August 5, 2015 BY PERSONAL DELIVERY Office ofthe Chief Counsel Attention: FAA Part 16(Airport Proceedings Docket) AGC-610 FederalAviationAdministration 800 IndependenceAve. S.W. Washington, D.C. 20591 

### -:::_ NBRR


# RECEIVED AUG 

## 52015
PART 16DOCKETS



### Re: Part 16 Complaint: National Business Aviation Association, Inc., Shoreline Aviation, Inc. (Connecticut); PlaneSense, Inc.; Fly the Whale, Inc.; Eastern Air Express, Inc.; FL Aviation Corporation; Tuckaire, Inc.; Autonomic Controls, Inc.; Shoreline Aviation, Inc. (Massachusetts); Wes Rae Contracting Corporation; Eagle Air, Inc.; andJET AS, Inc.v. Town ofEastHampton, New York- no. 16-15-08 DearSirs: The Complainants, as set forth above, submit this surreply to the reply filed by the Town of East Hampton ("East Hampton," "Town," or"Respondent") in this docketon August 3, 2015. Section 16.26 of the FAA's regulations provides for an answer to a motion to dismiss but not for subsequent filings. There is good cause for the FAA to accept this pleading, in the interests of a complete record and to fulfill the agency's intentthat complainants havethe lastopportunityto comment on such amotion. 

### The Complainants Have Stated A Claim For A Violation Of 49 U.S.C. § 

### 40103(e} and GrantAssurance#23 The Respondent's reply essentially replicates the Town's prior argument that the statutoryand contractual prohibition on "exclusive rights" is notthe mirror image of grant assurance #22, relying on language that appears in an outlier Part 16 decision - a position which is contradicted by numerous subsequent Part 16 decisions. Indeed, despite purporting to be a "reply," the Respondent in its pleading does not respond to the Complainants' careful explanation in their July 20, 2015 answer of why East Hampton's reasoning is unsound, and whythe Town's effortsto distinguish later Part 16 cases are unavailing. In any case, at a minimum the FAA should clarify its guidance following a complete briefing of the issues and careful consideration thereof by the agency, and notattemptto do so within the acceleratedtimeframe of 14C.F.R. 

### § 16.26. Moreover, to the extent that the Town in its motion to dismiss asserted that an exclusive rights claim could be maintained only if premised on an anti-competitive result, the Complainants answered that such a situation in fact had arisen at HTO, because an operator that is able to procure helicopters that are not deemed to be "noisy'' can hold out services at hours that other operators cannot. The Respondent

SAFETY &AIRCRAFT 0f'Ef!ATIONS LEGISLATIVE & REGULATORYADVOCACY NETWORKING &COMMERCE £DUCATIOI\! & CAREER DEVELOPMENT BUSINESS MANAGEMENT RESOURCES National BusinessAviation Association 1200 GStreet NW, Suite 1100 Washington, DC 20005**~202)** 783-9000 www.nbaa.orgnow claims that this is not actually an anti-competitive result, because no entity is literally prohibited from operating at HTO, and other operators could procure compliant aircraft. Butthat is simply notthe law. It is beyond question that an exclusive right may be constructive in form. See. e.g., Exclusive Rights at Airports, FAA Order 5190.1A, 

### § 11(c) (October 10, 1985); Maxim United, LLC v. Jefferson County Colorado, no. 16-01- 10, Director's Determination, at 24 (April 2, 2002) (purportedly neutral standard-setting process held in practice to havecreated constructive exclusive right). And the FAA- in a Part 16 proceedingthat is known tothe Respondent and its counsel

- specifically has confirmed that aircraft are not deemed fungible and that operators should not be expectedto procure new aircraft in orderto continueserving an airport: [T]he City's assumption that users can simply replace a C or D Category aircraftwith a Category B-11 aircraft minimizes the value ofthese flights to customers and the operational considerations involved. First, although some fractional companies do have trade-down options, not all contracts have that option.

.. . Moreover, some users, such as a corporate flight department with one aircraft, would have no ability to use a different aircraft. In the Matterofthe Cityof Santa Monica, no. 16-02-08, Director's Determination, at 45- 46 (May 27, 2008). Thus, even if the Respondent's interpretation of 49 U.S.C. 

### § 40103(e) and GrantAssurance #23were to be adopted bythe FAA, Complainants have nevertheless stated aclaim premised on exclusive rightsthat should be fully briefed. The Complainants Have Stated A Claim For A Violation OfGrantAssurance#25 Similarly, the Respondent repeats its argument that East Hampton's use of HTO airport revenue to defend the operating restrictions it has adopted forthe airport cannot amount to a violation of grant assurance #25. But the primary authority cited by the Respondent in fact is entirelyconsistentwith the Complaint, when quoted in full: While we agree that legal fees paid for facilitating the diversion of airport funds to the City's general fund cannot be legitimate expenses of the airport, we do not view the overall defense of the police department charges as equivalentto diversion. We havefound that mostofthe police department charges are reasonable. Based on our reasoning, the payment of a relatively small part of the police department charges might be considered diversion, but we need not address that issue here. Given the relatively small amount ofthe disallowed charges, the amount of legal fees incurred in defendingthose charges is likelyto be de minimis. Second Los Angeles International Airport Rates Proceeding, Final Decision, Order 95- 12-33, at 49 (December 22, 1995). In the instant case, the alleged violation

- and thus the legal fees incurred to defend it

- is not de minimis, but rather is at the core of the Respondent's recent actions to constrain operations at HTO. And contrary to the Respondent's assertion in its reply, the FAA did not in 1995 hold thatthe expenditure offunds to defend a charge ofdiversion was permissible, even if there was an underlying finding of diversion. Indeed, the FAA stated quitethe opposite in LAX II- i.e., legalfees paid to defend illegitimate airport conduct are themselves illegitimate- a position which is fully consistentwith the otherauthority previously cited bythe Complainants. As previously acknowledged by Complainants, the FAA's guidance on legal fees in the context ofgrantassurance #25 may have significant implicationsfor airports- but that is no reason to dismiss the pending complaint. Rather, the FAA should

- after a complete briefing, potentially including the production of documents by East Hampton about its expenditures

- proceed to clarify how this guidance should be applied in practice, at airports generally and at HTO in particular, following on East Hampton's public assertionthat itwill "spend scarce airportfundsto defendthese restrictions." **

### ** Accordingly, for the reasons set forth in this surreply and Complainants' prior answer, the Respondent's motion to dismiss this proceeding should be denied, and the relief previously requested bytheComplainants should be granted bythe FAA. Respectfullysubmitted,



# _k#.~ Steve Brown ChiefOperating Officer, NBAACertificateofService I hereby certify that I have this day caused the foregoing complaint to be served on the following persons at thefollowing addresses byfirst class mail, postage prepaid, with courtesy copies byelectronic mail:

• Larry Cantwell, Supervisor, 159 Pantigo Road, East Hampton, NY 11937, !cantwell@ehamptonQY.go'C;

• Elizabeth Vail, Town Attorney, 159 Pantigo Road, East Hampton, NY 11937, evaiI@ehamptonny.gov;

• Jemille Charlton, Airport Manager, 200 Daniels Hole Road, Wainscott, NY 11975, jcharl!on@ehamptonny.gov;and

• W. Eric Pilsk and Catherine van Heuven, Kaplan, Kirsch 

### &Rockwell 

### LLP, 1001 Connecticut Avenue, N.W., Suite 800, Washington, DC, 20036, epilsk@kaplankirsch.com, cvanheuven@kap!ankirsch.com. Datedthis5th dayofAugust2015.



# ~M·~

Steve Brown