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VIA ELECTRONIC MAIL AND CERTIFIED MAIL Office ofthe ChiefCounsel ATTN: FAA Part 16 Docket Clerk AGC-600 Federal Aviation Administration 800 Independence Avenue, SW Washington, DC 20591 9-AWA-AGC-Part-16@faa.gov November 24,2015 617.342.4001 fAX WWW.FOLEY.COM WRITER'S DIRECT LINE 617.342.4033 dbannard@foley.com EMAIL CLIENT/MATTER NUMBER 103341-0104

Rc: 

### Skydive Myrtle Beach, Inc. v. Horry County Dep 't 

### of Airjlor/s FAA Docket No.**16-14-0~** Dear Sir/Madam: On behalfofRespondent Harry County Department ofAirports, please find enclosed for filing an original and three copies ofthe following documents inthe above-referenced matter: I. Respondent Horry County DepartmentofAirports' Reply to Complainant Skydive Myrtle Beach, Inc.'s Appeal ofDirector's Determination; and 2. Certificate ofService. We are also filing an electronic copy ofthese documents pursuantto the procedure set forth in 14 CFR 

### § 16.13(h). Thank you for your attention to this matter.

DYB Enclosures
cc: Robert G. Eastman, Esq., Attorney for SDMB (viaelectronic mail and certified mail) Patricia Apone, Director ofAirports (via electronic mail)
BOSTON f3RUSSElB CHICAGO DETROIT JasonTerreri, Assistant Director ofAirports (via electronic mail) JACI\SONVII_l_F: LOS ANGELES MADISON M!AMI MILWAUKEE NEW YORK ORLANDO SACRAMENTO SAN DIEGO SAN FRANCISCO SHANGHAI SILICON VALLEY TALLAHASSEE TAMPA TOKYO WASHNGTON, D.C. 4838-0027-2171.1

# :FOLEY

FOLEY & LARDNER LLP 

### Office ofthe ChiefCounsel November 24, 2015 Page 2 Arrigo Carotti, Esq., County Attorney (via electronic mail) H. 

### Randolph Haldi, Esq., Deputy CountyAttomey (via electronic mail) Jeffrey R. Blease, Esq., Foley & 

### Lardner LLP Jaclyn V. Piltch, Esq., Foley & 

### Lardner LLP

4838-0027-2171.1

### FEDERAL AVIATION ADMINISTRATION OFFICE OF THE CHIEF COUNSEL

SKYDIVE MYRTLE BEACH, INC., ) ) ) ) 

### ) 

### Complainant, FAA DocketNo. 16-14-05


### v. ) 

### HORRY COUNTY DEPARTMENT OF AIRPORTS, ) ) ) ) 

### Respondent. )


# ___________ )

RESPONDENT HORRYCOUNTYDEPARTMENT OF AIRPORTS' REPLYTO COMPLAINANT SKYDIVE MYRTLE BEACH, INC.'S APPEAL OFDIRECTOR'S DETERMINATION
Respectfully submitted, HORRY COUNTY DEPARTMENT OF AIRPORTS,

David Y. at 

### ard, ' 

### q. Jeffrey R. 

### Blease,
..s . Jaclyn V. Piltch ·sq. FOLEY & 

### LARDNER LLP Ill Huntington Avenue Boston, MA 02199 Tel: (617) 342-4000 Fax: 

### (617) 342-4001 dbannard@foley.com jblease@foley.com jpiltch@foley.com

### OPENING STATEMENT Pursuant to 14 CFR 

### § 16.33(d), Respondent Horry County Department ofAirports ("HCDA") hereby submits its reply to Complainant Skydive Myrtle Beach, Inc.'s ("SDMB") appeal ofthe October 7, 2015 Director's Determination in this matter. As an administrative appeal, the grounds for the appeal are found solely within the Part 16 rules, specifically 14 CFR 

