IN THE UNITED STATES COURT OF APPEALS 

FOR THE FIFTH CIRCUIT 

FLIGHTLINE GROUND, INC., 

Petitioner, 

v. 

MICHAEL P. HUERTA, 

ADMINISTRATOR, FEDERAL 

AVIATION ADMINISTRATION 

Respondent. 

) 

) 

) 

) 

) CASE NO. _____ _ 

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) 

) 

) 

) 

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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 of the Federal Aviation Administration in 

the matter of Flightline Ground, Inc. v. Louisiana Department of Transportation 

and Development, as Successor to the Louisiana Division of Administration and 

the Board of Commissioners for the Management of the Lakefront Airport; NonFlood Protection Asset Management Authority, as Successor to the Board of 

Commissioners of the Orleans Parish Levee District and Orleans Parish Levee 

District, Division of Non-Flood Assets, FAA Docket No. 16-11-01, a copy of the 

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 of which this Petition for 

Review is timely and is lodged with this Honorable Court within sixty days of the 

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 of the 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 of completion, 49 U.S.C. §4611 O(b) provides: 

When a petition is filed under subsection ( a) of this section, the 

clerk of the court i~ediately shall send a copy of the petition to 

the Secretary, Under Secretary, or Administrator, as appropriate. 

The Secretary, Under Secretary, or Administrator shall file with 

the Court a record of any proceeding in which the order was 

issued, as provided in Section 2112 of Title 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 of 5TH CIR. R. 9.3(a). 

Flightline Ground, Inc., Petitioner herein, mindful of 5TH CIR. R. 9.4 and 

the requirements to expeditiously serve a copy of this Petition for Review on 

government counsel, as demonstrated by the attached Certificate of Service, is 

dispatching a complete copy of the Petition for Review to Reggie Govan, Chief 

2 
Counsel. Federal Aviation Administration, contemporaneous with the filing and 

submission of this Petition for Review. 

This Honorable Court "has exclusive jurisdiction to affirm, amend, modify, 

or set aside any part of the order and may order the ... Administrator to conduct 

further proceedings." 49 U.S.C. §46110(c). 

Respectfully submitted this the IO~ay of March, 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 of the 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 of the Chief Counsel 

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 of March, 2015. 

ALAN A(u" ARMSTRONG ~drd ., 

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 

5 
U.S. Department 

of Transportation 

Federal Aviation 

Administration 

JAN 1 5 2015 

Office of Airport 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 of Transportation 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 

TRANSPORTATION AND DEVELOPMENT, AS SUCCESSOR TO THE 

LOUISIANA DIVISION OF ADMINISTRATION AND THE BOARD OF 

COMMISSIONERS FOR THE MANAGEMENT OF THE LAKEFRONT AIRPORT; 

NON-FLOOD PROTECTION ASSET MANAGEMENT AUTHORITY, AS 

SUCCESSOR TO THE BOARD 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 of the final decision and order of the Federal Aviation Administration 

(FAA) with respect to the above-referenced matter. 
The Associate Administrator concludes that the analysis and conclusions contained in the 

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 of reliable, probative, and substantial evidence, and are 

consistent with applicable law, precedent, and FAA policy. 

The reasons for upholding the Director's Determination are set forth in the enclosed finaI 

agency decision. 

Manager, Airport Compliance 

Division 

Enclosure 

2 
CERTIFICATE OF SERVICE 

-1-

I HEREBY CERTIFY that on January 10,201 5, I caused to be placed in the United 

States mail (first class mail, postage paicila'true copy of the 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 of Transportation 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 of Airport Compliance 

and Management Analysis 
UNITED STATES DEPARTMENT OF TRANSPORTATION 

FEDERAL AVIATION ADMINISTRATION 

WASIllNGTON, DC 

Flightline Ground, Inc. 

Appellant/Complainant 

v. 

Louisiana Department of Transportation and 

Development, as successor to the Louisiana 

Division of Administration and the Board of 

Commissioners for the Management of the 

Lakefront Airport; Non-Flood Protection Asset 

Management Authority, as successor to the 

Board Of Commissioners of the Orleans Parish 

Levee District and Orleans Parish Levee District, 

Division of Non-Flood Assets. 

Appelleentespondent 

FAA Docket 16-11-01 

FINAL AGENCY DECISION 

I. INTRODUCTION 

This matter is before the Federal Aviation Administration (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 of October 24, 2012, issued by the Director of 

the FAA Office of Airport Compliance and Management Analysis, pursuant to the Rules of 

Practice for Federally Assisted Airport Enforcement Proceedings found in Title 14 Code of 

Federal Regulations (CFR) Part 16. The Director's Detennination dismissed the Complainant's 

allegations against the Louisiana Department of Transportation and Development, as successor 

to the Louisiana Division of Administration and the Board of Commissioners for the 

Management of the Lakeftont Airport; Non-Flood Protection Asset Management Authority, as 

successor to the Board of Commissioners of the Orleans Parish Levee District and Orleans Parish 
2 

Levee District, Division of Non-Flood Assets (OLD, Respondent, Appellee, or Sponsor) 

regarding OLD's Federal obligations associated with its operation of the New Orleans Lakefront 

Airport (Airport), in New Orleans, Louisiana. 

The Complainant argues on appeal to the Associate Administrator that the "Director's findings 

and conclusions were not supported by substantial evidence, ignored evidence in the record cited 

by Complainant, are arbitrary, capricious, an abuse of discretion or otherwise not in 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 of a Part 16 Director's Determination, the Associate Administrator must 

determine whether (a) the findings of fact made by the Director are supported by a 

preponderance of reliable, 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, Final Decision and Order p. 21 

(Dec. 30, 1999)] 

The FAA has 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 of facts, where an airport sponsor violates a lease agreement with a 

competitor fixed-base operator (FBO) of the 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 of the 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 Layout Plan, (1) allowing AeroPremier the right to 

sublease the second floor of Building 101 without seeking prior permission from 

the Respondent or (2) granting AeroPremier the right at its sole option to cancel 

the lease of the McDermott facility. 
The Respondent has not violated Grant Assurance 19, Operation and Maintenance 

by not restoring the National Guard Hangar within 14 months of the effective date 

of the 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 of the open drainage 

area and changes to an on-airport maintenance schedule. 

The Respondent has not violated Grant Assurance 22(c), Economic 

Nondiscrimination by entering into a settlement for damages with AeroPremier 

and Advantage Capital parents. The evidence presented on whether the OLD is 

unjustly discriminating against Complainant by charging Complainant nonreduced insurance premiums is inadequate to make a fmding. 

The Respondent has not violated Grant Assurance 24, Fee and Rental Structure, 

by failing to collect past monies due from AeroPremier or by 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 the Non-Flood Protection Asset Management 

Authority successor to the Board of Commissioners of the Orleans Levee District and Division 

of Administration, State of Louisiana, and the governing authority of the Non-Flood assets of the 

Orleans Levee District (OLD), including the New Orleans Lakefront Airport. [FAA Exhibit I, 

Item 38, page 1] 

On January 1,2007, Management of the Lakefront Airport shifted from the Orleans Levee 

District (OLD) to the State of Louisiana Division of Administration (DOA); ownership of the 

Airport stayed with the OLD. On August 15,2010, Management shifted again from DOA to the 

newly created Non-Flood Protection Asset Management Authority (Authority); the Authority 

was under Louisiana's Department of Transportation and Development (DOTD) but OLD still 

held ownership of the Airport. On January 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 of the 

Airport has been financed, in part, with funds provided by the FAA under the Airport 

Improvement Program (AlP), authorized by the 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 FAA Exhibit 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 at the New 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. 

On July 31, 2007, Complainant Flightline entered into anew lease with the Airport. On April 8, 

2008, a third party FBO, AeroPremier Jet Center, LLC (AeroPreruier), entered into a different lease 

for other airport property with the Airport. These leases were entered into in an effort to enhance the 

Airports' revenues and increase competition between and among the FBOs in an effort to make the 

Airport more self-sustainable. Throughout this time period repairs to certain hangars had been 

completed. [FAA Exhibit 1, Item 4, page 2] 

On August 13,2009, the Airport issued a formal notice of default to AeroPreruier for failure to pay 

rent. [FAA Exhibit I, Item 1, exhibit C-9, page 3] AeroPremier withheld these payments 

because the Airport had not completed repairs to office space leased by AeroPreruier, which the 

parties had agreed would be repaired by the Airport within 14 months of the effective date of the 

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 of Contract and 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, 

which the parties had agreed would be repaired by the Airport within 14 months of the lease 

execution. [FAA Exhibit 1, Item 4, pages 3, see also Civil Suit, FAA Exhibit 1, Item 4, Exhibit 

R-5] As part of this litigation, both AeroPreruier and the OLD commissioned reports calculating the 

losses sustained by AeroPreruier due to the OLD's breach of the lease. The report cormnissioned by 

the OLD, prepared by Holly Sharp of LaPorte, Sehrt, Roruig and Hand, concluded estimates based on 

two different scenarios: in one scenario, AeroPreruier suffered $199,613 in lost profits, and in the 

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 of Flanagan Partners, 

AeroPreruier sustained lost profits totaling $2,559,400. [FAA Exhibit 1, Item 4, exhibit R-4, 

page 5] 
5 

On November 24, 2009, F1ightline filed an informal Part 13 complaint with the FAA's LouisianalNew 

Mexico Airports District Office (ADO), allegiog violations of Grant Assurances, 22, 24, and 5 , and 

maintained that because the Airport Sponsor failed to maintain the 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 

on the 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 Court judge 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' of the lease between itself and 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 of the 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 shall provide a $473,000 credit to AeroPremier, which may be applied to past 

or future rent or any other obligation of AeroPremier to OLD. 

2. The OLD shall provide a $500,000 transferable rent credit to AeroPremier or Advantage 

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 ajier August J, 2011. The credit may be applied in the 

amounl of up to $100, 000 per year until exhausted 

3. The OLD waives and releases AeroPremier from the obligation under the Lease to invest 

$285,000 in improvements to real property atlhe Airport. 

