### IN THE UNITED STATES COURT OF APPEALS FORTHE FIFTH CIRCUIT

FLIGHTLINE GROUND, INC., Petitioner,



## v. MICHAEL P. HUERTA, ADMINISTRATOR, FEDERAL AVIATION ADMINISTRATION Respondent. ) ) ) ) 

### ) CASE NO.

_____ _ ) ) 

### ) ) ) 

### )



### PETITION FOR REVIEW COMES NOW Flightline Ground, Inc., pursuant to 49 U.S.C. §46110(a) and 14 C.F.R. §16.247(a), by and through its undersigned counsel, and petitions this Court for review ofthe Final Decision ofthe Federal Aviation Administration in the matter ofFlightline Ground, Inc. v. Louisiana Department of Transportation andDevelopment, as Successor to the Louisiana Division of Administration and the Boardof Commissionersfor the Management of the LakefrontAirport; NonFloodProtection AssetManagementAuthority, as Successor to the Boardof Commissioners of the Orleans Parish Levee District and Orleans Parish Levee District, Division of Non-FloodAssets, FAA Docket No. 16-11-01, a copy ofthe Federal Aviation Administration's Final Agency Decision being appended hereto and marked as Exhibit A. 

### The Federal Aviation Administration's Final Agency 1

### Decision was rendered January 15,2015, by reason ofwhich this Petition for Review is timely and is lodged with this Honorable Court within sixty days ofthe date ofthe Final Agency Decision as required by 49 U.S.c. §46110(a) ["

...the petition must be filed not later than sixty days after the order is issued

..." id.]. 

### See also Fed. R. App. P. 4(a)(1)(B). As noted previously, in compliance with 5TH CIR. R. 9.3, a copy ofthe Final Agency Decision in the underlying matter is appended to this Petition as Exhibit A. In and to the extent that 5TH CIR. R. 9.3(a) requires that the Petitioner demonstrate that the transcript has been ordered and that satisfactory fmancial arrangements have been made to pay for it, together with the transcript's estimated date ofcompletion, 49 U.S.C. §4611O(b) provides: When a petition is filed under subsection (a) ofthis section, the clerk ofthe court**i~ediately** 

### shall send a copy ofthe petition to the Secretary, Under Secretary, or Administrator, as appropriate. The Secretary, Under Secretary, or Administrator shall file with the Court a record ofany proceeding in which the order was issued, as provided in Section 2112 ofTitle 28. Inasmuch as 49 U.S.C. §46110(b) requires the Federal Aviation Administration to file the record in the underlying proceeding with this Honorable Court, Petitioner submits that it has complied with the requirements of5TH CIR. R. 9.3(a). Flightline Ground, Inc., Petitioner herein, mindful of5TH CIR. R. 9.4 and the requirements to expeditiously serve a copy ofthis Petition for Review on government counsel, as demonstrated by the attached Certificate ofService, is dispatching a complete copy ofthe Petition for Review to Reggie Govan, Chief 2

### Counsel. Federal Aviation Administration, contemporaneous with the filing and submission ofthis Petition for Review. This Honorable Court "has exclusivejurisdiction to affirm, amend, modify,

or set aside any part ofthe order and may order the

...Administrator to conduct further proceedings." 49 U.S.C. §46110(c). Respectfully submitted this the

# IO~ay ofMarch, 2015.

2900 Chamblee-Tucker Road Building 5, Suite 350 Atlanta, GA 30341 404-451-0313

- Office 404-451-0317

- Fax alan@alanarmstronglaw.com

3

### IN THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT

FLIGHTLINE GROUND, INC., Petitioner,



## v. MICHAEL P. HUERTA,**AD~STRATOR,FEDERAL** 

### AVIATION**AD~STRATION,** 

### Respondent. ) ) ) ) 

### ) CASENO.

_____ _ ) ) ) ) ) )



### CERTIFICATE OF SERVICE 

### The undersigned, in compliance with 5TH CIR. R. 

### 9.4 certifies that a complete copy ofthe above and foregoing Petition for Review, together with attached Exhibit A, was served by the most expeditious method available, to-wit, Federal Express, on the following: Reggie Govan, Esq. Office ofthe ChiefCounsel Federal Aviation Administration 800 Independence Avenue SW Washington, DC 20591 Gerard G. Metzger, Esq. Charles T. Curtis, Esq. Gerald G. Metzger, APLC 829 Baronne Street New Orleans, LA 70113 Brandon Brown, Esq. Louisiana DOT 1201 Capital Access Road Office S304/S305 Baton Rouge, LA 70804 J.E. Murdock, III, Esq. 5034 Nebraska Avenue Washington, DC 20008

4

## 10ft... This the

_ day 

### ofMarch, 2015. 

# A(u"

# ~drd ALAN ARMSTRONG ., Georgia Bar No. 022075

# ~ Counsel for Flightline Ground, Inc. 

### 2900 Chamblee-Tucker Road Building 5, Suite 350 Atlanta, GA 30341 404-451-0313

- Office 404-451-0317

- Fax alan@alanarmstronglaw.com

5U.S. Department of Transportation Federal Aviation Administration 

### JAN 1 5 

### 2015 Office ofAirport Compliance and Management Analysis



### CERTIFIED MAIL

- Return Receipt



### Mr. Alan Annstrong, Esq. Attorney at Law 2900 Chamblee Tucker Road Building 5, Suite 350 Atlanta, GA 30341 

### Mr. Brandon Brown, Esq. General Counsel Louisiana Department ofTransportation and

Development 1201 Capital Access Road Baton Rouge, LA 70804 

### Mr. Gerald G. Metzger, Esq. Mr. Charles Curtis, Esq. Metzger Law Finn 829 Baronne Street New Orleans, 

### LA 70113 Dear Messrs. Annstrong, Brown and Metzger: 800 Independence Ave., SW, Washington, DC 20591



### RE: FLIGHLINE GROUND INC. 

### v. LOUSIANA DEPARTMENT OF TRANSPORTATIONAND DEVELOPMENT, AS SUCCESSORTO THE LOUISIANA DIVISION OF ADMINISTRATION AND THE BOARD OF COMMISSIONERS FORTHE MANAGEMENT OFTHE LAKEFRONT AIRPORT; NON-FLOOD PROTECTION ASSET MANAGEMENT AUTHORITY, AS SUCCESSORTO THEBOARD OF COMMISSIONERS OF THE ORLEANS PARISH LEVEE DISTRICT AND 

### ORLEANS PARISH LEVEE DISTRICT, DIVISION OF NON-FLOOD ASSETS, FAA Docket No. 16-11-01 Enclosed is a copy ofthe final decision and order ofthe Federal Aviation Administration 

### (FAA) with respect to the above-referenced matter.The Associate Administrator concludes that the analysis and conclusions contained inthe Director's Determination with regard to Grant Assurance 5, Grant Assurance 19, Grant Assurance 22, Grant Assurance 24, Grant Assurance 25, and Grant Assurance 29 are supported by a preponderance ofreliable, probative, and substantial evidence, 

### and are consistent with applicable law, precedent, and FAApolicy. The reasons for upholding the Director's Determination are setforth 

### inthe enclosed 

### finaI agency decision.

Manager, Airport Compliance

Division Enclosure 2CERTIFICATE OF SERVICE 

## -1- I HEREBY CERTIFY that on January 

# 10,201 5, I causedto be placed in the United States mail (first class mail, postage paicila'true copy ofthe foregoing document addressed to: For Complainant Alan Armstrong, Esq. Attorney at Law 2900 Chamblee Tucker Road Building 5, Suite 350 Atlanta, GA For Respondent Brandon Brown, Esq. General Counsel Louisiana Department ofTransportation and

Development 1201 Capital Access Road Baton Rouge, LA 70804 Gerald G. Metzger, Esq. Charles Curtis, Esq. Metzger Law Firm 829 Baronne Street New Orleans, LA 70113 Hand Delivered to: FAA Part 16 Airport Proceedings Docket FAA Airport Compliance and Management Analysis, ACO-IOO 

# (I( ! ') 

# /l l)!

# itli,& {! /"-- Cklf'dia Roberts Office ofAirport Compliance

and Management Analysis

### UNITED STATESDEPARTMENT OF TRANSPORTATION FEDERALAVIATION ADMINISTRATION WASIllNGTON, DC

Flightline Ground, Inc.

Appellant/Complainant 

### v. Louisiana Department ofTransportation and Development, as successor to the Louisiana Division ofAdministration and the Board of Commissioners for the Management ofthe Lakefront Airport; Non-Flood Protection Asset Management Authority, as successor to the Board OfCommissioners ofthe Orleans Parish Levee District and Orleans Parish Levee District, Division ofNon-Flood Assets.

Appelleentespondent FAA Docket 16-11-01

FINALAGENCY DECISION I. INTRODUCTION This matter is before the Federal AviationAdministration (FAA) Associate Administrator for Airports on appeal filed by FlightJine Ground Inc., d/b/a Flightline First (Flightline, AppelJant, or Complainant) from the Director's Determination ofOctober 24, 2012, issuedby the Director of the FAA Office ofAirport Compliance and Management Analysis, pursuantto the Rules of Practice for FederallyAssistedAirportEnforcement Proceedings 

### found inTitle 14 Code of Federal Regulations (CFR) Part 16. The Director's Detennination dismissed the Complainant's allegations against the Louisiana Department ofTransportation and Development, as successor to the Louisiana Division ofAdministration and the Board ofCommissioners for the Management ofthe Lakeftont Airport; Non-Flood Protection Asset ManagementAuthority, as successor to the Board ofCommissioners ofthe Orleans Parish Levee District and Orleans Parish2

Levee District, Division ofNon-Flood Assets (OLD, Respondent, Appellee, or Sponsor) regarding OLD's Federal obligations associated with its operation ofthe New Orleans Lakefront Airport (Airport), in New Orleans, Louisiana. The Complainant argues on appeal to the Associate Administrator thatthe "Director's findings and conclusions were not supported by substantial evidence, ignored evidence in the record cited by Complainant, are arbitrary, capricious, an abuse ofdiscretion or otherwise notin accordance with law [5 U.S.C. § 706(2)(A)] and/or were contrary to constitutional right, power, privilege or immwrity [5 U.S.C. 

### § 706(2)(B)]." [FAA Exhibit I, Item 39, page 2] The Complainant objected to sixteen stated findings from the Director's Determination, arguing the Director made conclusions on specific allegations that were inconsistent with the facts and evidence in the record, arbitrary and capricious, and not in accordance with applicable law. [FAA Exhibit 1, Item 39] Upon an appeal ofa Part 16 Director's Determination, the Associate Administrator must determine whether (a) the findings offact made by the Director are supported by a preponderance ofreliable, probative, and substantial evidence, and (b) each conclusion oflaw is made in accordance with applicable law, precedent, and public policy. [See e.g., Ricks v. Millington MunicipalAirport, FAA DocketNo. 16-98-19, Final Decision and Order p. 21 (Dec. 30, 1999)] The FAAhas reexamined the record, including the Director's Determination, the administrative record supporting the Director's Determination, the Complainant's Appeal and the Respondent's Reply under applicable law and policy. Based on this reexamination, the FAA Associate Administrator for Airports affirms the Director's Determination. Under this specific set offacts, where an airport sponsor violates a lease agreement with a competitor fixed-base operator (FBO) ofthe Complainant FBO, and that through a mediated settlement agreement between the sponsor and the competitor FBO [See FAA Exhibit 1, Item 4, Exhibit R-2, page 2], the competitor receives a perceived or actual economic advantage, the sponsor is under no grant assurance obligation to provide compensation, financial or otherwise, to the Complainant FBO (i.e., provide same or similar benefits). This decision constitutes the final decision ofthe Associate Administrator for Airports pursuant to 14 CFR Part 16. 

### II. SUMMARY OF THE DIRECTOR'S DETERMINATION In the October 16, 2012, Director's Determination, the Director concluded: The Respondent has not violated Grant Assurance 5, Rights and Powers and/or Grant Assurance 29, Airport LayoutPlan, (1) allowing AeroPremierthe right to sublease the second floor ofBuilding 101 without seeking prior permissionfrom the Respondent or (2) granting AeroPremier the right at its sole option to cancel the lease ofthe McDermott facility.The Respondent has not violated Grant Assurance 19, Operation and Maintenance by not restoring the National Guard Hangar within 14 months ofthe effective date ofthe Respondents lease with AeroPremier. Evidence presented on an open drainage area is inadequate to make a finding on whether the OLD is allowing the airport to deteriorate and to become a safety hazard because ofthe opendrainage area and changes to an on-airport maintenance schedule. The Respondenthas not violated Grant Assurance 22(c), Economic Nondiscrimination by entering into a settlement for damages with AeroPremier and Advantage Capital parents. The evidencepresented on whether the OLD is unjustly discriminating against Complainant by charging Complainant nonreduced insurance premiums is inadequate to make a fmding. The Respondenthas not violated Grant Assurance 24, Fee and Rental Structure, by failing to collectpast monies due from AeroPremier orby offering rent credits and a temporary reduction in insurance payments to settle its breach oflease with AeroPremier. [FAA Exhibit 

### I, Item 38, pages 38-39] 

### III. THE PARTIES TO 

### THE COMPLAINT Respondent! Airport 3

The New Orleans Lakefront Airport sponsor is theNon-Flood Protection AssetManagement Authority successor to the Board ofCommissioners ofthe Orleans Levee District and Division ofAdministration, State ofLouisiana, and the governing authority ofthe Non-Flood assets ofthe Orleans Levee District (OLD), including the New Orleans Lakefront Airport. [FAA Exhibit I, Item 38, page 1] On January 1,2007, Management ofthe Lakefront Airport shifted from the Orleans Levee District (OLD) to the State ofLouisiana Division ofAdministration (DOA); ownership ofthe Airport stayed with the OLD. On August 15,2010, Management shifted again from DOAto the newly created Non-Flood Protection Asset Management Authority (Authority); the Authority was under Louisiana's Department ofTransportation and Development (DOTD) but OLD still held ownership ofthe Airport. OnJanuary 1,2012, the Authority became a stand-alone political division removed from DOTD; ownership continues to be with OLD. The Airport is a public-use airport located in New Orleans, Louisiana. The development ofthe Airport has been financed, in part, with funds provided by the FAA under the Airport Improvement Program (AlP), authorized bythe Airport and Airway Improvement Act of 1982, as amended, 49 U.S.C., § 47101, et seq. [FAA Exhibit 1, Item 38, page 2] The airport has accepted $31,444,836 million in FAA AlP funding since 1982. [FAA Exhibit 1,ltem 10] The Airport has 116 based aircraft and approximately 52,000 operations per year. [FAA Exhibit 1, Item 38, page 2 citing FAAExhibit 1, Item 10]4 

### Complainant on Appeal The Appellant is the Complainant, Flightline Ground Inc., d/b/a Flightline First (Flightline, Appellant or Complainant). Flightline is a FBO providing services to aircraft owners and operators on the New Orleans Lakefront Airport (Airport) and to transient aircraft requiring fuel, hangar or other services attheNew Orleans Lakefront Airport. [FAA Exhibit 1, Item 38, pages 2-3] Flightline signed its initial lease with OLD on July 31, 2007. [FAA Exhibit 1, Item 38, page 3] IV. FACTUAL BACKGROUND AND PROCEDURAL HISTORY Factual Background In

### late August 2005, Hurricane 

### Katrina struck southeast Louisiana, causing severe damage to areas including the Lakefront Airport (Airport) in Orleans Parish, Louisiana. OnJuly 31, 2007, Complainant Flightline entered into anewlease with the Airport. On April 8, 2008, a third party FBO, AeroPremier Jet Center, LLC (AeroPreruier), entered into adifferent lease for other airportproperty with the Airport. These leases were entered into in an effortto enhance the Airports' revenues and increase competitionbetween and among the FBOs in an effortto make the Airport more self-sustainable. Throughout this time periodrepairs to certain hangars 

### had been completed. [FAA Exhibit 1, Item 4, page 2] On August 13,2009,the Airport issued a formal notice ofdefault to AeroPreruier for failure to pay rent. [FAA Exhibit I, Item 1, exhibit C-9, page 3] AeroPremier withheld these payments becausethe Airport had not completed repairs to office space leasedby AeroPreruier, which the parties had 

### agreed would be repaired by the 

### Airport within 14 months ofthe effective date ofthe lease. [FAA Exhibit 1, Item 4, pages 2-3] The Airport and AeroPreruier agreed to "stay legal action pending 

### discussions to resolve the issues between them" with regard to the unpaid rent. [FAA Exhibit 1, Item 1, exhibit C-9, page 2] On August 17, 2009, AeroPreruier and its investors, Advantage Partners VI, LP and Advantage Capital Partnership XI, LP (Advantage Capital), filed a Petition for Breach ofContractand for Damages (Civil Suit) againstthe OLD in Orleans Parish Civil District Court, alleging that the Airport had breached their lease by not remediating damaged office space that was leased to AeroPremier, whichthe parties had agreed would berepaired by the Airport within 14 months ofthe lease execution. [FAA Exhibit 1, Item 4, pages 3, see also 

