BEFORE THE 

FEDERAL AVIATION ADMINISTRATION 

WASHINGTON, D.C. 

UNITED AIRLINES, INC., 

Complainant, 

v. 

THE PORT AUTHORITY OF NEW YORK 

AND NEW JERSEY, 

Respondent. 

RECEIVED 

JUN - 5 2015 

PART 16 DOCKETS 

Docket No. FAA-16-14-13 

REPLY OF UNITED AIRLINES, INC. TO 

THE PORT AUTHORITY OF NEW YORK AND NEW JERSEY'S 

ANSWER TO THE COMPLAINT 

Communications with respect to this document should ~ addressed to: 

Marc L. Warren 

Keith J. Harrison 

Gerald F. Murphy 

Steven J. Seiden 

CROWELL & MORING LLP 

1001 Pennsylvania Avenue, NW 

Washington, DC 20004 

(202) 624-2500 

mwarren@crowell.com 

Robert S. Span 

Alan K. Steinbrecher 

Sophy Chen 

STEINBRECHER & SPAN LLP 

1155 F Street, NW, Suite 1050 

Washington, DC 20004 

(202) 559-8680 

rspan@steinbrecherspan.com 

Counsel for United Airlines, Inc. 
I. INTRODUCTION. 

The Answer of the Port Authority of New York and New Jersey ("Port 

Authority") offers no substantive refutation of the Complaint of United Airlines, Inc. 

("United"). It consists of routine admissions and conclusory denials and asserts but 

one affu·mative defense, which has already been addressed by the Federal Aviation 

Administration ("FAA") in its April27, 2015 Order denying the Port Authority's 

Motion for Summary Judgment ("April27, 2015 Order"). 

The Complaint and United's Answer to the Motion for Summary Judgment 

(respectively, "Complaint" and "MSJ Answer") detail voluminous, specific, and 

credible evidence of the Port Authority's violations of its grant assurances and of 

federal law at Newark Liberty International Airport ("EWR"). Despite the 

requirements of Part 16, the Port Authority has offered almost no evidence in 

response. The meager evidence offered by the Port Authority does not even address, 

let alone refute, most of United's evidence. Therefore, the current state of the 

pleadings supports a Director's Determination in favor of United on all issues raised 

by the Complaint. At the very least, the evidence overwhelmingly supports an 

investigation by the FAA. 

If this is not the case for the FAA to take decisive action regarding rates and 

charges, surpluses, and revenue diversion, there will never be one. The scope and 

magnitude of United's evidence in the record raise significant issues of compliance 

with federal law and sound public policy. Without FAA action, there will be no 

means to fully assess the Port Authority's violations and no remedy to force the Port 

1 
Authority to comply with federal law. United respectfully requests entry of a 

Director's Determination in its favor. Should the FAA determine that there is any 

issue as to which further information is requil:ed, the FAA can initiate an 

investigation with respect to that issue. 

II. UNITED HAS PRODUCED UNREBUTTED EVIDENCE OF THE 

PORT AUTHORITY'S VIOLATIONS OF ITS GRANT ASSURANCES 

AND FEDERAL LAW. 

In denying the Port Authority's Motion for Summary Judgment, the FAA 

reaffirmed that its "role is to determine whether the airport proprietor is in 

compliance with its grant obligations and statutory obligations relating to airport 

fees. [78 Fed. Reg. 55332]." April 27, 2015 Order at 2. The FAA noted: "The 

Director has reviewed all the submissions and has concluded that there are genuine 

issues of material fact. The issues include but are not limited to the Respondent's 

compliance with Grant Assm·ance 22, Economic Nondiscrimination; Grant 

Assm·ance 24, Fee and Rental Structure; and Grant Assurance 25, Airport 

Revenues." Id. at 3. 

After identifying the key issues, the FAA ordered the Port Authority to file an 

answer to the Complaint. According to the Part 16 rules, the answer "shall, like the 

complaint, be accompanied by supporting documentation upon which the [party 

relies]." 14 C.F.R. § 16.23(g). Further, the answer shall contain "a concise but 

complete statement of the facts relied upon to substantiate the answers, 

admissions, denials, or averments made." 14 C.F.R. § 16.23(i). The Port Authority 

served its Answer on May 20, 2015. The Answer contains admissions and denials 

2 
relating to the allegations of United's Complaint, but the Port Authority chose to 

offer almost no evidence, additional facts, or argument beyond that which had been 

previously submitted by the Port Authority, and found to be insufficient, as part of 

its Motion for Summary Judgment. 

