Survey of Minimum Standards: Commercial Aeronautical Activities at Airports (2011)

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5 Minimum Standards can best be understood as an exercise of the airport sponsor’s proprietary authority over an airport, that is, its power as the property owner to condition use of the facility in exchange for the privi- lege of conducting aeronautical activities on the air- port.12 The FAA describes the many purposes served by Minimum Standards as follows: Promote safety in all airport activities and maintain a higher quality of service for airport users, protect airport users from unlicensed and unauthorized products and services, enhance the availability of adequate services for all airport users, promote the orderly development of air- port land…provide a clear and objective distinction be- tween service providers that will provide a satisfactory level of service and those that will not…prevent disputes between aeronautical service providers and reduce poten- tial complaints.13 Minimum Standards serve different purposes than other primary guiding documents such as airport Rules and Regulations, which regulate a wider variety of ac- tivities occurring at an airport, including aeronautical and nonaeronautical and commercial and noncommer- cial activities, and typically are adopted in furtherance of the airport sponsor’s police powers to protect health, safety, and welfare. In addition, airport sponsors may adopt leasing and development policies to govern those specific activities. III. LEGAL PRINCIPLES A. Challenges to Minimum Standards The FAA does not formally approve airport Mini- mum Standards, nor is there a requirement to submit draft documents for FAA review. While the FAA will comment on draft documents upon request, the FAA typically is called upon to evaluate Minimum Standards in response to an allegation or claim by an existing or prospective airport tenant or user that some aspect of the Minimum Standards violates the Sponsor Assur- ances. Reviewing courts consistently have held that there is no private right of action to allege a violation of the statutory prohibition on granting exclusive rights or the Sponsor Assurances.14 An airport tenant or user can 12 See Record of Decision, Executive Air Taxi Corp. v. City of Bismarck, FAA Docket Nos. 13-91-5 and 13-92-4, at 24 (June 29, 1993) (“The city established the minimum standards in its capacity as an airport owner and operator. [49 U.S.C. § 41713(b)] preserves the authority of local governments in their capacity as owners or operators of airports to exercise proprietary powers.”). 13 FAA Order 5190.6B § 10.4, available at http://www.faa. gov/airports/resources/publications/orders/compliance_5190_ 6/. 14 Bowling Green & Warren County Airport Bd. v. Martin Land Dev. Co., Inc., 561 F.3d 556 (6th Cir. 2009); Sw. Air Am- bulance, Inc. v. City of Las Cruces, 268 F.3d 1162, 1169 (10th Cir. 2001); Four T's Inc. v. Little Rock Mun. Airport Comm'n, 108 F.3d 909, 916 (8th Cir. 1997); Aircraft Owners and Pilots challenge an airport sponsor’s Minimum Standards by filing an informal or formal complaint with the FAA, pursuant to 14 C.F.R. Part 13 and Part 16. Informal complaints typically are considered by a compliance specialist in an FAA district or regional office.15 Formal complaints are filed with FAA Headquarters in Wash- ington, DC. FAA regulations prescribe a multistep process for investigating and adjudicating formal com- plaints.16 An index of administrative and judicial proceedings concerning airport Minimum Standards is provided in Appendix A. B. Reasonableness of Minimum Standards Whether offering comments in response to a request from the airport sponsor or evaluating Minimum Stan- dards in response to an informal or formal complaint, the FAA’s primary responsibility is to ensure that Minimum Standards do not violate federal law or the Sponsor Assurances by, in particular, imposing unrea- sonable conditions, unjustly discriminating, or confer- ring an exclusive right to conduct an aeronautical activ- ity.17 The FAA lacks jurisdiction to consider Ass'n v. Hinson, 102 F.3d 