4. The OLD waives and releases AeroPremier from the obligation under the Lease to pay 

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 leased space within Building 101, which 

is presently in use by AeroPremier, to the extent such space is unusable due to OLD's 

construction/renovation activities resulting from Lessor's Repair Obligation. 

6. OLD shall be responsible for the repair of damage to Building 101 which occurred 

as a result of Hurricane Katrina. OLD shall be forther 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 customer service 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 

2ndfloor o/Building 101 or to release the space to the OLD and thus exclude itfrom 

the Lease. 

10. AeroPremier shall not pay for (i) parking or sod in publically accessible areas and 

outside of the Airportfence (ii) car parking spaces it does not need. 

11. AeroPremier shall have access to terminal areas to the same extent as other FBOs, 
6 

including without limitation, terminal ramp space for 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 this Agreement is intended to 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 in potential violations of the 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 of contract, 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 benefitting AeroPremier in violation of Grant Assurance 22, 

Economic Non Discrimination; 24, Fee and Rental Structure; and 25, Airport 

Revenue." [FAA Exhibit 1, Item 33, page 1] 

• The lack of documentation submitted by AeroPremier regarding its losses and profits, 

which "may lead to more violations of Grant Assurances 22 (Economic 

Nondiscrimination) and 24 (Fee and Rental Structure)." [FAA Exhibit 1, Item 33, 

page 2] 

• Concerns that "the sponsor may have or may be ceding its rights and powers to 

operate and administer the airport by executing a settlement agreement that may 

allow AeroPremier to make leasing decisions without the sponsor's approval or 

acknowledgment that such decisions are in accordance with the Airport Layout Plan 

and the sponsor's right to develop its airport [ .. .] Grant Assurance 5 (Preserving 

Rights and Powers) and Grant Assurance 29 (Airport Layout Plan) may be affected by 

this provision. " [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 of the 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, to 
7 

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 of such 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] 

On March 15, 2011, the Respondent filed a motion for an extension of time 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 of case. [FAA 

Exhibit 1, Item 7] 

On March 21, 2011, the Complainant filed a motion to extend time to respond to the 

Respondent's Answer. [FAA Exhibit 1, Item 8] 

On March 28, 2011, the Complainant filed a second motion to extend time to respond to the 

Answer of the 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] 

On April 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 of the 

Complaint from 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 of the Management Authority. [FAA Exhibit I, 

Item 13] 

On April 15,2011, Complainant filed Notice of the Intention to Move to Amend 

Complainant's Response to the Answer of the 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 of The Intention to Move to Amend Complainant's 

Response to the Answer of the 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 of the 

Management Authority Filed April 6, 2011. 

(3) Complainant's Amendment to Its Response to the Answer of the 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, In the 

Alternative, For an Extension of Time in Which to Respond. [FAA Exhibit I, Item 18] 

On April 29, 2011, the FAA issued a Notice of Extension of Time to Rebut the Complainant's 

Response to the Answer of the 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 of Extension of Time 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 of Transportation 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 

of Time within Which to Respond. Includes Exbibit A. [FAA Exhibit 1, Item 22] 

On May 2, 2011, Complainant filed a Briefin Opposition of Flightline Ground, Inc. To The 

Prayer In The Motion Of The Louisiana Department Of Transportation 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 of Extension of Time to December 20, 2012. 

[FAA Exhibit I, Item 34] 

On December 6, 20 11, The Director of the Office of Airport Compliance and Management 

Analysis issued a Request for Additional Information and Notice of Extension of Time. 

[FAA Exhibit I, Item 26] 

On January 5, 2012, the Respondent provided a Submission of Documents 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 or in the Alternative File Affidavit 

of Brayton Matthews in Response to Respondent's Submission of Documents. [FAA Exhibit 1, 

Item 29] 

On January 13, 2012, the Complainant also submitted an affidavit from Brayton Matthews, 

Manager and Secretary of Flightline 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 of Brayton Matthews in Response to Respondent's 

Submission of Documents. [FAA Exhibit 1, Item 30] 

On February 21, 2012, the FAA issued an Order Denying Motion to Strike and Granting Motion 

to File Affidavit, and Notice of Extension of Time. [FAA Exhibit 1, Item 31] 

On April 2, 2012, the FAA issued a Notice of Extension of Time 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 of Extension of Time to August 31, 2012. [FAA 

Exhibit 1, Item 35] 

On August 27,2012, the FAA issued a Notice of Extension of Time to September 17,2012. 

[FAA Exhibit 1, Item 36] 
On September 18, 2012, the FAA issued a Notice of Extension of Time 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 of Respondent to the Appeal of the 

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 of Extension of Time to on or about June 2, 2013. 

[FAA Exhibit 1, Item 41] 

On March 7, 2013, the Complainant submitted an Objection to Failure of the 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 of Extension of Time to on or about September 16, 

2013. [FAA Exhibit I, Item 43] 

On June 20, 2013, the Complainant submitted an Objection to Failure of the Associate 

Administrator to Issue a Final Decision Even with the Extended Time Limits. [FAA Exhibit I, 

Item 44] 

On September 17,2013, the FAA issued a Notice of Extension of Time to on or about January 

31,2014. [FAA Exhibit I, Item 45] 

On September 24, 2013, the Complainant submitted an Objection to Failure of the 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 of Extension of Time to on or about June 2, 2014. 

[FAA Exhibit 1, Item 47] 

On May 29, 2014, the FAA issued a Notice of Extension of Time 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 of airport facilities. In each such program, the airport sponsor assumes certain 

obligations, either by contract or by restrictive covenants in property deeds and conveyance 

instruments, to maintain and operate its airport facilities safely and efficiently and in accordance 
II 

with specified conditions. Commitments assumed by airport sponsors in property conveyance or 

grant agreements are important factors in maintaining a high degree of safety 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 discussion pertaining to the Airport Improvement Program, Airport Sponsor 

Assurances, the FAA Airport Compliance Program, enforcement of Airport 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 of public-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 of receiving Federal financial 

assistance. Upon acceptance of an 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 Sponsor Assurances 

As a condition precedent to providing airport development assistance under AAfA, codified at 

Title 49 U.S.C. § 47101, et seq., the Secretary of Transportation 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 precedent to receipt of such 

assistance. These sponsorship requirements are included in every AlP grant agreement. Upon 

acceptance of an AlP grant by an airport sponsor, the assurances become a binding obligation 

between the airport sponsor and the F edera! Government. 

Six grant assurances are relevant to the Complainant's appeal: Grant Assurance 5, Preserving 

Rights and Powers; Grant Assurance 19, Operation and Maintenance; Grant Assurance 22, 

Economic Nondiscrimination; Grant Assurance 23, Exclusive Rights; Grant Assurance 24, Fee 

and Rental Structure; and Grant Assurance 29, Airport Layout Plan. 

Grant AsSUrance 5. Preserving Rights and Powers 

Grant Assurance 5, Preserving Rights and Powers!, reqnires the airport owner or sponsor to 

retain all rights and powers necessary to ensure the continued operation of the airport consistent 

with its Federal obligations. This assurance implements the provisions of AAIA, 49 U.S.C. § 

47107(a), et seq., and requires, in pertinent part, that the owner or sponsor of a federally 

obligated airport " ... will not take or permit any action which would operate to deprive it of any 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 of the tenns, conditions, and assurances in 

the grant agreement without the written approval of the Secretary, and will act promptly to 

acquire, extinguish or modifY any outstanding rights or claims of right of others which would 

interfere with such perfonnance by the sponsor." 

FAA Order 5190.6A, Airport Compliance Requirements, describes the responsibilities under 

Grant Assurance 5 assumed by the owners or sponsors of public-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 of the airport. [See 

Order 5190.6A, Sec .. 4-7 and 4-8.] 

2. Grant Assurance 19. Ooeration and Maintenance 

Grant Assurance 19, Operation and Maintenance, requires, in pertinent part, 

The airport and all facilities which are necessary to serve the aeronautical users of the airport, 

... shall be operated at all times in a saft and serviceable condition and in accordance with the 

minimum standards as may be required or prescribed by applicable ftderal, state and local 

agencies for maintenance and operation. It will not cause or permit any activity or action 

thereon which would interfere with its use for airport purposes. 

3. Grant Assurance 22, Economic Nondiscrimination 

Grant Assurance 22, Economic Nondiscrimination, requires the owner of any airport developed 

with Federal grant assistance to operate the airport for the use and benefit of the public and to 

make it available to all types, kinds, and classes of aeronautical activity on fair and reasonable 

tenns, and without unjust discrimination. Grant Assurance 22 deals with both the reasonableness 

of airport access and the prohibition of adopting unjustly discriminatory conditions as a potential 

for limiting access. Grant Assurance 22 implements the provisions of Title 49 U.S.C. 

§ 471 07(a)(1) through (6), and requires, in pertinent part; 

[The airport owner or sponsor] will make its airport available as an airport for public use on 

reasonable terms, and without unjust discrimination, to all types, kinds, and classes of 

aeronautical activities, including commercial aeronautical activities offering services 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 and not unjustly 

discriminatory conditions to be met by all users of the airport as may be necessary for the safe 

and efficient operation of the airport. [Assurance 22(h).] 

[The airport owner or sponsor] may .. . limit any given type, kind, or class of aeronautical 

use of the airport if such action is necessary for the safe operation of the airport or necessary to 
serve the civil aviation needs q(the public. [Assurance 22(i).] 

Subsection (h) qualifies subsection (a), and subsection (i) represents an exception to subsection 

(a) to pennit the sponsor to exercise control of the airport sufficient to preclude unsafe and 

inefficient conditions that would be detrimental to the civil aviation needs of the 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 of such 

restrictions when those restrictions deny or limit access to, or use 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 of public use airports developed with Federal assistance. Among these is the 

obligation to treat in a unifonn manner those users making the same or similar use of the 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 of an airport developed with Federal assistance is required to operate the airport for 

the use and benefit of the public and to make it available to all types, kinds, and classes of 

aeronautical activities on reasonable tenns and without unjust discrimination. [See FAA Order 

5190.6B, section 9.L(a).] 