### Civil Suit, FAA Exhibit 1, Item 4, Exhibit R-5] As part ofthis litigation, both AeroPreruier and the OLD commissionedreports calculating the losses sustained by AeroPreruier due to the OLD's breach ofthe lease. The report cormnissioned by the OLD, prepared by Holly Sharp ofLaPorte, Sehrt, Roruig and Hand, concluded estimates based on two different scenarios: in one scenario, AeroPreruier suffered $199,613 in lostprofits, andinthe second scenario, AeroPreruier suffered no lost profits. [FAA Exhibit 1, Item 4, exhibit R-3, page 8] In the report commissioned by AeroPreruier, prepared by Harold Flanagan ofFlanagan Partners, AeroPreruier sustained lost profits totaling $2,559,400. [FAA Exhibit 1, Item 4, exhibit R-4, page 5]5 

### OnNovember 24, 2009, F1ightline filed an informal Part 13 complaintwiththe FAA's LouisianalNew Mexico 

### Airports District Office (ADO), allegiog violations ofGrant Assurances, 22, 24, and 5 , and maintained that because the Airport Sponsor failed to maintainthe airport suitably, AeroPremier was being allowed to function on the Airport rent free giving AeroPremier an unfair competitive advantage. [FAA Exhibit I, Item 39, page 

### 7] On March 25, 2010, the ADO issued preliminary findings onthe informal complaint, stating

### that "we find that the Lakefront Airport sponsor is taking reasonable steps to cure the situation and at this time is in compliance with their grant assurances." [FAA Exhibit I, Item 39, page 3, 

### citing FAA Exhibit 1, Item 1, Exhibit C-28, page 2] On May 14,2010, the District Courtjudge hearing the civil suit issued a Judgment granted a Motion for Summary**~vdgment** filed by AeroPremier, which resulted in OLD being found to be summarily in breaeh'ofthe lease between itselfand AeroPremier. [FAA Exhibit I, Item 38, page 4, 

### citing FAA Exhibi.t 1, Item 4, exhibit 1, page 2] Following the issuance ofthis Judgment, the parties to thicivi! suit entered into mediation ofthe litigation, and on October 12, 2010, signed a Mutual Receipt, Release, and Indemnification Agreement (Settlement Agreement), settling the case for a total of $1,258,000. [FAA Exhibit 1, Item 38, page 4, 

### citing FAA Exhibit 1, Item 4, pages 3-5 and Settlement Agreement, FAA Exhibit 1, Item 4, Exhibit R-2] In this Settlement Agreement, the parties agreed in part that: 

### 1. The OLD shallprovide a $473,000 credit toAeroPremier, which may be appliedtopast or

future rent or any other obligation of AeroPremier to OLD. 2. The OLD shallprovide a $500,000 transferable rent credit to AeroPremier orAdvantage as they shall agree between the two of them, which credit may be applied to rent due at any time on Building 101 on or ajierAugust J, 

### 2011. The credit may be applied in the amounl of up to $100, 000peryear until exhausted 3. The OLD waives and releasesAeroPremier from the obligation under the Lease to invest $285,000 in improvements to realproperty atlheAirport. 4. The OLD waives andreleasesAeroPremier from the obligation under the Lease topay rent for Building 101, including the hangar,from August I, 2010 until renovations of Building 101 (as a whole) are completed. 5. AeroPremier shall receive a rent credit for any leasedspace within Building 101, which ispresently in 

### use byAeroPremier, to the extent such space is unusable due to OLD's construction/renovation activities resulting from Lessor's Repair Obligation. 6. OLD shall be responsiblefor the repair of damage to Building 101 which occurred as a result of Hurricane Katrina. OLD shall beforther responsible for the repair of damage to Building 101 which may occur as a result of the Lessor's Repair Obligation. 7. The office and customerservice space within BUilding 101 shall [

..] be commercially acceptable office space suitable for use as a FBO [

..}. 8. The OLD shall lease Building 103 to AeroPremier 

## f.

..]. 9. At any time before the expiration of21 months ajier completion of the Lessor's Repair Obligation, as dejined herein, AeroPremier shall have the right to either sub-lease the 2ndflooro/Building 101 or to release the space to the OLD andthus exclude itfrom the Lease. 10. AeroPremier shall notpay for (i)

### parking or sod inpublically accessible areas and outside of the Airportfence (ii) 

### carparking spaces it does not need. 11. AeroPremier shall have access to terminal areas to the same extent as other FBOs,6 

### includingwithout limitation, terminal ramp spacefor aircraft arrivals, departures and US. Customs. 12. AeroPremier shall have the right, at its 

### sole option, to cancel the Lease of the McDermott facility {.

..] effective upon 60 days' notice to OLD. [FAA Exhibit I, Item 38, page 4, 

### citing FAA Exhibit 1, Item 27, Exhibit R-2, pages 2-3] The Settlement Agreement also contained provisions in paragraph 17 that stipulated the Agreement was subject to FAA approval. [FAA Exhibit 1, Item 38, page 5, 

### citing FAA Exhibit 1, Item 4, Exhibit R-2, page 4] The parties also agreed to paragraph 14 in the Settlement Agreement that: 

### 14. The Parties agree that thisAgreement is 

### intendedto include a complete and ftnal release of all claims that have been or could be asserted in the Lawsuit, the matter having been settled to their satisfaction. Notwithstanding the above, there is no release in this Agreement for a (i) 

### breach of this Agreement or (ii) a foture breach of the Lease (as amended) or the FAA Sponsor assurances. [FAA Exhibit 1, Item 40, Exhibit R-2, page 3, 

### citing FAA Exhibit 1, Item 4, Exhibit R-2] On November 18, 2010, the FAA's LouisianalNew Mexico ADO provided comments regarding" concerns [the FAA] may have that could result inpotential violations ofthe sponsor's grant assurance obligations." [FAA Exhibit 1, Item 33, page 1] These concerns included:

• The disparity between the two commissioned reports estimating AeroPremier's losses due to the breach ofcontract, which 

### "may result in an improper use of airport revenue 

## if

the sponsor agrees to provide unfounded compensation, subsidies, and/or set an improper fee schedule benefittingAeroPremier in violation of GrantAssurance 22, Economic Non Discrimination; 24, 

### Fee andRental Structure; and 25, 

### Airport Revenue." [FAA Exhibit 1, Item 33, page 1] • The lack ofdocumentation submitted by AeroPremier regarding its losses and profits, which 

### "may lead to more violations of GrantAssurances 22 

### (Economic Nondiscrimination) and24 

### (Fee andRental Structure)." [FAA Exhibit 1, Item 33, page 2] • Concerns that 

### "the sponsor may have or may be ceding its rights andpowers to operate andadminister the airport by executing a settlement agreement that may allow AeroPremier to make leasing decisions without the sponsor's approval or acknowledgment thatsuch decisions are in accordance with the Airport Layout Plan and the sponsor's right to develop its airport [

.. .] GrantAssurance 

### 5 (Preserving Rights andPowers) and GrantAssurance 29 

### (Airport Layout Plan) may be affected by thisprovision. " [FAA Exhibit 1, Item 33, page 2] On February 2, 2011, the Complainant, Flightline Ground, Inc. filed a fonnal Part 16 Complaint with the FAA, alleging that the Respondent, as sponsor ofthe Lakefront Airport has engaged in activity contrary to its Federal obligations. In its Complaint, Flightline alleges that the Respondent has systematically and continuously permitted a competing FBO, AeroPremier, to7

default on financial obligations to the Respondent, which has placed the Complainant at a competitive disadvantage. [FAA Exhibit 1, Item 1, page 4] Complainant specifically alleges that the Respondent has violated 49 U.S.C., § 47107(a) (5) and airport Grant Assurance 22(c), which requires that each FBO at the airport shall be subject to the same rates, fees, rentals, and other charges as are uniformly applicable to all other fixed based operators making the same or similar uses ofsuch airport and utilizing the same or similar facilities. The Complainant also alleges the Respondent has violated Grant Assurances 5, 24, 25, and 29. [FAA Exhibit 1, Item 1, pages 4-7] Procedural History On February 2, 2011, the Complainant, Flightline Ground, Inc. filed a formal Complaint. [FAA Exhibit 1, Item 1] On February 22, 2011, the FAA issued a docketing notice and assigned docket number 16-11- 01 to the Complaint. [FAA Exhibit 1, Item 2] OnMarch 15, 2011, the Respondent filed a motion for an extension oftime to file an Answer. [FAA Exhibit 1, Item 3]

. On March 22, 2011, the Respondent provided its Answer to the Complaint. [FAA Exhibit 1, Item 4] On March 17, 2011, the Complainant filed a motion to alter the briefing schedule. [FAA Exhibit 1, Item 5] On March 17,2011, the Complainant responded to the Respondent's motion for extension of time to file an Answer. [FAA Exhibit 1, Item 6] On March 17, 2011, the Complainant filed a motion to amend the style ofcase. [FAA Exhibit 1, Item 7] OnMarch 21, 2011, the Complainant filed a motionto extend time to respond to the Respondent's Answer. [FAA Exhibit 1, Item 8] On March 28, 2011, the Complainant filed a second motionto extend time to respond to the Answer ofthe Respondent. [FAA Exhibit 1, Item 9] On April 6, 2011, the Airport Grant History for Lakefront Airport was added to the docket. [FAA Exhibit 1, Item 10] OnApril 6, 2011, Complainant submitted its Response to the Respondent's Answer. [FAA Exhibit 1, Item 11] On April 5, 2011, Counsel for the Complainant submitted an Affidavit in support ofthe Complaintfrom Michael A. Hodges, ABS Aviation Consultancy, Inc., d/b/a Airport Business Solutions. [FAA Exhibit 1, Item 12]

### On April 13,2011, Respondent filed a First Motion to Extend the Time to Rebut the Complainant's Response to the Answer ofthe Management Authority. [FAA Exhibit I, Item 13] On April 15,2011, Complainant filed Notice ofthe Intention to Move to Amend Complainant's Response to the Answer ofthe Management Authority Based upon Newly Discovered Evidence. This submission includes exhibit C-66, dated April 13, 2011. [FAA Exhibit I, Item 14] On April 21, 2011 the Complainant filed 3 additional pleadings: (l) 

### Complainant's Notice ofThe Intention to Move to Amend Complainant's Response to the Answer ofthe Management Authority Based upon Newly Discovered Evidence, dated April 15, 2011. Includes exbibit C-66. (2) Complainant's Motion to Amend Complainant's Response to the Answer ofthe Management Authority Filed April 6, 2011. (3) Complainant's Amendment to Its Response to the Answer ofthe Management Authority Based upon Newly Discovered Evidence. [FAA Exhibit I, Item 16] On April 22, 2011, Complainant filed an Amended Complaint. [FAA Exhibit 1, Item 15] 8



### On April 25, 2011, Complainant filed a Motion to Amend Complaint and includes exbibits C-66 through C-71. [FAA Exbibit 1, Item 17] On April 27, 2011, Respondent filed a Motion to Suspend Procedural Process and, Inthe Alternative, For an Extension ofTime in 

### Which to Respond. [FAA Exhibit I, Item 18] On April 29, 2011, the FAA issued a Notice ofExtension ofTime to 

### Rebut the Complainant's Response to 

### the Answer ofthe Management Authority, which extended the Rebuttal deadline to May 3, 2011. [FAA Exhibit 1, Item 19] On May 5, 2011, the FAA issued a Second Notice ofExtension ofTime regarding Respondent's Motion to Suspend Procedural Process to allow Respondent until June 3, 2011 to file its Rebuttal. [FAA Exhibit 1, Item 20] On March 15, 2011, The Louisiana Department ofTransportation and Development answered and stated it is not a proper party to the Complaint as it does not have any legal authority over the Non-Flood Protection Asset Management Authority. Electronically signed and dated March 15,2011. [FAA Exhibit 1, Item 21] On April 29, 2011, the Complainant filed a Briefin Opposition ofFlightline Ground, Inc. to Respondent's Motion to Suspend Procedural Process and in the Alternative, For an Extension ofTime within Which to Respond. Includes Exbibit A. [FAA Exhibit 1, Item 22] On May 2, 2011, Complainant filed a Briefin Opposition ofFlightline Ground, Inc. To The Prayer In The Motion OfThe Louisiana Department OfTransportation And Development

### Requesting Dismissal, Dated May 2, 2011. [FAA Exhibit I, Item 23] On March 24, 2011, the Complainant med an Amendment to Correct Errata to the Complaint. [FAA Exhibit I, Item 24] On June 2, 2011, the Respondent filed its Rebuttal to the Complainant's Response and Amended Response and Response to the Amended Complaint by the Management Authority, which includes Exhibit I. 

### [FAA Exhibit I, Item 25] On September 15,2011, the FAA issued a Notice ofExtension ofTime to December 20, 2012. [FAA Exhibit I, Item 34] On December 6, 20 11, The Director ofthe Office ofAirport Compliance and Management Analysis issued a Request for Additional Information and Notice ofExtension ofTime. [FAA Exhibit I, Item 26] On January 5, 2012, the Respondent provided a Submission ofDocuments in Response to the Request for Additional Information. [FAA Exhibit I, Item 27] 9



### On January 13, 2012, the Complainant filed a Motion to Strike orin the Alternative File Affidavit ofBraytonMatthews in Response to Respondent's Submission ofDocuments. [FAA Exhibit 1, Item 29] On January 13, 2012, the Complainant also submitted an affidavit from Brayton Matthews, Manager and Secretary ofFlightline Ground. [FAA Exhibit 1, Item 28] On January 16,2012, the Respondent med an Opposition to Complainant'S Motion to Strike or in the Alternative File Affidavit ofBrayton Matthews in Response to Respondent's Submission ofDocuments. [FAA Exhibit 1, Item 30] OnFebruary 21, 2012, the FAA issued an Order Denying Motion to Strike and Granting Motion to File Affidavit, and Notice ofExtension ofTime. [FAA Exhibit 1, Item 31] On April 2, 2012, the FAA issued a Notice ofExtension ofTime to June 30, 2012. [FAA Exhibit 1, Item 32] Letter dated November 18,2010, to 

### Mr. Robert Lupo and Mr. Louis Capo from Andy Velayos, Lead Program Manager for FAA's LouisianafNew Mexico ADO regarding proposed settlement agreement between OLD and AeroPremier. [FAA Exhibit I, Item 33] On June 20, 2012, the FAA issued a Notice ofExtension ofTime to August 31, 2012. [FAA Exhibit 1, Item 35] On August 27,2012, the FAA issued a Notice ofExtension ofTime to September 17,2012. [FAA Exhibit 1, Item 36]On September 18, 2012, the FAA issued a Notice ofExtension ofTime to October 12,2012. [FAA Exhibit 1, Item 37] On October 16,2012, the FAA issued the Director's Determination. [FAA Exhibit I, Item 38] 10

On November 14,2012, the Complainant filed an Appeal to the Director's Determination. [FAA Exhibit I, Item 39] On November 29, 2012, the Respondent filed the Reply ofRespondent to the Appeal ofthe Complainant to the Director's Determination including Respondent Exhibits R-I through R7. [FAA Exhibit 1, Item 40] On January 30, 2013, the FAA issued a Notice ofExtension ofTime to on or about June 2, 2013. [FAA Exhibit 1, Item 41] On March 7, 2013, the Complainant submitted an Objection to Failure ofthe Associate Administrator to Issue a Final Decision Even with the Extended Time Limits. [FAA Exhibit 1, Item 42] On June 7, 2013, the FAA issued a Notice ofExtension ofTime to on or about September 16, 2013. [FAA Exhibit I, Item 43] On June 20, 2013, the Complainant submitted an Objectionto Failure ofthe Associate Administrator to Issue a Final DecisionEven with the Extended Time Limits. [FAA Exhibit I, Item 44] On September 17,2013, the FAAissued a Notice ofExtension ofTime to on or about January 31,2014. [FAA Exhibit I, Item 45] On September 24, 2013, the Complainant submitted an Objection to Failure ofthe Associate Administrator to Issue a Final Decision Even with the Extended Time Limits. [FAA Exhibit I, Item 46] On January 30, 2014, the FAA issued a Notice ofExtension ofTime to on or about June 2, 2014. [FAA Exhibit 1, Item 47] On May 29, 2014, the FAA issued a Notice ofExtension ofTime to on or about October 1,2014. [FAA Exhibit I, Item 48] V. APPLICABLE FEDERAL LAW AND FAA POLICY The Federal role in civil aviation has been augmented by various legislative actions that authorize programs for providing Federal funds and other assistance to local communities for the development ofairport facilities. 

### In each suchprogram, the airport sponsor assumes certain obligations, either by contract or by restrictive covenants inproperty deeds and conveyance instruments, to maintain and operate its airport facilities safely and efficiently and in accordanceII

with specified conditions. Commitments assumed by airport sponsors in property conveyance or grant agreements are important factors in maintaining a high degree ofsafety and efficiency in airport design, construction, operation and maintenance, as well as ensuring the public fair and reasonable access to the airport. The following is a discussionpertaining to the Airport Improvement Program, Airport Sponsor Assurances, the FAA Airport Compliance Program, enforcement ofAirport Sponsor Assurances, and the Complaint and Appeal Process. The 

### Airport Improvement Program Title 49 U.S.C. 

### §47101, et seq., provides for Federal airport financial assistance for the development ofpublic-use airports under AlP established by the Airport and Airway Improvement Act of 1982 (AAIA), as amended. Title 49 U.S.C. 