United summarizes below the facts produced by both parties as to each 

violation of federal law. These facts demonstrate that United has more than met its 

burden of proof "to show noncompliance with an Act or any regulation, order, 

agreement or document of conveyance issued under the authority of an Act." 14 

C.F.R. § 16.23(k). Accordingly, a Director's Determination in favor of United on all 

issues is appropriate. At a minimum, however, the Complaint, the Answer, and the 

pleadings regarding the Motion for Summary Judgment demonstrate "a reasonable 

basis for further investigation, [upon which] the FAA will investigate the subject 

matter of the complaint." 14 C.F.R. § 16.29(a). 

A. Evidence of Violations of Grant Assurance 22 (Reasonableness 

of Rates). 

The FAA noted that its review "will include an examination of the flight fee 

and whether the fee was set consistent with Grant Assurance 22, and the Rates and 

Charges Policy." April27, 2015 Order at 2-3. Grant Assurance 22 provides in part 

that an airport sponsor must give assurance that it will "make the airport available 

as an airport for public use on reasonable terms." See also 49 U.S.C. § 47101(a)(12); 

49 U.S. C. § 47107 (requiring airport sponsors to give assurance that "the airport 

will be available for public use on reasonable conditions"). The Rates and Charges 

Policy requires that aeronautical rates be reasonable, and that·airfield charges be 

3 
cost-based. See, e.g., Rates and Charges Policy, 78 Fed. Reg. 55330, 55335, §§ 4.2.1, 

5.2. 

Additionally, as the FAA has recognized, the Rates and Charges Policy 

cautions that the "progressive accumulation of substantial amounts of surplus 

aeronautical revenue may warrant an FAA inquiry into whether aeronautical fees 

are consistent with the airport proprietor's obligations to make the airport available 

on fair and reasonable terms." April27, 2015 Order at 3. 

1. United's Evidence. 

United has produced substantial evidence showing that the Flight Fee at 

EWR is unreasonable, in violation of Grant Assurance 22 and the Rates and 

Charges Policy. The evidence is detailed in the Complaint and in United's MSJ 

Answer and will not be repeated here. In sum, United has shown that: 

• The airfield fees at EWR are by far the highest in the nation- 59% 

higher than at the next most expensive non-Port Authority airport 

(Chicago O'Hare) and even 75% higher than at John F. Kennedy 

International Airport ("JFK"), which the Port Authority also operates. 

• The EWR Flight Fee is set through a complex and non-transparent 

formula, the real result of which is that the Port Authority makes a 

substantial profit on the costs included in the Flight Fee rate base. 

• Costs included in the Public Aircraft Facilities Charge Factor 

component of the EWR Flight Fee, including charges for Aircraft 

Rescue and Fire Fighting ("ARFF''), are marked up by at least 38%. 

Costs in the Airport Services Charge Factor are m.arked up by at least 

14%. 

4 
• EWR's operating margins for 2009 through 2013 were 29%, 29%, 32%, 

31%, and 31%, respectively. 1 In contrast, the operating margins at 

JFK and LGA, while high, were significantly lower than at EWR. 

• EWR typically generates an annual surplus in excess of $160 million. 2 

• In the five -year period 2007-2011, EWR provided the Port Authority 

with $1.6 billion in operating cash flow. 

• The average salary in the Port Authority's Aviation Department was 

highest among its peer group of major airports in the country. 

• Unconstrained overtime and bloated benefit packages result in average 

pay levels for Port Authority employees that greatly exceed market 

rates, even in the expensive New York metropolitan area. 

• Excessive overtime pay has been a defining characteristic of Port 

Authority mismanagement for years. 

• The revised ARFF force will increase United's costs at EWR by more 

than $25 million annually and almost 510% more than in 2012. 

• The Port Authority staffs ARFF with airport police, trained as 

firefighters, each of whom will cost the Port Authority an average of 

$242,000 annually in compensation, overtime, and benefits, a sum 

considerably in excess of the market compensation for firefighters. The 

Port Authority included the entire cost of the ARFF in the EWR rate 

base, along with a $9 million mark-up. 

• Non-ARFF security costs included in the landing fee total more than 

$37 million. The Port Authority also charges the airlines a 14% markup on these costs. Security costs have risen 40% since 2010. High 

salaries and benefits, as well as excessive overtime, contribute to 

unreasonably high security costs at EWR. 

