### BEFORE THE UNITED STATES OF AMERICA DEPARTMENT OF TRANSPORTATION FEDERAL AVIATION ADMINISTRATION

THE FLIGHT SHOP, INC. D/B/A PROFESSIONAL AIR, and AERO FACILITIES, LLC Complainants, v. Docket No. 16-14-12 CITY OF BEND Respondent.

REBUTTAL OF THE CITY OF BEND
Pursuant to 14 C.F.R. § 16.23(f) and FAA’s March 27, 2015 and April 3, 2015 orders granting extensions of time, Respondent, the Ci ty of Bend, Oregon (“City” or “Respondent”), submits this Rebuttal in response to the Reply, Opposition to Motion to Dismiss, and Opposition to Motion for Summary Judgment (“Reply”) file d by The Flight Shop, Inc., d/b/a Professional Air (“Pro Air”) and Aero Facilities, LLC (“Aero F acilities”) (collectively, “Complainants”). The City incorporates all of the arguments made i n, and exhibits submitted with, its Consolidated Answer, Motion to Dismiss, and Motion for Summary Judgment (“Answer”) and reiterates those arguments as if restated herein. To the extent Complainants raise new allegations in their Reply that are not expressly addresse d in this Rebuttal, such alle gations are hereby denied. INTRODUCTION Complainants have the burden of provi ng their allegations and must do so by a preponderance of substantial and credible evidence. See 14 C.F.R. § 16.23(k)(1); BMI Salvage

### 2 Corp. v. Miami-Dade Cnty., Fla. , FAA Docket No. 16-05-16, Final Decision and Order on Remand at 51 (Apr. 15, 2011); Aerodynamics of Reading, Inc. v. Reading Reg’l Airport Auth. , FAA Docket No. 16-00-03, Final De cision and Order at 15-16 (J uly 23, 2001). Complainants fail to pass this basic threshold. In spite of the lack of evidence offered with the Complaint, the City responded to Complainants’ allegations with substantial and credible evidence showing that Complainants’ allegations are either untrue, not supported by law, or both. The evidence introduced by the City, on the other hand, shows that the City is aware of and committed to it s Federal obligations. Contrary to Complainants’ claims, the City has not granted or permitted—explicitly or implicitly—exclusive rights for the aeronautical use of the Bend Municipal Airport (“Airport”). The City did not create barriers for new entities s eeking to provide aeronautical services or for existing entities seeking to expand the aeronautical services they provide. The City has not discriminated against Complainants. On the c ontrary, the evidence shows that the City has worked long and patiently to accommodate them. A nd the City has retained all of the rights and powers necessary to operate and control the Airport and to continue to comply with its Grant Assurances. Most importantly, the Airport’s layo ut complies with FAA’s design criteria and is safe. Complainants, in their Reply, speculate at length on the City’s motives in its dealings with Pro Air, Aero Facilities, Leading Edge, and other users of the Airport. However, the evidence on which Complainants rely, even if take n out of context (as Complainants urge), does not support the claims that the City discriminate d against Complainants or that it is otherwise improperly operating the Airport. For all of thes e reasons, the Complaint is wholly without merit and should be dismissed.

### 3 DISCUSSION I. THE CITY HAS COMPLIED WITH ITS FEDERAL OBLIGATIONS IN ITS DEALINGS WITH COMPLAINANTS AND IN MAINTAINING A SAFE AIRPORT LAYOUT. In their Reply, Complainants belatedly attempt to build support for their earlier arguments that the City is in violation of severa l Grant Assurances. The City will not attempt to respond to arguments that it already addre ssed in its Answer. However, insofar as Complainants’ Reply presents new or altered (andsometimes contradictory) arguments, the City addresses those below. A. Complainants’ allegations about their competitors’ opportunities at the Airport are both contradict ory and inaccurate. Throughout this proceeding, Complainants have made a number of contradictory and unsupported claims meant to further their various theories about the City’s relationships to Complainants and their competitors. In sum, Co mplainants argue that the City ceded too much control of the Airport to them while simultaneously favoring their competitors. Several of these claims now appear in Complainants’ Reply in revised or altered form—in some instances in support of arguments that directly contradict the arguments made earlier in the Complaint. In each case, Complainant’s new and revised alle gations are unfounded and, in some cases (as noted below), factually inaccurate. For instance, Complainants now argue that th ey “have never asserted that they should have sole and exclusive standing as an FBO at the Airport.” Reply ¶ 13. This is untrue. In fact, Pro Air’s request for sole-FBO status is well-documented in an exchange of letters in the fall of 2012, around the time that the City was in discussi ons with Leading Edge regarding a lease for a fueling facility. Assistant City Attorney Gary Firestone wrote to Martin Hansen, counsel for Complainants, noting that Mr. Hans en had “mentioned that [he] woul d request that the City take