4. Grant Assurance 24. Fee and Rental Structure 

Grant Assurance 24, Fee and Rental Structure, implements the provisions of the AAIA, Title 49 

V.S.C. § 47107(a)(13), and requires, in pertinent part, that the sponsor of a federally obligated 

airport assure: 

It will maintain a fee and rental structur:e for the facilities and services at 

the airport which will make the airport as self-sustaining as possible under 

the circumstances existing at the particular airport, taking into account 

suchfactors as the volume of traffic and economy 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 of the assurance is for the airport operator to charge fees that are 

sufficient to cover as much of the 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 and charges applied to 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. Airport Revenues 

Grant Assurance 25, Airport Revenues, implements provisions of Title 49 U.S.C. § 4 7107(b) 

and § 4.1133, et seq., and requires, in pertinent part, that the sponsor ofa federally obligated 

airport assure: 

a. All revenues generated by the airport and any local taxes on aviation fuel 

established after December 30, 1987, will be expended by itfor the capital or 

, operating costs of the airport; the local airport system; or other local facilities 

which are owned or operated by the owner or operator of the airport and which 

are directly and substantially related to the actual air transportation of 

passengers or property; or for noise mitigation purposes on or off the airport. 

b. As pari of the annual audit required under the Single Audit Act of 1984, the 

sponsor will direct that the audit will review, and the resulting audit report will 

provide an opinion concerning, the use of airport revenue and taxes in paragraph 

(a), and indicating whether fonds paid or transferred to the owner or operator are 

paid or transferred in a manner consistent with Title 49, United States Code and 

any other applicable provision of law, including any regulation promulgated by 

the Secretary or Administrator. 

c. Any civil penalties or other sanctions will be imposedfor violation of this 

assurance in accordance with the provisions of Section 47107 of Title 49, 

United States Code. 

14 

FAA's Policy and Procedures Concerning the Use of Airport Revenues (64 Fed. Reg. 7696, 

February 16,1999) (Revenue Use Policy) provides, among other things, the FAA's policy on the 

use of airport revenue. It provides, in relevant part, that: 

All fees. charges, renls, or other payments 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 conducted by the 

sponsor itself as airport owner and operator, including revenue received; 

i. From any activity conducted by the sponsor on airport property acquired with 

federal assistance; 

ii. From any aeronautical activity conducted by the sponsor which is directly 

connected to a sponsor's ownership of an airport subject to 49 U.S.c. § 47107(b) 

or 47133; or 
iii. From any nonaeronautical activity conducted by the sponsor on airport 

property not acquired with federal assistance, but only to the extent of the fair 

rental value of the airport property. The fair rental value will be based on the 

fair market value. 

[See Revenue Use Policy at Section ILB.1.b., 64 Fed. Reg. 7696, 7716] 

6. Grant Assurance 29. Aimort Lavout Plan 

Grant Assurance 29, Airport Layout Plan, implements provisions of Title 49 U.S.C. 

§ 471 07(a)(16), and requires that the sponsor of a federally obligated airport assure: 

a. It will keep up to date at all times an Airport Layout Plan of the airport 

showing (1) boundaries of the airport and all proposed additions thereto, together 

with the boundaries of all offiite areas owned or controlled by the sponsor for 

airport purposes and proposed additions thereto; (2) the location and nature of 

all existing and proposed airport facilities and structures (such as runways, 

taxiways, aprons, terminal buildings, hangars, and roads), including all proposed 

extensions and reductions of eXisting airport facilities; and (3) the location of all 

existing and proposed non-aviation areas and of all existing improvements 

thereon. Such Airport Layout Plans and each amendment, revision, or 

modification thereof shall be subject to the approval of the Secretary which 

approval shall be evidenced by the signature of a duly authorized representative 

of the Secretary on the face of the Airport Layout Plan. The sponsor will not make 

or permit any changes or alternations in the airport or any of its facilities that are 

not in conformity with the Airport Layout Plan as approved by 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 the facilities is made which the 

Secretary determines adversely affects the safety, utility, or efficiency of any 

federally owned, leased, or fonded property on or off the airport and which is not 

in conformity with the Airport Layout Plan as approved by the Secretary, the 

owner or operator will, ifrequested by the Secretary (1) eliminate such adverse 

effect in a manner approved by the Secretary; or (2) bear all costs of relocating 

such property (or replacement thereof) to a site acceptable to the Secretary and 

all costs of restoring such property (or replacement thereof) to the level of safety, 

utility, effiCiency, and cost of operation existing before the unapproved change 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 or permitting any 

changes or alterations in the airport or any of its facilities that are not in conformity with its 
FAA-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 of Federal property for 

airport purposes. The FAA incorporates these obligations in grant agreements and 

instruments of conveyance to protect the 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 of a 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 of airports. Rather, 

it monitors the administration of valuable rights, which airport sponsors pledge to the people 

of the United States in exchange for monetary grants and donations of Federal 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 of Federal funds or the conveyance of Federal property for 

airport purposes. The Order, inter alia, analyzes the various obligations set forth in the 

standard airport sponsor assurances, addresses the application of the assurances in the 

operation of public-use airports, and facilitates interpretation of the assurances by FAA 

personnel. 

The FAA Compliance program is designed to achieve voluntary compliance with Federal 

obligations accepted by owners and/or operators of public-use airports developed with FAA 

administered assistance. Therefore, in addressing allegations of noncompliance, 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 alleged or potential past violation of applicable federal 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 but 
complete statement of the facts relied upon to substantiate each allegation. The complaint shall 

also describe how the complainant was directly and substantially affected by the things done or 

omitted by the 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 of the complaint. In rendering its initial determination, 

the FAA may rely entirely on the complaint and the responsive pleadings provided. Each party 

shall file documents that it considers sufficient to present all relevant facts and arguments 

necessary for the FAA to determine whether the sponsor is in compliance. [14 CFR, Part 16, 

§ 16.29.] 

The proponent of a motion, request, or order has the burden of proof. A party who has asserted 

an affirmative defense has the burden of proving the affirmative defense. This standard burden 

of proof is consistent with the Administrative Procedure Act (APA) and Federal case law. The 

AP A provision states, "[ e ]xcept as otherwise provided by statute, the proponent of a rule or order 

has the burden of proof." [5 U.S.C. § 556(d).] [See also, Director, Office of Worker's 

Compensation Programs. Department of Labor v. Greenwich Collieries, 512 US 267, 272 

(1994); Air Canada et al. v. Department of Transportation, 148 F3d 1142, 1155 (DC Cir, 1998).] 

Title 14 CFR § 16.229(b) is consistent with 14 CFR § 16.23, which requires that the complainant 

submit all documents then available to support his or her complaint. Similarly, 14 CFR § 16.29 

states that "[ e ]ach party 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 Determination may file an appeal 

with the Associate Administrator within 30 days after the date of service of the initial 

determination. lfno appeal is filed within the time period specified, the Director's 

Determination becomes the final decision and order of the 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 be presented in the complaint documents. [14 CFR, Part 16, 

§ l6.23(b)(3).] New allegations or issues should not be presented on appeal. Review by the 

Associate Administrator is limited to an examination of the 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 recognition that 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 that where 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, it is the Associate Administrator's responsibility to determine whether (a) the 

findings of fact made by the Director are supported by a preponderance of reliable, probative, 

and substantial evidence, and (b) each conclusion of law 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 of the Complaint, the Director of the Office of Airport Compliance and 

Management Analysis detennined that the Authority is not currently in violation of Federal 

obligations under Grant Assurances 5, Rights and Powers; 19, Operation and Maintenance; 22, 

Economic Nondiscrimination; 24, Fee and Rental Structure; 25, Airport Revenues; and 29, 

Airport Layout Plan. 

On appeal, the Associate Administrator for Airports upholds the Director's Detennination based 

on each conclusion oflaw made 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 Layout Plan, by allowing AeroPremier the right to sublease 

the second floor of Building 101 (Building 101 or NG Hangar) without seeking prior 

permission from the Respondent and (2) granting AeroPremier the right at its sole 

option to cancel the lease of the 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 of the NG Hangar without seeking prior pennission from the 

Airport or (2) granting AeroPrernier the right at its sole option to cancel the lease of the 

McDennott facility. [FAA Exhibit 1, Item 38, page 38] However, the Director strongly 

encouraged OLD that if the permission to sublease the 2nd floor of the NG Hangar results in 

a sublease for a nonaeronautical purpose without approval by the FAA, or if AeroPremier were 

to cancel its lease of the 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 I 90.6B, the Director also strongly encouraged the Respondent to, 
19 

"place a 'subordination clause' in all of its tenant leases and agreements that subordinates 

the terms of the 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 of its rights and powers. 

A typical subordination clause states that if there is a conflict between the terms of a 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 that the Sponsor's conferring on AeroPremier the right to sublease Building 101 

would operate to deprive it of any of the rights and powers necessary to perform any and all of the 

terms, conditions, and assurances of the grant agreement without the written approval of the 

Secretary, in violation of Grant Assurance No.5. [FAA Exhibit I, Item 39, page 22]. The 

Complainant further appealed and stated "that in light of this uncontradicted status of the 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 (hereinafter the 'Settlement Agreement') executed between the 

Sponsor, AeroPremier and the Advantage Capital entities dated October 12, 2010. [FAA Ex. 1, Item 

39, page 47) 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 MT North Apron, MT Hangar Deck, MT 

Office/Shop, MT South Apron, MT Parking Areas [east of North Apron, east of 

Office/Shop, and east of South Apron)) effective upon 60 days' notice to OLD ... 

The Complainant contends that Paragraphs 9 and 12 in the Settlement Agreement were the 

precise provisions in the document that Andy Velayos of the FAA LouisianalNew 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 warned the Sponsor that if it 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 

layout plan." [FAA Ex. 1, Item 39, page 48]. 