1 The Port Authority's financial statements for 2014, now available, show 

that EWR had an operating margin of 31% in 2014. The operating margin at JFK 

was below 21%. The Port Authority of NY & NJ, Financial Statements and 

Appended Notes for the Year Ended December 31, 2014 (Mar. 13, 2015), at 91, 

http://www.panynj.gov/corporate-information/pdf/financial-statement-2014.pdf. 

2 In 2014, EWR generated a surplus of $219 million. Id. 

5 
• The Port Authority's compensation and benefit package for ARFF 

staffers, other security personnel, and administrative employees in the 

Aviation Department is significantly higher than market. 

• The Port Authority has monopoly power with respect to the airports in 

the New York City metropolitan area, the most important market in 

the United States both for domestic and international travel. 

• To be competitive, United must serve the New York City metropolitan 

market. United is committed to its EWR hub. United cannot simply 

move its hub operation; its enormous investments at EWR make 

impossible a move of these operations to JFK or LGA. 

• The Port Authority uses its monopoly power to impose aeronautical 

fees well above those of other large airport operators. 

In addition to the factual evidence, United has submitted extensive legal 

authorities (unrebutted by the Port Authority) demonstrating that airfield rates 

and charges must be reasonable, transparent, and cost-based. See, e.g., Complaint 

~~~ 26- 35, 159-165; MSJ Answer at 41, 46, 48. The excessive charges for labor 

included in the Flight Fee, the mark-up on all charges, and the excessive surpluses 

generated at EWR establish that the EWR Flight Fee is not cost-based and is 

unreasonable as a matter of law. Id. 

2. The Port Authority's Evidence. 

With respect to the allegations that the EWR Flight Fee is unreasonable, the 

Port Authority's Answer contains no new evidence. Instead, the Port Authority 

relies exclusively on evidence it produced in support of its Motion for Summary 

Judgment. But that evidence focuses on the existence of lease agreements between 

6 
United or Continental, on the one hand, and the Port Authority, on the other hand. 3 

The FAA has ah'eady rejected the Port Authority's argument that the existence of 

those ag1·eements deprives the FAA of jurisdiction in this case. 

The Declaration of Cheryl Yetka, submitted in support of the Port Authority's 

Answer, admits that the Port Authority has diverted a total of almost $2 billion 

since 2005, including an estimated $221 million in 2014. Exhibit A to Yetka Dec., 

Attachment 2. While the Port Authority argues that this diversion is legally 

grandfathered (more on that below), the Port Authority ignores legal authorities 

that show that it is unreasonable to charge rates that will generate the surplus 

revenue that allows such diversion. See Complaint~~ 126-135; MSJ Answer at 41, 

47-50. Whether or not the Port Authority is allowed to divert the surplus is not the 

issue in assessing the reasonableness of EWR fees. The issue is whether United is 

being required to pay for the costs of facilities, whether those facilities are the 

World Trade Center, the Pulaski Skyway, or any other non-aeronautical facility, 

that United does not use. As United has shown, under the Rates and Charges 

Policy and well-settled case law, it is improper and unreasonable to charge fees that 

subsidize these other facilities. Id. 

3 Exhibits to the Declaration of Joseph R. Garcia, offered by the Port 

Authority in support of its Motion for Summary Judgment, substantiate the markup of costs in the Flight Fee. In 2014, the PAF and ASF components of the EWR 

Flight Fee included a total of $55 million in surplus revenue over costs. Garcia 

Dec., Exhibit 2. 

7 
The Port Authority offers no evidence to refute United's evidence that the 

Flight Fee is not cost-based, that the EWR Flight Fee generates huge surpluses, 

and that specific expense items in the Flight Fee are excessive and unreasonable. 

Accordingly, United has more than met its burden on this issue and a Dil:ector's 

Determination that the EWR Flight Fee violates Grant Assurance 22 and federal 

law is warranted and appropriate. 

B. Evidence of Violations of Grant Assurance 22 (Unjust 

Discrimination). 

Grant Assurance 22 also provides that airport rates and charges must be 

non-discriminatory. 

1. United's Evidence. 

United has produced evidence showing that the Port Authority's rates at 

EWR unjustly discriminate against United, including: 

• In 2014, the Port Authority charged higher Flight Fees at EWR than it 

did at JFK and LGA. The 2014 EWR Flight Fee was 75% higher than 

the 2014 JFK Flight Fee. 

• In 2014, the difference between the Flight Fee at ~WR and the Flight 

Fee at JFK meant that United paid more than $80 million more in 