### 4 advantage of an exception that would allow [the Airport] to have only a single FBO based on the size of the airport and the inab ility to support two FBOs.” An swer Ex. 29 at 1. Mr. Hansen replied with Pro Air’s analysis of FAA’s exception to the rule against the granting of exclusive rights and concluded by requesting that Mr. Firestone “bring this exception to the attention of the City Council in their consider ation of the current FBO lease request from Leading Edge Aviation.” 1 

### Rebuttal Ex. 1 at 1. Despite this, and despite their new assertions that they have never sought to have an exclusive right at the Airport, the subtext of Complainants’ pleadings throughout this Part 16 investigation (and the informal Part 13 investigation that preceded it) reflect th eir apparent belief that they were entitled to one. Accordingly, in an effort to put forth another convoluted, speculative, and inaccurate theory about the City’s motives in administering agreements with various Airport tenants, Complain ants also argue that the City granted Aero Facilities too many rights at the Airport. The City addressed at length the flaws and inaccuracies with these theories in its Answer and sees no need to reiterate them here. However, the City must address Complainants’ misstatements regarding the extent of Aero Facilities’ control of the east side of the Airport. As an initial matter, Complainants imply that the 18 acres designated as Phase III are entirely within Aero Facilities’ control. Reply ¶ 6. That is untrue. While it is true that Aero Facilities has certain reimbursement rights for infrastructure that it developed for its own leasehold that may also benefit the developer of the Phase III parcel (Reply ¶ 14; Complaint

1 As shown in Answer Exhibit 35, FAA’s Northwest Mountain Region informed the City that it did not consider “either of the two conditions [allowing fo r grant of an exclusive right] to be true at the airport, and therefore the airport is obligated to not excludea service provider on the airport.” The City acted accordingly.

### 5 Ex. 9 at 18, 46) 2 

### the Phase III parcel itself is neither leasedto nor under the direct control of Aero Facilities. Separately, Complainants attempt to in troduce new arguments about road access to undeveloped land on the Airport’s east side, stating that [i]n order for the [City] to connect the north parcel road to the existing surface road, the [City] would have to abandon the existing Gibson Air Road, obtain a waiver of setback from the County, and pay to construct an enti rely new road parallel to and offset from the existing road by only a few feet. Reply ¶ 17. Complainants suggest that this w ould require excavating existing rock berm and drainage along Gibson Road and ch aracterize this as “theoretically possible” but “impractical and very expensive.” Id. Complainants overstate the difficulties of constructing a new road to access that parcel and evidence an unfamiliarity with the property boundaries in question. The City owns a strip of land over 100 feet wide from the edge of the area leased to Aero Facilitie s to the Airport property boundary. While the City may need to excavate a s hort stretch of berm or construct a short jog around it, by and large, an access road could be built without much hassle. No setback waiver would be needed from the County—the setbac k referenced by Complainants applies to structures, not to roads or driveways 3 

### — nor would the City need to abandon the existing Gibson

2As noted in the Answer, Aero Facilitie s’ Ground Lease is subordinated to th e City’s Grant Assurances. Answer at 43-44.
3 Deschutes County Code Section 18.04.030 defines “s etback” to mean “an open space on a lot which is unobstructed from the ground upward except as otherwise provided in DCC Title 18.” Even if a setback requirement were applicable to roads, which it is not, the setback in this case would be a side setback, and the applicable code provision is Deschutes County Code Section 18.76.060F, which provides that “[t]he minimum side setback between any structure and a prop erty line shall be three feet, and the minimum total of both side setbacks shall be 12 feet.” If this were considered a rear prope rty line, the applicable provision would be Deschutes County Code Section 18.76.060G, which provides that “[t]he mi nimum rear setback between any structure and a rear property line shall be 50 feet.” A road or driveway is not a structure. But even if a road were considered a structure and the property line were considered a rear property line, the setback would be 50 feet, which would still leave