### § 47107, 

### et seq., sets forth assurances to which an airport sponsor agrees as a condition ofreceivingFederal financial assistance. Upon acceptance ofan AlP grant, the assurances become a binding contractual obligation between the airport sponsor and the Federal Government. The assurances made by airport sponsors in AlP grant agreements are important factors in maintaining a viable national airport system. 

### Airport SponsorAssurances As a condition precedent to providing airport development assistance under AAfA, codified at Title 49 U.S.C. 

### § 47101, et seq., the Secretary ofTransportation receives certain assurances from the airport sponsor. The AAIA, 49 U.S.c. § 47101, et seq., sets forth assurances to which an airport sponsor receiving Federal financial assistance must agree as a condition precedentto receipt ofsuch assistance. These sponsorship requirements are included in every AlP grant agreement. Upon acceptance ofan AlP grant by an airport sponsor, the assurances become a binding obligation between the airport sponsor and the Federa! Government. Six grant assurances are relevant to the Complainant's appeal: Grant Assurance 5, Preserving Rights andPowers; Grant Assurance 19, Operation andMaintenance; Grant Assurance 22, Economic Nondiscrimination; Grant Assurance 23, Exclusive Rights; Grant Assurance 24, Fee andRental Structure; and Grant Assurance 29, AirportLayoutPlan. 

### Grant AsSUrance 

### 5. PreservingRights andPowers Grant Assurance 5, Preserving Rights andPowers!, reqnires the airport owner or sponsor to retain all rights and powers necessary to ensure the continued operation ofthe airport consistent with its Federal obligations. This assurance implements the provisions ofAAIA, 49 U.S.C. 

### § 47107(a), et seq., and requires, inpertinent part, that the owner or sponsor ofa federally obligated airport "

...will not take or permit any action which would operate to deprive it ofany of

I See, e.g., the Fedeml Aviation Act of 1958, as amended and recodified, Title 49 U.S.c. §§ 40101, 40113, 40114, 46101. 46104, 46105, 46106, 46110; and the Airport and Airway Improvement Act of 1982, as amended and recodified, Title 49 U.S.c. §§ 4710S(d), 47106(d}, 47107(k), 47107(1), 4711l(d). 47122.12

the rights and powers necessary to perfann any or all ofthe tenns, conditions, and assurances in the grant agreement without the written approval ofthe Secretary, and will act promptly 

### to acquire, extinguish or modifY any outstanding rights or claims ofright ofothers which would interfere with such perfonnance by the sponsor." FAA Order 5190.6A,Airport Compliance Requirements, describes the responsibilities under GrantAssurance 5 assumed by the owners or sponsors ofpublic-use airports developed with Federal assistance. Among these is the responsibility for enforcing adequate rules, regulations, or ordinances as are necessary to ensure the safe and efficient operation ofthe airport. [See Order 5190.6A, Sec

.. 4-7 and 4-8.] 

### 2. GrantAssurance 19. Ooeration andMaintenance Grant Assurance 19, Operation andMaintenance, requires, in pertinent part, The airport andall facilities which are necessary to serve the aeronautical users of the airport,

...shall be operatedat all times in a saft andserviceable condition andin accordance with the minimum standards as may be required orprescribedby applicable ftderal, state andlocal agenciesfor maintenance and operation. It will not cause orpermit any activity or action thereon which would interfere with its use for airportpurposes. 

### 3. GrantAssurance 22, EconomicNondiscrimination Grant Assurance 22, Economic Nondiscrimination, requires the owner ofany airport developed with Federal grant assistance to operate the airport for the use and benefit ofthe public and to make it available to all types, kinds, and classes ofaeronautical activity on fair and reasonable tenns, and without unjust discrimination. Grant Assurance 22 deals with both the reasonableness ofairport access and the prohibition ofadopting unjustly discriminatory conditions as a potential for limiting access. Grant Assurance 22 implements the provisions ofTitle 49 U.S.C. § 471 07(a)(1) through (6), and requires, inpertinent part; [The airport owner or sponsor] will make its airport available as an airport forpublic use on reasonable terms, andwithout unjust discrimination, to all types, kinds, andclasses of aeronautical activities, including commercial aeronautical activities offeringservices to the public at the airport. [Assurance 22(a).]

...eachfixed-base operator at the airport shall be subject to the same rates,fees, rentals, and other charges as are uniformly applicable to all other fIXed-based operators making the same or similar uses of such airport and utilizing the same or similar facilities. [Assurance 22( c).] [The airport owner or sponsor

## 1 may establish such reasonable andnot unjustly discriminatory conditions to be metby all users of the airport as may be necessary for the safe andefficient operation of the airport. [Assurance 22(h).] [The airport owner or sponsor] may .. .limit anygiven type, kind, or class of aeronautical use of the airport if such action is necessary for the safe operation of the airport ornecessary toserve the civil aviation needs q(thepublic. [Assurance 22(i).] Subsection (h) qualifies subsection (a), and subsection (i) represents an exceptionto subsection (a) to pennit the sponsor to exercise control ofthe airport sufficientto preclude unsafe and inefficient conditions that would be detrimental to the civil aviation needs ofthe public. In all cases involving restrictions on airport use imposed by airport owners for safety and efficiency reasons, the FAA will make the final detennination on the reasonableness ofsuch restrictions when those restrictions deny or limit access to, oruse of, the airport. [See FAA Order 5190.6B, section 14.3.] 13

FAA Order 5190.6B describes the responsibilities under Grant Assurance 22 assumed by the owners or sponsor ofpublic use airports developed with Federal assistance. Among these is the obligation to treat in a unifonn mannerthose users making the same or similar use ofthe airport and to make all airport facilities and services available on reasonable tenns without unjust discrimination. [See FAA Order 5190.6B, Chapter 9.] The owner ofan airport developed with Federal assistance is required to operate the airport for the use and benefit ofthe public and to make it available to all types, kinds, and classes of aeronautical activities onreasonable tenns and without unjust discrimination. [See FAA Order 5190.6B, section 9.L(a).] 

### 4. Grant Assurance 24. Fee andRentalStructure Grant Assurance 24, Fee andRental Structure, implements the provisions ofthe AAIA, Title 49 

### V.S.C. § 47107(a)(13), and requires, in pertinentpart, that the sponsor ofa federally obligated airport assure: It 

### will maintain afee and rental structur:efor thefacilities andservices at the airport which will make the airport as self-sustaining aspossible under the circumstances existingat theparticular airport, taking into account suchfactors as the volume of traffic andeconomy of collection. Grant Assurance 24 addresses fees the owner or sponsor levies on airport users in exchange for the services the airport provides and satisfies the requirements of

### § 47107(a)(13) by addressing self-sustainability. The intent ofthe assurance is for the airport operator to charge fees that are sufficient to cover as much ofthe airport's costs as is feasible while maintaining a fee and rental structure consistent with the sponsor's other Federal obligations. In addition, FAA Order 5190.6B states: To aid in establishing uniform rates andcharges appliedto aeronautical activities on the airport, the sponsor should establish minimum standards to be met as a condition for the right to conduct an aeronautical activity on the airport. [FAA Order 5190.6B at Section 9.6.e.]5. Grant Assurance 25.AirportRevenues Grant Assurance 25,AirportRevenues, implements provisions ofTitle 49 U.S.C. § 47107(b) and 

### § 

### 4.1133, et seq., and requires, inpertinentpart, that the sponsorofa federally obligated airport assure:

a. Allrevenues generated by the airportandany local taxes on aviation fuel establishedafter December 30, 1987, will be expendedby itfor the capital or

,operating costs of the airport; the local airport system; or other local facilities which are ownedor operatedby the owner or operator of the airport andwhich are directly andsubstantially relatedto the actual air transportation of passengers orproperty; or for noise mitigationpurposes on or off the airport. b. As pari of the annual audit required under the Single AuditActof 1984, the sponsor will direct that the audit will review, andthe resulting audit report will provide an opinion concerning, the use of airport revenue andtaxes inparagraph (a), andindicating whether fondspaidor transferred to the owner or operator are paidor transferred in a manner consistent with Title 49, United States Code and any other applicableprovision of law, including any regulationpromulgated by the Secretary orAdministrator.



### c. Anycivilpenalties or other sanctions will be imposedfor violation of this assurance in accordance with theprovisions of Section 47107 of Title 49, UnitedStates Code. 14

FAA's Policy and Procedures Concerning the Use ofAirport Revenues (64 Fed. Reg. 7696, February 16,1999) (Revenue Use Policy) provides, among otherthings, the FAA's policy onthe use ofairport revenue. It provides, inrelevant part, that: All fees. charges, renls, or otherpayments received by or accruing to the sponsor for anyone o/the follOWing reasons are considered to be airport revenue: Revenue from sponsor activities on the airport. Airport revenue generally includes all revenue received by the sponsor for activities conductedby the sponsor itself as airportowner and operator, including revenue received; i. From any activity conductedby the sponsor on airportproperty acquiredwith federal assistance; ii. From any aeronautical activity conductedby the sponsor which is directly connectedto a sponsor's ownership of an airport subject to 49 U.S.c. 

### § 47107(b) or47133; oriii. From any nonaeronautical activity conducted by the sponsor onairport property notacquiredwith federal assistance, but only to the extent of thefair rental value of the airportproperty. Thefair rental value will be basedon the fair market value. [See Revenue Use Policy at Section ILB.1.b., 64 Fed. Reg. 7696, 7716] 

### 6. Grant Assurance 

### 29.AimortLavoutPlan Grant Assurance 29,AirportLayout Plan, implements provisions ofTitle 49 U.S.C. § 47107(a)(16), and requires that the sponsor ofa federally obligated airport assure:

a. It will keep up to date at all times anAirportLayoutPlan of the airport showing 

### (1) boundaries of the airport andallproposedadditions thereto, together with the boundaries of all offiite areas owned or controlledby the sponsor for airportpurposes and proposedadditions thereto; 

### (2) the location andnature of all existingand proposedairport facilities andstructures (such as runways, taxiways, aprons, terminal buildings, hangars, androads), including allproposed extensions and reductions of eXisting airport facilities; and (3) the location of all existing and proposednon-aviation areas andof all existing improvements thereon. SuchAirportLayoutPlans andeach amendment, revision, or modification thereof shall be subject to the approval of the Secretary which approval shall be evidencedbythe signature of a duly authorizedrepresentative of the Secretary on the face of the AirportLayout Plan. The sponsor will not make orpermitany changes or alternations in the airport orany of itsfacilities thatare not in conformity with the AirportLayoutPlan as approvedby the Secretary and which might, in the opinion of the Secretary, adversely affect the safety, utility, or efficiency of the airport. b . 

## .if a change or alteration in the airport or thefacilities is made which the Secretary determines adversely affects the safety, utility, or efficiency of any federally owned, leased, or fondedproperty on or off the airport andwhich is not in conformity with the AirportLayout Plan as approvedby the Secretary, the owner or operator will, ifrequestedby the Secretary (1) eliminate such adverse effect in a manner approved bythe Secretary; or (2) bearall costs of relocating suchproperty (or replacement thereof) to a site acceptable to the Secretary and all costs of restoring suchproperty (or replacement thereof) to the level of safety, utility, effiCiency, andcost of operation existing before the unapprovedchange in the airport or its facilities. 15

Specifically, Grant Assurance 29 requires the airport owner or sponsor to keep its Airport Layout Plan (ALP), which is a planning tool for depicting current and future airport use, up to date. Grant Assurance 29 prohibits the airport owner or sponsor from making orpermitting any changes or alterations in the airport or any ofits facilities that are not in conformity with itsFAA-approved ALP. The FAA Airport Compliance Program The FAA discharges its responsibility for ensuring that airport sponsors comply with their Federal obligations through its Airport Compliance Program. Sponsor obligations are the basis for the FAA's airport compliance effort. The airport owner accepts these obligations when receiving Federal grant funds or when accepting the transfer ofFederal property for airport purposes. The FAA incorporates these obligations in grant agreements and instruments ofconveyance to protectthe public's interest 

### in civil aviation and to ensure compliance with Federal laws. 16

The FAA designed the Airport Compliance Program to ensure the availability ofa national system of safe and properly maintained public-use airports which airport sponsors operate in a manner consistent with their Federal obligations and the public's interest in civil aviation. The Airport Compliance Program does not control or direct the operation ofairports. Rather, it monitors the administration ofvaluable rights, which airport sponsors pledge to the people ofthe United States in exchange for monetary grants and donations ofFederal property, to ensure that airport sponsors serve the public interest. Order 5190.6B, 

### FAA Airport Compliance Manual (September 30,2009) sets forth policies and procedures for the FAA Airport Compliance Program. The Order is not regulatory and is not controlling with regard to airport sponsor conduct; rather, it establishes the policies and procedures for FAA personnel to follow in carrying out the FAA's responsibilities for ensuring airport compliance. It provides basic guidance for FAA personnel 

### in interpreting and administering the various continuing commitments airport owners make to the United States as a condition for the grant ofFederal funds or the conveyance ofFederal property for airport purposes. The Order, 

### inter alia, analyzes the various obligations set forth in the standard airport sponsor assurances, addresses the application ofthe assurances in the operation ofpublic-use airports, and facilitates interpretation ofthe assurances by FAA personnel. The FAA Compliance program is designed to achieve voluntary compliance with Federal obligations accepted by owners and/or operators ofpublic-use airports developed with FAA administered assistance. Therefore, in addressing allegations ofnoncompliance, the FAA will make a determination as to whether an airport sponsor is 

### currently in compliance with the applicable Federal obligations. Consequently, 

### "the FAA 

### will consider the successful action by the airport to cure any allegedorpotentialpast violation of applicablefederal obligations to be grounds for dismissal of such allegations." [See Wilson Air Center v. Memphis and Shelby County Airport Authority, FAA Docket No. 16-99-10, (August 30, 2001) (Final Decision and Order), page 

### 5.] The Complaint Process Pursuant to 14 CFR, Part 16, § 16.23, a person directly and substantially affected by any alleged noncompliance may file a complaint with the FAA. The complainant shall provide a concise butcomplete statement ofthe facts relied upon to substantiate each allegation. The complaint shall also describe howthe complainant was directly and substantially affected by the things done or omitted bythe respondents. [14 CFR, Part 16, § 16.23(b)(3,4).] 17

If, based on the pleadings, there appears to be a reasonable basis for further investigation, the FAA will investigate the subject matter ofthe complaint. 

### In rendering its initial determination, the FAA may rely entirely on the complaint and the responsive pleadingsprovided. Eachparty shall file documents that it considers sufficient to present all relevant facts and arguments necessary for the FAA to determine whetherthe sponsor is in compliance. [14 CFR, Part 16, § 16.29.] The proponent ofa motion, request, or order has the burden ofproof. A party who has asserted an affirmative defense has the burden ofproving the affirmative defense. This standard burden ofproofis consistentwith the Administrative Procedure Act (APA) and Federal case law. The AP A provision states, "[ e]xcept as otherwise provided by statute, the proponent ofa rule or order has the burden ofproof." [5 U.S.C. 

### § 556(d).] 

### [See also, Director, Office ofWorker's Compensation Programs. Department ofLabor v. Greenwich Collieries, 512 US 267, 272 (1994); Air Canada et al. v. Department ofTransportation, 148 F3d 1142, 1155 (DC Cir, 1998).] Title 14 CFR 

### § 16.229(b) is consistent with 14 CFR 

### § 16.23, whichrequires thatthe complainant submit all documents then available to support his or her complaint. Similarly, 14 CFR 

### § 16.29 states that "[ e]achparty shall file documents that it considers sufficient to present all relevant facts and argument necessary for the FAA to determine whether the sponsor is in compliance." Right to Appeal the Director's Determination A party to the Complaint adversely affected by the Director's Determinationmay file an appeal with the Associate Administrator within 30 days after the date ofservice ofthe initial determination. lfno appeal is filed within the time period specified, the Director's Determinationbecomes the final decision and order ofthe FAA without further action. A Director's Determination that becomes final because there is no administrative appeal is not judicially reviewable. [14 CFR, Part 16, 

### § 16.33] Part 16 requires all relevant facts to bepresented in the complaint documents. [14 CFR, Part 16, 

### § l6.23(b)(3).] New allegations orissues should not be presented on appeal. Review by the Associate Administrator is limited to an examination ofthe Director's Determination and the administrative record upon which such determination was based. Under Part 16, Complainants are reqnired 

### to provide with the complaint and reply all supporting documentation upon which it relied to substantiate its claims. Failure to raise all issues and allegations in the original complaint documents may be cause for such issues and allegations to be deemed waived and not reviewable upon appeal. This is consistent with the Supreme Court's recognitionthat courts may require administrative issue exhaustion as a general rule because it is usually appropriate under an [administrative] agency's practice for contestants in an adversarial proceeding before it to develop fully all issues there. The Court concluded thatwhere parties are expected to develop the issues in an adversarial administrative proceeding, the rationale for requiring issue exhaustion is at its greatest. 