### § 16.33(e), whichprovides four specific grounds for appeal. SDMB's appeal should be denied because it fails to recite any ofthese four grounds ofappeal. Even when the purported issues presented by SDMB are evaluated within the ti·amework ofthe four controlling grounds, they still fail to provide a basis for anything other than the issuance ofa final decision that affirms the Director's Determination. This is because the FAA'sreview ofinfonnation (a) from its infonnal investigation and (b) provided by HCDA at the FAA's request was in full compliance withthe provisions ofPart 16. In contrast, SDMB's accusations ofexparte 

### connnunications are based on
a misinterpretation ofa later section ofPart 16 that is inapplicable to the instantproceeding. Even ifthat section were applicable, however, the conespondence and other informationHCDA provided to the FAA was notmade to a "decisional employee" and thus cannot constitute ex parte 

### communications as defined in Part 16. Finally, all statements and docwnents that SDMB submits that relate to events occuning after January 14, 2015- the date ofthe parties' final Part 16 submission- are an inappropriate attempt to submitnewissues and evidence without the required petition or good cause shown, and should not be considered on appeal. Forthese
reasons and as discussed more fully herein, SDMB's appeal should be denied, and a final decision should issue affim1ing all findings ofthe October 7, 2015 Director's Determination.

4851·9913-2203.4

### LEGAL STANDARD An initial Director's Determination is rendered "[a]fter considerationofthepleadings and other information obtained by the FAA after investigation." 14 CFR § 

### 16.31 (a). This investigation may include "[a] review ofthe written submissions or pleadings by the parties, as supplemented by any informal investigation the FAA considers necessary and by additional information fumished by theparties at FAA request." 14 CFR § 

### 16.29(b)(1). 

### "On appeal, the Associate Administrator will consider
... any issues accepted in the Director's Determination using the following analysis: (1) 

### Are the findings offacteach supported by a preponderance ofreliable, probative, and substantial evidence contained in the record? (2) 

### Are conclusions made in accordance with law, precedent and policy? (3) 

### Are the questions on appeal substantial? (4) 

### Have any prejudicial errors occurred?" 14 CFR § 

### 16.33(e). "Any new issues or evidence presented in an appeal
...will not be considered unless accompanied by a petition and good cause found as to why the new issue or evidence was not presentedto the Director." 14 CFR 

### § 16.33(t). ARGUMENT I. SDMB Does NotRaise Any ofthe FourGrounds for Appeal. SDMB raises two "issues onappeal": (1) whether the FAA violated SDMB's due process rights when it purportedly "received evidence exparte"

### from HCDA and "refused SDMB's FOIA requests for all documents in FAA possessionrelating to CRE 

### parachute operaiions," and (2) whether the Director's Determination was "arbitrary and capricious and an abuse ofdiscretion in violation ofthe 

### S'h Amendment due process clause ofthe U.S. Constitution, APA 5 USC§ 557(d) and 14 CFR § 

### 16.303 when it relied on facts and evidence 

### 2 4851-9913-2203.4

### not properly submitted into the Part 16 proceedings andreceived exparte." 

### Appeal Br. at 1. Neither ofthese "issues" falls withinthe four available grounds for appeal of

### aDirector's Determination. See 

### 14 CFR 

### § 16.33(e). Because SDMB's appeal fails onits face to state an appealable issue, the Director's Determination should 

### be affirmed. 

### II. All Fom· Grounds for Appeal Support Affirming the Director's Dctet·mination. To the extentthe Associate Administrator considers SDMB's "issues on appeal" within the framework ofthe four available grounds for appeal, the Administrator must reachthe same result and affirm the Director's Determination, for the following reasons. 

### A. The Director's Findings ofFact Are Each Supported by a Preponderance of Reliable, Probative. ami Substa_mlill...l;l;yjdence Contained in the Record. The October 7, 2015 Director's Detennination is a sixty-sevenpage, well-reasoned decision, based on the substantial pleadings submitted by the parties and the FAA's own investigation. The "Chronological Background" section alone comprises fourteen ofthese pages and contains 126 citations to the record. DD at 5-18. The Director's compilation and analysis of safety incidents at HCDA comprises seven full pages. 