### 6 Road (on City-owned lands), as Complainants suggest. Id. In short, the City has retained both the right and the ability to access all of the undeveloped land on the Ai rport’s east side. Finally, perhaps nothing epitomizes Complain ants’ “have their cake and eat it too” approach so much as its treatment of the so-c alled Smith Hangars, which are a set of hangars on the west side of the Airport that were built in 2009 by an unrelated developer. Answer at 46. Complainants barely alluded to these hangars in their Complaint, and did so only to dismiss their importance, writing that “the fact that a few small hangars were squeezed into the west side of the Airport” does not “protect Resp ondent from a claim that it gran ted an exclusive right to Aero Facilities.” Complaint ¶ 58. In their Reply, how ever, Complainants portray those same hangars as a threat to their business, arguing that the hangars put Aero Facilities at a serious competitive disadvantage and are evidence of discriminatory behavior by the City. Reply ¶ 8. Complainants write, of their difficulties in the economic downt urn, that “[i]t did not help that in 2009 the Respondent permitted a local developer named Smith to build a set of new hangars on the west side . . . ; and forc[ed] the Complainant to comp ete head-to-head in leasing their hangars during the worst of the economic downturn.” Id

. The Smith Hangars were built on a spot thathad been shown on the 2002 Airport Master Plan ALP as available for development. Allowi ng Airport development other than that planned by Complainants, whether during an economic dow nturn or otherwise, does not constitute discrimination by the City. 4 

### But, of course, nor have Complainants—who complain bitterly about competition at the Airport—been granted an exclusive right, despite their request that the

plenty of room for a road.
4The Evans Affidavit notes, correctly, that the City did not request proposals prior to offering for lease the land on which the Smith Hangars were built. Reply Ex. 6, Evans Affidavit ¶ 9. The City was not legally required to do so.

### 7 City do so. Not only do other aeronautical busine sses operate at the Airport, but additional land remains available for development. See Roadhouse Aviation v. City of Tulsa , FAA Docket No. 16-05-08, Director’s Determination at 29 (Dec. 14, 2006), aff’d , Final Decision and Order (June 26, 2007) (“The intent of Grant Assurance 23 an d companion guidance language in FAA Order 5190.6A is that an airport sponsor not lease all available land to one FBO, thereby granting an exclusive right.”) (emphasis added).
B. Complainants mischaracterize the City’s actions taken to manage the Airport. In their Reply, Complainants again imprope rly interpret Airport-related management decisions as discriminatory actions intended to harm them. As the City previously explained, see Answer at 13-15, the City has made prudent deci sions to operate the Airp ort in compliance with its Federal obligations and to accommodate growthin aeronautical activity. The new evidence introduced by Complainants in their Re ply does not show unjust discrimination.
1. The City has treated Complainants in a fair and straightforward manner. In their Reply, Complainants attempt to portray themselves as victims of the City’s alleged deceptive practices, when in reality, the City has consistently acted reasonably toward Complainants and in compliance with its Federal obligations. First, Complainants allege that Aero Facilities was induced to enter into the Agreements 5 

### with the City based on certain representations made by City representatives aro und the time that the City had issued a Request for Proposals (“RFP”) for the development of the eas t side of the Airport. Reply ¶ 6. The Evans Affidavit claims that “[t]he City represented th at there was no land lefton the west side for

5 The Agreement for Development of Property – Bend Municipal Airport Eastside Development (“Development Agreement”) (Complaint Ex. 3) an d a Master Airport Ground Lease (“Ground Lease”) (Answer Ex. 14) (collectively, th e “Agreements”).

### 8 development, and that all future developmen t at the Bend Airport would be done on the east side.” Reply Ex. 6, ¶ 7. Mr. Evans, however, doe s not say who made that statement or when and in what context the statement was made. The most reliable evidence about the circ umstances surrounding the RFP is the RFP itself. Answer Ex. 12. It makes no claims about what other development opportunities might have been available at the Airport and make s no promises about where or when such development may occur. Conversely, the RFP e xpressly states that the successful proposer would be required to comply withall applicable Federal laws. Id . at 19; see also 49 U.S.C. §§ 40103(e), 47107(a)(4) (prohibiting exclusive rights at airports). Additionally, the Development Agreement, which resulted from the selection of Aero Facilities as the successful proposer, is unambiguous that th ere were no other components to the deal other than those memorialized in the agreement itself. Complaint Ex. 3, § 2.6.4 (“Developer enters into this Agreement without reliance upon any verbal re presentation of any kind by the City, its employees, agents or consultants regarding any aspect of the s ite, the Project, its feasibility, financing or compliance with any governmental regulation.”); Complaint Ex. 3, § 8.13 (“There is no other oral or written agreement between the Parties with regard to this subject matter. There are no oral or written represen tations made by a Party, implied or express, other than those contained in this Agreement.”). Finally, and just as importantly, throughout the negotiations over the terms of the Agreements, Aero Facilitie s had access to maps and drawings showing the proposed leasehold in the context of the size and layout of the Airport. See, e.g. , Answer Exs. 12 at 10; 59. Those maps and drawings made clear that there was remain ing land available for aeronautical development.