### [See Sims v. Apfel, 530 US 103, 108-110 (2000) citing Hormel v.Helvering, 312 US 552 (1941) and US v. LA Tucker Truck Lines, 344 US 33, (1952).] 

### FAA's Responsibility with Regard to an**App~** Pursuant to 14 CFR, Part 16, § 16.33, the Associate Administrator will issue a final decision on appeal from the Director's Determination, without a hearing, where the complaint is dismissed after investigation. 18

In such cases, itis the Associate Administrator's responsibility to determine whether (a) the findings offact made by the Director are supported by a preponderance ofreliable, probative, and substantial evidence, and 

### (b) each conclusion oflaw is made in accordance with applicable law, precedent, and public policy. [See e.g. Ricks v Millington Municipal Airport, FAA Docket No. 16-98-19, (December 30,1999) (Final Decision and Order) p. 21; and 14 CFR, Part 16, § 16.227.] VI. ANALYSIS AND DISCUSSION Upon consideration ofthe Complaint, the Director ofthe Office ofAirport Compliance and Management Analysis detennined that the Authority is not currently in violation ofFederal obligations under Grant Assurances 5, Rights andPowers; 19, Operation andMaintenance; 22, Economic Nondiscrimination; 24, Fee andRental Structure; 25,AirportRevenues; and 29, AirportLayout Plan. On appeal, the Associate Administrator for Airports upholds the Director's Detennination based on each conclusion oflawmade in accordance with applicable law, precedent, and public policy. The Associate Administrator for Airports fmds that the Director omitted analysis on certain facts in the exhibits that otherwise would have made the same determination in accordance with applicable law, precedent, and public policy. 

### 1. Whether Respondent violated Grant Assurance 5, Rights and Powers andlor Grant Assurance 29, Airport LayoutPlan, by allowing AeroPremierthe right to sublease the second floor ofBuilding 101 (Building 101 orNG Hangar)without seeking prior permission from the Respondent and (2) granting AeroPremier the right atits sole option to cancel the lease ofthe McDermott facility. The Director found and concluded that the Airport had not violated Grant Assurance 5, Rights and Powers andlor Grant Assurance 29, Airport Layout Plan, by 

### (1) allowing AeroPremier the right to sublease the second floor ofthe NG Hangar without seeking prior pennission from the Airport or (2) granting AeroPrernier the right at its sole option to cancel the lease ofthe McDennott facility. [FAA Exhibit 1, Item 38, page 38] However, the Director strongly encouraged OLD that ifthe permission to sublease the 2nd floor ofthe NG Hangar results in a sublease for a nonaeronautical purpose without approval by the FAA, or ifAeroPremier were to cancel its lease ofthe McDermott facility without OLD oversight, OLD could be found in noncompliance under Grant Assurances 5 and 29. [FAA Exhibit I, Item 38, pages 18-19] In citing the FAA Order 5 I90.6B, the Director also strongly encouraged the Respondent to,19

"place a 'subordination clause' in all ofits tenant leases and agreements that subordinates the terms ofthe lease or agreement to all current and future Federal grant assurances and surplus property obligations. A subordination clause may assist the sponsor in amending a tenant lease or agreement that otherwise deprives the sponsor ofits rights and powers. A typical subordination clause states that ifthere is a conflict between the terms ofa lease and the Federal grant assurances, the grant assurances will take precedence and govern." [FAA Exhibit I, Item 38, page 18. See also FAA Order 5190.6B, Paragraph 6.6, page 6-2] The Complainant appealed the Director's Determination with respect to Grant Assurance No.5 for the reason thatthe Sponsor's conferring on AeroPremier the right to sublease Building 101 would operate to deprive itofany ofthe rights and powers necessary to perform any and all of the terms, conditions, and assurances ofthe grant agreement without the written approval ofthe Secretary, in violation ofGrant Assurance No.5. [FAA Exhibit I, Item 39, page 22]. The Complainant further appealed and stated "that in light ofthis uncontradicted status ofthe record, no other reasoned conclusion is possible other than the Sponsor ceded rights and powers to AeroPremier to sublease Building 101 and terminate the lease on the McDermott Facility." [FAA Exhibit I, Item 39, page 48] The Complainant continues to make an argument about the Mutual Receipt, Release and Indemnification Agreement (hereinafterthe 'Settlement Agreement') executed between the Sponsor, AeroPremier andthe Advantage Capital entities dated October 12, 2010. [FAA 

### Ex. 1, Item 39, page47) Paragraphs 9 and 12 states: 9. AI any time before the expiration of 21 months after completion of the lessors repair obligation, as defined herein, AeroPremier shall have the right to either sub-lease the secondfloor of Building 101 or to release the space to the OLD and thus exclude it from the lease; 12. AeroPremier shall have the right, at its sole option, to cancel the lease of the McDermott Facility (defined as MTNorthApron, MTHangar Deck, MT Office/Shop, MTSouthApron, MTParkingAreas [east of NorthApron, east of Office/Shop, andeast of SouthApron)) effective upon 60 days' notice to OLD

... The Complainant contends that Paragraphs 9 and 12 in the SettlementAgreement were the preciseprovisions in the document that Andy Velayos ofthe FAALouisianalNew Mexico ADO was referencing when he cautioned the Sponsor: "the right to sublease certain space should be subordinate to the grant agreements." [FAA Ex. I, Item 39, page 48]. The Complainant further contends that Mr. Velayos warnedthe Sponsor that ifit did sign the Settlement Agreement without subordinating AeroPremier's rights to sublease Building 101 the Sponsor would "be ceding its rights and powers to operate and administer the airport

...

### in accordance with the airport layoutplan." [FAA Ex. 1, Item 39, page 48]. The Complainant also argnes that Mr. Velayos was notthe oulyperson to comment about paragraphs 9 and 12 ofthe Settlement Agreement [FAA Ex. I, Item 27, Ex. R-2] The Complainantidentified their own expert witness, Michael Hodges, and suggested that there is agreement with 

### Mr. Velayos as he testified in this Affidavit:

... Inparagraph 9 of the SettlementAgreement, the Sponsor hasgiven AeroPremier the right to sublease the secondjloor of the office space within the NG Hangar withoutfirstobtainingpermission from the Sponsor. This is a clear violation of GrantAssuranceNo.5 (Preserving Rights andPowers) andis also a violation of GrantAssuranceNo. 29 (the Airport Layout Plan)

.

... Inparagraph 12 of the SettlementAgreement, the Sponsor givesAeroPremier the right to cancel the [ease on the McDermoll- Tidewater Hangar. This violates GrantAssurance Nos. 5 and29 for the reasons discussedabove in myassessment of

paragraph 9 of the SettlementAgreement. [FAA Exhibit I,Item 39] The Complainant specifically stated that "No subordination clauses appear (in paragraphs 9 or 12." (Emphasis in original) The Complainant further argued "despite warnings from 20



### Mr. Velayos that paragraphs 9 and 12 ofthe Settlement Agreement should have subordination language inserted to avoid violations ofGrant Assurance Nos. 5 and 29 the Settlement Agreement was executed by the Sponsor without inserting subordination clauses." [FAA Ex. I, Item 39, page 48, citing FAA Exhibit I, Item 27, Exhibit R-2]. Inthe Respondents' Reply to the Complainant's Appeal, the Respondent wrotethat "it agreed with and fully accepted the admonition ofthe Directorthat Grant Assurance 5 requires that subleases should be subject to sponsor concurrence and that any sublease to a non-aeronautical tenant 

### in Building 101 without FAAconcurrence would subject the sponsor to a potential violation ofGrant Assurance S." [FAA Exhibit I, Item 40, page 3] The Respondent further identified that "the parties to the Settlement understood that FAA approval would be necessary for at least some of the terms ofthe agreement and therefore made the agreement subjectto FAA approval." [FAA Exhibit I, Item40, page 3, Citing FAAExhibit I, Item4, Exhibit R-2, page 4, Para. 17]. The Complainant's 

### arguments that

### the AiIport Sponsor

### had not 

### snbordina!edthe agreements totheFAA 

### grant assumnces arenotpersuasive andhave no merit Asnoted 

### inthe Factual Background section of the Director's Determination, the SettlementAgreement 

### states: The SettlementAgreementalso contained the condition that it was subject 10 FAA approval. [FAA Exhibit 

### 1, Item 

### 38, page 

### 5. citing FAA Exhibit 

### 1. Item 4, Exhibit R-2, page 4J Close review ofthe Settlement Agreement revealed additional language reflecting the subordination ofthe Settlement Agreement to the grant assurances. Althoughnot expressly set forth 

### in Paragraphs 9 and 12 in the Mutual Receipt, Release and Indemnification Agreement, Paragraph 14 ofthat Agreement states: 

### I4. The Parties agree lhat thisAgreement is intended/0 include a complete andfinal release of all claims that have been or couldhave been asserted in the Lawsuit, themalterhaving been settledto their satisfaction. Notwithstanding the above, there is no release in thisAgreementfor a (i) breach of thisAgreement or (ii) afoture breach of the Lease (as amended) or the FAA Sponsor assurances. [FAAExhibit I, Item 40, ExhibitR-2, page 3, citingFAA Exhibit 1, Item4, ExhibitR-2] 21

The language in Paragraph 14 unambiguously subordinated all the terms and conditions ofthe entire Settlement Agreement to the grant assurances. The parties had negotiated that ifthere is a conflict between the terms ofthe Settlement Agreement, the grant assurances will take precedence and govern. This subordination clause clearly permits the Airport Sponsor to amend the Settlement Agreement ifthere is a conflict that otherwise could deprive the sponsor ofits rights and powers with AeroPremier. [See FAA Order 5190.6B, Paragraph 6.6 (a), page 6-2] Thus, the Airport Sponsor had inserted specific language in their documents throughout its legal negotiations to ensure that it had sufficient control over the airport in order to maintain compliance with the grant assurances.2 Subsequent to the issuance ofthe Director's Determination, in its Answer to the Complainant's Appeal the Respondent stated: "the Respondent had consented to the assigrnnent and assumption ofAeroPremier's lease to another new airport lessee, Hawthorne Aviation. Hawthorne, prior to any sublease being entered into, released the second floor ofBuilding 101, to the Old and excluded it from the Lease. Hawthorne has also made the decision not to cancel the lease on the McDermott Hangar." [FAA Exhibit I, Item 40, Pages 2-3] The Respondent's consent to the assigrnnent ofthe AeroPremier lease demonstrates the Respondent's understanding ofits Federal obligations and further strengthens the argument that the Airport Sponsor acted appropriately in subordinating the agreement to the grant assurances. Consequently, the Associate Administrator for Airports finds that the lack ofa discussion of Paragraph 14 ofthe Settlement Agreement in the Director's Determination is a harmless error. The FAA notes that the Complainant also failed to discuss the subordination clause (paragraph 14) in the Settlement Agreement in his initial and amended Complaints and subsequent arguments. The Associate Administrator finds that the Director ultimately made the correct determination in this matter and that the airport sponsor is in compliance with Grant Assurance 5, Rights and Powers, and Grant Assurance 19, Airport Layout Plan, with regards to the above Issue. Based upon the Respondent's consent to the Assigrnnent ofthe AeroPremier Lease to Hawthorne and actions taken by Hawthorne, the Associate Administrator finds that the Complainant's claims concerning (I) allowing AeroPremier the right to sublease the second floor ofthe NG Hangar without seeking prior permission from the Airport and (2) granting AeroPremier the right at its sole option to cancel the lease ofthe McDermott facility also can be considered resolved. Therefore, the Associate Administrator for Airports upholds the Director's Determination concerning this issue.

:2 A method asponsor may use in this regard is to place a "subordination clause" in all ofits tenant leases and agreements that subordinates the tenns ofthe lease or agreement to the federal grant assurances and surpluS property obligations. See FAA Order SI90.6B, Paragraph 6.6(a). See also Platinum Aviation and Platinum Jet Center BMI v. Bloomington-Normal Airport Authority issued November 28, 2007 (FAA 16-06-09 and Gina Michelle Moore v. Sumner COWIty Regional Airport Authority issued February27,2009 (FAA 16-07-160).22



### 2. Whetherthe Respondent is 

### in violation ofGrantAssurance 19, Operation and Maintenance by (1) 

### failing to operatethe airport suitably becauseRespondents did not restore the National Guard Hangar within 14 

### months ofthe effective date ofthe Respondents lease with AeroPremier and/or (2) allowing the airportto deteriorate and to become a safety hazard because ofan open drainage area and changes to an onairportmaintenance schedule. The Director was notpersuaded that the Respondent violated Grant Assurance 19, Operations and Maintenance, by failing to restore the 

### NG Hangar with 14 months ofthe effective date ofthe Respondent's lease with AeroPremier. [FAA Exhibit 1, Item 38, page 21] The Director found that the repairs were dependent 

### inpartuponthe receipt ofFEMA funds. When those funds were not available as anticipated, the delay 

### in repairing the NG Hangarwith the lease provisions did not result 

### in a violation ofGrantAssurance 19. [FAA Exhibit 1, Item 38, page 24] The Director also found the allegations and evidence presented by Complainantregarding an open

### drain areaonthe 

### aiJportramp and changesto anon-airport maintenance schedule are insufficient to conclude thatthe Respondenthas so neglected the facilities at the Airport as to rise to a violation ofGrant Assurance 19. [FAA Exhibit 1, Item 38, page 24] The Director found that repairs and reconstruction as a result ofHurricane Katrina may not necessarily have been completed as timely as desired. However, rather than a violation of Grant Assurance 19, this issue is instead a potential breach oflease between the contracted parties (in this case, AeroPremier and the OLD) and was more appropriately addressed 

### in state court. [FAA Exhibit I,Item38,page23] Grant Assurance 19 specifically states that: "nothing herein shall be construed as requiring the maintenance, repair, restoration, or replacement of any structure or facility which is substantially damaged or destroyed due to an act of Godor other condition or circumstance beyond the control of the sponsor." [Assurance 19] The Director found thatthe Respondent was confronted with not only physical damage 

### to the Airport, but also with the need to coordinate with Federal agencies to provide additional financial aid to allow repair and reconstruction. [FAA Exhibit I, Item 38, page 22] Although an acceptable level ofmaintenance is difficult to express objectively, the FAA will consider a general aviation airportcompliantwith its Federal maintenance obligation whenthe sponsor:

... Fullywuierstamis thatairport facilities must be kept in a safo andserviceable condition

... Makes available the equipment, personnel, 

### fonds, andother resources, including contractarrangements, to implementan effictive maintenanceprogram.

... Adoptsandimplements a detailed program of cyclical preventive maintenance adequate to carry out this commitment.23 [FAA Order 5190.6B,**~** 7.5] The Director also found that the Complainant could not explain why the failure to timely repair the NG Hangar resulted in failure to operate and maintain the Airport as required by Grant Assurance 19. [FAA Exhibit 1, Item 38, page 22] The Director further found "the Complainant has not shown that the Respondent failed to understand that the airport must bekept in a safe and serviceable condition, orfailed to make resources available as those resources were made available to the Respondent." [FAA Exhibit I, Item 38, page 23] Finally, the Director found that the Complainant failed to allege the Respondent has failed to carry out a detailed preventative maintenance program. [FAA Exhibit 1, Item 38, page 23] The Complainant appealed the Director's Determination based on several issues. The Complainant objects to the Director's finding that FEMA funds were not available to effect repairs to the NG Hangar, since Complainant cited that the Directorrefused to address evidence in record showing the money to renovate theNG Hangar had been available since 2006. [FAA Exhibit 1, Item 39, page 45] The Complainant further contends not only was the FEMA newspaper story cited to the Director in Complainant's Amended Complaint butthat the unsworn nature ofthe evidence did not diminish its credibility. [FAA Exhibit 1, Item 39, page 54] Accordingly, the Complainant contends the Director's Determination that FEMA funds were unavailable is not supported by substantial evidence. [FAA Exhibit 1, Item 39, page 53]. 