The Complainant also argnes that Mr. Velayos was not the ouly person to comment about 

paragraphs 9 and 12 of the Settlement Agreement [FAA Ex. I, Item 27, Ex. R-2] The Complainant 
identified their own expert witness, Michael Hodges, and suggested that there is agreement with 

Mr. Velayos as he testified in this Affidavit: 

... In paragraph 9 of the Settlement Agreement, the Sponsor has given 

AeroPremier the right to sublease the secondjloor of the office space within the 

NG Hangar withoutfirst obtaining permission from the Sponsor. This is a clear 

violation of Grant Assurance No.5 (Preserving Rights and Powers) and is also a 

violation of Grant Assurance No. 29 (the Airport Layout Plan) . 

... In paragraph 12 of the Settlement Agreement, the Sponsor gives AeroPremier the 

right to cancel the [ease on the McDermoll- Tidewater Hangar. This violates 

Grant Assurance Nos. 5 and 29 for the reasons discussed above in my assessment 

of paragraph 9 of the Settlement Agreement. 

[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 of the Settlement Agreement should have subordination 

language inserted to avoid violations of Grant 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]. 

In the Respondents' Reply to the Complainant's Appeal, the Respondent wrote that "it agreed with 

and fully accepted the admonition of the Director that 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 FAA concurrence would subject the sponsor to a potential violation of Grant 

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 of the agreement and therefore made the agreement subject to FAA approval." [FAA 

Exhibit I, Item 40, page 3, Citing FAA Exhibit I, Item 4, Exhibit R-2, page 4, Para. 17]. 

The Complainant's arguments that the AiIport Sponsor had not snbordina!ed the agreements to the FAA 

grant assumnces are not persuasive and have no merit As noted in the Factual Background section of the 

Director's Determination, the Settlement Agreement states: 

The Settlement Agreement also 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 of the Settlement Agreement revealed additional language reflecting the 

subordination of the Settlement Agreement to the grant assurances. Although not expressly set 

forth in Paragraphs 9 and 12 in the Mutual Receipt, Release and Indemnification Agreement, 

Paragraph 14 of that Agreement states: 

I4. The Parties agree lhat this Agreement is intended /0 include a complete andfinal 

release of all claims that have been or could have been asserted in the Lawsuit, the 
malter having been settled to their satisfaction. Notwithstanding the above, there is no 

release in this Agreementfor a (i) breach of this Agreement or (ii) afoture breach 

of the Lease (as amended) or the FAA Sponsor assurances. 

[FAA Exhibit I, Item 40, ExhibitR-2, page 3, citing FAA Exhibit 1, Item 4, ExhibitR-2] 

21 

The language in Paragraph 14 unambiguously subordinated all the terms and conditions of the 

entire Settlement Agreement to the grant assurances. The parties had negotiated that if there is a 

conflict between the terms of the Settlement Agreement, the grant assurances will take 

precedence and govern. This subordination clause clearly permits the Airport Sponsor to amend 

the Settlement Agreement if there is a conflict that otherwise could deprive the sponsor of its 

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 of the Director's Determination, in its Answer to the Complainant's 

Appeal the Respondent stated: "the Respondent had consented to the assigrnnent and 

assumption of AeroPremier's lease to another new airport lessee, Hawthorne Aviation. 

Hawthorne, prior to any sublease being entered into, released the second floor of Building 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 of the AeroPremier lease demonstrates the Respondent's 

understanding of its 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 of a discussion of 

Paragraph 14 of the 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 of the 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 of the NG 

Hangar without seeking prior permission from the Airport and (2) granting AeroPremier the 

right at its sole option to cancel the lease of the McDermott facility also can be considered 

resolved. 

Therefore, the Associate Administrator for Airports upholds the Director's Determination 

concerning this issue. 

:2 A method a sponsor may use in this regard is to place a "subordination clause" in all of its tenant leases and agreements that subordinates the 

tenns of the 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 February 27,2009 (FAA 16-07-160). 
22 

2. Whether the Respondent is in violation of Grant Assurance 19, Operation and 

Maintenance by (1) failing to operate the airport suitably because Respondents did not 

restore the National Guard Hangar within 14 months of the effective date of the 

Respondents lease with AeroPremier and/or (2) allowing the airport to deteriorate and 

to become a safety hazard because of an open drainage area and changes to an onairport maintenance schedule. 

The Director was not persuaded that the Respondent violated Grant Assurance 19, Operations 

and Maintenance, by failing to restore the NG Hangar with 14 months ofthe effective date of the 

Respondent's lease with AeroPremier. [FAA Exhibit 1, Item 38, page 21] The Director found 

that the repairs were dependent in part upon the receipt of FEMA funds. When those funds were 

not available as anticipated, the delay in repairing the NG Hangar with the lease provisions did not 

result in a violation of Grant Assurance 19. [FAA Exhibit 1, Item 38, page 24] The Director also 

found the allegations and evidence presented by Complainant regarding an open drain area on the 

aiJport ramp and changes to an on-airport maintenance schedule are insufficient to conclude that the 

Respondenthas so neglected the facilities at the Airport as to rise to a violation of Grant 

Assurance 19. [FAA Exhibit 1, Item 38, page 24] 

The Director found that repairs and reconstruction as a result of Hurricane 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 of lease 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 God or other condition or circumstance 

beyond the control of the sponsor." [Assurance 19] 

The Director found that the 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 of maintenance is difficult to express objectively, the FAA will consider a general aviation 

airport compliant with its Federal maintenance obligation when the sponsor: 

... Fully wuierstamis that airport facilities must be kept in a safo and serviceable 

condition 

... Makes available the equipment, personnel, fonds, and other resources, including 

contract arrangements, to implement an effictive maintenance program . 

... Adopts and implements 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 be kept in a safe and 

serviceable condition, or failed 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 Director refused to address evidence in 

record showing the money to renovate the NG 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 but that the unsworn 

nature of the 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 not shown that the Respondent failed to understand that the 

airport must be kept in a safe and serviceable condition, or failed to make 

resources available as though resources were made available to Respondent. Nor 

has the Complainant alleged that the Respondent has failed to carry out a 

detailed preventative maintenance program. 

[FAA Exhibit 1, Item 38, page 23] 

Furthermore, the Director again in denying a violation of Grant Assurance 19 wrote: 

The Director is not persuaded that Respondent violated Grant Assurance 19, 

operations and maintenance, by failing to meet self-imposed deadlines to repair 

the NG Hangar. The Respondent's repairs were dependent in part upon receipt of 

FEMA fonds; when those fonds were not available as antiCipated the delay in the 

NG Hangar did not result in a violation of Grant 19. The Director also finds that 

the allegations and evidence presented by 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 neglected the 

facilities at the Airport as to rise to a violation Grant Assurance 19. 

[FAA Exhibit 1, Item 38, page 24]. 

The Complainant argued that there was no sworn testimony in the record that FEMA fonds were 

not available. The Complainant contends that there was evidence in the record that the FEMA 

funds were available beginning in 2006. [FAA Exhibit 1, Item 39, pages 45 and 53 citing FAA 
Exhibit I, Items 14, 15, 16, 17 Exhibits C-66 and C-68] According to the Complainant, the 

Complainant submitted a newspaper article written by Ben Myers in a New Orleans newspaper 

on April 8, 2011: 

Lakefront Airport's owner is providing a questionable explanation for the slow 

pace of repairs to a hangar that is central to a Federal Aviation Administration 

investigation. 

The Non-Flood Protection Asset Management Authority, the public entity that 

owns the airport, blames the Federal Emergency Management Agency for having 

"obligated and then de-obligated fonds necessary" to repair the hangar and office 

space. 

The Authority's explanation appears in a formal response to a complaint Flightline 

First [sic}, a Lakefront tenant, filed with the FAA claiming the airport showed 

favoritism toward a competitor. 

The explanation is "definitely not correct, " FEMA public assistance Officer Eddie 

Williams said 

FEMA records show that $2.5 million has been "obligated"for the hangar, 

meaning the money has been placed in a reimbursement account the Governor's 

office controls. The money has been available to the Office of Facility Planning 

and Control in the form of reimbursements for completed work since an initial 

$1.8 million deposit in October 2006. But only $287, 896.27 has been drawn 

down this fall, according to 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 entire Amended Complaint and Amended Response to the 

Answer of the Management Authority on "newly discovered evidence." That 

"evidence, "which would never be accepted evidence in any court oflaw as it violates 

several standard rules of admissibility, is a statement made by a FEMA employee which 

appeared in an article in the New Orleans City Business newspaper on April 8, 2011. In 

that article the FEMA employee stated that he was "pretty certain" thot FEMAfonds 

necessary for the repair of the National Guard Hangar were not deobligated by 

FEMA. However. the a11ached emaiJs from Ms. Lisa Smeltzer from the State of Louisiana 

Division of Administration made it crystal clear that the said FEMA funds were 

deobligated in September, 2007 and reobligated in December, 2008. See, Exhibit 1 

attached The FEMA employee was therefore misirifOrined and the Complainant based an 

entire Amended Complaint and Amended Response on that misinformation. This 

pattern of using misinformation is found throughout Complainant's filings. 

[FAA Exhibit 1,Item 40, page S, citing FAA Exhibit 1, ltern25,page3] 

24 
25 

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 in repairing the NO Hangar did not rise to a violation of Grant Assurance 19." [FAA 

Exhibit 1, Item 40, page 4] The Respondent further emphasizes this by writing "Until the funds 

were obligated, the State of Louisiana was unable to proceed with the work." [FAA Exhibit 1, 

Item 40, page 5] 

The Respondent emphasized a series of e-mails sent by Ms. Lisa Smeltzer from the State of 

Louisiana Division of Administration. [FAA Exhibit I, Item 25, page 3] 

The record includes a series of e-mails submitted as part of the Respondent's Reply to the 

Amended Complaint. These e-mails reflect the uncertainty associated with the availability of 

FEMA funds which in turn delayed the airport sponsor in repairing 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 of the Department of 

Administration sent an e-mail to Louis Capo, Executive Director of the Orleans Levee District. 

She wrote: 

We have been trying to get the money backfrom FEMAfor the PWs [project 

worksheets} that were de- obligated at Lakefront Airportfor several months nOw. 