### 9 Similarly, Complainants allege that Aero F acilities’ planned devel opment at the Airport was delayed as a result of the required Environm ental Assessment (“EA”). Complainants imply that the City sandbagged them with this federa l National Environmental Policy Act requirement, stating that “Respondent did not inform the Complainant Aero Facilities, nor was the Complainant aware, that a new [E A] would be required.” Reply ¶ 7. Such a conclusion is belied by the evidence that Complainants themselves submit. The City was, like Complainants, surprised when it became clear that an EA would be required. Reply Ex. 1 (“[T]he City of Bend was not aware that they would be required to conduct an EA and unfortunately had negotiated with . . . Aero Facilities to le ase property for expansion on the eas t-side of the airport.”). The evidence also shows that the City was committe d to keeping Aero Facilities up-to-date on the status of the EA and understood th at Aero Facilities was “anxious to begin construction.” Reply Ex. 3. Further, while Complainants acknowledge that Aero Facilities missed the agreed-to development schedule because of the EA, Reply ¶ 7, the City understood that this was reasonable given the circumstances that included, among other things, the EA, and attempted to accommodate a revised schedule. See Answer at 6-7. Complainants also argue that the City “reneg ed on its promise” regarding Pro Air’s ramp space. Reply ¶ 22. As an initial matter, it s hould be noted that the Fl ight Services Building Lease Renewal shows that even at that early datethe parties were contemplating that Pro Air’s 120,000 square foot ramp space would need to be adjusted “to reflect av ailable area after reconstruction of Taxiway A.” Answer Ex. 28 at1. That agreement was signed by Pro Air one year before entering into the ramp space Lease Amendment that permanently reduced the ramp space and rent. Answer Exs. 28, 32.

### 10 Moreover, the City has already explained it s rationale for reducing Pro Air’s ramp in order to accommodate the reconstruction of Taxi way A, which was important for the continued development of the Airport. Answer at 9. At th e time, the City offered to swap Pro Air the ramp space needed for the taxiway project for similar ramp space to the north of Pro Air’s leasehold, near Pro Air’s fueling facilities. 6 

### Answer Ex. 31 at 2. Complainants’ own evidence notes that Pro Air rejected the substitute ramp space as not acceptable “on a short-term or long-term basis.” Reply Ex. 12. As a result, the City instead ag reed to reduce Pro Air’s leased ramp space and concomitant rent. Answer Ex. 31 at 1. A l ease amendment reflecting these reductions became effective on August 18, 2012. Answer Ex. 32. In its Answer, the City denied Complainants’ allegation, Complaint ¶ 68, that the City misled Pro Air’s manager in order to induce him to sign the lease amendment, Answer ¶ 68; Answer at 4 8. In their Reply, Complainants now seek to introduce parol evidence in the form of an affidavit in an attemp t to support the allegation that Pro Air was misled. Reply at 11; Reply Ex. 10, ¶¶ 3, 6. This new testimony, however, cannot call the lease amendment itself into dispute. The City did not simply “agree via email” as Complainants suggested, but rather prepared an addendum to “make sure all the points are covered.” Reply Ex. 11 at 2-3. The lease amen dment speaks for itself; it does not provide that the reduction of space and rent wa s short-term. Answer Ex. 32; see also Answer at 48 & n.18; Lolita’s Airport Café, Inc. v. City of Houston , FAA Docket No. 16-99-22, Director’s

6In an affidavit of Gwil Evans that Complainants previous ly submitted to the Circuit Court of the State of Oregon for the County of Deschutes (and now submit as evidence in this proceeding), Mr. Evans denies that the City offered Pro Air ramp space “directly next to its fuel farm locati on,” and instead claims that the “City only offered tie-down spaces out on the taxiway that were far away from our FBO operations.” Reply Ex. 10, ¶ 8. Whether Complainants want to refer to the ramp space as mere tie-down spaces is irrelevant. But to characterize the space that the City offered as being “out on the taxiway” is wrong under any interpretation. There are no aircraft tie-downs on the taxiway. The ramp space offered by the City was immediately north of Pro Air’s leasehold and next to its fuel farm, along the edge of the Taxiway A. Answer Ex. 11 at 9-11; Reply Ex. 11 at 2. That the space may have been “far away” from the core area from which Pro Air conducts its business is a function of the 80,000 square-foot apron area that Pro Air already enjoys.