### In explaining why no Grant Assurance 19 violation was found, the Director wrote: The Complainant has notshown that the Respondent failed to understand that the airport must be kept in a safe andserviceable condition, or failed to make resources available as though resources were made available to Respondent. Nor has the Complainant allegedthat the Respondent has failed to carry out a detailedpreventative maintenanceprogram. [FAA Exhibit 1, Item 38, page 23] Furthermore, the Director again in denying a violation ofGrant Assurance 19 wrote: The Director is notpersuadedthat Respondent violated GrantAssurance 19, operations andmaintenance, by failing to meetself-imposeddeadlines to repair the NGHangar. The Respondent's repairs were dependent inpart upon receipt of FEMAfonds; when thosefonds were notavailable as antiCipated the delay in the NG Hangar didnot result in a violation of Grant 19. The Director alsofinds that the allegations andevidencepresentedby the Complainant regarding an open drain area on the airport ramp and changes to an on-airport maintenance schedule are inslffficient to conclude that the Respondent has so neglectedthe facilities at the Airportas to rise to a violation GrantAssurance 19. [FAA Exhibit 1, Item 38, page 24]. The Complainant argued that there was no sworn testimony in the record thatFEMAfonds were notavailable. The Complainant contends that there 

### was evidence intherecordthatthe FEMA funds were available beginning in 2006. [FAA Exhibit 1, Item 39, pages 45 and 53 citing FAAExhibit I, Items 14, 15, 16, 17 Exhibits C-66 and C-68] According to the Complainant, the Complainant submitted a newspaper article written by BenMyers in a New Orleans newspaper on April 8, 2011: LakefrontAirport's owner isproviding a questionable explanation for the slow pace of repairs to a hangar that is central to a FederalAviationAdministration investigation. The Non-FloodProtectionAssetManagementAuthority, thepublic entity that owns the airport, blames the Federal Emergency ManagementAgency for having "obligatedandthen de-obligated fonds necessary" to repair the hangar andoffice space. The Authority's explanation appears in a formal response to a complaintFlightline First [sic}, a Lakefronttenant,filed with the FAA claiming the airportshowed favoritism towarda competitor.

The explanation is "definitely not correct, " FEMApublic assistance Officer Eddie Williams said FEMA records show that $2.5 million has been "obligated"for the hangar, meaning the money has beenplaced in a reimbursementaccount the Governor's office controls. The money has been available to the Office of FacilityPlanning and Control in the form of reimbursements for completedworksince an initial $1.8 million deposit in October 2006. But only $287, 896.27 has been drawn down thisfall, accordingto FEMA. [FAA Exhibit I, Item 39, pages 53-54, citing FAA Exhibit 1, Items 15 and 17, Exhibits C-66 and C-68]. In its rebuttal and response, Respondent stated as follows: Complainant bases its entireAmendedComplaint andAmendedResponse to the Answer of the ManagementAuthorityon "newly discoveredevidence." 

### That "evidence, "whichwouldnever be acceptedevidence inanycourt oflaw as itviolates severalstandard

### rulesof 

### admissibility, is astatement

### made bya FEMA employee

### which appearedin anarticle intheNew Orleans CityBusiness newspaper onApril 

### 8, 2011. In thatarticle the FEMA employee statedthathewas "pretty certain" thotFEMAfonds necessary for the repair of theNational GuardHangar were not deobligated by FEMA. However. 

### the a11ached

### emaiJs from Ms. LisaSmeltzer from 

### theState of Louisiana Division of Administration

### made itcrystalclear that the saidFEMAfunds were deobligated in September, 2007andreobligatedinDecember, 2008. See, Exhibit 1 attached The FEMA employeewastherefore misirifOrined

### andthe Complainant basedan entireAmendedComplaint andAmendedResponse on that misinformation. This pattern of usingmisinformation is found throughout Complainant's filings. [FAAExhibit 1,Item40, page S, citingFAAExhibit 1, ltern25,page3] 2425

The Respondent replied that its obligations "to repair the NO Hangar was dependent in part upon the receipt ofFEMA funds and when those funds were not available as the OLD had anticipated, the delay inrepairing the NO Hangar did not rise to a violation ofGrant Assurance 19." [FAA Exhibit 1, Item 40, page 4] The Respondent further emphasizes this by writing "Until the funds were obligated, the State ofLouisiana was unable 

### to proceed withthe work." [FAA Exhibit 1, Item 40, page 5] The Respondent emphasized a series ofe-mails sentby Ms. Lisa Smeltzer from the State of Louisiana Division ofAdministration. [FAA Exhibit I, Item 25, page 3] The record includes a series ofe-mails submitted as part ofthe Respondent's Reply

### to the Amended Complaint. These e-mails reflect

### the uncertainty associated withthe availability of FEMA funds which in turn delayed the airport sponsor inrepairing the aitport facility. The emails also indicated that the state was having difficulties funding the facility repairs at Lakefront Airport. In one e-mail, on Monday, August 18, 2008, Ms. Lisa Smeltzer ofthe Department of Administration sent ane-mail to Louis Capo, Executive Director ofthe Orleans Levee District. She wrote: We have been trying to getthe money backfrom FEMAfor the PWs [project worksheets} that were de- obligatedatLakefrontAirportfor several months nOw. There is a bigmeetingtomorrow to discuss these PWs with top FEMApeople. Couldyou sendme a list of whatyou want to do with each of the bldgs., i.e., Bldg. 

### #

- demolish, Bldg. # - repair, etc.for all seven buildings which were assignedto the Military at the time of the hurricane? [Exhibit 1, Item 25, Exhibit 1] In a subsequent e-mail dated August 22, 2008, from Lisa Smeltzer ofthe State ofLouisiana Department ofAdministration to Louis Capo, she wrote: GoodNews! On Tuesday, 8119108, FEMA (rep.from Odell's office, Walk, Stark, Connelly, etc.), GOHSEP (Reilly, Col. 

### K, etc.: and the Military (Gen. Downer, etc.) met to discuss the deobligatedPWs from Jackson Barracks andLakefront Airport. Asyou may know, this issue has beengoing on since Sept. 07. Asa result of the meeting (and here is the goodnews), FEMA saida letter will be sent to us nextweek, (but don'thald your breath waitingon a letter), statingthat there isNODUPLICATIONoffonding. We areproceedingon their word (since about 30 people were in the meeting). Thus, FPC (Office of Facility Planningand Control) will write newPWrequestsfor the seven (7) buildings ownedby the Military at the time of the storm. Wejust received the new formfrom GOHSEP andRonnie 

### will work on this onMonday. We wouldthen expect FEMA to send people to write the PWs. We willprobably need assistance from the deSigners on cost, scope, etc. What I wouldlike to do is have FPC assistyou andmaintain the contractyou have with the d£signer so we do not have to go backto selection board FPC couldhandle the bids andissue the

### contract to the contractor for the work included in the PWs. We will also assist with any improvedoralternateprojects. So, itloolcs like we are backon this with

### youandlookforwardto making some progress. [FAA Exhibit I, Item 25, Exhibit I] 26

Finally, Ms. Lisa Smelter ofthe State ofLouisianaDivisionofAdministration 

### in an e-mail to Louis Capo on April 4, 

### 2011 provided a synopsis about the FEMA funds availability for the repair work at Lakefront Airport: 

### The de-obligation occurred in 9107 andthe re-obligation occurred J 

### 2108, so I apologize 

## if I was afew months off. Once the PWs were re-obligated, we had to go through scope alignment which took several months. See attached spreadsheet showing obligation of funds for the 3,d 

### versions in Sept./Oct. 2009. Until thefunds are obligated, we are unable toproceedwith work. Note also a 

### 4'h version on each PWwas not obligated until early 2011 (smaller dollars, but again additional fundsfor theproject.) HopefUlly, this answers the question. [FAA Exhibit I, Item 25, Exhibit I] The Complainant also provided a newspaper article about alleged state corruption in which a FEMApublic assistance officer suggested that the explanation provided bythe airport sponsor was definitely not correct. [FAA Exhibit 1, Item 39, page 42 

### citing FAA Exhibit I, Item 15 C-66 and FAA Exhibit 1, Item 17, Exhibit C-66] However, the Complainant did not provide any evidence to show that the FEMA public assistance officer had been personally involved with the Lakefront Airport orhad personal knowledge ofthe 

### 2008 meetings or subsequent timelines where the different versions ofPWs (project worksheets) were developed for the repair of Lakefront Airport as written inthe State ofLouisiana Division ofAdministration e-mails. Even though not sworn testimony, a reasonable reading ofthe chain ofe-mails shows there were several versions ofthe scope ofwork for construction repair to be negotiated between the Airport Sponsor and FEMAfor the Lakefront Airport repairs between December 

### 2008 and early 

### 2011. It also appears to be clearthat the State ofLouisiana Division ofAdministration would not permit the Airport Sponsor to proceed with all repair work until all ofthe smaller but additional FEMA funds for the individual Lakefront Airport projects were fully obligated in early 

### 2011. To suggest otherwise, one would obligate the airport sponsorto make up the difference out of pocket inthe local funds until reimbursed by FEMA ifthe funds everbecome available. It is reasonable for a public entity such as an airport sponsornot to commit to a project until the total funding package is inplace. The Respondent also informed the FAA that the work onthehangar was completed in February 

### 0[2012. [Exhibit I, Item 40, page 4] TheAviation Group (TAG) Reportalso included an email datedApril 6, 

### 20II, whichreflected the work being scheduled inside the hangar and the necessary coordination requirements for the constructionto take place:

### Date: Wed, 6

### Apr201111:16:54 From: Vick Corso To: Rolando Gonzalez GoodmorningRolando, As requestedper our conversation 

### 4/6/11 the construction inside hanger will startthis comingMonday 4/11/2011. From this day on till thefirst week of June we will need total access to the hangar from tam till 4:30pm Monday-- Saturday and possible Sunday. 

## If andevent[sic 

## Jwe 

### are working later hours that dayyou will be notified that morning. There can be noplanes in the hangar due to the working inprogress. The inside of hangar will be staging area toprep materials to be installed, sprinkler systems,fire alarm, coildoor install, and hangar glass replaced. I'm not sure how this will affect using it after hours but 

## if you flel that the aircrqfi will be safo beingstoredwith equipment andhardware thatwill be your call. Please letAnthony know 

## if you have any request day to day. Thanks, Vick Corso VickCorso c.E.O. Corso Companies/ Anode, Inc. [FAA Exhibit I, Item 25, Exhibit I] 27

This e-mail highlights the timetable ofscheduled work and the necessary coordination between all affected parties and tenants for importaot safety and security capital improvements such as the sprinkler system, fire alarm, doors, glass, etc., being installed. Until the funds were obligated in full, everyone was unable to proceedwith work. The PWs (project worksheets) were not able to be finalized between the Airport Sponsor, the State of Louisiana, and FEMA, until the actual amounts were confirmed. Once the funds were reobligated, the State had to go through an additional scope alignment, which took several months. There is therefore substantial evidence inthe record ofthis proceeding demonstrating the unavailability ofthe necessary FEMA funds at issue for the Airport Sponsor to complete the scope ofwork and necessary repairs. The Associate Administrator for Airports finds that the factual evidence supports the Director's Determination. An examination of the State ofLouisiana e-mails on appeal further substantiates the Director's conclusion that Respondent did not violate Grant Assurance 19 by failing 

### to meet the self-imposed deadline 

### to repairthe National Guard Hangar ("NG Hangar"). Furthermore, according to the Respondent's Reply to the Complainant's Appeal, the repairs to the NG Hangar were completed in February of2012. [FAA Exhibit I, Item 40, page 4] The FAA will make a determination as to whether an airport sponsor is currently in compliance with applicable Federal obligations. Consequently, 

### "the FAA will consider the successfol action by the airport to cure any allegedorpotentialpast violation of applicablefederal obligations to be groundsfor dismissal of such allegations." [See Wilson Air Center v. Memphis and Shelby County Airport Authority, FAA Docket No. 16-99-10, (August 30, 2001) (Final Decision and Order), page 5] Therefore, this issue can be considered moot.28

The Director also correctly found that the allegations and evidence presented by Complainant regarding an opendrain onthe Airport ramp, which has long since been repaired, and changes to an on-Airport maintenance schedule didnot

### rise

## roaviolation

### ofGnmtAssumnce 19. [FAA Exhibit 1, Item 38, page 23] In its Original Complaint, the Complainant stated the following: "The Orleans Levy [sic] District is allowing the airport to deteriorate and to become a safety hazard In the recentpast, ajetaircraft was being relocated on the airport ramp. Because the Orleans Levy [sic] District/ailedto maintain the drainplates andcover in aproper configuration and failed to have themproperly secured, when the aircraft was movedby tug across the drainplate, theplate gave way andthe aircraft was damaged The airport sponsor...denies any liability or responsibility for this damage to the aircraft. The incidentwith this aircraft is merely one illustration of the manner in which the Orleans Levy District is allowing the LakefrontAirport to deteriorate. Further, 

### if you will examine the Exhibit JB

.... you will note that the

...District now desired to defer filter changes on thefueljilter systemfrom an annual replacement cycle to every two years. While this may have a certain appeal economically, it maypresent a safety hazard" [FAA Exhibit I, Item 1, page 21] The Director found that other than Complainant's statements above, there was no additional information provided inthe pleadings to substantiate these claims. The Complainant has submitted four images that depict a square, open area onthe ramp with an adjacent cover - this appears to be a drain area and cover. [FAA Exhibit I, Item I, Exhibits 45, 46, 47, 48] Additionally, the images show that parking cones had been placed around the area to warn and prevent others from getting close to it. The Complainant objects to the Director's Determination finding "a Complaint must present more substantial evidence ofrepeated failure" before Complainanthad proven the Sponsor failed to maintain the Airport in violation of49 U.S.C. 

### § 47107(a)(7) and Grant Assurance 19 when there are no such requirement inthe statute nor in Grant Assurance 19." [FAA Exhibit 1, Item 39, page 44] Even though the Complainant submitted four photographs as exhibits, there is no reliable, probative and substantial evidence to reasonably conclude that there were any airport hazards as the Complainant specifically claimed aboutthe open drain area or changes inthe fuel filter system. The four pictures show appropriate temporary safety measures such as placing the parking cones until the repair could be completed. The Airport Sponsor appears to have taken the appropriate temporary corrective actionto maintain the safety ofLakefront Airport. The FAA will make a detennination as to whether an airport sponsor is currently in compliance with applicable Federal obligations. Consequently, "the FAA will consider the successful action by the airport to cure any alleged or potential past violation ofapplicable Federal obligations tobe grounds for dismissal ofsuch allegations." [See Wilson Nr Center v. Memphis and Shelby County Airport Authority, FAA Docket No. 16-99-10, (August 3D, 2DD!) (Final Decision and Order), page 5 (Wilson FAD).] Therefore, the Airport Sponsor's corrective measures taken properly resolved this issue. Therefore, the Associate Administrator for Nrports fmds that the Director's Determination is upheld on appeal concerning this issue. 

### 3. Complainant's Appeal ofDirector's Use on the Act ofGod provision in Grant Assurance 19, Operation and Maintenance, for the Determination. The Complainant objected to the Director's Determination finding that" an "act of God" excusedcompliance with the Sponsor's duty to maintain the Airport suitably as required by 49 Us.

### C. § 47107(a)(7), since there is no "act of God" exception to that duty in the statute andsince Hurricane Katrina tookplace in 2005 and the Sponsor's lease with AeroPremier was executed in 2008, after Hurricane Katrina struck the GuifCoast with the result thatHurricane Katrina was notandcouldnot have been an intervening "act of God" excusingthe Sponsor'sperformance of its duties.[sic}" [FAA Exhibit 1, Item 39, page 21] 29

The Complainant contends that "even if there were an "act of God" exception that applied in this factpattern, a contention the Complainant submits isfallacious,for the "act of God" exception to be triggered, the "act of God" wouldhave hadto have actedas a superseding or intervening cause. There was no "act ofGod"fromApril 8, 2008 to August 1, 2009 thatprevented the Airport Sponsor from suitably maintaining the Airport.[sic]" FAA Exhibit 

### 1, Item 39, pages 21- 22] Grant Assurance 19 states: 19. OPERATION ANDMAINTENANCE

a. The airportandall facilities which are necessary to serve the aeronautical users of the airport, other thanfacilities ownedor controlledby the United States, shall be operatedat all times in a safe andserviceable condition andin accordance with the minimum standards as may be required orprescribed by applicable Federal, state andlocal agencies for maintenance and operation. 1t will notcause orpermit any activity or action thereon which would interfere with its use for airportpurposes. It will suitably operate andmaintain the airport and all facilities thereon or connectedtherewith. with due regard to climatic and flood conditions. Any proposal to temporarily close the airport for non-aeronautical purposes must first be approved by the Secretary. InfUrtherance of this assurance, the sponsor will have in effect arrangementsforb. Operating the airport's aeronautical facilities whenever required;



### c. Promptly marking andlighting hazards resultingfrom airport conditions,including temporary conditions; and d. Promptly notifying airmen of any condition affecting aeronautical use of the airport. Nothing containedherein shall be construedto require that the airport be operatedforaeronautical use during temporaryperiods when snow,flood or other climatic conditions interftre with such operation andmaintenance. Further, nothing herein shall be construedas requiring the maintenance, repair, restoration, orreplacement of any structure or facility which is substantially damaged or destroyeddue to an act of Godor other condition or circumstance beyondthe control of the sponsor. 30