There is a big meeting tomorrow to discuss these PWs with top FEMA people. 

Could you send me a list of what you want to do with each of the bldgs., i.e., Bldg. # 

- demolish, Bldg. # - repair, etc. for all seven buildings which were assigned to 

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 of the State of Louisiana 

Department of Administration to Louis Capo, she wrote: 

Good News! 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 deobligated PWs from Jackson Barracks and Lakefront 

Airport. As you may know, this issue has been going on since Sept. 07. 

As a result of the meeting (and here is the good news), FEMA said a letter will be 

sent to us next week, (but don't hald your breath waiting on a letter), stating that there 

is NO DUPLICATION offonding. We are proceeding on their word (since about 30 

people were in the meeting). Thus, FPC (Office of Facility Planning and Control) 

will write new PWrequestsfor the seven (7) buildings owned by the Military at the 

time of the storm. We just received the new formfrom GOHSEP and Ronnie will 

work on this on Monday. 

We would then expect FEMA to send people to write the PWs. We will probably 

need assistance from the deSigners on cost, scope, etc. What I would like to do is 

have FPC assist you and maintain the contract you have with the d£signer so we 

do not have to go back to selection board FPC could handle the bids and issue the 
contract to the contractor for the work included in the PWs. We will also assist with 

any improved or alternate projects. 

So, it loolcs like we are back on this with you and lookforward to making some 

progress. 

[FAA Exhibit I, Item 25, Exhibit I] 

26 

Finally, Ms. Lisa Smelter of the State of Louisiana Division of Administration 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 and the 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 the funds are obligated, we are unable to proceed with work. Note 

also a 4'h version on each PW was not obligated until early 2011 (smaller 

dollars, but again additional funds for the project.) 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 

FEMA public assistance officer suggested that the explanation provided by the 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 or had personal knowledge of the 2008 meetings or subsequent timelines 

where the different versions ofPWs (project worksheets) were developed for the repair of 

Lakefront Airport as written in the State of Louisiana Division of Administration e-mails. 

Even though not sworn testimony, a reasonable reading of the chain of e-mails shows there were 

several versions of the scope of work for construction repair to be negotiated between the Airport 

Sponsor and FEMA for the Lakefront Airport repairs between December 2008 and early 2011. It 

also appears to be clear that the State of Louisiana Division of Administration would not permit 

the Airport Sponsor to proceed with all repair work until all of the 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 sponsor to make up the difference out of 

pocket in the local funds until reimbursed by FEMA if the funds ever become available. It is 

reasonable for a public entity such as an airport sponsor not to commit to a project until the total 

funding package is in place. The Respondent also informed the FAA that the work on the hangar 

was completed in February 0[2012. [Exhibit I, Item 40, page 4] 

The Aviation Group (TAG) Report also included an email dated April 6, 20 II, which reflected 

the work being scheduled inside the hangar and the necessary coordination requirements for the 

construction to take place: 
Date: Wed, 6 Apr 201111:16:54 

From: Vick Corso 

To: Rolando Gonzalez 

Good morning Rolando, 

As requested per our conversation 4/6/11 the construction inside hanger will 

start this coming Monday 4/11/2011. From this day on till the first week of 

June we will need total access to the hangar from tam till 4:30 pm Monday--

Saturday and possible Sunday. If and event [sic J we are working later hours 

that day you will be notified that morning. There can be no planes in the 

hangar due to the working in progress. The inside of hangar will be staging 

area to prep materials to be installed, sprinkler systems, fire alarm, coil door 

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 being stored with 

equipment and hardware that will be your call. Please let Anthony 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 of scheduled 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 proceed with 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 in the record of this proceeding demonstrating 

the unavailability of the necessary FEMA funds at issue for the Airport Sponsor to complete the 

scope of work and necessary repairs. 

The Associate Administrator for Airports finds that the factual evidence supports the Director's 

Determination. An examination of the State of Louisiana 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 repair the 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 alleged or potential past violation of applicable federal 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 open drain on the Airport ramp, which has long since been repaired, and changes to 

an on-Airport maintenance schedule did not rise ro a violation 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 recent past, a jet aircraft was being relocated on 

the airport ramp. Because the Orleans Levy [sic] District/ailed to maintain the 

drain plates and cover in a proper configuration and failed to have them properly 

secured, when the aircraft was moved by tug across the drain plate, the plate gave 

way and the aircraft was damaged The airport sponsor ... denies any liability or 

responsibility for this damage to the aircraft. The incident with this aircraft is 

merely one illustration of the manner in which the Orleans Levy District is 

allowing the Lakefront Airport to deteriorate. Further, if you will examine the 

Exhibit JB .... you will note that the ... District now desired to defer filter changes 

on the fuel jilter system from an annual replacement cycle to every two years. 

While this may have a certain appeal economically, it may present 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 in the pleadings to substantiate these claims. The Complainant has 

submitted four images that depict a square, open area on the 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 of repeated failure" before Complainant had proven the Sponsor failed 

to maintain the Airport in violation of 49 U.S.C. § 47107(a)(7) and Grant Assurance 19 when 

there are no such requirement in the 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 about the open drain area or changes in the 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 action to maintain the safety of Lakefront 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 of applicable Federal obligations to 
be grounds for dismissal of such 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 of Director's Use on the Act of God 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" 

excused compliance with the Sponsor's duty to maintain the Airport suitably as required 

by 49 Us. C. § 471 07(a)(7), since there is no "act of God" exception to that duty in the 

statute and since Hurricane Katrina took place in 2005 and the Sponsor's lease with 

AeroPremier was executed in 2008, after Hurricane Katrina struck the GuifCoast with 

the result that Hurricane Katrina was not and could not have been an intervening "act of 

God" excusing the Sponsor's performance 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 

fact pattern, a contention the Complainant submits is fallacious, for the "act of God" exception 

to be triggered, the "act of God" would have had to have acted as a superseding or intervening 

cause. There was no "act ofGod"from April 8, 2008 to August 1, 2009 that prevented the 

Airport Sponsor from suitably maintaining the Airport.[sic]" FAA Exhibit 1, Item 39, pages 21-

22] 

Grant Assurance 19 states: 

19. OPERATION AND MAINTENANCE 

a. The airport and all facilities which are necessary to serve the aeronautical 

users of the airport, other thanfacilities owned or controlled by the United States, 

shall be operated at all times in a safe and serviceable condition and in 

accordance with the minimum standards as may be required or prescribed by 

applicable Federal, state and local agencies for maintenance and operation. 1t 

will not cause or permit any activity or action thereon which would interfere with 

its use for airport purposes. It will suitably operate and maintain the airport and 

all facilities thereon or connected therewith. 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. In fUrtherance of this 

assurance, the sponsor will have in effect arrangements forb. Operating the airport's aeronautical facilities whenever required; 

c. Promptly marking and lighting hazards resultingfrom airport conditions, 
including temporary conditions; and 

d. Promptly notifying airmen of any condition affecting aeronautical use of the 

airport. Nothing contained herein shall be construed to require that the airport 

be operatedfor aeronautical use during temporary periods when snow, flood or 

other climatic conditions interftre with such operation and maintenance. 

Further, 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 God or other condition or circumstance 

beyond the control of the sponsor. 

30 

First, Complainant's allegation that there is no 'act of God' 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 of any structure or facility which is substantially damaged or destroyed due 

to an act of God or other condition or circumstance beyond the control of the sponsor. 

This is the 'act of God' exception that provides flexibility for the sponsor in compliance with 

Grant Assurance 19 in the aftennath of an 'act of God' event. There is little question that 

Hurricane Katrina constituted an 'act of God'. 3 As to the allegation (or insinuation) that because 

the act of God exception is not included in the statutory provision 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 FAA has 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 of the assurances. Sponsors are not free to ignore non-statutory grant assurances or 

tenns. 

Second, Complainant alleges in the alternative that even if there is an 'act of God' exception, that 

the Director erred because Hurricane Katrina occurred in August 2005 and that three years later 

after that event, the sponsor could no longer utilize the 'act of God' exception to excuse 

compliance with Grant Assurance 19. [FAA Exhibit I, Item 39, page 44] However, the grant 

assurance does not require the sponsor to maintain, repair, restore, or replace any airport 

structures within any timeframe;4 as noted above, it states that the assurance cannot be construed 

to require the sponsor to take these actions where airport structures are "substantially damaged or 

destroyed" due to the 'act of God'. As a result, there is no merit to Complainant's claim that 

there was no 'act of God' from April 8, 2008 to August I, 2009 that prevented the Airport 

Sponsor from suitably maintaining the Airport. [FAA Exhibit I, Item 39, page 44] The FAA 

need not demonstrate or find any intervening or supervening causes. 

The AeroPremier lease required the Airport Sponsor to repair the facility in 14 months of the 

effective date of the 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 

3See Skandia Insurance Co Ltd. V. Star Shipping AS 173 F.Supp.2d 1228, 1239-]240 (S.D. Ala. 2001), citing 1 AmJur.2d Act ofOod § 5 

(1962)("HulTicanes are precisely the sort ofnatwal disaslt:r for which the Act of God 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 a reasonable amount of time. 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 of the entire fmancing for the facility repairs. Thus, the Airport Sponsor had no 

obligation to perfonn the maintenance or repairs to any of its facilities because of the Act of 

God, in this case Hurricane Katrina, even three years after the actual Act of God event, without 

all of the necessary capital improvement funds to complete the project in its entirety from 

planning the final Project Work Sheets through to completion of construction work. According 

to Respondent, the work on the 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 not persuasive 

on appeal. The Director's Determination is upheld concerning its findings on Grant 

Assurance 19. 

4. Whether the Respondeotviolated Grant Assurance 22(c), Economic Nondiscrimination, 

Grant Assurance 24, Fee and Rental Structure, and Grant Assurance 25, Airport 

Revenues, by agreeing to a settlement that benefited AeroPremier and its Advantage 

Capital parent and unjustly discriminated against Complainant. 

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 its judgment for that of the court or 

OLD in determining the level of damages appropriate to resolve OLD's breach of lease 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. 

