express’s scheduled operation). Centennial Express went to some trouble to set up scheduled operations at Centennial Airport. The injunction the Airport Authority obtained halting Centennial Express/Golden Eagle Charters’ scheduled passenger operations certainly would not have helped the financial situation of Centennial Express and Golden Eagle Charters. Regardless, even if there was no causal connection between the ban on the one hand and the surrender of the operating certificate and dissolution of Golden Eagle Charters on the other, the ban still had a direct and substantial effect on Centennial Express - Centennial Express/Golden Eagle Charters sought to operate scheduled passenger service at Centennial Airport, but the Airport Authority obtained an injunction stopping it from doing so. 34a of Airport Safety and Standards issued his initial deter- mination finding the Airport Authority in violation of Federal law and its grant assurances and the Airport Authority requested a hearing. The Rules of Practice pro- vide that: “The parties to the hearing are the respon- dent(s) named in the hearing order, the complainant(s), and the agency.” 14 C.F.R. § 16.203(b)(1) (emphasis added). They further provide, in relevant part, that, “the agency attorney will serve as prosecutor for the agency from the date of issuance of the Director’s determination pro- viding an opportunity for hearing.” 14 C.F.R. § 16.203(b)(2) (emphasis added). In accordance with these provisions, the Hearing Order named the FAA Office of Airport Safety and Standards as a separate party, “as prosecutor for the agency.” (Emphasis added.) See also 14 C.F.R. § 16.3, which defines “agency attorney” as an attorney “who represents the FAA during the investigation of a complaint or at a hearing on a complaint, and who prosecutes on behalf of the FAA ....” 10 The FAA Office of Safety and Standards has indicated in its reply brief that if the complaints were dismissed, the Director would begin an investigation under 14 C.F.R. § 16.101. The FAA does not need a “live” complainant to initiate an investigation. Notice and the opportunity for informal resolution under Section 16.101 at this point would be pro forma. The Airport Authority has had ample notice of the FAA’s position, and the Airport Authority’s refusal to comply with its grant assurances after an FAA investigation and several decisions does not suggest an interest in informal resolution. Under the circumstances, complaint dismissal would be wasteful of agency and taxpayer resources. aaa 35a Thus, the role of the FAA Office of Airport Safety and Standards is not to represent Complainants, but to repre- sent the agency, acting to protect the public interest. The role of the private complainant is simply to bring to the agency’s attention apparent violations of airport grant assurances. See 61 Fed. Reg. at 53,999 (October 16, 1996), noting that the FAA is the party with the burden of proof and that the Rules of Practice give Complainants party - status only to assist the FAA in the development of the factual record. In summary, Complainants Centennial Express and Thomas Kehmeier have standing because the Airport Authority’s ban on scheduled passenger service substan- tially and directly affected them. In addition, the FAA has standing by operation of the rules.1? IV. Mootness As for the Airport Authority’s and Greenwood’s argument that this proceeding is moot, it is undisputed that the ban on scheduled passenger service continues in 11 While Greenwood claims that the FAA intentionally destroyed evidence “highly relevant” to its standing claim —i.e., the Part 135 operator file for Centennial Express/Golden Eagle Charters - the record indicates that the local FAA Flight Standards District Office destroyed the file along with other inactive files several years ago when moving FAA Denver- based field offices to the new Denver International Airport. In any event, Greenwood has not shown how the Part 135 file is relevant to this proceeding. 36a place at Centennial Airport.!? Thus, this case presents a live controversy because the FAA, as a party, has a genu- ine interest in enforcing the applicable Federal statutory provisions and grant assurances.}5 “ V. Due Process Under the Rules of Practice in Part 16, a Hearing Officer rather than an Administrative Law Judge presides over the hearing. (See, e.g., 14 C.F.R. § 16.202, detailing the powers of the Hearing Officer, which include presid- ing over the hearing and issuing an initial decision.) Greenwood argues that the FAA Deputy Chief Counsel violated its due process rights by declining to amend the hearing order to include the issue of whether the Hearing Officer should have referred the case to an Administra- tive Law Judge for a hearing under the Administrative Procedure Act (APA). 