### I d. at 45-51. SDMB has not argued that the Director reached incorrect conclusions or that the factual findings inthese or other sections ofthe Detennination are not supported by the evidence contained in the record and, as such, the first ofthe fom available grounds for appeal does not exist. SDMB argues that some oftheevidence in therecord was gathered in violation ofits due process rights, referring to this evidence as "exparte 

### documents." See 

### Appeal Br. at 4-5 (listing conespondence between the FAA and HCDA from April 2015 through September 2015). This argument is flat wrong, and stems from a misreading ofPart 16. Contrary to SDMB's allegation that the collection ofinfmmation by the FAA after the parties had concluded Part 16 briefing
was clone exparte 

### in violation ofPart 16, 

### § 16.29(b)(l) specifically allows the FAA to conduct 

### 3 4851-9913-2203.4"laJ review ofthewritten submissions or pleadings ofthe parties, 

### as supplementedby any informalinvestigation the F.4A considers necessary andby additional informationfurnished by 

### theparties at

### F M request." (Emphasis added). Section 16.31(a) further provides thatthe Director's Determination will be rendered "[a]fter consideration ofthe pleadings 

### andother information obtainedby the FAA after investigation." (Emphasis added). Separate and apart from these two provisions, the FAA is chargedunder federal law with oversight ofaviation safety. Inthe instant case, as part ofthese responsibilities, the FAA's Director ofAirport Safety and Standards and the local FAA Flight Standards District Office (FSDO) sought information fi"om HCDA regarding reportedrunway incursions and related safety incidents at Grand Strand Airport (also referred to byits airport code "CRE"). 

### See, e.g., DD at 13-15, 17-18, and Items 29-31; Appeal Br. at4-5. HCDAresponded to these requests, but did notprovide any such infom1ation directly to a decisional employee with respectto the Part 16 proceeding. 

### !d. As part ofits oversight, the FSDO also sought information from SDMB,but SDMB refused to cooperate. 

### See DD at 15-16. In addition, the FAA conducted its own internal analyses ofthe incidents relating to skydiving operations at CRE. 

### See, e.g., id. at 15 (referencing ATO Memorandum); 45-52 (compiling safety incident data based on reports from boththe County and FAA). The FAA also included inthe record various materials created by neither the FAA northe parties, but instead bythe U.S. Parachute Association. 

### ld. at Items 23, 24A, 24B. All ofthese materials are appropriately included in the oftlcial record supporting the Director's Determination, which pursuant to Part 16 can include: the "written submissions [and] pleadings ofthe parties," information developed through the FAA's "informal investigation," and "additional information furnished by [HCDA] at FAA request.'" See§§ 16.29(b)(l); 16.31.



### 4 4851-9913-2203.4B. The Director's Conclusions Are Made in Accordance with Law, Precedent and Policv. Though SDMB claims that the FAA's "receipt" of

### "exparte evidence" and "refusal" of SDMB's "FOIA requests for all documents in FAA possession relating to CRE parachute operations" somehow violated its "dueprocess rights" under the "5th Amendment due process clause ofthe U.S. Constitution, APA 5 USC§ 557(d) and 14 CFR 

### § 16.303," 

### (see Appeal Br. at 1, 7) such argument once again stems from a misinterpretation ofPart 16. Section 16.301 provides that "fromthe time a proceeding is noticed for hearing
... No interestedperson outside the FAA
... shall make or knowingly causeto be made to any decisional employee an ex parte communication relevant to the merits oftheproceeding." 1 With its expansive reading ofthis provision, SDMB appears to take the position that once a Part 16 action against an airport sponsor is initiated, the FAA may no longer communicate with that airport on

### any matter outside the presence ofthe opposingparty. This would, ofcourse, be an untenable interpretation. In any event, the documents to which SDMB objects are not 

### exparte communications as defined in§ 16.301. These documents are conespondencebetween HCDA and the FAA's Director ofAirport Safety and Standards and the local FAA FSDO- neither of which are "decisional employees" ofthe FAA with respect to a Part 16 proceeding. In addition,
as discussed 

### supra,§ Il.A, because all ofthis correspondence was either collected as part ofthe FAA's '·informal investigation" orfurnished "at FAArequest," both ofwhichare specifically allowed by § l6.29(b)(I), none ofit can be considered 