First, Complainant's allegation that there is no 'act ofGod' exception in Grant Assurance 19 has no merit. The assurance in subparagraph (d) states that, nothing herein shall be construed as requiring the maintenance, repair, restoration, or replacement ofany structure or facility which is substantially damaged or destroyed due to an act ofGod or other condition or circumstance beyond the control ofthe sponsor. This is the 'act ofGod' exception thatprovides flexibility for the sponsor in compliance with Grant Assurance 19 in the aftennath ofan 'act ofGod' event. There is little question that Hurricane Katrina constituted an 'act ofGod'.3 As to the allegation (or insinuation) thatbecause the act ofGod exception is not included in the statutoryprovision relating to Grant Assurance 19 (49 U.S.C. 47107(a)(7)), the exception carriers no legal weight or effect, Complainant is in error. The FAAhas statutory authority to promulgate new grant assurances and modify existing assurances (see, e.g., 49 U.S.C. 47107(h)); all sponsors are contractually obligated to comply with all ofthe assurances. Sponsors are notfree to ignore non-statutory grant assurances or tenns. Second, Complainant alleges in the alternative that even ifthere is an 'act ofGod' exception, that the Director erred because Hurricane Katrina occurred in August 2005 and thatthree years later after that event, the sponsor could no longer utilize the 'act ofGod' exception to excuse compliance with Grant Assurance 19. [FAA Exhibit I, Item 39, page 44] However, the grant assurance does not require the sponsorto maintain, repair, restore, orreplace any airport structures within any timeframe;4 as noted above, it states that the assurance cannotbe construed to require the sponsorto take these actions where airport structures are "substantially damaged or destroyed" due to the 'act ofGod'. As a result, there is no merit to Complainant's claim that there was no 'act ofGod' from April 8, 2008 to August I, 2009 that preventedthe Airport Sponsor from suitably maintaining the Airport. [FAA Exhibit I, Item 39, page 44] The FAA need not demonstrate orfind any intervening or supervening causes. The AeroPremier lease required the Airport Sponsorto repair the facility in 14 months ofthe effective date ofthe Respondents lease with AeroPremier. [FAA Exhibit I, Exhibit 38, page 3, citing FAA Exhibit 1, Item I, Exhibit 4, pages 2-3] As the Respondent properly provided in the

3 See Skandia Insurance Co Ltd. V. Star Shipping AS 173 F.Supp.2d 1228, 1239-]240 (S.D. Ala. 2001), citing 1AmJur.2d Act ofOod § 5 (1962)("HulTicanes are precisely the sort ofnatwal disaslt:r for which the Act ofGod exception from liability is afforded." See 2 Benedict on Admbalty § 152 (7th ed.I990)). 4 However, the sponsor is required to colTect unsafe conditions within areasonable amount oftime. FAA Order 5190.68. '" 7.1 O.31

e-mails submitted as an exhibit, the Airport Sponsor was unable to perform its contractual duties due to the lack ofthe entire fmancing for the facility repairs. Thus, the Airport Sponsor had no obligation to perfonn the maintenance orrepairs to any ofits facilities because ofthe Act of God, in this case Hurricane Katrina, even three years after the actual Act ofGod event, without all ofthe necessary capital improvement funds to complete the project in its entirety from planningthe final Project Work Sheets through to completion ofconstruction work. According to Respondent, the work onthe hangar was completed in February of2012 once the capital improvement funds were received. [FAA Exhibit 1, Item 40, page 4] The Associate Administrator for Airports finds that the Appellant's argument is notpersuasive on appeal. The Director's Determination is upheld concerning its findings on Grant Assurance 19. 4. WhethertheRespondeotviolated GrantAssurance22(c), Economic Nondiscrimination, GrantAssurance 24, Fee and Rental Structure,and GrantAssurance25, Airport Revenues, by agreeing to a settlementthatbenefited AeroPremier and its Advantage Capitalparent and unjustlydiscriminated againstComplainant. The Director was not persuaded that the Respondent violated Grant Assurance 22, Economic Nondiscrimination, by agreeing to a settlement agreement that offered rent credits and other concessions to AeroPremier. The FAA will not substitute itsjudgment for that ofthe court or OLD in determining the level ofdamages appropriate to resolve OLD's breach oflease with AeroPremier. The Director was not persuaded by the evidence presented that the Complainant has been economically disadvantaged by the OLD's settlement agreement with AeroPremier. [FAAExhibit 1, Item 38, page 32] The Director also was not able to make a finding on the evidence presented as to whether the Complainant has been charged excessive insurance rates to 'make up' for a reduction in insurance fees paid by AeroPremier. The Director advised the Complainantto contact the Respondent to resolve this issue. [FAA Exhibit 1, Item 38, page 32] The Complainant appealed the Director's Determination finding that the Sponsor's conferring $1,258,000 in economic benefits on AeroPremier and the Advantage Capital entities was a "business decision" when the FAA Southwest Region Airport District Office (ADO) had requested detailed financial documentation in evaluating charges ofviolation against Grant Assurances 22, 24, 25, 5 and 29. [FAA Exhibit 1, Item 39, page 21] The Complainant argued the Director reversed his subordinates' position without explanation and declared, in the absence ofthe necessary documentation, the Sponsor's actions werejustified as a "business decision." [FAA Exhibit 1, Item 39, page 21] The Complainant further argued that the Director's finding that there was no violation ofGrant Assurance 22 because it was ajustified "business decision" wasbased onthe Director's finding that FEMA funds to renovate premises leased to AeroPremier were not available when there was no sworn testimony to support that finding and there was evidence in the record demonstratingthe Director's finding was manifestly untrue. [FAA Exhibit 1, Item 39, page 21] The Complainant also objected to the Director's Determination finding that the Airport Sponsor's32 conferring $500,000 in rent credits on the Advantage Capital entities was lawful as a business decision when the Advantage Capital entities lost their motion for summaryjudgment in the underlying litigation. [FAA Exhibit 1, Item 39, page 21] The Complainant also objected to the Director's finding that, "

...the Director is notpersuaded that the teJTI\s ofthe settlement are so beneficial to AeroPremier, over and above the damages ifsustained, that it rises to a situation where Flightline or other FBOs on the airport have incurred unjust economic discrimination as a result." [FAA Exhibit 1, Item 39, page 23] The Complainant objected to the Director's finding that 

### "GrantAssurance 22 

### was not violated to the extent the Director found the court in the underlying litigation rendered judgment on the SettlementAgreement and by virtue of court approval, the Director was notpersuadedthat it 

### rises to a situation where Flightline incurred unjust economicdiscrimination as a result. " [sic] [FAA Exhibit 1, Item 39, page 23] The Complainant conclndes that the Director's finding is not supported by substantial evidence. [FAA Exhibit 1, Item 39, page 23, 

### citing FAA Exhibit 1, Items 12, and FAAExhibit 1, Item 28] The Complainant points to the Velayos letter to the Sponsor ofNovember 18, 2010. The FAA's Lead Planner for the Louisiana/NewMexico ADO wrote: 

### We believe that, due to the significant differences betweenAeroPremier's estimate and OLD's report, implementation of this settlement may result in an improper use of airport revenue. 

## If the sponsor agrees to base its settlement on unfounded compensation, subsidies, and/or set an improper foe schedule benefiting AeroPremier, this action may violate GrantAssurance 22 

### (Economic NonDiscrimination), 24 

### (Fee andRental Structure), and 25 

### (Airport Revenue). [FAA Exhibit 1, Item 33, Exhibit C-55, page 1] The Complainant hired Michael Hodges, its expert witness consultant in management ofFBOs and airports, who provided an Affidavitthat Grant Assurance 22(c), 24 and 25(a) were all interrelated and the evidence before him led

### him to conclude the Sponsor was in violation of Grant Assurance 22(c), 24, 25(a), 5 and 29. The Complainantappea1ed

### the Director's Determination as not

### supported by "substantial evidence" inlightofthefollowing: 

### 1. Complainantsubmittedswomtestimony from MichaelA. Hodges, MAl, 

### an 

### expert infixed base operations and

### managingairports who opinedthe Sponsorwas in violation of Grant Assurance Nos. 22(c), 24, 

### 25(a), 5 and

### 29. 

### 2. Hodges concludedthe deal between the Sponsorand 

### AeroPremier in the Order of February 22, 

### 2010, and

### the SettlementAgreementof October 12, 

### 2010was "arbitrary, capricious and 

### discriminatory in favor of AeroPremierand

### againstFlightline, and

### was not predirutedupon any

### supportable marketdala or justifiable analyses of damages

### or 

### financial impacts. 3. Hodges notedthateven in the absence of office space renovations to theNGHangar, itwaS still

...fo/ly capable of beingrentedto aircrafi owners to house theiraircraft. 4. Hodges notedthe economicconcessions the SponsorgaveAeroPremieraspart

### of the deal' were grossly anddemonstrably in excess of anykinds of damagesAeroPremiercould possibly have

### s'!Iforedasa consequence of aportion of the facility's office space having notbeen renovated5. Hodges forther noted: The disparate economic treatment the Sponsor 

### has handed

### outto Oc(yssey andFlightlme comparedtoAeroPremierconvinces me as a professional in the aviation industry thatthe intentof the Sponsorwas to favor the interests of AeroPremier andtheAdvantage Capital entities over those of Flightline and Odyssey. 6. Hodges notedthatwhile there wasa 15% reduction in the improved portion of the NG Hangar, the rental was reduced inparagraph 4 of the Order from $28,259.83per month to $7,500.00permonth. 33



### 7. Hodges noteda rationalperson wouldnot reduce the rentby 75%for a 15% reduction in the available space. 8. Hodges opinedthe violation of GrantAssuranceNo. 22 in the form of unjustifiedand discriminatory economic concessions resulted in a violation of GrantAssurance No. 24 requiring the Sponsor to seta rentstructure to make the airportasself-sustaining as possible. 9. Hodges notedeven 

## if intent to discriminate wasa requirement toprovidinga violation of GrantAssuranceNo. 22(c), the requirement hadbeen met basedon the evidence. 10. Hodges opined that the unauthorizedand unwarranted economic concessions conftrred bythe Sponsor onAeroPremier resulted in a violation of GrantAssurance No. 25, the AirportSponsor is takingmoney from Flightlme 

### andusing that money to subsidizeAeroPremier. 11. AnalyzingAeroPremier's economic lossprojections, Hodges noted: the grossprofit andmarketshareprojections

...are excessive. 12. Drawing on his experience in the industry, Hodges noted:

... theprojection that AeroPremier couldachieve 33% marketshare in such a shortperiod

.. is not supportable basedupon market andhistorical data. 13. Hodges examinedthe SettlementAgreement notingthat a rent credit of$473,OOO. 00 wasdiscriminatory under GrantAssurance No, 22(c) andthereby also violatedGrant AssuranceNos. 24 and25(a) rId**~14(a)1.** 14. Hodges remarkedthe $500,000.00 rent credit inparagraph 2 of the Settlement Agreementviolated GrantAssurance Nos. n(c), 24 and 25(a) rId**~14(b)].** 15. Hodges noted that forgivingAeroPremier frompaying $285,000.00 to make improvements as recitedinparagraph 

### 3 of the SettlementAgreementviolatedGrant Assurance Nos. 22(c), 24 and25(a). 16. According to Hodges, the waiver of50% of the insurance and utility fees in paragraph 

### 4 of the SettlementAgreement violated GrantAssuranceNos. 22(c), 24 and25(a).17.According to Hodges, paragraph 9 andparagraph 12 of the SettlementAgreement allowingAeroPremier to sublease the secondfloor office space in the NGHangar without obtaining permission from the Sponsor andto cancel the Ml'Hangar lease violated GrantAssuranceNos. 

### 5 and29. 18. Finally, Hodges noted, all FBOs in their flrst two to threeyears of operations invariably lose money ...{FJorAeroPremierto have lost moneyon operations in their firstyear wouldnot be atypical. Infact itwould be expected

.... [FAA Exhibit 1, Item 39, pages 32-34, citing FAA Exhibit 1, Item 12] Further, the Complainant contended the Director relied on the Sponsor's submission of material and the submitted material was debunked and its reliability impeached by the sworn testimony ofBraytonMatthews, Manager and Secretary ofFlightline Ground with respect to potential tenants that would have paid AeroPremier rent iftheoffice space in the NO Hangar had beenrenovated. The Complainants assert: 1. Net Jets never did any business withAeraPremier; 2. NOLA was evictedbyAeroPremier for failure to timelypay rent; 3. GCA is a tenant of AeroPremier in the MTHangar; 4. Dominic Lala isjust apilot, not an aircraft owner; 5. He never heard ofCAA; 6. He never heard ofWay Home Contracting; 7. The two hangars operated byAeroPremier are filled to capacity; and 8. The TAG Report is deceptive and is misleading. [FAA Exhibit 1, Item 39, pages 36-37 citing FAA Exhibit 1, Item 28] 34

The Complainant contended the Director's reliance onthe TAG Report inrendering his fmdings confirms the Director's conclusions that the Sponsor made a business decision and the finding that Complainant had failed to carry its burden ofproofwas not supported by substantial evidence. [FAA Exhibit 1, Item 39, page 37 citing FAAExhibit 1, Item 27, pages 2-4] 

### In its Reply, the Respondent maintained that there is no disputingthe factthata courtof competent jurisdiction in the State of Louisiana a4judgedthe OLDliable for breach of its lease withAeroPremierafteralldue legal proceedings. Even though the issue of liability toAdvantage Capital wasnotdecidedby 

### summary judgment, that potentia/liabilitystill remainedto be a4judgedata trial on the merits. The issue facing the OLD was notwhether it oweddamages toAeroPremier

### !Jut how

### much those damages wouldbe. A business decision was made 

### to mediate the case andenter into asettlementagreement. The 

### underlymg litigation, which as the Director cO/rectly poinled

### out, is beyondthe pwview

### of theFAA. Furthennore, the Respondent continues

....

### theDirectorcorrectlydeterminedthatthe evidencepresentedby

### the Complainantthatit

### hadbeen economicallydisadvantagedby

### the SettlementAgreementwas not persuasive. The Respondent 

### argues thatthe Complainantsimplyassumedeconomic disadvantage as a resultof thesettlementagreementandthat it

### neverconsideredthe damage done toAdvantage Capitaland 

### AeroPremieras a resultof the breach of the lease. The

### Respondentalso suggests that the Complainantdidnotconsider the economic benefitComplainantclearly e'1Joyedasa resultof the breach of AeraPremier'slease. [FAA Exhibit 1, Item 40, pages 5-6, 

### citingFAA Exhibit 1, Item 25, page 3] The Respondent further responded by: 

### the Complainant's 'experts "who wrote the conclusory text, didnotbring to this proceeding extensive, direct experience operating andmanagingFBOs. Their perspective does not reJate to trying to impress aprospective tenant bywalking her/him through the FBO lobby or hangar. They have never endured the demands of the marketplace when the competitorFBO has aprice advantage. On 

### the other hand, theprincipals of TAG haveyears of hands on experience doing the actual work of runningan FBO andthat is the issue in thisproceeding. [FAA Exhibit 1, Item 25, page 9] The Respondent further stated that: 

### [tofurther contrast the Complainant's expert,] the Respondent hiredan independent consultant, The Aviation Group (TAG), to examine all the facts of thisproceedingandtheir charge includedthe development of information outside of the Louisiana litigation. TAG examined the traffic data before andafter Katrina. They examinedthe airportplan. They assessedthe actual intoplane rates offered by the FEOs. They trackedthe history of the FBOs on theAirport and traced the trends of the various companies thatprecededthe events at issue. In order to understandthe actions of theAuthority, TAG measuredthe impact of Katrina on the region andthe Airport. They set, as criteria for measuring the Respondent'sperformance andof the management's decisions on the FBOs, their knowledge of other comparable airports. They did independent economic and financial analyses. In short, TAG completedan independent, objective review of the actions at issue. [Exhibit 1, Item 25, pages 9-10] 3536



### The Mutual Receipt Release and Indemnification Agreement AeroPremier and the Orleans Levee District, Division ofNon-Flood Assets (OLD) engaged in litigation inthe Civil District Courtfor the Parish ofOrleans, State ofLouisiana, in the case of AeroPremier Jet Center, LLC v. Board ofCommissioners, et ai, No. 09-8632. The central focus ofthis litigation was the claim asserted by AeroPremier that it lost profits because the OLD failed to timely complete renovations to the National Guard Hangar office space leased by AeroPremier. Attendant to that litigation, the OLD permitted AeroPremier to operate without paying the full rent due under an existing lease between AeroPremier and the OLD. [FAA Exhibit 1, Item 1, C-54] On March 1,2010, Harold Flanagan ofFlanagan Partners prepared a damages calculation report commissioned by AeroPremier. This report considered damages other than lost fuel sales. The report reviewed OLD's failure to timely meet contractual deadlines, improper material benefits to 

### AeroPremier's competition including subsidized parking area, ramp space and hangar space and operational infringement. The report also considered lost fuel sales, 'butfor' circumstances and 

### lost net

### income on leasing space 

### at arate of$25,000 permonth. [FAA Exhibit I, Item 27, exhibit R4. pages 2-4] In October 2010, AeroPremier, its partner Advantage Capital Partners, and OLD entered into a "Mutual Receipt, Release and Indemnification Agreement (Settlement Agreement}." The Agreement stated, in part, that: 

### The OLD shallprovide a $473,000 credit to AeroPremier, which may be applied topast or foture rent or any other obligation of AeroPremier to OLD. The OLD shallprovide a $500, 000 transferable rent credit to AeroPremier orAdvantage {

..