### 11 Determination at 13-14 (Sept. 11, 20 00) (finding that the only written evidence of the outcome of negotiations was the amendment itself when partie s disagreed on intent and additional evidence does not prove decisions weremade on contract terms). Even if it were appropriate to look outside the four corners of th e lease amendment, the evidence that Complainants now submit fails to prove that Pro Air had a reasonable be lief that the reduction in ramp space would be temporary. While the construc tion that relocated Taxiway A slightly to the west was a temporary project, Answer at 9, the end result (the relocated Taxiway A) is permanent, as was evident from the nature of the proj ect and the construction plans. Likewise, the City did not mislead Pro Air about new tie-down spaces that became available more recently to the south of Pro Air’s leasehold. In November 2012, the City offered to work with Pro Air to “provide incentives to it s current tie-down tenants to relocate . . . to free up spots that can be leased” to Pro Air. Answer Ex. 29 at 2. Although Complainants allege that the City did not tell them about a waiting list for tie-down sp aces until 2013, the evidence shows that as early as November 2012 the City informed Complainants’ legal counselthat “[t]he City is willing to lease at least some additional tie-dow n spots to Professional Air in the desired area (immediately to the south of the existing Prof essional Air tie-down area ) as spaces become available.” Answer Ex. 29 at 1-2. At the time, th e City also noted that another tenant might be interested in some of the spots, and if that we re the case, the City would provide some spots to both. Id. The City was clear with Complainants as to options for obtaining additional tie-down
spaces. 7

7 It should be noted that in their Reply, dated March 2015, Complainants do not acknowledge that Pro Air had entered into a lease agreement fo r additional tie-down spaces three months earlier, in January 2015. See Answer Ex. 53. It is unclear if Comp lainants still believe that they are being treated unfairly with regard to tie-down spaces. See Roadhouse Aviation v. City of Tulsa , FAA Docket No. 16-05-08, Director’s Determination at 31 (“FAA is

### 12 Similarly, Complainants’ allegations relati ng to the Blue Hangar lease do not show mistreatment by the City or that the City treat ed a similarly-situated entity differently. Wilson Air Ctr., LLC v. Memphis & Shelby Cnty. Airport Auth., FAA Docket No. 16-99-10, Director’s Determination at 19 (Aug. 2, 2000), aff’d , Final Agency Decision and Order (Aug. 30, 2001). While the City and Complainants may disagree on the negotiations surrounding the Blue Hangar lease, the City provided Pro Ai r with a lease as requested. See Answer Ex. 30. Although Pro Air has refused to sign the lease, Pro Air continue s to occupy the Blue Hangar on a month-to-month basis. Answer ¶ 40; Answer at 55. 8 

### There is no evidence that Pr o Air has suffered because of any of the City’s alleged actions or inactions.
2. The City has not treated Complain ants differently than similarlysituated entities. Complainants argue that the City’s actions, taken in light of the City’s alleged motives, show unjust discrimination agains t them. This is also lega lly and factually untrue. Complainants initially alleged that the City’s grant to Leading Edge of a one-year waiver to meet the fueling requirements imposed by the Minimum Standards is an example of unjustly discriminatory treatment. Complaint ¶ 66. In its Answer, the City noted th at it has the discretion to waive the Minimum Standards, Answer ¶ 29; see also Answer Ex. 34 at 2 (the City has the “right to waive these standards, or portions ther eof, when it deems, in its discretion, such waiver is in its best interest”), and that , in fact, it previously had gran ted a similar waiver to Pro Air, Answer ¶ 66, allowing it to conti nue operating its FBO business although it failed to maintain its charter operator certificate.

interested in current compliance.”).
8 More recently, although the City presented Pro Air witha notice of breach for failure to execute the Blue Hangar lease tendered by the City, see Reply Ex. 19, Pro Air continues to enjoy the benefits of using the Blue Hangar.