[FAA Exhibit 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 Complainant to 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 of violation 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 

of the necessary documentation, the Sponsor's actions were justified 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 of Grant Assurance 22 because it was a justified "business decision" 

was based on the 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 demonstrating the 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's 
32 

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 summary judgment in the 

underlying litigation. [FAA Exhibit 1, Item 39, page 21] The Complainant also objected to the 

Director's finding that, " ... the Director is not persuaded that the teJTI\s of the settlement are so 

beneficial to AeroPremier, over and above the damages if sustained, 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 "Grant Assurance 22 was not violated to the extent the Director found the court in the 

underlying litigation rendered judgment on the Settlement Agreement and by virtue of court 

approval, the Director was not persuaded that it rises to a situation where Flightline incurred 

unjust economic discrimination 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 FAA Exhibit 1, Item 28] 

The Complainant points to the Velayos letter to the Sponsor of November 18, 2010. The FAA's 

Lead Planner for the Louisiana/New Mexico ADO wrote: 

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 base its settlement on unfounded 

compensation, subsidies, and/or set an improper foe schedule benefiting 

AeroPremier, this action may violate Grant Assurance 22 (Economic NonDiscrimination), 24 (Fee and Rental 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 of FBOs 

and airports, who provided an Affidavit that 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" in light of the following: 

1. Complainant submitted swom testimony from Michael A. Hodges, MAl, an expert infixed 

base operations and managing airports who opined the Sponsor was in violation of Grant 

Assurance Nos. 22(c), 24, 25(a), 5 and 29. 

2. Hodges concluded the deal between the Sponsor and AeroPremier in the Order of February 

22, 2010, and the Settlement Agreement of October 12, 2010 was "arbitrary, capricious and 

discriminatory in favor of AeroPremier and against Flightline, and was not prediruted upon 

any supportable market dala or justifiable analyses of damages or financial impacts. 

3. Hodges noted that even in the absence of office space renovations to the NG Hangar, it waS 

still .. .fo/ly capable of being rented to aircrafi owners to house their aircraft. 

4. Hodges noted the economic concessions the Sponsor gave AeroPremier as part of the deal' 

were grossly and demonstrably in excess of any kinds of damages AeroPremier could 

possibly have s'!Ifored as a consequence of a portion of the facility's office space having 

not been renovated 
5. Hodges forther noted: The disparate economic treatment the Sponsor has handed out to 

Oc(yssey and Flightlme compared to AeroPremier convinces me as a professional in the 

aviation industry that the intent of the Sponsor was to favor the interests of AeroPremier 

and the Advantage Capital entities over those of Flightline and Odyssey. 

6. Hodges noted that while there was a 15% reduction in the improved portion of the NG 

Hangar, the rental was reduced in paragraph 4 of the Order from $28,259.83 per 

month to $7,500.00 per month. 

33 

7. Hodges noted a rational person would not reduce the rent by 75%for a 15% reduction 

in the available space. 

8. Hodges opined the violation of Grant Assurance No. 22 in the form of unjustified and 

discriminatory economic concessions resulted in a violation of Grant Assurance No. 

24 requiring the Sponsor to set a rent structure to make the airport as self-sustaining as 

possible. 

9. Hodges noted even if intent to discriminate was a requirement to providing a violation 

of Grant Assurance No. 22(c), the requirement had been met based on the evidence. 

10. Hodges opined that the unauthorized and unwarranted economic concessions 

conftrred by the Sponsor on AeroPremier resulted in a violation of Grant Assurance 

No. 25, the Airport Sponsor is taking money from Flightlme and using that money to 

subsidize AeroPremier. 

11. Analyzing AeroPremier's economic loss projections, Hodges noted: the gross profit 

and market share projections ... are excessive. 

12. Drawing on his experience in the industry, Hodges noted: ... the projection that 

AeroPremier could achieve 33% market share in such a short period .. is not 

supportable based upon market and historical data. 

13. Hodges examined the Settlement Agreement noting that a rent credit of$473,OOO. 00 

was discriminatory under Grant Assurance No, 22(c) and thereby also violated Grant 

Assurance Nos. 24 and 25(a) rId ~14(a)1. 

14. Hodges remarked the $500,000.00 rent credit in paragraph 2 of the Settlement 

Agreement violated Grant Assurance Nos. n(c), 24 and 25(a) rId ~14(b)]. 

15. Hodges noted that forgiving AeroPremier from paying $285,000.00 to make 

improvements as recited in paragraph 3 of the Settlement Agreement violated Grant 

Assurance Nos. 22(c), 24 and 25(a). 

16. According to Hodges, the waiver of50% of the insurance and utility fees in 

paragraph 4 of the Settlement Agreement violated Grant Assurance Nos. 22(c), 24 

and25(a). 
17.According to Hodges, paragraph 9 andparagraph 12 of the Settlement Agreement 

allowing AeroPremier to sublease the secondfloor office space in the NG Hangar 

without obtaining permission from the Sponsor and to cancel the Ml' Hangar lease 

violated Grant Assurance Nos. 5 and 29. 

18. Finally, Hodges noted, all FBOs in their flrst two to three years of operations 

invariably lose money .. .{FJor AeroPremier to have lost money on operations in their 

first year would not be atypical. Infact it would 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 of Brayton Matthews, Manager and Secretary of Flightline Ground with 

respect to potential tenants that would have paid AeroPremier rent if the office space in 

the NO Hangar had been renovated. The Complainants assert: 

1. Net Jets never did any business with AeraPremier; 

2. NOLA was evicted by AeroPremier for failure to timely pay rent; 

3. GCA is a tenant of AeroPremier in the MT Hangar; 

4. Dominic Lala is just a pilot, not an aircraft owner; 

5. He never heard ofCAA; 

6. He never heard of Way Home Contracting; 

7. The two hangars operated by AeroPremier 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 on the TAG Report in rendering 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 of proof was not supported by 

substantial evidence. [FAA Exhibit 1, Item 39, page 37 citing FAA Exhibit 1, Item 27, pages 

2-4] 

In its Reply, the Respondent maintained that 

there is no disputing the fact that a court of competent jurisdiction in the State of Louisiana 

a4judged the OLD liable for breach of its lease with AeroPremier after all due legal 

proceedings. Even though the issue of liability to Advantage Capital was not decided by 

summary judgment, that potentia/liability still remained to be a4judged at a trial on the 

merits. The issue facing the OLD was not whether it owed damages to AeroPremier 
!Jut how much those damages would be. A business decision was made to mediate the case 

and enter into a settlement agreement. The underlymg litigation, which as the Director 

cO/rectly poinled out, is beyond the pwview of the FAA. 

Furthennore, the Respondent continues .... the Director correctly determined that the 

evidence presented by the Complainant that it had been economically disadvantaged by the 

Settlement Agreement was not persuasive. 

The Respondent argues that the Complainant simply assumed economic disadvantage as a 

result of the settlement agreement and that it never considered the damage done to Advantage 

Capital and AeroPremier as a result of the breach of the lease. The Respondent also 

suggests that the Complainant did not consider the economic benefit Complainant clearly 

e'1Joyed as a result of the breach of AeraPremier's lease. 

[FAA Exhibit 1, Item 40, pages 5-6, citing FAA Exhibit 1, Item 25, page 3] 

The Respondent further responded by: 

the Complainant's 'experts " who wrote the conclusory text, did not bring to this 

proceeding extensive, direct experience operating and managing FBOs. Their 

perspective does not reJate to trying to impress a prospective tenant by walking 

her/him through the FBO lobby or hangar. They have never endured the demands 

of the marketplace when the competitor FBO has a price advantage. On the other 

hand, the principals of TAG have years of hands on experience doing the actual work 

of running an FBO and that is the issue in this proceeding. 

[FAA Exhibit 1, Item 25, page 9] 

The Respondent further stated that: 

[to further contrast the Complainant's expert,] the Respondent hired an 

independent consultant, The Aviation Group (TAG), to examine all the facts of 

this proceeding and their charge included the development of information outside 

of the Louisiana litigation. TA G examined the traffic data before and after 

Katrina. They examined the airport plan. They assessed the actual into plane rates 

offered by the FEOs. They tracked the history of the FBOs on the Airport and 

traced the trends of the various companies that preceded the events at issue. In 

order to understand the actions of the Authority, TAG measured the impact of 

Katrina on the region and the Airport. They set, as criteria for measuring the 

Respondent's performance and of the management's decisions on the FBOs, their 

knowledge of other comparable airports. They did independent economic and 

financial analyses. 

In short, TAG completed an independent, objective review of the actions at issue. 

[Exhibit 1, Item 25, pages 9-10] 

35 
36 

The Mutual Receipt Release and Indemnification Agreement 

AeroPremier and the Orleans Levee District, Division of Non-Flood Assets (OLD) engaged in 

litigation in the Civil District Court for the Parish of Orleans, State of Louisiana, in the case of 

AeroPremier Jet Center, LLC v. Board of Commissioners, et ai, No. 09-8632. The central 

focus of this 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 of Flanagan 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, 'but for' circumstances and 

lost net income on leasing space at a rate of$25,000 per month. [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 shall provide a $473,000 credit to AeroPremier, which may be applied 

to past or foture rent or any other obligation of AeroPremier to OLD. 

The OLD shall provide a $500, 000 transferable rent credit to AeroPremier 

or Advantage { .. J which credit may be applied to 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 $100,000 per year until exhausted. 

The OLD waives and releases AeroPremier from the obligation under the Lease 

to invest $285,000 in improvements to real property at the Airport. 

The OLD waives and releases AeroPremier from the obligation under the Lease 

to pay rentfor Building 101, including the hangar,from August 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 is presently in use by AeroPremier to the extent such space is unusable 

due to OLD's construction/renovation activities resulting from Lessor's Repair 

Obligation. 

OLD shall be responsible for 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 suitable for use as a FBO and consistent with the agreed plans, 

specifications, drawings and floor plans. . 