### "exparte." Regardless, the provisions of

SDMB mistakenly references § 16.303, which discusses the procedures that adecisional employee who receives an exparte communication must follow. In addition, the incorrect quote attributed to§ 16.301 and reference to § 16.307 on page 8ofthe Appeal Briefmake it seem as ifSDMB mistakenly referenced aprior version ofPart 16 for all its citations. 5 4851-9913-2203.4this section are irrelevant, as a condition precedentunder§ 16.301 is that theproceeding must first be "noticed for hearing," which never occurred with the instant Pmt 16 proceeding? SDMB's FOIA complaint is a red herring. First, SDMB'sFOIArequestto the FAA is an entirely separate proceeding from the Part 

### 16 matter, and not 

### apart ofthe Director's Determination that is reviewable on appeal. Second, while SDMB complains thatthe FAA "refused" its "requests for all documents inFAA possession relating to CREparachute operations," Appeal Br. at 2, 3 n.l, 10 n.3, theFAA letter included in SDMB'sAppendix belies this claim. The FAA letter makes abundantly clear that only SDMB'srequestfor a fee waiveron its FOTA requestwas denied, and provides no basis for SDMB's claim that its request

### tor doctm1ents under FOIA was denied. Br. App'x at 33-35. Third, for the reasons stated infra, 

### §lll, the FOIA request and denial are new evidence that should notbe considered on appeal. C. The Questions on Appeal AreNot Substantial, and No Prejudicial Error Has Qccurred. ----·--- As discussed in more detail supra,§§ II.A and ILB, the Director's Determination appropriately included information submitted by the parties and collected from its owninfom1al investigation, none ofthis information constituted exparte communications, and no violation of SDMB's due process rights occurred. Forthese reasons, the questions presented on appeal are not substantial, and no prejudicial error has occurred. 

### HI. TheNew Issues and Evidence in SDMB'S Appeal Should Not Be Considered. In its appeal brie±; SDMB seeksto introduce new issues and evidence withoutthe required petition or showing ofgood cause. See 14 CFR § 16.33(t). This includes all statements in the sections ofSDMB's brieftitled "Statement ofRelevant Facts," "Ex Parte Communications

The same result is reached with respect to the cited provision ofthe Administrative Procedures Act, 5 U.S.C. § 557(d), which also only applies "when ahearing is required to be conducted in accordance withH the Act. See 5 U.S.C. 

### !i 557(a). 6 4851-9913-2203.4Outside FAA Part 16 Record and Pleadings," and "RelevantPost Decision Procedural Facts and Events" regarding events that tookplace after the date ofthe parties' final Part 16 sLtbmission on January 14, 2015, as well as the majority ofdocuments in SDMB'sAppendix. 

### See Appeal Br. at 3-6; Br. App'x at 1-23 and 33-34. These statements and documents comprise an attempt by SDMB to inappropriately supplement the record, and should be disregarded by the Administrator. 

### See 14 CFR § 16.33(±). So, too, should the Administrator disregardthe argument SDMB seeks to raise, for the tirst time on appeal, that the Anti-Head Tax Act, 49 U.S.C. 

### §40l16(b)(l), (4), prohibited HCDA from charging SDMB "apercentage based on gross receipts ofrevenue." Appeal Br. at 10. There can be no "good cause" why this purely legal issue "was not presented to the Director" in the 

### seven filings SDMB made priorto theDirector's Determination (including two Motions to Supplementthe Pleadings). 

### See 14 CFR 

### § 16.33(1). Nor does the Anti-Head Tax Act even apply to SDMB's claims. First, SDMB misapprehends the difference between the Anti-Head Tax Act's prohibition ofthe imposition of sales taxes by state and local governments on revenues derived from aeronautical activities, including skydiving, and thepermissiblerecovery ofthe costs ofoperating an airportbythe airport authority from the airport's aeronautical tenants. 

### Compare 49 U.S.C. 

### §40116(d)(2)(iv) 

### with§ 401 16(e)(2). Second, the United States Snpreme Court has held that a fcc imposed on aeronanticalusers is reasonable ifit"(1) is based on some fair approximation ofuse ofthe facilities, (2) is not excessive in relation to the benefits conferred, and (3) does not discriminate against interstate commerce." 