### 13 Complainants now argue that the Minimum Sta ndards waiver the City granted to Leading Edge was a “significantly unfair waiver,” Repl y ¶ 20, and deny that a waiver was ever required for, or granted to, Pro Air, suggesting that af ter its charter certificate had expired, Pro Air continued to provide air charter services by brokering with third parties. Reply ¶ 19. However, the Minimum Standards require provision of charter services, not contracting for them. Answer Ex. 34, § 4.1.2(b). The evidence that Complainan ts submitted into the administrative record plainly shows that Pro Air did not have its air operato r certificate for a period of time while it continued to operate as an FBO, Reply Ex. 8, yet the City did not terminat e Pro Air’s right to be an FBO. Answer Ex. 1, ¶ 5. Meanwhile, Complainants appear to find the fueling waiver for Leading Edge objectionable, at least in part, because Leading Edge allegedly owed Pro Air money at the time that it sought to install and operate its own fuel farm. Reply ¶ 20. Financial distress is the same explanation, however, that Complainants give fo r Pro Air’s “difficult decision to reduce and then ultimately to stop providing charter services with it s own aircraft and pilots.” Reply ¶ 18. Both the waiver granted to Pro Air and the City’s d ecision to allow Leading E dge to have a one-year period in which to begin selling Jet A 9 

### were soundly within the City ’s discretion and do not show unreasonable discrimination. C. Complainants mischaracterize Leading Edge’s operations. In an effort to further its argument that the City has favored Complainants’ competitors, Complainants continue to make a number of arguments suggesting that the City has ignored

9 To be clear, that one-year period has now expi red and Leading Edge is now selling jet fuel. See Answer at 54 n.24.

### 14 violations of Airport or FAA rules committed by Leading Edge. Reply ¶¶ 11-12, 20, 26. On at least one issue, Complainants have altered their argument since the Complaint. In particular, Complainants devote consider able space to the ques tion of where Leading Edge parks its fuel trucks. In their Complaint, Complainants stated that Leading Edge has been allowed to “park their refueling trucks directly on active taxiways in object free areas even though that creates a very signi ficant safety issue.” Complaint ¶ 67 (alleged without any supporting evidence). In its An swer, the City showed that Le ading Edge parks its fueling vehicles at the edge of ramp space it leases from the City, in a location that is exactly opposite from the nearest taxiway. Answer at 57; Answer Ex. 68. In their Reply, Complainants now state that, while Leading Edge parks its fuel trucks within its leased area, its “leased space is directly next to areas of taxiing aircraft.” It submits a picture that it claims shows “a taxiing corporate jet squeezing through on the taxi lane next to Leading Edge’s parked fuel trucks.” Reply ¶ 26. Complainants’ description of the photograph, however, is mere rhetoric. The City does not de ny that the aircraft parking apron leased by Leading Edge is directly next to areas where aircraft taxi (that is, after all, the nature of aircraft parking aprons), but the fuel trucks are not parked next to taxiways. Rather, they are commonly parked at the western edge of Leading Edge’s leased ramp space, which is several feet away from hangars, some of which are leased by other aer onautical tenants. As a result, as aircraft go in and out of hangars, aircraft may move near th e spot where the fuel trucks are parked. This does not make it unsafe. Leading Edge parks its fuel trucks in compliance with the Fire Code regulations. The current locati on does not impinge on Pro Air’s leasehold or operations. The City showed in its Answer that this claim lack s merit, Answer at 57, and Complainants’ revised argument fares no better.

### 15 D. The Airport layout meets FAA desi gn standards and is safe. In an attempt to further their argument that conditions at the Airport are unsafe, 10 

### Complainants selectively point to portions of a ConnectOregon funding application, which stated that there is “considerable conflict between fixed wing aircraft and rotorcra ft” at the Airport, as “evidence” that the Airport layout is currently unsafe. Re ply ¶ 31; Reply Ex. 5 at 13. See also Reply Ex. 20 at 2. However, the City was clear inits application that th e proposed project would provide “an additional safe ty buffer between rotorcraft and fixe d wing traffic,” Reply Ex. 5 at 6. No one ever suggested that the project was need ed to remedy unsafe conditions. Safety is the City’s utmost priority at the Airport and the fact that the C ity actively seeks to expand and promote safe operations is not evid ence of an unsafe Airport layout. Finally, it is worth noting that Pro Air was itself “considering entering the helicopter flight training arena” and stated that it would ne ed more ramp space to do this. Reply Ex. 13 at 2. In doing so, Pro Air did not ex press concern that there would be conflict between fixed-wing and rotary-wing operations w ithin its own ramp space.
II. THE ADDITIONAL EVIDENCE CO MPLAINANTS INTRODUCE DOES NOT SUBSTANTIATE THEIR ALLEGATIONS. Apparently belatedly acknowledging that th at they bear the burden of proving the allegations in their Complaint, 14 C.F.R. § 16.23(k)(1), Complainan ts now submit twenty exhibits that attempt to both respond to the City’s Answer as well as provide post-submittal support for Complainants’ original claims. Complainants accomplish neither goal.