1421, 1427 (7th Cir. 1996); Nw. Air- lines, Inc. v. County of Kent, 955 F.2d 1054, 1058–59 (6th Cir. 1992); New England Legal Found. v. Mass. Port Auth., 883 F.2d 157, 168–69 (1st Cir. 1989); Air Transp. Ass'n v. Pub. Utils. Comm’n, 833 F.2d 200, 207 (9th Cir. 1987); Anderson v. USAir, Inc., 818 F.2d 49, 54 (D.C. Cir. 1987); Montauk- Caribbean Airways, Inc. v. Hope, 784 F.2d 91, 97 (2d Cir. 1986); Arrow Airways, Inc. v. Dade County, 749 F.2d 1489, 1491 (11th Cir. 1985); Diefenthal v. C.A.B., 681 F.2d 1039, 1048–1051 (5th Cir. 1982); Rauch v. United Instruments, Inc., 548 F.2d 452, 455, 460 (3d Cir. 1976); but see Cedarhurst Air Charter, Inc. v. Waukesha County, 110 F. Supp. 2d 891, 895– 99 (E.D. Wis. 2000). 15 See FAA Order 5190.6B §§ 5.4–5.15, available at http://www.faa.gov/airports/resources/publications/orders/ compliance_5190_6/. 16 See Rules of Practice for Federally-Assisted Airport En- forcement Proceedings, 14 C.F.R. § 16 (2009), available at http://www.access.gpo.gov/nara/cfr/waisidx_09/14cfr16_ 09.html. 17 See Grant Assurance 22, http://www.faa.gov/airports/aip/ grant_assurances/media/airport_sponsor_assurances.pdf (the airport sponsor shall “make the airport available as an airport for public use on reasonable terms and without unjust dis- crimination to all types, kinds and classes of aeronautical ac- tivities, including commercial aeronautical activities offering services to the public at the airport.”); Grant Assurance 23, http://www.faa.gov/airports/aip/grant_assurances/media/ airport_sponsor_assurances.pdf (the airport sponsor shall not grant an “exclusive right for the use of the airport by any per- son providing, or intending to provide, aeronautical services to the public.”). See also 49 U.S.C. §§ 40103(e), available at http://www.law.cornell.edu/uscode/html/uscode49/usc_sec_49_0 0040103----000-.html, 47107(a)(1), available at http://www. law.cornell.edu/uscode/html/uscode49/usc_sec_49_00047107---- 000-.html and 47107(a)(4), available at http://www.law.cornell. edu/uscode/html/uscode49/usc_sec_49_00047107----000-.html.

6 constitutional and contractual issues that may be re- lated to Minimum Standards.18 More specifically, the FAA requires that Minimum Standards be “relevant to the activity for which they apply” and “attainable.”19 The FAA also has advised that Minimum Standards should “reasonably protect the investment of providers of aeronautical services to meet minimum standards from competition not making a similar investment.”20 The FAA has advised that it does not “control or di- rect the operation of airports”21 and typically does not substitute its judgment or second-guess an airport sponsor’s decision to impose particular standards. The following are some examples of FAA decisions in re- sponse to formal complaints regarding the requirements of specific airport Minimum Standards: • The FAA found that an airport sponsor could re- quire that an air carrier operating aircraft with more than nine seats maintain aircraft liability insurance of $20 million per occurrence, but further found that it would be unreasonable to require such coverage for an air carrier operating nine-seat aircraft because such coverage may not be attainable.22 • The FAA found that requiring fixed base operators (FBOs) to provide certain services in exchange for the privilege of selling aviation fuel was neither unreason- able nor unjustly discriminatory.23 18 See 14 C.F.R. § 16.1, available at http://www.access. gpo.gov/nara/cfr/waisidx_09/14cfr16_09.html. 19 FAA Order 5190.6B § 10.2, available at http://www.faa.gov/airports/resources/publications/orders/comp liance_5190_6/, FAA Advisory Circular 150/5190-7 § 1.2(a), http://www.faa.gov/documentLibrary/media/advisory_circular/1 50-5190-7/150_5190_7.pdf. 20 FAA Advisory Circular 150/5190-7 § 1.2(d)(3), http://www.faa.gov/documentLibrary/media/advisory_circular/1 50-5190-7/150_5190_7.pdf. 21 Director’s Determination, BMI Salvage Corp. v. Miami- Dade County, FAA Docket No. 16-05-16, at 9 (July 25, 2006), http://part16.airports.faa.gov/pdf/16-05-16b.pdf, BMI Salvage Corp. v. FAA, 272 F. Appx 842 (11th Cir. 2008). 