August 5, 2015 

BY PERSONAL DELIVERY 

Office of the Chief Counsel 

Attention: FAA Part 16 (Airport Proceedings Docket) 

AGC-610 

Federal Aviation Administration 

800 Independence Ave. S.W. 

Washington, D.C. 20591 

-:::_ NBRR 

RECEIVED 

AUG 5 2015 

PART 16 DOCKETS 

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.; 

and JET AS, Inc. v. Town of East Hampton, New York- no. 16-15-08 

Dear Sirs: 

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 docket on 

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 

intent that complainants have the last opportunity to comment on such a motion. 

The Complainants Have Stated A Claim For A Violation Of 49 U.S.C. § 40103(e} 

and Grant Assurance #23 

The Respondent's reply essentially replicates the Town's prior argument that the 

statutory and contractual prohibition on "exclusive rights" is not the 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 why the Town's efforts to 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 not attempt to do so within the accelerated timeframe of 14 C.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 0 f'Ef!ATIONS LEGISLATIVE & REGULA TORY ADVOCACY NETWORKING & COMMERCE £DUCATIOI\! & CAREER DEVELOPMENT BUS I NESS MANAGEMENT RESOURCES 

National Business Aviation Association 1200 G Street NW, Suite 1100 Washington, DC 20005 ~202) 783-9000 www.nbaa.org 
now 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. But that is simply not the 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 have created constructive exclusive right). And the FAA- in 

a Part 16 proceeding that is known to the Respondent and its counsel - specifically has 

confirmed that aircraft are not deemed fungible and that operators should not be 

expected to procure new aircraft in order to continue serving an airport: 

[T]he City's assumption that users can simply replace a C or D Category 

aircraft with a Category B-11 aircraft minimizes the value of these 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 Matter of the City of 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. § 

401 03(e) and Grant Assurance #23 were to be adopted by the FAA, Complainants have 

nevertheless stated a claim premised on exclusive rights that should be fully briefed. 

The Complainants Have Stated A Claim For A Violation Of Grant Assurance #25 

Similarly, the Respondent repeats its argument that East Hampton's use of HTO 

airport revenue to defend the operating restrictions it has adopted for the airport cannot 

amount to a violation of grant assurance #25. But the primary authority cited by the 

Respondent in fact is entirely consistent with 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 equivalent to diversion. We have found that most of the 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 of the disallowed charges, the amount of legal 

fees incurred in defending those charges is likely to 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 that the expenditure of 
funds to defend a charge of diversion was permissible, even if there was an underlying 

finding of diversion. Indeed, the FAA stated quite the opposite in LAX II- i.e., legal fees 

paid to defend illegitimate airport conduct are themselves illegitimate- a position which 

is fully consistent with the other authority previously cited by the Complainants. 

As previously acknowledged by Complainants, the FAA's guidance on legal fees 

in the context of grant assurance #25 may have significant implications for 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 assertion that it will "spend scarce airport funds to defend these 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 by the Complainants should be granted by the FAA. 

Respectfully submitted, 

_k#.~ Steve Brown 

Chief Operating Officer, NBAA 
Certificate of Service 

I hereby certify that I have this day caused the foregoing complaint to be served 

on the following persons at the following addresses by first class mail, postage prepaid, 

with courtesy copies by electronic 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, 

evai I @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. 

Dated this 5th day of August 2015. 

~M·~ Steve Brown