{ .. .} 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 Federal Aviation Administration 

(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 Region Louisiana/New Mexico ADO's letter of November 16, 2010, reviewing 

the proposed settlement agreement, expressed concerns with the proposed agreement and 

suggested, in part, that: 

the sponsor addresses its findings, specifically, the conclusions in the two 

scenarios reported by the CPA firm estimating AeroPremier's losses. In its 

statements to the sponsor, Aero Premier estimated its losses amount to 

nearly $2.6M However, the OLD report purports two vastly different results. 

In scenario #1, the report estimates losses amount to just 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 unfounded compensation, subsidies, and/or set 

an improper fee schedule benefiting AeroPremier in violation of Grant 

Assurance 22, Economic Non Discrimination; 24, Fee and Rental Structure; 

and 25, Airport Revenue·.l 

Finally, we are concerned that acceptance by the OLD of the documentation, 

or lack thereof submitted by AeroPremier to support its estimations and 

allegations regarding lost income and profits may lead to more violations of 

Grant Assurances 22 (Economic Nondiscrimination) and 24 (Fee and Rental 

Structure). For example, we recommend the sponsor engage in due diligence 

to quantifY statements and estimations pertaining to AeroPremier's assertions it 

lost $25, 000 per month in leasing opportunities. 

37 

'The OlD ~oncd a report from Holly Sharp ofl.aPorte. Sehrt. RomiglWld Hand to review re:oc«t and documents and render an opinion A:gBrding the 

losses, if any. sustained by AeroPremier as a result of tile failure orthe OLD to refuJbi.m the forma l...oWsiana Naliona1 Guard Hangar by August 1,2009 

fur use as office space. 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 AeroPremier was $199,613. In scenario two (2), there was no profit lost (FAA Exhibit I. 

Item 27, exhibit R-31 
38 

[FAA Exhibit 1, Item 33, pages 1-2] 

The OLD commissioned a report from 'The Aviation Group' (TAG), which reviewed thetenns 

and conditions of 1he settlement agreement between the OLD and AeroPremier. In June 2011, TAG 

issued a report that concluded that the settlement agreement was fair to all parties. Specifically, the 

report stated: 

The Settlement Agreement gave rent credits to AeroPremier and Advantage 

Capital as well as relief from some obligations. A rent credit for past rental 

payments of $473, 000 was granted to AeroPremier as well as rent credits for some 

foture rental payments until such time as repairs are completed. Both parties, 

OLD and AeroPremier presented their projections of current andfoture losses 

that rangedfrom a low of less than $200, 000 from OLD to a high of over 

$2, 000, 000 from AeroPremier. The OLD report was narrow in scope as it only 

considered foel sales and not all the other non-:JUel revenue potential. The time 

periodfor foture losses extended only to 2012 . 

... In addition to aeronautical services, AeroPremier is unable to provide office space 

to potential customers. [ . .] AeroPremier is unable to assure customers of when 

and what space will be available. This loss of rent continues to negatively impact 

their revenue stream. Snapshot projections of finanCial performance that both 

parties presented during the settlement hearing are difficult and obviously open to 

much criticism. However, as time has passed since these projections were made, 

the continued efficts of the lack of the expected renovated National Guardfacility 

reinforce that the amount of the settlement was appropriate . 

... The Settlement Agreement also provided a $500,000 transferable rent credit to 

AeroPremier or Advantage Capital. [ . .] This rent credit applied over a 5 year 

period is appropriate for Advantage 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 Guard hangar. This obligation was in the original 

lease in 2008. It will now be 3 or more years before AeroPremier will be able to 

make improvements to the facility as projected [ . .] Since AeroPremier intends to 

spend a significant amount to improve the facility, the relief of the specific 

amount of the obligation appears appropriate." 

[FAA Exhibit 1, Item 38, page 28 citing FAA Exhibit 1, Item 27, Exhibit R-7, pages 7-8] 

The Complainant contended that the Sponsor's submission of material was debunked and its 

reliability impeached by the sworn testimony of Brayton Matthews with respect to potential 

tenants that would have paid AeroPremier rent if the office space in the NG Hangar had been 

renovated. [FAA Exhibit 1, Item 39] The Complainant also appealed, in part, based on the 

Matthews Affidavit that: 

8. The TAG Report is deceptive and is misleading. 
[FAA Exhibit 1, Item 39, 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 

Settlement Agreement that: 

"For the FAA to understand the motivation of the OLD to settle the state court 

litigation initiated by AeroPremier, it is important to understand the factual and 

procedural antecedents that led to the mediated settlement. 

Under the Transportation Statute and the relevant FAA policies, Airport Sponsors are 

entitled to use their best judgment to settle lawsuits using airport revenue in concert with 

those statutory and regulatory obligations. As explained below, 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 adverse judgment in the state lawsuit, (3) the OLD recognized 

that its expert report covered only one element of the damages claimed by AeroPremier, 

lostfoel sales. and (4) a settlement meant that the OLD would not have to pay a 

monetary judgment. which would have allowed AeroPremier to offset 100% of all 

amounts due OLD until the judgment was paid. 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 amount AeroPremier could have recovered in its lawsuit. [ . .] 

AeroPremier presented a very strong case during the state court litigation. 

During the early stages of the litigation. AeroPremier obtained a partial 

summary judgment for breach of lease based on the OLD's failure to repair 

the facility on a timely basis [ . .] AeroPremier's expert witness. an accountant 

named Harold Asher. opined that AeroPremier lost between $2 million and 

$3.5 million as a result of the OLD's contract breaches. He further opined 

that had AeroPremier 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 liable for all the damages. foreseeable or not, that 

are a direct consequence of his failure to perform.' As the law permits. the 

expert's calculation included more than just lost customers that could be 

identified by name. and also took into account lost market share and other 

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 did not include a number of items, including "[tlhe 

loss of other revenue streams generated along with the loss of fuel revenue; in 

addition to providingfoel, an FEO also earns substantial revenue through the 

provision of maintenance, office rent, hangar fees, detailing. catering, rental cars. 

travel service foe. ground support and tie 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 that the 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 between the FAA and the airport sponsor, indicate that one 

potential valuation of damages to AeroPremier by one expert identified between $2 and $3.5 

million and as high as $5 million in potential liability under state law. [FAA Exhibit I, Item 38, 

Page 29 citing FAA 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 by the other party. 

Furthermore, the Respondent assured that the Settlement Agreement was subordinated to 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 of a 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 of an 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. On the 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 protect themselves 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 itself as a going concern in the face of litigation. [JetA way v. Montrose, CO, FAA 

Docket No. 16-08-01 (Director's Determination) (July 2,2009) page 17.] See also [Kent J. 

Ashton, Jacquelin R. Ashton v. City of Concord, 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 of AeroPremier'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 of the Settlement Agreement is not evidence in itself of unjust 
discrimination. 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 of its lease 

with AeroPrernier and the sponsor faced a substantial risk of an adverse judgment. It was 

appropriate and reasonable for the sponsor to explore settlement with Aero Premier, and for that 

settlement - instead of providing for OLD to pay a monetary judgment - providing instead for 

AeroPremier to offset 100% of all amounts due OLD until the judgment was paid. The 

settlement is reasonable because when monetized, the rent credits were much less than the 

amount AeroPremier could have recovered in its lawsuit. It would appear that this 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 competitor FBO that was not part of the 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 AeroPremier with revenues by the Airport. 

The Director was not persuaded by the arguments or evidence presented that the award of rent 

credits and other concessions to AeroPremier via the Settlement Agreement were wildly 

inflated and therefore an unallowable use of airport revenue or a violation of the 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 of the 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 of its 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 of the airport to be as self-sustaining as possible under these unique circumstances. [FAA 

Exhibit I, Item 38, page 38] 

The Director also was not persuaded that the OLD was in violation of Grant Assurance 24 

for agreeing to rent credits and a temporary reduction in insurance payments to settle its breach 

of lease with AeroPremier. Court costs and settlement expenses as a result of a lawsuit are an 

acceptable use of airport revenue. [FAA Exhibit 1, Item 38, page 38] 

On Appeal, 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 Grant Assurance 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 requested detailed 

financial documentation in evaluating charges of Grant Assurance Violations 

Nos. 22,24, 25, 5 and 29, the requested data was never produced, but the 

Director reversed his subordinates without explanation and declared in the 

absence of the necessary documentation, the Sponsor's actions were justified 

as a "business decision." [FAA Exhibit I, Item 39, page 21] 

In its Amended Complaint, the Complainant alleges that the OLD is in violation of Grant 

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 by systemically and intentionally allowing AeroPremier to pay less than 

its contractually-obligated lease payments, insurance payments and other obligations 

to Respondents are effictively subsidizing AeroPremier 's operation with revenues 

generated by the Airport, including money obtainedfrom Complainant." 

Respondent by agreeing in a private mediation session to confer $1,258,000.00 in 

additional economic benefits in AeroPremier { . .] is diverting ami/or intends to divert 

Airport revenues to andfor the benefit of AeroPremier .... 

42 

Respondents, by arbitrarily and capriciously assessing AeroPremier's leased premises at 

a grossly reduced value with no appraisal [are] diverting revenues generated by the Airport 

{ . .] to AeroPremier and subsidizing AeroPremier's operations ... 

While granting economic concessions to AeroPremier for insurance obligations on the 

theory it has been damaged by premises not folly remediated and 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, in the 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 remediated and by chargingfull 

insurance to Complainant operating in similar circumstances, Respondents are diverting 

revenues generated by the Airport (insurance paid by Complainant) to AeroPremier. " 

[FAA Exhibit 1, Item 15, page 9] 

The Director found that the Complainant provided little information regarding that it was forced 

to pay full insurance premiums for its leased space although it did not provide details of how that 

its space was unusable or even whether it had contacted OLD to discuss a reduced rate until the 

facility was fully functionaL [FAA Exhibit 1, Item 38, page 31] In the absence of the 

Complainant providing the details or requesting similar treatment and was denied, the Director 

could not make a determination that because one FBO received a reduction in its insurance fees 

because of a breach of lease, 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 of the record, the Director correctly determined that use of the Grant 

Assurance 24 was more appropriate than Grant Assurance 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 of proof which is on the 

proponent of the 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 of a 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 out the legal vulnerabilities of an 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 retain the 

proprietary right to demand that 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 subordinating the specific terms and conditions to its' grant assurances. In the Mutual 

Receipt, Release and Indemnification Agreement, paragraph 14 states: 

The parties agree that this Agreement is intended to include a complete and final 

release of all claims that have been or could have been asserted in the Lawsuit, 

the matter having been settled to their satisfaction. Notwithstanding the above, 

there is no release in this Agreement for a (a) breach of this Agreement or (ii) a 
44 

future breach of the Lease (as amended) or the FAA Sponsor assurances. 

