UNITED STATES DEPARTMENT OF TRANSPORTATION 

FEDERAL AVIATION ADMINISTRATION 

WASHINGTON, D.C. 

United Airlines, Inc. 

Complainant, 

v. 

The Port Authority of New York 

and New Jersey 

Respondent. 

) 

) 

) 

) 

) 

) 

) 

) 

ORDER 

FAA Docket No. 16-14-13 

On February 10,2015, the Respondent, The Port Authority ofNew York and New Jersey 

filed a Motion for Summary Judgment Dismissing the Complaint filed by Complainant, 

United Airlines, Inc. The Complainant requested an extension of time to respond to the 

Respondent's Motion which was granted by the Director. On March 27, 2015, the 

Complainant filed its response to the Respondent's Motion. 

The Respondent asserts that the Federal Aviation Administration (FAA) should not 

entertain jurisdiction ofthe Complainant's Part 16 Complaint. The Respondent asserts 

that the FAA will not take jurisdiction under Part 16 to adjudicate a complaint regarding 

a fee established by agreement brought by a party to the agreement. The Respondent also 

asserts that the Complainant cannot sustain its burden because it did not include the lease 

agreement language containing the flight fee in its complaint or exhibits. Respondent 

claims there is no revenue diversion, and that the Complainant does not deny that the 

Respondent is grandfathered. The Respondent does acknowledge that 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. 

The Complainant contends that the Respondent failed to meet its burden to prove the 

absence of genuine issues of material fact on all claims. The Complainant acknowledges 

that it did not submit the lease agreements, but that "the Complaint clearly alleges the 

existence of the lease and describes the formula for calculating the EWR Flight Fee." 

The Complainant cites to the Rates and Charges Policy in stating, "FAA's role is to 

determine whether the airport proprietor is in compliance with its obligations and 

statutory obligations relating to airport fees." The Complainant claims that the FAA 

should exercise its jurisdiction to investigate whether the Newark Liberty International 
Airport (EWE) Flight Fee is reasonable. The Complainant contends the Respondent's 

Motion should be denied. 

Analysis 

2 

The Respondent is correct that as stated in the Policy Regarding the Establishment of 

Airport Rates and Charges (Rates and Charges Policy), "It is the fundamental position of 

the [DOT] that the issue of rates and charges is best addressed at the local level by 

agreement between users and airports. [See Rates and Charges Policy, 78 Fed. Reg. 

55331 (September 10, 2013)] 

The Rates and Charges Policy recognizes that DOT will not entertain a complaint about 

the reasonableness of a fee set by agreement filed by a party to the agreement setting the 

disputed fee. The Policy does not stop here, but goes on to state that "a dispute that is not 

subject to processing under the expedited procedures mandated by§ 47129, including a 

dispute over matters described by§ 47129 (e) and (f), will be processed by FAA under 

procedures applicable to airport compliance matters in general." (emphasis added) [78 

Fed.Reg.55331,55332] 

As recognized by the Complainant, the FAA's 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] The Respondent is also correct in that the "FAA 

proceeding is not intended to provide a mechanism for adjudicating the respective rights 

of the parties to a fee dispute." [Id., 55332] 

The FAA has entertained numerous cases in which the airport sponsor and a Part 16 

complainant have a formal agreement. FAA's role is not to enforce the lease terms 

between the parties to an agreement, but to enforce the Federal obligations in the grant 

agreements between an airport sponsor and the Federal Government. [See AmAv v. 

Maryland Aviation Administration, FAA Docket No. 16-05-12, (March 20, 2006) 

(Director's Determination), p. 23] 

The FAA has explained in Part 16 decisions that any action that is contrary to the 

sponsor's grant assurances is within the scope of the FAA to review and address. When 

information contained in the administrative record to a Part 16 complaint leads the 

Agency to review areas of noncompliance - whether or not they are alleged by the 

complainant- the Agency will, nonetheless, make a finding on those areas. [See for 

example, M. Daniel Carey and Cliff Davenport v. Afton-Lincoln County Municipal 

Airport Joint Powers Board. FAA Docket No. 16-06-06, (January 19, 2007) (Director's 

Determination), Issue 7] 

Under this standard, the FAA does not view the Complainant's failure to include the 

lease agreements with its original Complaint filing as a fatal flaw under the Part 16 

requirements requiring dismissal of the Complaint. The lease agreements were filed by 

the Respondent and are now part of the administrative record, and are subject to review. 

Such a review will include an examination of the flight fee and whether the fee was set 
3 

consistent with Grant Assurance 22, and the Rates and Charges Policy. 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." [78 Fed. Reg. 55335] 

Additionally, the Respondent failed to support its claim that there is no genuine issue 

material fact as to the Respondent's use of airport revenue and its grand fathering status. 

The FAA's Policy and Procedures Concerning the Use of Airport Revenue (Revenue Use 

Policy), 64 Fed. Reg. 7696, 7722 (Feb. 16, 1999) provides that " to detect whether airport 

revenue has been diverted from an airport, the FAA will depend primarily upon four 

sources of information: 1. Annual report on revenue use submitted by the sponsor under 

the provisions of 49 U.S.C. § 47107(a)(19), as amended. 2. Single audit reports 

submitted, pursuant to 49 U.S.C. § 47107(m), with annual single audits conducted 

under 31 U.S.C. §§ 7501-7505. 3. Investigation following a third party complaint filed 

under 14 CFR Part 16, FAA Rules of Practice for Federally Assisted Airport Enforcement 

Proceedings, and 4. DOT Office of Inspector General audits. [See Meyer v. City of 

Cincirmati, Ohio, FAA Docket No. 16-12-14, Director's Determination, September 12, 

2014, at page 14] There is a sufficient allegation regarding revenue diversion warranting 

review under the Part 16 enforcement process. 

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 Assurance 22, Economic Nondiscrimination; Grant Assurance 24, 

Fee and Rental Structure; and Grant Assurance 25, Airport Revenues. 

ACCORDINGLY, it is ordered that: 

Respondent's Motion for Summary Judgment Dismissing the Complaint is denied. The 

Respondent shall, within 20 days of when this Order is served, file its Answer to the 

Complaint. 

Randall S. Fiertz 

Director, Office of Airport Compliance 

and Management Analysis 
CERTIFICATE OF SERVICE 

HEREBY CERTIFY that on April j[]__, 2015, I caused to be placed in the United States 

mail (first class, postage paid) or personally delivered a true copy of the foregoing Order 

addressed to: · 

Counsel for Respondent 

Carlene V. Mcintyre, Assistant General Counsel 

Arnold D. Kolikoff, Attorney 

Faith Tabafunda, Attorney 

Law Department 

THE PORT AUTHORITY OF NEW YORK AND NEW JERSEY 

150 Greenwich Street, 25th Floor 

New York, NY 10006 

Counsel for Complainant 

Marc L. Warren, Esq. 

Keith J. Harrison, Esq. 

Gerald F. Murphy, Esq. 

Steven J. Seiden, Esq. 

CROWELL & MORING LLP 

1001 Pennsylvania Avenue, NW 

Washington, DC 20004 

Robert S. Span, Esq. 

Alan K. Steinbrecher, Esq. 

Sophy Chen, Esq. 

STEINBRECHER & SPAN LLP 

1155 F Street, N.W., Suite 1050 

Washington, DC 20004 

Hand-Delivered to: 

FAA Part 16 Airport Proceedings Docket (AGC-600) 

FAA Office of Airport Compliance and Management Analysis, AC0-1 00 

4 

t1Pwiv ~~~ 4-t-l-IS 

Claudia Roberts 0 

Office of Airport Compliance and 

Management Analysis