## Jwhich credit may be appliedto rent due at any time on Building 101 on or after August 

### 1, 2011. The credit may be applied in the amount of up to $100,000peryear until exhausted. The OLD waives andreleasesAeroPremier from the obligation under the Lease to invest $285,000 in improvements to realproperty at the Airport. The OLD waives andreleasesAeroPremier from the obligation under the Lease to pay rentfor Building 101, including the hangar,fromAugust 1, 

### 2010, until renovations of Building 

### 1-1 (as a whole) are completed. AeroPremier shall receive a rent credit for any leased space within Building 101 which ispresently in use byAeroPremier to the extent such space is unusable due to OLD's construction/renovation activities resulting from Lessor's Repair Obligation. OLD shall be responsiblefor the repair of damage to Building 101 which occurred as a result of Hurricane Katrina. OLD shall further be responsible for the repair of damage to Building 101 which may occur as a result of the

### Lessor's Repair Obligations. The office and customer service space within Building 101, shall, upon completion of the Lessor's Repair Obligation, be commercially acceptable office space suitablefor use as a FBO andconsistent with the agreed plans, specifications, drawings and floorplans.

. {

.. .}AeroPremier shall have the right to either sub-lease the 2"floor of bUilding 101 or to releases the space to OLD [

..]. This Agreement is subject to the approval of the FederalAviationAdministration (FAA). 

## If the FAA declines to approve the Agreement, the Parties agree to recommence mediation with Judge Ponder within thirty (30) days. [FAA Exhibit 1, Item 1, C-54) The 

### FAA's Soufuwest RegionLouisiana/NewMexico ADO's letterof November 16, 2010, reviewing the proposed settlement agreement, expressed concerns with the proposed agreement and suggested, in part, that: 

### the sponsor addresses itsfindings, specifically, the conclusions in the two scenarios reported by the CPAfirm estimatingAeroPremier's losses. In its statements to 

### the sponsor, Aero Premier estimated its losses amount to nearly $2.6M However, the OLD reportpurports two vastly different results. In scenario #1, 

### the report estimates losses amount tojust under $200,000, while in scenario #2, 

### the report states there are no losses. We believe that, due to the significant differences between AeroPremier 's estimate and OLD's report, implementation of this settlement may result in an improper use of airport revenue. 

## If the sponsor agrees to provide unfoundedcompensation, subsidies, and/or set an improper fee schedule benefitingAeroPremier in violation of Grant Assurance 22, 

### Economic Non Discrimination; 24, 

### Fee andRental Structure; and25, 

### Airport Revenue·. l 

### Finally, we 

### are concerned that acceptance by the OLD of the documentation, or lack thereof submitted byAeroPremier to support its estimations and allegations regarding lost income andprofits may lead to more violations of GrantAssurances 22 

### (Economic Nondiscrimination) and 24 

### (Fee andRental Structure). For example, we recommend the sponsor engage in due diligence to quantifY statements and estimationspertaining to AeroPremier's assertions it lost $25, 

### 000per month in leasing opportunities. 37

'The OlD**~oncd** areportfrom HollySharpofl.aPorte.Sehrt.RomiglWld Handto review re:oc«t and documents and render an opinion A:gBrdingthe losses, ifany. sustained by AeroPremier as aresult of tilefailure orthe OLD torefuJbi.mthe formal...oWsianaNaliona1 GuardHangarbyAugust 1,2009 furuse as officespace. customer service area and other commercial uses. This report focused exclusively on lost fuel sales and provided estimates based on two scenarios. In scenario one (I), lost profit to AeroPremierwas $199,613. In scenario two (2), there was no profit lost (FAA Exhibit I. Item 27, exhibit R-3138 [FAA Exhibit 1, Item 33, pages 1-2] The OLD commissioned a report from 'The Aviation Group' (TAG), which reviewed thetenns andconditions of1he settlement agreement betweenthe OLD and AeroPremier. InJune 2011, TAG issued a report that concludedthatthe settlement agreement was fair to all parties. Specifically, the report stated: The SettlementAgreementgave rent credits toAeroPremier andAdvantage Capital as well as relief from some obligations. A rent credit forpast rental payments of 

### $473, 000 was grantedtoAeroPremieras wellasrent credits for some foture rental payments untilsuch time as repairs are completed. Bothparties, OLD andAeroPremierpresentedtheirprojections of current andfoture losses that rangedfrom a low of less than $200, 000 from OLD to a high of over $2, 000, 000from AeroPremier. The OLD report was narrow in scope as itonly considered foel sales andnot all the other non-:JUel revenuepotential. The time periodfor foture losses extendedonly to 2012

.

... In addition to aeronautical services, AeroPremier is unable toprovide office space topotential customers. [ ..]AeroPremier is unable to assure customers of when andwhat space will be available. This loss of rent continues to negatively impact their revenue stream. Snapshotprojections of finanCialperformance that both partiespresentedduring the settlementhearing are difficult andobviously open to much criticism. However, as time haspassedsince theseprojections were made, the continued efficts of the lackof the expectedrenovatedNational Guardfacility reinforce that the amount of the settlement was appropriate

.

... The SettlementAgreementalsoprovideda $500,000 transferable rent credit to AeroPremier orAdvantage Capital. [ ..] This rentcredit appliedover a 

### 5year period is appropriate forAdvantage to use in order to try to recapture the lost value in their investment

.

... AeroPremier was also released from the obligation to invest $285,000 in improvements in the National Guardhangar. This obligation was in the original lease in 2008. Itwill now be 

### 3 or more years beforeAeroPremier will be able to make improvements to the facility asprojected [ ..]SinceAeroPremier intends to spenda significant amount to improve thefacility, the relief of the specific amount of the obligation appears appropriate." [FAA Exhibit 1, Item 38, page 28 citing FAA Exhibit 1, Item 27, ExhibitR-7, pages 7-8] The Complainant contended that the Sponsor's submission ofmaterial was debunked and its reliability impeached by the sworn testimony ofBrayton Matthews with respect to potential tenants that would have paid AeroPremier rent ifthe office space inthe NG Hangar had been renovated. [FAA Exhibit 1, Item 39] The Complainant also appealed, inpart, based on the Matthews Affidavit that: 8. The TAG Report is deceptive andis misleading.

### [FAA Exhibit 1, Item39, page 37 citing 

### FAA Exhibit 1, Item 28, page 3] The Comphtinant fmally argued that the Director's reliance on this report 

### was not supported by substantial evidence. [FAA Exhibit 1, 

### Item 39, page 37] 39



### The Director considered the information from the Respondent's Background on the Justification for the SettlementAgreementthat: "For the FAA to understand the motivation of the OLD to settle the state court litigation initiatedbyAeroPremier, it is important to understandthe factual and proceduralantecedents that ledto the mediated settlement. Under the Transportation Statute andthe relevant FAApolicies, AirportSponsors are entitledto use their best judgment to settle lawsuits usingairport revenue in concert with those statutory andregulatory obligations. As explainedbelow, because (1) the OLD had been found liable for breach of the lease with AeroPremier, (2) the OLD faced a substantial risk of a large adversejudgment in the state lawsuit, (3) the OLD recognized that its expert report coveredonly one element of the damages claimed byAeroPremier, lostfoel sales. and (4) a settlement meant that the OLD would nothave topay a monetary judgment. which would have allowedAeroPremier to offset 100% of all amounts due OLD until thejudgment waspaid. the OLD decided that it was reasonable to settle the state lawsuit immediately for rent credits. When monetized, these credits were much less than the amountAeroPremier could have recovered in its lawsuit. [ ..] AeroPremierpresented a very strong case during the state court litigation. During the early stages of the litigation. AeroPremier obtainedapartial summary judgment for breach of lease based on the OLD's failure to repair thefacility on a timely basis [ ..]AeroPremier's expert witness. an accountant namedHaroldAsher. opinedthatAeroPremier lost between $2 million and $3.5 million as a result of the OLD's contract breaches. Hefurther opined that hadAeroPremier failed as a result of OLDs actions. the losses would have exceeded $5 million. Pursuant to Louisiana Civil Code Article 1997. 'An obligor in badfairh is liablefor all the damages.foreseeable or not, that are a direct consequence of his failure toperform.' As the lawpermits. the expert's calculation includedmore thanjust lost customers that could be identifiedby name. and also took into account lost market share andother identifiable losses. The Respondent also stated that, with regard to the FAA's reforence to the OLD report in its request for forther information. while this report shows a loss of only $200,000. the report analYSis didnot include a number of items, including "[tlhe loss of other revenue streamsgeneratedalong with the loss of fuel revenue; in addition toprovidingfoel, an FEO also earns substantial revenue through the provision of maintenance, office rent, hangar fees, detailing. catering, rental cars. travel service foe. ground support andtie down foes. The OLD expert report did not include these other revenue sources. "[FAA Exhibit I, Item 38, page 29 citing FAA Exhibit I, Item 27, pages 2-4J Based on the above FAA policy, the Associate Administrator finds that the Director correctly reviewed the submitted exhibits. [FAA Exhibit I, Item 38, pages 40-42] The Associate Administrator also finds thatthe administrative record shows the Director performed due diligence in this investigation and requested and reviewed additional detailed fmancial information from the Airport Sponsor concerning the Mutual Receipt, Release and Indemnification Settlement Agreement before making the Director's Determination. [FAA Exhibit I, Item 26] The Associate Administrator for Airports finds that the Director properly concluded thatthis additional information reasonably addressed the FAA's concerns about its need to have additional financial information. 40

The exhibits, including the exchanges betweenthe FAA and the airport sponsor, indicate that one potential valuation ofdamages to AeroPremier by one expert identified between $2 and $3.5 million and as high as $5 million inpotential liability under state law. [FAA Exhibit I, Item 38, Page 29 citingFAA Exhibit I, Item 27, Pages 2-4] Although it is easy to second guess whether it is right or wrong, any party with potential financial liability will take reasonable action in an attempt to lower the potential financial damages. Mediation was one tool that was available to the Respondent. Fortunately for the Respondent, this was agreed to bythe other party. Furthermore, the Respondent assured that the Settlement Agreement was subordinatedto the FAA Grant Assurances. Thus, it appears from the evidence that settlement negotiations through mediation was an appropriate and reasonable business tool to utilize under these conditions based on the prospective and actual losses. FAA policy requires that a proponent ofa business at an airport has a responsibility to engage in negotiations that include details oflocation, services, financing and qualifications, among other business issues. Pointing out the legal vulnerabilities ofan airport operator in negotiations is not the same as negotiating business particulars. Complaining, fonnally or informally, does not replace a proponent's responsibility to negotiate detailed proposals. Onthe contrary, airport sponsors retain the proprietary right to demand that aeronautical business proposals include business plans with business details and associated commercial risks. Likewise, airport sponsors also may negotiate to protectthemselves from litigation or complaints from existing businesses on the airport. The FAA has found that an airport sponsor may exercise its proprietary rights to protect itselfas a going concern in the face oflitigation. [JetA way v. Montrose, CO, FAA DocketNo. 16-08-01 (Director's Determination) (July 2,2009) page 17.] See also [Kent J. Ashton, Jacquelin R. Ashton v. City ofConcord, NC, FAA Docket No. 16-02-01 (Director's Determination) (August 22, 2003) page 27.] The Complainant further argued that in order for the airport sponsor to be in compliance with Grant Assurance 22, they should be treated equally with similar economic benefits such as reduced rents and insurance rates as AeroPremier, after the Settlement Agreement. However, the Complainant has not provided any evidence that the Respondent substantially breached the Complainant's lease terms or conditions similar to that ofAeroPremier's lease. This is a specific circumstance that distinguishes between determining whether the Complainant is being unjustly discriminated or not under these specific circumstances under Grant Assurance 22. To simply assume this as a result ofthe Settlement Agreement is not evidence in itselfofunjustdiscrimination. Consequently, based on the review ofthe entire administrative record, the Associate Administrator for Airports finds that the Director's Determination was made in accordance with the law, precedent, and policy and Grant Assurance 22, Economic Nondiscrimination, should be upheld. 41

In short, this decision finds that the Complainant's allegation that the Director erred in finding that the settlement between OLD and AeroPremier was inconsistent with the grant assurances has no merit. Through state court litigation, OLD had been found liable for breach ofits lease with AeroPrernier and the sponsor faced a substantial risk ofan adversejudgment. Itwas appropriate and reasonable for the sponsor to explore settlement with Aero Premier, and for that settlement

- instead ofproviding for OLD to pay a monetaryjudgment

- providing instead for AeroPremier to offset 100% ofall amounts due OLD until thejudgment was paid. The settlement is reasonable because when monetized, the rent credits were much less thanthe amount AeroPremier could have recovered in its lawsuit. It would appear thatthis settlement actually helped OLD make its airport as self-sustaining as possible under the existing circumstances under Grant Assurance 24. There is no unjust discrimination here. The harmed party (AeroPremier) had a right to damages, but not the unharmed competitor FBO (Flightline). The grant assurances do not require a sponsor to provide same or similar compensation, rent credits, etc. to a competitorFBO that was notpart ofthe lawsuit and settlement. 

### 5. Whether the Respondent violated Grant Assurance 24, Fee and Rental Structure, and/or Grant Assurance 25, Airport Revenues, by making no effort to collect monies due from AeroPremier and (2) by intentionally subsidizing AeroPremierwith revenues by the Airport. The Director was not persuaded by the arguments or evidence presented thatthe award ofrent credits and other concessions to AeroPremier via the Settlement Agreement were wildly inflated and therefore an unallowable use ofairport revenue or a violation ofthe obligation for the OLD to be as self-sustaining as possible under these unique circumstances. Rather, the Director was persuaded that the settlement agreement was a reasonable solution to this matter and perhaps served to hold down the ultimate cost ofthe settlement. [FAA Exhibit 1, Item 38, pages 37-38] Furthermore, the Director was persuaded that the OLD recognized its liability in failing to meet the terms ofits lease with AeroPremier and negotiated a resolution that was accepted by AeroPremier. The Director found that this resolution did not rise to a violation of Grant Assurance 24 in that the rent credits granted to AeroPremier do not negatively impact the ability ofthe airport to be as self-sustaining as possible underthese unique circumstances. [FAA Exhibit I, Item 38, page 38] The Director also was not persuaded that the OLD was in violation ofGrant Assurance 24 for agreeing to rent credits and a temporary reduction in insurance payments to settle its breach oflease with AeroPremier. Court costs and settlement expenses as a result ofa lawsuit are an acceptable use ofairport revenue. [FAA Exhibit 1, Item 38, page 38] OnAppeal, the Complainant objects to the Director's finding that there is no violation:there is no violation of 

### 49 

# u.s.c. 47107(a)(3)and GrantAssurance No. 24 because it is not supported by substantial evidence, is arbitrary, capricious, an abuse of discretion or otherwise not 

### in accordance with law

...[FAA 

### Exhibit I, 

### Item 39, page 18] Also, under the Complainant's Appeals' Objections and Enumerations No.8, the Complainant objects, in 

### part

to the Director's Determination finding that the Sponsor's conferring $1,258,000 in economic benefits on AeroPremier and the Advantage Capital entities was a "business decision" when his subordinates requesteddetailed financial documentation in evaluating charges of GrantAssurance Violations Nos. 

### 22,24, 25, 5 and 

### 29, the requested data was neverproduced, but the Director reversed his subordinates without explanation and declared in the absence of the necessary documentation, the Sponsor's actions werejustified as a "business decision." 

### [FAA Exhibit I, Item 39, page 21] In its Amended Complaint, the Complainant alleges that the OLD is in violation ofGrant Assurance 

### 25, Airport Revenues, because it intentionally allowed AeroPremier to 

### pay less than its contractually-obligated lease payments, insurance payments and other obligations. [FAA Exhibit I, Item 15, page 8] The Complainant, in its Complaint, alleges that the OLD is unlawfully diverting revenue, and that Respondents bysystemically and intentionally allowingAeroPremier to pay less than its contractually-obligatedleasepayments, insurancepayments andother obligations to Respondents are effictively subsidizingAeroPremier 's operation with revenues generated by the Airport, including money obtainedfrom Complainant."

Respondent byagreeing in aprivate mediation session to confer $1,258,000.00 in additional economic benefits inAeroPremier { ..] is diverting ami/or intends to divert Airport revenues to andfor the benefit of AeroPremier

.... 42

Respondents, by arbitrarily and capriciously assessingAeroPremier's leasedpremises at a grossly reduced value with no appraisal [are] diverting revenues generated by the Airport { ..] to AeroPremier and subsidizingAeroPremier's operations

... While granting economic concessions to AeroPremier for insurance obligations on the theory it has been damaged bypremises not folly remediatedand by charging full insurance to Complainant operating in similar circumstances, Respondents are diverting revenues generated by the Airport { ..] to AeroPremier

.... 