[FAA Exhibit I, Item 40, Exhibit R-2, page 3, citing FAA Exhibit I, Item 4, Exhibit R-2] 

The FAA is persuaded that OLD recognized its liability in failing to meet the terms of its lease 

with AeroPremier and negotiated an acceptable resolution for the parties. 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 of legal proceedings is an acceptable use of airport revenue under 

Grant Assurance 25. 

Thus, the Associate Administrator for Airports cannot find that the Director erred in making this 

determination with respect 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 be provided an eVidentiary hearing; 

That the Complainant be afforded the right to engage in discovery pursuant to 14 

C.F.R. §16.213; 

That Complainant be afforded the right to take deposition testimony pursuant 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 FEMA funds 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 Final Decisions without hearing. 

The Associate Administrator will issue a final decision on appeal from the 

Director's determination, without a hearing, where--(l) The complaint is 

dismissed after investigation; (2) A hearing is not required by statute and is not 

otherwise made available by the FAA; or (3) The FAA provides opportunity for a 

hearing to the respondent and the respondent waives the opportunity for a 

hearing as provided in subpart E of this part. 

45 

In this matter, the Director dismissed the 14 CFR Part 16 Complaint. The record on appeal does 

not support the overturning of the 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. The record does 

not support the need for further discovery in rendering an initial determination; the FAA may 

rely entirely on the complaint and responsive pleadings. Each party must file the documents that 

it considers 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 of the substantial record. 

The Complainant is not entitled to a hearing. Under § 16.31, a hearing is only made available to 

a sponsor where the Director's Determination finds the respondent in noncompliance and 

proposes the issuance of a compliance order. In that case, the Determination would include 

notice of opportunity for a hearing under subpart F of part 16, if such an opportunity is provided 

by the FAA. The Determination issued in this matter did not include these findings or any notice 

of availability of a hearing. See also section 16.1 09(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 of grant funds, an order 

withholding approval of any new application to impose a passenger facility charge 

pursuant to section 112 of the 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 of the 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 of the availability of a hearing under subpart F of this part. 

Again, Complainant is not entitled to a hearing under the 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 after 
investigation. 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 of fact or 

conclusions of law in issuing the 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 of fact made by the Director are supported by a 

preponderance of reliable, 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 that the Director's Determination is supported by a 

preponderance of reliable, probative, and substantial evidence, and is consistent with applicable 

law, precedent, and FAA policy. The Appeal does not contain persuasive arguments sufficient to 

reverse any portion of the Director's Determination. 

The Director's Determination is affirmed. This decision constitutes the final decision of the 

Associate Administrator pursuant to 14 CFR § 16.33(a). 

ORDER 

ACCORDINGLY, it is hereby ORDERED that (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 of grants 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 of these 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 of the 

Federal Aviation Administration may file a petition for review pursuant to 49 U.S.C. § 46110, in 

the United States Court of Appeals for the District of Columbia Circnit or in the Court of 

Appeals of the United States for the Circuit in which the person resides or has its principal place 

of business. The petition must be filed not later than 60 days after a Final Decision and Order 

has been served on the party. [14 CFR. Part 16, § 16.247(a).] 

/A~~··7r·t:~cC-Z;_j_ Eduardo A. ~el~ Associate Administrator 

for Airports 

. /"!.~ ot:(J 
Index of Administrative Record 

FAA Exhibit 1 

Flightline Ground, Inc. 

v. 

Louisiana Department of Transportation 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 of Docketing, dated Februmy 22, 2011. 

Item 3 - Motion for Extension of Time to File an Answer, dated March 15, 20 II. 

Item 4 - Answer from the Non-Flood Protection Asset Management Authority, dated March 16, 20 II 

(date stamped March 22, 2011). 

Item 5 - Complainant's Motion to Alter Briefing Schedule, dated March 17, 2011. 

Item 6 - Response to Motion for Extension of Time to File Answer, datedMmch 17, 2011. 

Item 7 - CompIainant's Motion to Amend Style of Case, dated March 17, 20 II. 

Item 8 - Comp1ainanes Motion to Extend Time to Respond to the Answer of the Management Authority, 

dated March 21, 2011. 

Item 9 - Comp1ainanes Seoond Motion to Extend Time to Respond to the Answer of the Management 

Authority, dated March 28, 2011. 

Item 10 - Airport Grant History, dated April 6, 2011. 

Item 11-CompIainant's Response to the Answer of the Management Authority, dated April 5, 2011-

Includes exhibits C-I through C-65. 

Item 12 - Affidavit of Michael A. Hodges, MAl, dated April 5, 2011. 

Item 13 - Respondent's First Motion to Extend Time to Rebut the Complainant's Response to the Answer 

of the Management Authority, dated April 13, 20 II. 

Item 14 - Complainanfs Notice of the Intention to Move to Amend CompIainant's Response to the 

Answer of the Management Authority Based upon Newly Discovered Evidence. Includes exhibit C-66, 

dated April 18, 201 L 

Item 15 - Amended Complaint, filed by F1ightline 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 of The Intention to Moveto Amend Comp1ainant's Response to the 

Answer of the Management Authority Based Upon Newly Discovered Evidence, dated 

April 15,201 I. Includes exhibit C-66; 

Complainant's Motion to Amend Complainant's Response to the Answer of the 

Management Authority Filed April 6, 2011; and 

CompIainant's Amendment to Its Response to the Answer of the Management Authority 

Based Upon Newly Discovered Evidence. 

Item 17 - CompIainant's Motion to 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 Of Time In Which To Respond. 

Item 19 - Notice of Extension of Time to Rebut the Complainant's Response to the Answer of the 

Management Authority, dated April 29, 201 I, extending Rebuttal deadline to May 3, 2011. 

2 

Item 20 - Second Notice of Extension of Time regarding Respondent's Motion to Suspend Procedural 

Process (Item R) to allow Respondent until June 3, 2011 to file its Rebuttal, issued May 5, 2011. 

Item 21 - Answer by Louisiana Department ofTransportarion and Development stating 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. 

Item 22 - Brief in Opposition ofFlightline Ground, Inc. To Respondent's Motion to Suspend Procedural 

Process and in the Alternative, for an Extension OfTime Within Which To Respond, dated April 29, 

20 II. Includes Exhibit A. 

Item 23 - Briefin Opposition ofFlightline Ground, Inc. To The Prayer In The Motion Of The 

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 Response to the 

Amended Complaint by the Management Authority, Dated June 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 of Extension of Time, dated 

December 6, 2011. 
Item 27 - Respondents Submission of Documents in Response to Request for Additional 

Information - dated January 5, 2012 

Item 28 - Affidavit of Brayton Matthews - Manager and Secretary of Fligbtline Ground, Inc. 

- dated January 13,2012. 

Item 29 - Complainant's Motion to Strike or in the Alternative File Affidavit of Brayton 

Matthews in Response to Respondent's Submission of Documents, dated January 13,2012. 

3 

Item 30 - Opposition to Complainant's Motion to Strike or in the Alternative File Affidavit 

of Brayton Matthews in Response to Respondent's Submission of Documents, dated January 16, 

2012. 

Item 31 - Order Denying Motion to Strike and Granting Motion to File Affidavit, and Notice 

of Extension of Time, dated February 21, 2012. 

Item 32 -Notice of Extension of Time until June 30, 2012, dated April 2, 2012. 

Item 33 - Letter, dated November 16,2010, to Mr. Robert Lupo, Chairman of the Non-Flood 

Protection Asset Management Authority and Mr. Louis Capo, Director of Non-Flood Assets, 

Orleans Levee District from FAA's Southwest Region LouisianalNew Mexico ADO 

regarding the proposed settlement agreement. 

Item 34 -Notice of Extension of Time until December 20, 2011, dated September 15,2011. 

Item 35 - Notice of Extension of Time until August 31, 2012, dated June 20,2012. 

Item 36 -Notice of Extension of Time to September 17,2012, dated August 27,2012. 

Item 37 -Notice of Extension of Time to October 12, 2012, dated September 18,2012. 

Item 38 -On October 16,2012, the FAA issued the Director's Determination. 

Item 39 - Complainant's Appeal of the Director's Determination dated Nov. 14,2012. 

Item 40 - On November 29,2012, the Respondent filed the Reply of Respondent 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 of Extension of Time to on or about 

June 2, 2013. 

Item 42 - On March 7,2013, the Complainant submitted an Objection to Failure of the 

Associate Administrator to Issue a Final Decision Even with the Extended Time Limits. 

Item 43 - On June 7, 2013, the FAA issued a Notice of Extension of Time to on or about 
September 16, 2013. 

Item 44 - On June 20, 20l3, the Complainant submitted an Objection to Failure of the 

Associate Administrator to Issue a Final Decision Even with the Extended Time Limits. 

Item 45 - On September 17,2013, the FAA issued a Notice of Extension of Time to on or 

about January 31, 2014. 

Item 46 - On September 24, 2013, the Complainant submitted an Objection to Failure of the 

Associate Administrator to Issue a Final Decision Even with the Extended Time Limits. 

Item 47- On January 30, 2014, the FAA issued a Notice of Extension of Time to on or about 

June 2,2014. 

Item 48 - On May 29,2014, the FAA issued a Notice of Extension of Time to on or about 

October 1,2014. 

Item 49 - On October 10, 2014, the FAA issued a Notice of Extension of Time to on or about 

November 7, 2014. 

Item 50 - On December 10, 2014, the FAA issued a Notice of Extension of Time to on or about 

January 16,2015. 

4