UNITED STATES DEPARTMENT OF TRANSPORTATION FEDERAL AVIATION ADMINISTRATION WASHINGTON, D.C. 

## RECEIVED AUG 32015 National Business AviationAssociation, Inc., et al. 

### PART 16 DOCKETS Complainants, FAADocketNo. 16-15-08 v. Town ofEast Hampton, NY Respondent.
RESPONDENT TOWN OFEAST HAMPTON, NEW YORK'S REPLYIN SUPPORT OFITS MOTION TO DISMISS THE COMPLAINT Designation ofpersons to receive service for theTown ofEastHampton,New York:

ElizabethVail TownAttorney Town ofEast Hampton 159 Pantigo Road East Hampton, NY 11937 EVail@EHamptonNY.Gov W. Eric Pilsk Catherine vanHeuven Kaplan Kirsch & Rockwell LLP 1001 Connecticut Ave., NW, Suite 800 Washington, D.C. 20036 epilsk@kaplankirsch.com cvanheuven@kaplankirsch.com Telephone: (202) 955-5600 Facsimile: (202) 955-5616In its response to the Town of East Hampton, New York's (the "Town") Motion to Dismiss the Complaint, Complainants raise new factual issues not raised in the Complaint and raisebaseless legal arguments to which abriefreplyis appropriate. 1 I. COMPLAINANTS FAIL TO STATE A CLAIM FOR A VIOLATION OF ASSURANCE 23 In their Answer brief, Complainants present evidence that a new helicopter operator is
now offering service at East Hampton Airport ("Airport") with aircraft that are not "noisy" under the Town's Local Laws. Complainants use this evidence in an attempt to salvage their exclusive rights claimby arguing that this new operator is evidence ofthe requisite anti-competitive effect. Complainants Response at 4-5. But that new information does not raise even a colorable issue underAssurance 23. The FAAhas determined that in order to find aviolation ofAssurance 23, a complainant must "prove that an anti-competitive result would occur ifthe Ordinance were implemented." Final Agency Decision, In the Matter of the City of Santa Monica, FAA DocketNo. 16-02-08, at 51 (May 14, 2009). The fact that additional service has been added at the Airport simply underscores that competition has not been harmed. The fact is that no entity is prohibited from operating at the Airport and that no entityis granted an exclusive right. Moreover, nothing inthe Local Laws, or any other Town law or policy, prohibits any operator, including Complainants, from operating at the Airport with compliant aircraft. No operator is permitted to exclude any other operator. No monopoly is created and competition is fully preserved. This is not a case,
Although Part 16 does not expresslyprovide for a replyin support ofaMotion to Dismiss, Part 16 does not prohibit replies either. In this case, because Complainants have introduced new evidence in their answer to the Town's Motion to Dismiss, a briefreply is warranted to rebut that evidence and introduce additional authority to rebut issues raised in Complainants' answer. Consideration ofthis short reply will not lengthen the proceedings or prejudice the parties. Complainants also state that they did notreceive a copy ofthe Town'sMotionto Dismiss until July 8, 2015. However, the Town hand delivered a copy ofthe Motion to Dismiss to NBAA's office at 1200 G Street, NW, Suite 1100, Washington, D.C. shortly after 9:00a.m. on June 25, 2015. The Motion was left with the receptionist. The Town has no knowledge ofwhat happenedto the package after that.
2like a lease, where an airport sponsor grants one or more entities control of a limited airport
resource or right to conduct business which necessarily excludes others. The Local Laws apply equally to all Airport users and provide the same opportunities and limitations for all. Complainants present absolutely no evidence that the Town intended to exclude any specific operator or group ofoperators and grant an exclusive right ofaccess byother operators. And, in fact, there is no such evidence. The Local Laws are neutral, noise-based rules intended to address a local noise problem. They do not limit competition at the Airport and do not confer a monopoly on any operator. NBAA's complaint, even iftreated as amended, simply does not state a claim underAssurance 23. Finally, Complainants argue that the Director should ignore the Final AgencyDecision in Santa Monica because it is an "outlier" that has not been widely cited or relied upon. But Complainants fail to point to any FAA decision ofany kind that overturns Santa Monica or that repudiates its findings. Nor can they. The fact is that Santa Monica rests on a careful and thorough reading ofthe statutory and legislative basis ofthe prohibition against exclusive rights to conclude that Assurance 23 is not the mirror image of Assurance 22, and requires an additional showing ofanti-competitive effect akin to a monopoly. E.g., Mot. to Dismiss at 5-7. That position was articulated notjustby the Final Agency Decision, butbythe Hearing Officer, and both decisions rejected the "mirror image" theory relied upon in the Director's Determination. !d. Moreover, Santa Monica, like this case, involved an access restriction and is therefore more applicable to this case thanthe cases citedbyComplainants. The Director cannot simply ignore Santa Monica, as Complainants urge. To the contrary, the Director is bound by the Final Agency Decision in Santa Monica. The fact that Santa Monica has not been widely cited or relied upon in other cases does not make it incorrect. In any event, the Town is