10It is worth noting that Complainants no longer argue that the Enticknap Report (Complaint Ex. 11) is credible evidence of a safety problem at the Airport.

### 16 As detailed above, many of Complainants’ exhibits either provide inadequate or no support for the proposition for which they are introduced, or are misleadingly characterized. 11 

### In other cases, Complainants attempt to support th eir misstatements of the facts with a post hoc affidavit that merely reiterates the allegations in the Complaint. See Reply Ex. 6. That attempt is self-serving and fails to substantiate Complainants ’ theories. Complainants had the obligation to “[i]nclude all documents then available in the ex ercise of reasonable dilig ence, to be offered in support of the complaint,” 14 C.F.R. § 16.23(b )(2), when they filed that Complaint. 12

### They did not do so. Regardless, the evidence submitted by Complainan ts with their Complaint, together with the evidence submitted with their Reply, still fails to sustain Complainants’ burden of proving their allegations. Because the evidence that Complainants now submit does not support their claims, Complainants do not meet the le gal standards for proving their claims. See Answer at 32-35.
III. THE CITY PROPERLY MADE DISP OSITIVE MOTIONS AT THE TIME OF ITS ANSWER. Complainants argue that the City erred in filing its Motions to Di smiss and for Summary Judgment at the same time as its Answer. 13 

### In support of that argument, Complainants interpret

11 Additionally, some of the evidence that Complainants now submit is duplicative of evidence submitted by the City, and Complainants provide no explanation for why they needed to resubmit the same document. Compare Reply Ex. 12 with Answer Ex. 31 at 2.
12For example, Complainants offer no reason why the Ev ans Affidavit, Reply Ex. 6, was not submitted with the Complaint. As a result, the reliability and probative value of this affidavit should now be in question. Complainants similarly provide no justification for failing to submit the ex hibits they now seek to introduce with the Complaint, even though many of these documents were (or could have been) available at the time the Complaint was filed. See, e.g., Reply Ex. 1 (emails from 2008); Reply Ex. 5 ( ConnectOregon Application 2009-2011); Reply Ex. 10 (affidavit dated July 14, 2014, and accompanying exhibits).
13 While the City does not seek to make an unauthorized reply to Complainants’ Answer to the City’s dispositive motions, the City believes it is necessary to address its novel procedural arguments.

### 17 Part 16 procedural rules narrowl y to preclude simultaneous answ ers and dispositive motions. FAA rules are permissive, providing that “[i]n li eu of an answer, the respondent may file a motion to dismiss the complaint or a motion for summary judgment on the complaint.” 14 C.F.R. § 16.26(a). Complainants argue that fi ling an Answer simultaneously with dispositive motions is an attempt to “overwhelm the record.” Reply at 17. They also argue that it is “confusing” for the City to argue “both that the cause of action was insufficiently stated” and that “no material issues of fact exist.” Id. Both as a legal and as an equitable matter, Co mplainants’ position shou ld be rejected. As to the former, the City has followed a process lo ng allowed by the FAA. While the Part 16 rules themselves do not contain specific directions beyond the provision quoted by Complainants, the FAA appears to have intended them to provide for an alternative procedure rather than to replace the existing one, under which respondents routinely file dispositive motions at the same time as their Answer. 14 

### See, e.g., McDonough Props., L.L.C. et al. v. City of Wetumpka , FAA Docket No. 16-12-11; Va. One Dev., Inc. v. City of Atlanta , FAA Docket No. 16-12-09; Truman Arnold Cos. d/b/a TAC Air v. Chattanooga Metro. Airport Auth. , FAA Docket No. 16-11-08; N. Air, Inc. v. Cnty. of Kent, Mich. , FAA Docket No. 16-11-10. 15 

### For instance, FAA’s Part 16 “FAQ” specifically provides that “Responde nt’s answer may include a motion to dismiss the complaint, or any portion of it, with a supporting me morandum of points and legal authorities.” 16