### NorthwestAirlines, Inc. v. County of Kent, Michigan, I 14 S. Ct. 855, 864 (1994). Third, HCDA has an obligation to maintaina fee and rental structure which will makethe airport as self-sustaining as possible. 

### See Grant Assurance No. 24. Thus, arental


### 7 4851-9913-2203.4structure that charges the greater ofa fixed fee or a reasonable percentage ofrevenues derived from aeronautical operations is a fair and reasonablemeans ofrecovering the costs ofthe aeronautical facilities provided for use by aeronautical users ofand tenants at a federally obligated airport. 

### CONCLUSION Forthe foregoing reasons, SDMB's appeal should be denied, and a tina! decision should issue affirming all tindings ofthe October 7, 20 15 Director's Determination.

8 4851-9913-2203.4 Respectfully submitted, HORRY COUNTYDEPARTMENT OF AIRPORTS,

David Y. an ard, Es f Jeffrey R. Blease, Esq. Jaclyn 

### V. Piltch, Esq. FOLEY & LARDNERLLP Ill Huntington Avenue Boston, MA02199 Tel: (617) 342-4000 Fax: (617) 342-4001 dbmmard@foley.com jblease@foley.com jpiltch@foley.com

### CERTIFICATE OF SERVICE I hereby certify that Ihave this day served the foregoing Respondent Horry County Department ofAirports' Reply to Complainant Skydive Myrtle Beach. Inc.'s Appeal of Director's Detennination onthe following persons at the following addresses, by electronic mail in accordance with 14 CFR Pmt 16 

### § 16.13(h), and by certified mail:

Office ofthe ChiefCounsel ATTN: FAA Pmt 16 Docket Clerk AGC-600 Federal Aviation Administration 800 Independence Avenue SW Washington, DC 20591 9-AWA-AGC-Pmt-16@faa.gov

Dated: November 24, 2015

4839-8436-27951 

### Counselfi;r Skydive Myrtle Beach, Inc. Robert G. Eastman, Esq. Eastman & 

### Associates, LLC P.O. Box. 180 Charleston, SC 29402 robertgeastman@msn.com



# I I

### Long, Sharon (FAA) From: Sent: To: 

### Cc: Subject: Attachments: DBannard@foley.com Tuesday, November 24, 2015 5:06 PM 9-AWA-AGC-Part-16 (FAA) 'robertgeastman@msn.com'; Patricia Apone (aponep@horrycounty.org); Terreri, Jason (terrerij@HorryCounty.org); Carotti, Arrigo (CarottiA@HorryCounty.org); Randy Haldi (haldir@HorryCounty.org); JBiease@foley.com; JPiltch@foley.com; DBannard@foley.com Skydive Myrtle Beach, Inc. v. Horry County Dep't ofAirports, FAA Docket No. 16-14-05 Letter to Office ofthe Chief Counsel, FAA- 11-24-15.pdf; Horry Co. Dept. Airports' Reply to Skydive Myrtle Beach's Appeal of Director's Determination.pdf; Certificate of Service.pdf
Please accept the attached documents for filing in the captioned matter.
David Y. Bannard Foley & Lardner LLP 111 Huntington Avenue 1 Suite 2500 Boston, MA 02199-7610 p 617.342.4033 Cell (9781844-4149 Email:

**QJ20J\Di"!I~L@JQ!§:~L<;::QI.U** View Mv Bio Vts'tt Foley.com 

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From: Piltch, Jaclyn V. Sent: Tuesday, November 24, 2015 4:58PM To: Bannard, David Y. Subject: FW: Skydive Myrtle Beach, Inc. v. Horry County Dep't of Airports
Jaclyn V. PiItch Foley & Lardner LLP 111 Huntington Avenue 1 Suite 2500 Boston, MA02199-7610 p 617.342.4083 From: Rezek, Anton J. Sent: Tuesday, November 24, 2015 4:58 PM To: Piltch, Jaclyn V. Subject: Skydive Myrtle Beach, Inc. v. Horry County Dep't of Airports



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