flight fees than it would have paid if it flew its EWR schedule at JFK. 

• There is no economic justification for these higher charges at EWR; in 

fact, the Port Authority's cost per enplanement is actually higher at 

JFK than at EWR. 

• If the Flight Fee methodology currently used at JFK were to be used at 

EWR, the airlines operating at EWR would pay a total of $52 million 

less annually than they cunently pay. 

• The Port Authority's imposition of a higher Flight Fee at EWR than at 

JFK and LGA puts United at a significant competitive disadvantage. 

8 
• In its operations at EWR, United competes with airlines serving JFK 

andLGA. 

• Air carriers operating out of JFK and LGA, on the one hand, are 

making similar use of the New York area airport &ystem as those air 

carriers operating out of EWR, on the other hand. 

• The Port Authority itself has acknowledged that "air service at one of 

the Port Authority airports competes with the air service of one or 

more other airports." 

• The Port Authority is required by the interstate compact from which it 

was created, and other related state laws, to operate the three major 

airports in the New York metropolitan area as a unified system. 

2. The Port Authority's Evidence. 

With respect to the issue of discriminatory rates, in its Answer the Port 

Authority submits copies of the flight fee agreements for JFK and LGA and admits 

that the flight fee methodology at those airports "differs in certain respects from the 

flight fee formula for airlines serving EWR." Statement of Respondent The Port 

Authority of New York and New Jersey Pursuant to 14 C.F.R § 16.23(i)(2) In 

Support Of Its Answer at 4. The Port Authority also argues that (1) United "is not 

at a competitive disadvantage with ail·lines that serve LGA and/or JFK because 

EWR's passenger market is discrete from that of LGA and EWR (sic)" and (2) that 

"United has the option of moving its East Cost hub operations at EWR" to 

Washington Dulles International Airport ("lAD"). Id. That is all the Port Authority 

has to say on the issue of economic discrimination. 

The Port Authority offers no evidence explaining or justifying the significant 

difference in flight fees between EWR, on the one hand, and JF:K or LGA, on the 

9 
other hand. Nor does the Port Authority respond to the legal authorities cited by 

United demonstrating that such differences constitute unjust discrimination. See, 

e.g., Complaint ,1~ 150-152, 166-169; MSJ Answer at 50-55. The statement that the 

EWR market is discrete from that of LGA or JFK is incorrect and inconsistent with 

positions taken by the Port Authority in comments to the U.S. Department of 

Transportation ("DOT'') and the FAA. See, e.g., In the Matter of Petition for Waiver 

of the Terms of the Order Limiting Scheduled Operations at LaGuardia Airport, 

Docket No. FAA-2010-0109, Comment of the Port Authority of New York and New 

Jersey (Mar. 22, 2010), at 3 (the NYC "metropolitan area is served by a single 

airport system operated by the Port Authority to serve one travel region. . .. The 

market area of one airport overlaps the market areas of others so that air service at 

one of the Port Authority airports competes with the air service of one or more other 

airports.') (emphasis added); Newark International Airport Airline Competition 

Plan (Dec. 11, 2000), available at http://www.panyni.gov/airports/pdf/ewrcompetition-plan-december-2000.pdf, at 1, 5 ("The Port Authority's 1947 bi-State 

air terminal legislation ... provides that: 'The States of New York and New Jersey 

declare and agree that each air terminal within the Port of New York District 

serves the entire district, and that the problem of furnishing proper and adequate 

air terminal facilities within the district is a regional and interstate problem, and 

that it is and shall be the policy of the two states to encourage the integration of 

such air terminals so far as practicable in a unified system.' ... Because of the 

proximity [of} the Port Authority airports [the Port Authority} considers them to a 

10 
certain extent interchangeable as airlines and passengers can [choose] among the 

facilities based upon their needs.'} (emphasis added). 

The Port Authority's cavalier assertion that United can simply move out of 

EWR and go to lAD if it doesn't like the rates charged at EWR ignores all the 

evidence of the importance of the New York City metropolitan ru·ea market, and is 

outrageous, particularly since the Port Authority has argued that United has longterm lease agreements at EWR and has invested a billion dollars in its EWR 

facilities. Indeed, the Port Authority's argument that "if United doesn't like being 

discriminated against, it can leave town" demonstrates exactly why the FAA must 