12 To support its mootness argument, Greenwood states that there are currently no Part 135-certificated carriers seeking to offer scheduled service at Centennial Airport. Assuming, arguendo, that Greenwood’s representation is still accurate, these proceedings are not moot because the Airport Authority has conceded that one need not have a Part 135 certificate at time of application. In addition, the Airport Authority’s ban would likely discourage potential carriers from applying to operate scheduled service. 13 Also, because the mootness doctrine arises from the case or controversy requirement for Article III courts, it does not necessarily apply to proceedings before Article I executive branch administrative proceedings. wl. Sr Se tae ee a) ise 37a Greenwood’s Standing to Raise Issues In this proceeding, the Director withheld approval of the Airport Authority's new grants — not Greenwood’s. Greenwood is merely an intervenor.14 Under 49 U.S.C. § 47106(d),the statute under which the Director’s Deter- mination withheld approval of new grants, only the Air- port Authority, as the airport sponsor, may request a hearing. Significantly, the Airport Authority, the only respondent with the statutory right to a hearing, has not argued that an Administrative Law Judge rather than the Hearing Officer should have heard its case. Greenwood, having no right to request a hearing, is outside the “zone of interests” protected by 49 U.S.C. § 47106(d). Clarke v. Securities Industry Association, 479 U.S. 388 (1987). As a result, Greenwood is without stand- ing to raise the issue of who should have heard this case. Inapplicability of APA Even if the Airport Authority, rather than Green- wood, had raised the same argument - i.e., that the APA requires that an administrative law judge hear this case — it would still fail. Greenwood argues as follows: 14 The section in the Rules of Practice regarding intervention provides that “Participation under this section is at the discretion of the FAA, and no decision permitting participation shall be deemed to constitute an expression by the FAA that the participant has such a substantial interest in the proceeding as would entitle it to judicial review of such decision.” 14 C.F.R. § 16.207(d). 38a ... the Hearing Officer did not satisfy the APA’s separation of functions doctrine because he is an FAA attorney in the Procurement Legal Division of the Office of the Chief Counsel. The Office of the Chief Counsel is responsible, inter alia, for investigations and enforcement actions by the FAA. The Hearing Officer, therefore, was con- spicuously under the supervision and direction of an agency employee who is engaged in the performance of investigative or prosecuting functions for the agency. Since the Hearing Offi- cer and FAA investigators are responsible to the FAA Administrator through the same chain of authority (the Chief Counse!), the Hearing Offi- cer’s role as adjudicator in this case violated the APA. (Appeal Brief at 33.) The APA, however, does not apply to hearings pro- vided under 49 U.S.C. §§ 47106(d) & 47111(d).15 15 The wording of 49 U.S.C. § 47106(d) indicates that Congress did not intend to require full agency adherence to all APA Section 554 components. Unlike another part of the same statute (the Airport and Airway Improvement Act of 1982, as amended) which is subject to the APA and which expressly requires a hearing before an administrative law judge under 14 C.F.R. Part 302 [see 49 U.S.C. 47129(c)], 49 U.S.C. § 47106(d) only requires “an opportunity for a hearing.” Section 554 of the APA does not apply where the statute, rather than requiring a hearing on the record, simply requires an opportunity for a hearing without more. Friends of the Earth v. EPA, 966 F.2d 690, 6593 [sic] (D.C. Cir. 1992); St. Louis Fuel and Supply Co. v. FERC, 890 F.2d 446, 448 (D.C. Cir. 1989). a : > a 4 a 2 +4 t “1 a 2 3 $ 3 i ARNE ON a gle Ei iet e DNIE K EIN Ps 39a Part 16’s Separation of Functions Provision Although the APA does not apply, to ensure the integrity of the decisionmaking process, the Rules of Practice in 14 C.F.R. Part 16 include a provision separat- ing investigative/prosecutorial functions from adjudica- tive/decisionmaking functions. See 14 C.F.R. § 16.5(b), providing that an agency employee who investigates or prosecutes will not advise or communicate substant [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386014_2260%3A1. Public record. Not legal advice.