3affirmatively relying on Santa Monica here, and Complainants have failed to provide any legal basis for ignoring orreversingthat decision. II. COMPLAINANTS FAIL TO STATE A CLAIM FORA VIOLATION OF ASSURANCE 25 Complainants' case for revenue diversion rests on the simplistic notion that an airport operating rule that restricts access for noise purposes cannot be considered to advance an airport purpose. From that premise, Complainants argue that airport operators may not spend airport
revenue to defend an access restriction. But Complainants do not cite any authority for that proposition for the simple reason that there is none. The fact is that access restrictions have long been recognized as permissible, and Complainants cite no example where an airport operatorwas not permitted to use airport revenue to defend such measures.2 The authority to which Complainants cite is inapposite; they address only cases inwhich airport revenue was spent for a non-airport purpose, such as acquiring land that could never be used for an airport purpose or closing an airport altogether. Moreover, Complainants' argument is particularly misplaced here where there has been no final determination that the Local Laws are unlawful in any way. Indeed, therecent decision byJudge Seybert inFriends of EastHamptonAirportv. Town of East Hampton demonstrates thatthere are strong arguments that the Local Laws are lawful. Finally, Complainants' argument regarding legal fees has been implicitly rejected by Department ofTransportation inFinal Decision, SecondLosAngelesInternationalAirportRates

2 E.g., Naples v. FAA, 409 F.3d 431 (D.C. Cir. 2005) (upholding Stage 2 ban as reasonable under Grant Assurances); Nat'/Helicopter Corp. of Am. v. City of New York, 137 F.3d 81 (2d Cir. 1998) (upholding curfew and weekendban onhelicopters);AlaskaAirlines v. City of LongBeach, 951 F.2d 977 (9th Cir. 1991) (upholding overall cap on number ofcommercial operations and curfew on noisy aircraft); GlobalInt'lAirway Corp. v. PANYNJ, 727 F.2d 246 (2d Cir 1984) (upholding restriction on operations bynoisy aircraft); Nat'/Bus. AviationAss'n v. City of Naples AirportAuth., 162 F. Supp.2d 1343 (M.D. Fla. 2001) (upholding ban on noisy aircraft); ArrowAir, Inc. v. PortAuth. of New YorkandNew Jersey, 602 F. Supp. 314 (S.D.N.Y. 1985) (upholding banonnoisyaircraft); Santa Monica Airport Ass'n v. City ofSanta Monica, 481 F. Supp. 927 (CD. Cal. 1979), aff'd, 659 F.2d 100 (9th Cir.l981) (upholding curfew, weekend helicopter training ban, ban on noisy aircraft, and certain touch and go operations).
4Proceeding, Docket No. OST-95-474 (Dec. 22, 1995). That case involved legal fees associated with the defense of the airport's rates and charges and legal fees incurred in defending allegations ofrevenue diversion. Even though some ofthe underlying charges were found to be
revenue diversion, the Department allowed the legal fees to be included in the rate base, stating: "we do not view the overall defense of the police department charges [much of which were found to be revenue diversion] as equivalent to diversion." Id. at 49. The Department drew a clear distinction between funds illegally diverted (impermissible use ofairport funds) and funds spent to defend the charge ofdiversion (permissible use of airport funds). Similarly here, the Town's use ofairport revenue to defend the Local Laws is a permissible use ofAirport revenue,
even ifthe Local Laws are ultimately struck down on somebasis or another. To hold otherwise would place airport operators in the untenable position ofhaving to
secure non-airport sources ofrevenue any time an airport action is challenged as contrary to grant assurances or other law. Such a rule would effectively require airport operators to seek pre-approval from the FAA for controversial measures and/or for retaining outside legal counsel to avoid being placed in a financial bind. That would represent a major change in the current relationship between the FAA, airport operators, and airportusers that has no basis incurrent law
or the grant assurances. Complainants' parochial focus on preventing the Town from defending its Local Laws should not create a precedent that will hamstring the ability ofairport operators nationwide to obtainlegal counsel to defend against challenges to airport actions.

5Forthe foregoing reasons, the Town's Motionto Dismiss shouldbe granted. Respectfully submitted this 3d day ofAugust, 2015.

ElizabethVail TownAttorney Town ofEastHampton 159 Pantigo Road East Hampton, NY 11937 EVail@EHamptonNY.Gov W. Eric Pilsk Catherine van Heuven Kaplan Kirsch & Rockwell LLP 1001 ConnecticutAve., NW, Suite 800 Washington, DC 20036 epilsk@kaplankirsch.com cvanheuven@kaplankirsch.com Telephone: (202) 955-5600 Facsimile: (202) 955-5616

6CERTIFICATE OFSERVICE Ihereby certifythat Ihave this 3d day ofAugust, 2015, served the foregoing RespondentTown ofEastHampton, NewYork's Replyin Support ofIts Motion to Dismiss the Complaintonthe following parties byhand delivery and email atthefollowing addresses: Office ofthe ChiefCounsel Attn: FAAPart 16 Airport Proceedings Docket, AGC-610 Federal AviationAdministration 800 IndependenceAvenue, SW Washington, D.C. 20591
Steve Brown ChiefOperating Officer National Business Aviation Association, Inc. 1200 G Street, NW Suite 1100 Washington, D.C. 20005
Datedthis 3d dayofAugust, 2015.



# ~~ W. Eric Pilsk

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