22 Final Decision and Order, Flamingo Express v. City of Cincinnati, FAA Docket No. 16-06-04, at 14–16 (Aug. 7, 2007), http://part16.airports.faa.gov/pdf/16-06-04.pdf. 23 Director’s Determination, Self Serve Pumps, Inc. v. Chi- cago Executive Airport, FAA Docket No. 16-07-02, at 21–22 (Mar. 17, 2008), http://part16.airports.faa.gov/pdf/16-07- 02b.pdf (“Bundling aeronautical services with the retail sale of fuel and setting levels of service for fueling are long-standing and common industry practice.”); Director’s Determination, Lanier Aviation LLC v. City of Gainesville, FAA Docket No. 16- 05-03, at 12 (Nov. 25, 2005), http://part16.airports.faa.gov/pdf/16-05-03b.pdf, ([N]either the City’s Federal obligations nor the Advisory Cir- cular prevent a sponsor from issuing minimum standards re- garding the required level-of-service associated with retailing aviation fuel at the Airport. In fact, the FAA relies on airport sponsors to create minimum standards for the provision of avia- tion services at its airport which best serve the civil aviation in- terests of the public.). • The FAA found that it was unreasonable for an airport sponsor to require that an aircraft rental com- pany perform certain administrative functions at the airport and have staff available even when no sched- uled business was taking place, because the require- ments were unduly burdensome and not relevant to the business conducted.24 • The FAA found that requiring an airport tenant to place his fuel tanks in a designated fuel farm was nei- ther unreasonable nor unduly burdensome.25 • The FAA found that fees and other requirements on self-fueling operations were reasonable.26 • The FAA found that requiring commercial aero- nautical service providers to lease and develop airport property in conformance with the airport master plan and airport layout plan was reasonable and not un- justly discriminatory.27 • The FAA found that imposing minimum-leased- space requirements for commercial aeronautical service providers was reasonable and not unjustly discrimina- tory.28 C. Enforcement of Minimum Standards To comply with the Sponsor Assurances, the FAA further requires that Minimum Standards must be ob- 24 Director’s Determination, Roger Leonard Cardinals’ Pilot Shop v. Chesapeake Airport Auth., FAA Docket No. 16-01-06, at 36 (Oct. 22, 2002), http://part16.airports.faa.gov/pdf/16-01- 06b.pdf, ([W]hile we find it is reasonable for the Complainant to main- tain a certain level of business presence at CPK—including of- fice space and staffing at the time of aircraft pick-up—we do not find it reasonable to require the Complainant to (1) conduct his scheduling, dispatching, and record-keeping functions at CPK, and (2) maintain continuous staffing of the office during busi- ness hours when the Complainants aircraft based at CPK are not being leased.). 25 Final Decision and Order, Airborne Flying Serv. v. City of Hot Springs, FAA Docket No. 16-07-06, at 15–19 (May 2, 2008), http://part16.airports.faa.gov/pdf/16-07-06.pdf. See also Final Decision and Order, Turner v. City of Kokomo, FAA Docket No. 16-98-16 (July 27, 1999), http://part16.airports.faa. gov/pdf/16-98-16a.pdf. 26 Director’s Determination, Scott Aviation v. DuPage Air- port Auth., FAA Docket No. 16-00-19, at 2 (July 19, 2002), http://part16.airports.faa.gov/pdf/16-00-19b.pdf, (We find the minimum standards and the fees established by the Airport Authority for self-fueling operations are generally reasonable, including (a) payment of a $.025 fuel flowage fee, (b) using off-airport parking for its fuel trucks, (c) maintaining a $1,000,000 environmental liability insurance policy, (d) deposit- ing the deductible amount associated with the $1,000,000 envi- ronmental liability insurance policy with the Airport Authority, and (e) enforcing special licensing requirements for fuel truck drivers.). 27 Record of Determination, Buffalo Jet Ctr., Inc. v. Niagara Frontier Transp. Auth., FAA Docket No. 16-98-01, at 20–24 (Aug. 19, 1998), http://part16.airports.faa.gov/pdf/16-98- 01b.pdf. 28 Record of Decision, Hamilton v. City of Yankton, FAA Docket No. 13-93-06, at 27 (Oct. 23, 1995).