### [FAA Exhibit I, Item 15, pages 8-9] Additionally, inthe initial Complaint, the Complainant also argued that it 

### was obligated to pay insurance premiums in full as required by its lease. The Complainant stated:43

"While granting economic concessions to AeroPremier for insurance obligations on the theory it has been damaged by premises not fully remediatedand by chargingfull insurance to Complainant operating in similar circumstances, Respondents are diverting revenues generated by theAirport (insurance paidby Complainant) to AeroPremier. " [FAA Exhibit 1, Item 15, page 9] The Director found that the Complainantprovided little information regarding that it was forced to payfull insurance premiums for its leased space although it did not provide details ofhow that its space was unusable or even whether ithad contacted OLD to discuss a reduced rate until the facility was fully functionaL [FAA Exhibit 1, Item 38, page 31] In the absence ofthe Complainant providing the details orrequesting similar treatment and was denied, the Director could not make a determination that because one FBO received a reduction in its insurance fees because ofa breach oflease, then the Complainant should receive a reduction as well was not reasonable. [FAA Exhibit 1, Item 38, page 31] However, the Director did suggest that the Complainant contact the Respondent to resolve this issue. [FAA Exhibit 1, Item 38 page 32] Based upon review ofthe record, the Director correctly determined that use ofthe Grant Assurance 24 was more appropriate than GrantAssurance 25, Airport Revenues, as the basis of analysis. The Complainant's correct allegation under Grant Assurance 24 is closely intertwined with the Complainant's Grant Assurance 22 allegation. In this specific circumstance, each assurance is required for the other to survive the necessary burden ofproofwhich is onthe proponent ofthe allegation. [14 CFR § 16.229] The Associate Administrator for Airports previously has determined that the Director was reasonable in categorizing the Settlement Agreement as business negotiations between parties. A proponent ofa business at an airport again has a responsibility to engage in negotiations that include details oflocation, services, financing and qualifications, among other business issues. Pointing outthe legal vulnerabilities ofan airport operator in negotiations is not the same as negotiating business partiCUlars. Complaining, formally or informally, does not replace a proponent's responsibility to negotiate detailed proposals. Airport sponsors retainthe proprietary right to demandthat aeronautical business proposals include business plans with sufficient information concerning the business details and associated commercial risks. Airport sponsors would be expected to negotiate to protect themselves from litigation and/or complaints with little or no merit. Finally, there is no specific language in the Settlement Agreement that the airport sponsor has abrogated its Federal obligations without FAA concurrence. Again, referring to the Settlement Agreement, the Associate Administrator found express language that the airport sponsor included subordinatingthe specific terms and conditions to its' grant assurances. In the Mutual Receipt, Release and Indemnification Agreement, paragraph 14 states: Theparties agree that this Agreement is intended to include a complete and final release of all claims that have been or couldhave been asserted in the Lawsuit, the matter having been settledto their satisfaction. Notwithstanding the above, there is no release in thisAgreement for a (a) breach of thisAgreement or 

### (ii) a44 future breach of the Lease (as amended) or the FAA Sponsor assurances. [FAA Exhibit I, Item40, Exhibit R-2, page 3, citingFAA Exhibit I, Item 4, Exhibit R-2] The FAA is persuaded that OLD recognized its liability in failing to meet the terms ofits lease with AeroPremier and negotiated an acceptable resolution for theparties. By agreeing to rent credits and a reduction in insurance payments to settle its breach does not violate the airport sponsor's ability to be financially self-sufficient under Grant Assurance 24. Court costs and a settlement expense as a result oflegal proceedings is an acceptable use ofairport revenue under Grant Assurance 25. Thus, the Associate Administrator for Airports cannot find that the Director erred in 

### making this determination withrespect to the Respondent complying with its obligations under Grant Assurance 24, Fee and Rental Structure, and Grant Assurance 25,Airport Revenues, as being inconsistent with the grant assurances. 

### 6. 

### Complainant'. Request for Hearing In both the original Complaint and in the Amended Complaint, the Complainant requested the following: That Complainant beprovidedan eVidentiary hearing; That the Complainant be affordedthe right to engage in discoverypursuant to 14 C.F.R. 

### §16.213; That Complainant be afforded the right to take deposition testimonypursuant to 14 C.F.R. 

### §16.212; That Complainant be afforded the right to subpoena witnesses/documents pursuant to 

### 14 C.F.R. 

### §16.217. [FAA Exhibit I, Item 39, pages 56-58, citing FAA Exhibit 1, Item I, page 33, and Item IS, pages 43-44] The Complainant believes the Director's finding that FEMAfunds were not available was in error and should be reversed. The Complainant also asks that the FAA direct that discovery be conducted to include requests for an evidentiary hearing; discovery, deposition testimony, and to subpoena witnesses and documents. [FAA Exhibit 1, Item 39, page 58]14 CFR Part 16 states: 

### Under 14 

### CF.R 

### § 16.33 

### FinalDecisions withouthearing. The AssociateAdministrator will issue a final decision on appeal from the Director's determination, without a hearing, where--(l) The complaint is dismissedafter investigation; (2) A hearing is not required bystatute and is not otherwise made available by the FAA; or (3) The FAAprovides opportunity for a hearing to the respondent andthe respondent waives the opportunity for a hearing asprovided in subpart E of thispart. 45

In this matter, the Director dismissed the 14 CFR Part 16 Complaint. The record on appeal does not support the overturning ofthe Director's Determination. The record shows that the Director examined an extensive administrative record, including 56 exhibits submitted by the Complainant. The parties' other pleadings contained ample documentation. Therecord does not supportthe need for further discovery in rendering an initial determination; the FAA may rely entirely on the complaint andresponsive pleadings. Each party must file the documents that itconsiders sufficient to present all relevant facts and arguments necessary for the FAA to determine whether the sponsor is in compliance solely from the record. [14 CFR Part 16 paragraph 

### (b) (1)] Flightline has not persuasively argued that the Determination was not decided on the basis ofthe substantial record. The Complainant is not entitled to a hearing. Under 

### § 16.31, a hearing is only made available to a sponsorwhere the Director's Determination finds the respondent innoncompliance and proposes the issuance ofa compliance order. In that case, the Determination would include notice ofopportunity for a hearing under subpart F ofpart 16, ifsuch an opportunity is provided by the FAA. The Determination issued in this matter did not include these findings or any notice ofavailability ofa hearing. See also section 16.109(a): The agency will provide the opportunity for a hearing if, in the Director's determination, the agency proposes to issue an order terminating eligibility for grants pursuant to 49 U.S.C. 47106(e) and 471 I I(d), an order suspending the payment ofgrant funds, an order withholding approval ofany new application to impose a passenger facility charge pursuantto section 112 ofthe Federal Aviation Administration Act of 1994, 49 U.S.C. 471 11 (e), a cease and desist order, an order directing the refund offees unlawfully collected, or any other compliance order issued by the Administrator to carry out the provisions ofthe Acts, and required to be issued after notice and opportunity for a hearing. In cases in which a hearing is not required by statute, the FAA may provide opportunity for a hearing at its discretion. 

### (b) In a case in which the agency provides the opportunity for a hearing, the Director's determination issued under 

### § 16.31 will include a statement ofthe availability ofa hearing under subpart F ofthis part. Again, Complainant is not entitled to a hearing underthe above authorities and the FAA is not providing a discretionary hearing. Pursuant to 14 CFR Part 16.33, the Associate Administrator will issue a final decision from the Director's Determination, without a hearing, where the complaint is dismissed afterinvestigation. 6 [FAA Exhibit 1, Item 38, page 16] VII. CONCLUSION The FAA's role in this Appeal is to detemtine whether the Director erred in findings offact or conclusions oflaw in issuingthe Director's Determination. The Associate Administrator finds no error by the Director in the Director's Determination. 46

Specifically, upon an appeal ofa Part 16 Director's Determination, the Associate Administrator must determine whether (a) the findings offact made by the Director are supported by a preponderance ofreliable, probative, and substantial evidence, and (b) each conclusion oflaw is made in accordance with applicable law, precedent, and public policy. [See e.g. Ricks v Millington Municipal Airport, FAA Docket No. 16·98-19 (December 30, 1999) (Final Decision and Order, page 21)] In arriving at a final decision on this Appeal, the FAA has reexamined the record, including the Director's Determination, the administrative record supporting the Director's Determination, the Appeal and Reply submitted by the parties, and applicable law and policy. Based on this reexamination, this decision concludes thatthe Director's Determination is supported by a preponderance ofreliable, probative, and substantial evidence, and is consistent with applicable law, precedent, and FAApolicy. The Appeal does not containpersuasive arguments sufficient to reverse any portion ofthe Director's Determination. The Director's Determination is affirmed. This decision constitutes the final decision ofthe Associate Administrator pursuant to 14 CFR 

### § 16.33(a). ORDER ACCORDINGLY, it is hereby ORDEREDthat (1) the Director's Determination is affirmed, and (2) the Appeal is dismissed, pursuant to 14 CFR § 16.33.

6 A hearing, with oral argument. is required for either withholding approval or payment ofgrants as stated in 49 U.S.c. 47106(d), 49 U.S.C, 47111, and 47114(c) and (e)." 78 Fed. Reg. 56135, 56137. None ofthese requirements were triggered in this matter.47 

### RIGHT OF APPEAL A party 

### to this decision disclosing a substantial interest in the Final Decision and Order ofthe Federal Aviation Administration may file a petition for reviewpursuant to 49 U.S.C. § 46110, in the United States Court ofAppeals for the District ofColumbia Circnit orinthe Court of Appeals ofthe United States for the Circuit in which theperson resides orhas its principal place ofbusiness. Thepetitionmust befiled not later than 60 days after a Final Decision and Order has been served onthe party. [14 CFR. Part 16, 

### § 16.247(a).]

# /A~~··7r·t:~cC-Z;_j_ Eduardo A.

# ~el~ Associate Administrator

for Airports 

# .

# /"!.~ 

# ot:(J

### Index ofAdministrative Record FAAExhibit 1 Flightline Ground,Inc. 

### v. Louisiana Department ofTransportation and Development Docket No. 16- 11-01 Item 1-

### Part 16 Complaint, dated Februmy 2,2011, alleges that the Respondent violated 49 U.S.C. § 

### 47107(a) (5) and airport Grant Assurance 22(c). Includes exhibits I-56. Item 2

- Notice ofDocketing, dated Februmy 22, 2011. Item 3

- Motion for Extension ofTime to 

### File an Answer, dated 

### March 15, 20II. Item4

- Answer from the

### Non-FloodProtectionAssetManagement Authority, datedMarch 16, 20II (date stamped March 22, 2011). Item 5

- Complainant's Motion to

### Alter Briefing Schedule, dated March 17, 2011. Item 6

- Response to Motionfor ExtensionofTimeto

### FileAnswer, datedMmch 17, 2011. Item 7

- CompIainant's Motionto 

### Amend Style ofCase, dated March 17, 20II. Item 8

- Comp1ainanesMotionto 

### ExtendTimeto

### Respondto the

### Answerof the Management Authority, dated March 21, 2011. Item 9

- Comp1ainanes SeoondMotion to

### Extend Timeto

### Respond 

### to the Answerof theManagement Authority, dated March 28, 2011. Item 10

- Airport Grant History, dated April 6, 2011. Item 

### 11- CompIainant's Response to 

### theAnswer ofthe

### ManagementAuthority, datedApril 5, 2011- Includes exhibits C-I through C-65. Item 12

- Affidavit ofMichael A. 

### Hodges, MAl, dated April 5, 2011. Item 13

- Respondent's FirstMotionto

### Extend Time to

### Rebutthe 

### Complainant's Response to the Answer ofthe Management Authority, dated April 13, 20II. Item 14

- 

### ComplainanfsNotice of the

### Intentionto

### Move to

### Amend CompIainant's Response to the Answer

### of theManagementAuthority BaseduponNewlyDiscoveredEvidence. Includes exhibit C-66, dated April 18, 201 L Item 15

- Amended Complaint, filed byF1ightline GrOlUld, Inc. and dated

### April 22, 2011. Includes exhibits C-66 through C-71.

### Item 16

- On April 21, the Complainant filed 3 additional pleadings. Item16 includes: CompIainant's Notice ofThe Intentionto Moveto Amend Comp1ainant's Response to the Answer

### of the ManagementAuthority BasedUponNewlyDiscovered Evidence, dated April 15,201 I. 

### Includes exhibit C-66; Complainant's Motionto AmendComplainant's Response to the Answer of the Management Authority Filed April 

### 6, 2011; and CompIainant's Amendmentto Its Response to the Answerof the ManagementAuthority Based Upon Newly Discovered Evidence. Item 17

- CompIainant's Motionto Amend Complaint, dated April 25, 2011. Includes exhibits C-66 through C-71. Item 18

- Respondent's Motion to Suspend Procedural Process 

### and, In The

### Alternative, For An Extension OfTime In Which To Respond. Item 19

- Notice ofExtension ofTime to Rebut the Complainant's Response to the Answer ofthe Management Authority, dated

### April 29, 201 I, extending Rebuttal deadline to May 3, 2011. 2



### Item 20

- Second Notice ofExtension ofTime regarding Respondent's Motionto Suspend Procedural 

### Process (Item R) to allow RespondentuntilJune 3, 2011 to file its Rebuttal, issued May 5, 2011. Item 21

- Answer by Louisiana Department ofTransportarion and Development statingitis not a properparty to the Complaintas it does not have any legal authority overtheNon-Flood Protection Asset Management Authority. Electronically signed and dated March 15, 2011. Item 22

- Briefin OppositionofFlightline Ground, Inc. ToRespondent's Motionto Suspend Procedural Process and in the Alternative, for an Extension OfTimeWithin Which To Respond, dated April 29, 20II. Includes Exhibit A. Item 23

- BriefinOpposition ofFlightline Ground, Inc. To The PrayerInThe Motion OfThe Louisiana Department OfTransportarion And Development Requesting Dismissal, Dated May 2, 2011. Item 24

- Amendment to correct errata to the Complaint, dated March 24, 2011. Item 25

- Rebuttal to the Complainant's Response and Amended Response and Responseto the Amended Complaintbythe Management Authority, DatedJune 2, 2011. Includes: Exhibit 1 which is an email exchange regarding the obligation and de-obligation ofFEMA funds and a report prepared by The Aviation Group. Item 26

- Request for Additional Information and Notice ofExtension ofTime, dated December 6, 2011.

### Item 27

- Respondents Submission ofDocuments in Response to Request for Additional Information

- dated January 5, 2012 Item 28

- Affidavit ofBrayton Matthews

- Manager and Secretary ofFligbtline Ground, Inc.

- dated January 13,2012. Item 29

- Complainant's Motion to Strike orin the Alternative File Affidavit ofBrayton Matthews in Response to Respondent's Submission ofDocuments, dated January 13,2012. 3



### Item 30

- Opposition to Complainant's Motion to Strike or in the Alternative File Affidavit ofBrayton Matthews in Response to Respondent's Submission ofDocuments, dated January 16, 2012. Item 31

- Order Denying Motion to Strike and Granting Motion to File Affidavit, and Notice ofExtension ofTime, dated February 21, 2012. Item 32 -Notice ofExtension ofTime until June 30, 2012, dated April 2, 2012. Item 33

- Letter, dated November 16,2010, to Mr. Robert Lupo, Chairman ofthe Non-Flood Protection Asset Management Authority and Mr. Louis Capo, Director ofNon-Flood Assets, Orleans Levee District from FAA's Southwest Region LouisianalNew Mexico ADO regarding the proposed settlement agreement. Item 34 -Notice ofExtension ofTime until December 20, 2011, dated September 15,2011. Item 35

- Notice ofExtension ofTime until August 31, 2012, dated June 20,2012. Item 36 -Notice ofExtension ofTime to September 17,2012, dated August 27,2012. Item 37 -Notice ofExtension ofTime to October 12, 2012, dated September 18,2012. Item 38 -OnOctober 16,2012, the FAA issued the Director's Determination. Item 39

- Complainant's Appeal ofthe Director's Determination dated Nov. 14,2012. Item 40

- On November 29,2012, the Respondent filed the Reply ofRespondent to the Appeal ofthe Complainant to the Director's Determination including Respondent Exhibits R-I through 

### R7. Item 41- On

### January 30, 2013, the FAA issued a Notice ofExtension ofTime to onor about June 2, 2013. Item 42

- On March 7,2013, the Complainant submitted an Objection to Failure ofthe Associate Administrator to Issue a Final Decision Even with the Extended Time Limits. Item 43

- On June 7, 2013, the FAA issued a Notice ofExtension ofTime to on or aboutSeptember 

### 16, 2013. Item 44

- OnJune 

### 20, 20l3, the Complainant submitted an Objection to Failure ofthe Associate Administrator to Issue a Final Decision Even with the Extended Time Limits. Item 45

- On September 

### 17,2013,the FAA issued a Notice ofExtension ofTime to on or about January 

### 31, 2014. Item 46

- On September 

### 24, 2013, the Complainant submitted an Objection to Failure ofthe Associate Administrator to Issue a Final Decision Even with the Extended Time Limits. Item 

### 47- On January 

### 30, 2014, the FAA issued 

### a Notice ofExtension ofTime to on or about June 

### 2,2014. Item 48

- On May 

### 29,2014, the FAAissued a Notice ofExtension ofTime to on or about October 

### 1,2014. Item 49

- On October 

### 10, 2014, the FAA issued a Notice ofExtension ofTime to on or about November 

### 7, 2014. Item 50

- On December 10, 

### 2014, the FAAissued a Notice ofExtension ofTime to on or about January 

### 16,2015. 4