take action to ensure compliance with federal law. 

Accordingly, United has more than met its burden on this issue and a 

Director's Determination that the EWR Flight Fee is unjustly discriminatory is 

warranted and appropriate. 

C. Evidence of Violations of Grant Assurance 25. 

Grant Assurance 25 and other provisions of federal law make clear that an 

airport may not unlawfully divert revenues to non-airport facilities or functions. 

1. United's Evidence. 

United has produced substantial evidence showing that the Port Authority's 

use of airport revenues violates Grant Assurance 25 and federal law, including: 

• Since 2004, the Port Authority has diverted more than $2 billion from 

the New York area airports to non-airport uses. 

• The Port Authority uses airport revenues to pay for highways, bridges, 

parks, hospitals, and other facilities that it does not own or operate. 

11 
• The Port Authority currently plans to spend $1.8 billion over a tenyear period to improve roads and bridges it does not own or operate. In 

2014 alone, the Port Authority spent $181 million to repair the Pulaski 

Skyway and $60 million on the Wittpenn Bridge, structures owned and 

operated by the State of New Jersey. 

• According to a report by the FAA, in the six year period 2005-2010, the 

Port Authority diverted a total of more than $1.7 billion in airport 

revenues to non-airport uses, an average of almost $300 million 

annually. This total was almost ten times higher than the amounts 

diverted by SFO and ORD, the grandfathered airports with the next 

highest totals. 

• The Port Authority also spends millions of dollars annually on other 

non-Port Authority facilities. In 2014 alone, the Port Authority spent 

$48 million on non-Port Authority facilities in the region.4 

Of course, the Port Authority is able to divert these sums because, as shown 

above, EWR generates huge surpluses every year. As the FAA stated in the April 

27, 2015 Order, "the issue of accumulated surpluses is one which the FAA and the 

U.S. Department ofTransportation (DOT) will examine in the context of reviewing 

complaints concerning revenue diversion." April 27, 2015 Order at 1. 

2. The Port Authority's Evidence. 

In the April27, 2015 Order, the FAA also stated that the Complaint contains 

"a sufficient allegation regarding revenue diversion warranting review under the 

Part 16 enforcement process." April27, 2015 Order at 3. Despite this, the only 

evidence submitted by the Port Authority in its Answer relating to revenue 

diversion is the Declaration of Cheryl Yetka, which admits that the Port Authority 

has diverted almost $2 billion since 2005, and that the revenue diversion for 2014 is 

4 See, e.g., Complaint ~~ 32, 176; MSJ Answer at 4 7-48. 

12 
estimated to be $221 million.s Exhibit A to Yetka Dec., Attachment 2. The Port 

Authority contends that the total diversion is within the limits of its grandfather 

exception and is thus proper. 

The Port Authority's Answer offers no new facts or legal support for the 

notion that the Port Authority can use airport revenues to fund facilities and 

projects it does not own or operate. The clear language of the grandfather clause 

requires that airport revenues can only be used "to support ... other facilities of the 

owner or operator." 49 U.S.C. § 47107(b)(2). In its Motion for Summary J udgment, 

the Port Authority argued that despite the plain language of the statute, it is 

allowed to spend airport revenues on non-owned facilities that "support" or are 

"related to" its owned facilities. Port Authority Memorandum In Support of Motion 

for Summary Judgment at 34-36. The Port Authority claimed that the use of 

airport revenues to fund regional non-Port Authority projects is lawful.G Id. at 35-

36. It also insisted that the use of airport revenues to fund State Routes 1 and 9, 

the Pulaski Skyway, and the Wittpenn Bridge is appropriate because "of the 

ongoing needs of the Port Authority's facilities for efficient transportation and 

egress of goods and supplies." Id. In short, according to the Port Authority, 

5 United does not concede that the Port Authority's calculations capture all of 

its diverted revenue, but for the purposes of this proceeding, the admission that $2 

billion has been diverted in the last decade, including $221 million in 2014, and 

including spending on non-Port Authority facilities, provides ample support for FAA 

reVIew. 

6 The issue is not whether the Port Authority's expenditures are legal under 

its own governing documents. The issue here is whether the expenditures comply 

with 49 U.S. C. § 47107(b)(2). Clearly, they do not. 

13 
spending airport revenues on anything to do with transporting goods or servicing 

people is permissible because its employees or operations are among those that 