7 jectively and uniformly applied.29 The following are some examples of FAA decisions in response to formal complaints regarding the application and enforcement of Minimum Standards: • The FAA found that it was not unreasonable for an airport sponsor to waive certain minimum standards for a prospective tenant where the airport sponsor previ- ously had waived the same standards for another ten- ant.30 • The FAA found that it was not unjustly discrimi- natory for an airport sponsor to refuse to waive certain minimum standards for a tenant, where the tenant had alleged that the airport sponsor had failed to enforce different minimum standards against another airport tenant.31 • The FAA found that an airport sponsor was not unjustly discriminating against an FBO by failing to enforce minimum insurance requirements, where the sponsor had demanded corrective action by both airport FBOs to satisfy the requirements.32 However, the FAA 29 FAA Order 5190.6B § 10.2, available at http://www.faa. gov/airports/resources/publications/orders/compliance_5190 _6/, FAA Advisory Circular 150/5190-7 § 1.1, http://www.faa. gov/documentLibrary/media/advisory_circular/150-5190-7/150 _5190_7.pdf. 30 Director’s Determination, Johnson v. Goldsboro-Wayne Airport Auth., FAA Docket No. 16-08-11, at 36 (Oct. 9, 2009), http://part16.airports.faa.gov/pdf/16-08-11b.pdf, (While the Director does not condone the Respondent’s prac- tice of routinely deviating from its Minimum Standards, this alone is not a violation of the Federal Grant Assurances. The question before the Director is whether or not these deviations result in the dissimilar treatment of two similarly situated par- ties. Because the Complainant was offered the same waivers at SIG, an allegation of unjust discrimination cannot stand.). 31 Director’s Determination, Self Serve Pumps, Inc. v. Chi- cago Executive Airport, FAA Docket No. 16-07-02, at 27 (Mar. 17, 2008), http://part16.airports.faa.gov/pdf/16-08-11b.pdf, (It is insufficient to simply state that another party is manag- ing to escape sanction from the airport sponsor by departing from standards in one way, so that the airport sponsor must al- low a complaining party to depart from standards in a different way. In fact, to sustain an allegation of unjust discrimination, the Complainant, in the extant case, must comply with Mini- mum Standards to a degree similar to Signature Aviation and request similar treatment in any preference granted by the Air- port.). 32 Director’s Determination, Flightline Aviation, Inc. v. City of Shreveport, FAA Docket No. 16-07-05, at 27 (Mar. 7, 2008), http://part16.airports.faa.gov/pdf/16-08-11b.pdf, (In this case, Respondent clearly understands its obligations under Grant Assurance 22; that it must enforce standards equally among similarly situated operators. It has a program or process in place and is implementing that program to ensure compliance with Grant Assurance 22 as evidenced by a multi- tude of correspondence to the two FBOs for the violations of the Amended Minimum Standards and the actions by Respondent to address those violations…. The fact Respondent may not have enforced certain provisions of its standards in the past does not impact [its] compliance status today since it is equitably enforc- ing the insurance provisions of its Amended Minimum Stan- dards upon both FBOs today.). found, in a prior proceeding involving the same airport, that the airport sponsor was unjustly discriminating against an FBO by failing to apply and enforce the air- port Minimum Standards objectively and uniformly to similarly situated airport tenants.33 • The FAA found that an airport sponsor engaged in unjust discrimination and impermissibly granted an exclusive right when it failed to require a tenant to comply with amended Minimum Standards where the lease agreement required compliance with amended standards.34 See also Penobscot Air Servs. v. FAA, 164 F.3d 713, 728 (1st Cir. 1999) (Penobscot alleges that Knox County permitted Barnstorm Aviation to perform commercial aircraft maintenance without a lease and without complying with Knox County’s minimum standards, whereas Penobscot was required to comply with all minimum standards. Penobscot states this allegation in conclu- sory terms, and failed to supply the agency either with specifics or with evidence to support its claim. Therefore the FAA dis- missed Penobscot’s claim on the ground that it was “unsubstan- tiated and without supportive documentation to warrant further investigation.” That decision was not arbitrary or capricious.). Final Decision and Order, Rick Aviation v. Peninsula Air- port Comm’n, FAA Docket No. 16-05-18, at 9–18 (Nov. 6, 2007), http://part16.airports.faa.gov/pdf/16-05-18.pdf; Director’s De- termination, The Aviation Ctr., Inc. v. City of Ann Arbor, FAA Docket No. 16-05-01, at 23–28 (Dec. 16, 2005), http://part16.airports.faa.gov/pdf/16-05-01b.pdf; Director’s Determination, GFK Flight Support, Inc. v. Grand Forks Reg’l Airport Auth., FAA Docket No. 16-01-05, at 29 (Mar. 22, 2002), http://part16.airports.faa.gov/pdf/16-01-05b.pdf, ([W]e note that it is possible for an airport sponsor to be found in violation of its Federal obligations for failure to investi- gate alleged misconduct of a flying club when the sponsor has been provided with a reasonable basis for further investigation. A sponsor could also be in noncompliance for failing to terminate a flying club’s use or lease agreement if said flying club contin- ues to violate the conditions of its tenancy required by FAA Or- der 5190.6A. However, we find that it was reasonable for the Respondent not to terminate the Flying Club’s tenancy at the airport in this case.). Director’s Determination, United Aircraft Servs., Inc. v. Hancock County Port Comm’n, FAA Docket No. 16-00-04, at 15–17 (Oct. 12, 2000), http://part16.airports.faa.gov/pdf/16-00- 04b.pdf. 33 Director’s Determination, Royal Air, Inc. v. City of Shreveport, FAA Docket No. 16-02-06, at 53 (Jan. 9, 2004), http://part16.airports.faa.gov/pdf/16-02-06b.pdf, (Specifically, the Director found: Respondent did not enforce its minimum leased-space requirements for aircraft rental op- erations; Respondent inconsistently interpreted and applied its requirement for fixed-base operators to employ mechanics or to make such mechanics available for repair services; …Respondent did not enforce its policy to ensure only author- ized mechanics meeting the minimum standards were providing services on the airport[;] Respondent did not enforce its mini- mum insurance standards for aircraft rental operations.). 34 Director’s Determination, Carey v. Afton-Lincoln County Mun. Airport Joint Powers Bd., FAA Docket No. 16-06-06, at 38 (Jan. 19, 2007), http://part16.airports.faa.gov/pdf/16-06- 06b.pdf (“In this case, the minimum standards may not be unreasonable, but the Respondent is applying the minimum standards in such a manner to provide an advantage for one

8 • The FAA found that, while the airport sponsor did not engage in economic discrimination in its enforce- ment of the airport’s Minimum Standards, the sponsor violated Assurance 5 (Preserving Rights and Powers) as a result of its “informal business practices, ad hoc pro- cedures, and non-transparent decision-making proc- esses.”35 D. Judicial Challenges to Minimum Standards Airport Minimum Standards may implicate protec- tions under the U.S. Constitution and the requirements of federal and state law. An existing or prospective ten- ant or user can file a complaint in federal or state court to present claims of Constitutional deprivation or statu- tory violation. Reviewing courts have found the following in re- sponse to allegations regarding airport Minimum Stan- dards: • A federal court held that an airport sponsor did not violate the Equal Protection Clause or Due Process Clause of the Fourteenth Amendment by imposing dif- ferent and more onerous standards upon a full-service FBO than upon limited service providers.36 • A federal court held that an airport sponsor is im- mune from suit under the Sherman Act for allegedly anti-competitive behavior in the terms and enforcement of Minimum Standards.37 tenant to the detriment of others. This results in the granting of an exclusive right to the tenant enjoying the advantage.”). 35 Director’s Determination, Moore v. Sumner County Reg’l Airport Auth., FAA Docket No. 16-07-16, at 42 (Feb. 2009), http://part16.airports.faa.gov/pdf/16-07-16b.pdf. 36 Executive Air Taxi Corp. v. City of Bismarck, 518 F.3d 562, 566–69 (8th Cir. 2008). See also Rectrix Aerodrome Ctrs., Inc. v. Barnstable Mun. Airport Comm’n, 632 F. Supp. 2d 120, 128–130 (D. Mass. 2009) (same); AH Aero Servs. v. Ogden City, 2007 U.S. Dist. LEXIS 65322 * 4–7 (D. Utah Aug. 31, 2007), https://ecf.utd.uscourts.gov/cgi-bin/show_public_doc? 2005cv0066-249 (court held that airport sponsor did not violate Equal Protection Clause or Due Process Clause of Fourteenth Amendment by allegedly differential enforcement of Minimum Standards); Pan Am. Airways Corp. v. Pease Dev. Auth., 2003 U.S. Dist. LEXIS 19346* 3–6 (D.N.H. Oct. 29, 2003) (court held that airport sponsor did not violate Equal Protection Clause of the Fourteenth Amendment by imposing different rules related to retail fuel sales and self-fueling). 