benefit, making such expenditures "related to" Port Authority "operations." 

As United pointed out in response to the Motion for Summary Judgment, 

such an interpretation of the statute would allow limitless diversion. See MSJ 

Answer at 48-50. Such a tortured construction of the grandfather clause would 

create exceptions that would swallow the clause. An argument could be made that 

any spending, no matter how far afield, somehow benefits or supports some Port 

Authority facility. This is not the law, and the Port Authority provides nothing 

further to support its contention. Id. 

Accordingly, United's evidence warrants a Dir·ector's Determination that the 

Port Authority's diversion of airport revenue to non-Port Authority facilities is 

unlawful. Further, in light of the accumulated surpluses at EWR, the history of the 

Port Authority's non-compliance with revenue diversion regulations, the Port 

Authority's excessive spending of airport revenues on non-aeronautical facilities 

such as the World Trade Center, and the other facts detailed in United's Complaint, 

the FAA should initiate a thorough audit and investigation of revenue diversion by 

the Port Authority. 

III. THE FAA MUST ACT IN LIGHT OF THE EVIDENCE. 

Since United assuredly has met its burden of proof under 14 C.F.R. §§ 16.23 

and 16.29, the FAA must now do its duty. The FAA should exercise its authority 

under Part 16 to enter a Director's Determination finding the Port Authority in 

14 
violation of the grant assurances and federal laws cited in United's Complaint. If 

there is any issue as to which the FAA deems further information is required, the 

FAA can initiate an investigation of the Port Authority's unlawful practices with 

respect to that issue. By its express terms, Part 16 states that an investigation 

may, "at the sole discretion of the FAA," include one or more of the following: (1) a 

review of the written submissions or pleadings of the parties, as supplemented by 

any informal investigation the FAA considers necessary and by additional 

information furnished by the parties at FAA request; (2) obtaining additional oral 

and documentary evidence by use of the agency's authority to compel production of 

such evidence under 49 U.S.C. §§ 40113, 46104 and 47122; and (3) conducting or 

requiring that a sponsor conduct an audit of airport financial records and 

transactions as provided in 49 U.S.C. §§ 47107 and 47121. 14 C.F.R. §§ 16.29(b)(1)-

(3). 

As the FAA has recognized, the term "investigation" in Part 16 "is used to 

mean the thorough review of the facts provided in the pleadings within the context 

of applicable law and policy" and "[w]hile the FAA may obtain additional oral and 

documentary evidence, it is not required to do so." Town of Fairview, Texas u. City 

of McKinney, Texas, FAA Docket No. 16-04-07, Final Decision and Order (Nov. 30, 

2005) at 20 (emphasis in original). In other words, "[i]f the Director has determined 

the administrative record is sufficient to render a decision ... the Director is not 

required to request additional information beyond the pleadings presented by 

Complainant and Respondent." Id. 

15 
In addition, consistent with its broad investigative authority under Part 16, 

the FAA routinely requires parties to provide supplemental information and 

evidence to complete the administrative record. See, e.g., Pensacola Aviation 

Center, LLC v. Pensacola International Airport, FAA Docket No. 16-12-12, Request 

for Additional Information (Mar. 13, 2015) (requesting additional information and 

clarification from the Respondent regarding certain lease amendment provisions 

and the extent to which the Re.spondent honored them); Frank Hinshaw, Skydiving 

School, Inc. d/b/a Skydive Hawaii and Island Skydiving, L.L.C. v. The State of 

Hawaii, FAA Docket No. 16-12-04, Request for Additional Information (Feb. 20, 

2015) (after issuing a preliminary determination finding Respondent to be in 

violation of Grant Assurance 22, requesting additional information from the 

Complainant and Respondent regarding their respective positions taken during 

negotiations concerning the development of temporary operational procedures to be 

followed by skydiving and transient users of the airport); Drake Aerial Enterprises, 

LLC dl b I a Air America Aerial Ads and James Miller v. City of Cleveland, FAA 

Docket No. 16-09-02, Request for Additional Information (Aug. 27, 2009) (requesting 

additional information and documentation from Respondent regarding its process 

for reviewing and approving new aeronautical businesses at the airport). Likewise, 

should the FAA determine here that additional information and/or documentation is 

necessary to complete the administrative record prior to its issuance of a Director's 