37 Rectrix Aerodrome Ctrs., Inc. v. Barnstable Mun. Airport Comm’n, 534 F. Supp. 2d 201, 203–06 (D. Mass. 2008). But see Scott Aviation, Inc. v. DuPage Airport Auth., 393 F. Supp. 2d 638, 646–47 (N.D. Ill. 2005) (rejecting motion to dismiss Sherman Act claim based on immunity); Cedarhurst Air Char- ter, Inc. v. Waukesha County, 110 F. Supp. 2d 891, 893–95 (E.D. Wis. 2000) (rejecting assertion of immunity from Sherman Act claim). See also Top Flight Aviation, Inc. v. Wash. County Reg’l Airport Comm’n, 224 F. Supp. 2d 966, 972–77 (D. Md. 2002) (court held that an airport sponsor did not engage in anti-competitive behavior in violation of the Sherman Act for denying access to an airport by a business that did not satisfy the Minimum Standards). • A federal court held that an airport sponsor did not violate the Racketeer Influenced and Corrupt Organiza- tions Act for allegedly concealing the minimum stan- dards for retail fuel sales.38 E. Amendments to Minimum Standards Just as it is the airport sponsor’s prerogative to adopt Minimum Standards, airport sponsors can amend or update Minimum Standards as well. Amendments to Minimum Standards also must be reasonable and not unjustly discriminatory and must not confer an exclu- sive right to conduct an aeronautical activity.39 While an airport sponsor generally can limit new commercial aeronautical activities while drafting or updating Minimum Standards, sponsors must find reasonable alternatives to accommodate certain activities, such as self-fueling, that the FAA has declared must be permit- ted.40 One issue that may arise when an airport sponsor amends its Minimum Standards is the application of the amended Minimum Standards to existing airport tenants and users. Whether or not the amended stan- dards apply typically is a function of the language of the existing leases, permits, and other relevant agreements. The FAA recommends that airport sponsors impose a continuing obligation to comply with amendments to Minimum Standards.41 The FAA recognizes that 38 Rectrix Aerodrome Ctrs., Inc. v. Barnstable Mun. Airport Comm’n, 632 F. Supp. 2d 120, 126–27 (D. Mass. 2009). 39 See FAA Advisory Circular 150/5190-7 § 1.2(e), http://www.faa.gov/documentLibrary/media/advisory_circular/1 50-5190-7/150_5190_7.pdf (“Minimum standards can be amended periodically over time; however, a constant juggling of minimum standards is not encouraged…. An airport sponsor can provide for periodic reviews of the minimum standards to ensure that the standards continue to be reasonable.”); Final Decision and Order, Airborne Flying Serv. v. City of Hot Springs, FAA Docket No. 16-07-06, at 17 (May 2, 2008), http://part16.airports.faa.gov/pdf/16-07-06.pdf, (It is reasonable and prudent to review and update standards and regulations for proposed aeronautical activities to ensure those standards and regulations serve to promote safety, protect airport users from unlicensed and unauthorized products and services, maintain and enhance the availability of adequate ser- vices for all airport users, promote the orderly development of airport land, and ensure efficiency of operations.). Director’s Determination, Carey v. Afton-Lincoln County Mun. Airport Joint Powers Bd., FAA Docket No. 16-06-06, at 35 (Jan. 19, 2007), http://part16.airports.faa.gov/pdf/16-06- 06b.pdf (“The airport owner or sponsor may quite properly increase the minimum standards from time to time in order to ensure a higher quality of service to the public. Manipulating the standards solely to protect the interest of an existing ten- ant, however, is unacceptable.”); Record of Decision, Int’l Avia- tion, Inc. v. City of Frederick, FAA Docket No. 13-89-5, at 12– 14 (Mar. 6, 1992) (FAA found that changes in the Minimum Standards did not violate Grant Assurance 22 or Grant Assur- ance 23). 40 See Director’s Determination, Maxim United v. Jefferson County, FAA Docket No. 16-01-10, at 24 (Apr. 2, 2002), http://part16.airports.faa.gov/pdf/16-01-10b.pdf. 41 Id. at 22.