Determination, the agency should do so via a request for additional information and 

16 
evidence and/or initiation of an audit of the Port Authority's financial records and 

transactions. See 14 C.F.R. § 16.29(b). 

United believes the agency has a sufficient basis right now- based on the 

pleadings submitted in the record to date- to render its Director's Determination. 

Part 16 states unequivocally that in rendering its initial determination, "FAA may 

rely entirely on the complaint and the responsive pleadings provided" and, further, 

that "[e]ach party shall file documents it considers sufficient to present all relevant 

facts and argument necessary for the FAA to determine whether the sponsor is in 

compliance." 14 C.F.R. § 16.29(b)(1). United's Complaint and MSJ Answer describe 

in great detail the facts and arguments giving rise to the various federal law and 

grant assurance violations committed by the Port Authority. Among other 

practices, the Port Authority charges aeronautical users, including United, 

exorbitant and unreasonable rates; uses a fee methodology that is not cost-based 

and lacks transparency; fails to make EWR available on reasonable terms; 

generates excessive surplus revenues amounting to hundreds of millions of dollars 

in order to subsidize non-aeronautical functions; improperly diverts airport revenue; 

and unjustly discriminates among aeronautical users. 

The Port Authority's only and ultimately futile defense of these allegations 

depended entirely on a procedural tactic- namely, that United's Complaint should 

be summarily dismissed because the existence of written agreements between 

United and the Port Authority precluded the FAA from investigating the complaint. 

Now that this theory has been decisively rejected (see April 27, 2015 Order), all that 

17 
remains for the FAA to consider at this stage are the hollow admissions and denials 

set forth in the Port Authority's Answer. Distilled to its core, the Port Authority's 

Answer merely regul'gitates the information and positions the Port Authority 

presented in previous pleadings and circularly denies, without further explanation 

or clarification, the substantive allegations presented in the Complaint. Because 

the Port Authority has failed to refute (much less address) the substantive merits of 

United's Complaint in any meaningful way despite having over six months and 

numerous procedural opportunities to do so, the FAA would be upholding its duty 

and well within its discretion to issue a Director's Determination finding the Port 

Authority to be in violation of the grant assurances and federal laws cited in the 

Complaint and imposing any remedies it deems appropriate and in the public 

interest. Simply put, if the Port Authority hasn't been able to, or has chosen not to, 

muster any credible countervailing evidence by now, despite the clear admonitions 

of Part 16 and the FAA's April27, 2015 Order, the FAA should act accordingly and 

issue its Director's Determination in favor of United.7 

IV. CONCLUSION. 

In light of the foregoing, United respectfully requests entry of a Director's 

Determination in its favor on all issues. The pleadings and evidence offered by 

7 Should the Port Authority decide to file a rebuttal to this Reply, it would be 

inappropriate for the Port Authority to submit new evidence in any such document, 

as the pu1·pose of a rebuttal is to respond to evidence or ru·guments contained in the 

Reply - not to introduce new evidence that United may not have an opportunity to 

address. 

18 
United afford a robust basis to conclude that the Port Authority has violated federal 

airport grant assurances and federal law. The Port Authority's Answer adds 

nothing. The evidence supports FAA action in this case and the public interest 

demands it. 

June 4, 2015 

Respectfully submitted, 

W ~-~~ Robert S. Span 

19 

Alan K. Steinbrecher 

Sophy Chen 

STEINBRECHER & SPAN LLP 

1155 F Street, NW, Suite 1050 

Washington, DC 20004 

(202) 559-8680 

~::re:S::c:m Marc L. Warren 

Keith J. Harrison 

Gerald F. Murphy 

Steven J. Seiden 

CROWELL & MORING LLP 

1001 Pennsylvania Avenue NW 

Washington, DC 20004 

(202) 624-2500 

mwarren@croweJ..1.com 

Counsel for 

United Airlines, Inc. 
CERTIFICATE OF SERVICE 

I certify that I have this date served the foregoing Reply of United Airlines, 

Inc. on the following persons by overnight express mail, in accordance with the 

Department's Rules of Practice: 

Chief Counsel 

Attn: FAA Part 16 Docket Clerk 

AGC-600 

Federal Aviation Administration 

800 Independence Ave., SW 

Washington, DC 20591 

June 4, 2015 

Carlene V. Mcintyre, Esq. 

Assistant General Counsel 

Port Authority of New York and New Jersey 

Law Department 

25th Floor 

4 World Trade Center 

150 Greenwich Street 

New York, NY 10006