14As far as the City can ascertain, FAA has not yet decide d any cases filed after the revised procedural rules went into effect on September 12, 2013; thus, there are no ex amples of cases where FAA has ruled on dispositive motions filed at the same time as the answer under the new rules.
15 It must be noted that one of Complainants’ counsels of record here is the same counsel who represented the complainants in TAC Air and Northern Air , and who is familiar with the procedure of filing dispositive motions together with the Answer.
16Fed. Aviation Admin., 14 CFR Part 16 Rules and Administrative Decisions: Frequently Asked Questions, http://part16.airports.faa.gov/index.cfm?pa ge=FAQ#A7 (last visited May 4, 2015).

### 18 Further, the Notice of Proposed Rulemaking (“NPRM”) that FAA issued in 2012, putting forth the rule Complainants now cite, also makes clear that FAA intended for respondents to have the option of filing dispositive motions before an answer to a complaint. The proceeding was put into place to benefit respondents faced with frivolous complaints. In the NPRM, the FAA specifically noted that “[s]pons or representatives in Part 16 actions have indicated to the FAA that the full process under the current rule is burdensome in cases where complaints may be considered frivolous.” Rules of Practice for Federally-Assisted Airport Enforcement Proceedings (Retrospective Regulatory Re view), 77 Fed. Reg. 13027, 13030 (proposed Mar. 5, 2012). In particular, airport s ponsors brought up “complaints they believe were filed merely to harass, intimidate, or cause financ ial hardship to a respondent.” Id. Those stakeholders “suggested that a responsive motion could be us ed to dispose of frivolous complaints.” Id. Accordingly, FAA adopted 14 C.F.R. § 16.26(a) to “relieve the respondent and the agency from completing a full investigative process in cert ain cases by allowing the respondent to file a motion to dismiss or a motion for summary j udgment in lieu of preparing an answer.” Id. Here, the City chose to provide FAA with a fu ll accounting of events at the Airport even when, as with Complainants’ claims regarding safety, they are outside Part 16 applicability. See 14 C.F.R. § 16.1(a). The City’s submittal into th e administrative record of detailed information and evidence regarding the events and circum stances surrounding the allegations and claims made by Complainants is not duplicative or bur densome and was submitted in the context of a paragraph-by-paragraph answer to allegations made by Complainants themselves. The submission of both motions and an answer simultaneously should not be “c onfusing” (Reply at 17): all of Complainants’ claims fail both as a matter of law and as to the facts. While the City continues to believe that dismissal as outlined in the Motion to Dismiss and Motion for SummaryJudgment is warranted and appropriate, the City provided a full response to Complainants' allegations, in case FAA deems an investigation to be necessary as an alternative means to reach

a determination. 

### IV. CONCLUSION
For the foregoing reasons, the City respectfully requests that the Complaint be summarily
dismissed as requested in the City's dispositive motions or that, in the alternative, it be dismissed
after full investigation.

May 7, 2015 Respectfully submitted,

Katharine M. Mapes Jessica R. Bell Spiegel & McDiarmid LLP 1875 Eye Street, N.W. Suite 700 Washington, DC 20006
Email: pablo.nuesch@ spiegelmcd.com Phone: 202-879-4000 Fax:**202~393-2866** Attorneys for the City of Bend, Oregon

19

# Exhibit 1C. E. "WtN 11 FRANCIS MARtiN E. HANSEN' GERALD A. MARTIN MicHAEL H. McGEAN t 

### FRANCIS HANSEN 

## & MARTIN UP. ATIORNEYS AT LAW 1148 NW HILL STREET, BEND, OR 97701-1914

PHONE,541-389-5010' FAx,541-382-7068 WWW.FRANCISHANSEN.COM

November 27, 2012 COPY BY EMAIL: gfirestone@ci.bend.or.us Gary Firestone Assistant City Attorney City of Bend 710 NWWall Street Bend, OR 97701 Re: Professional Air- Exclusive FBO Rights · Dear Gary: CHRISTOPHER j. MANFREDI t ALISON A. HUYCKE

SARAH E. HARLOS ALisoN G. HoHENGARhN

. t ADMJITED IN OREGON AND CALIFORN]A *ADMITIED IN OREGON AND WASHINGTON

Thank you for yol.ir letter of November 26, 2012, I will review that with my client. In your letter you asked me to provide the authoritythat gives the City of Bend the right to deny a request for an FBO to an otherwise qualified FBO operator. As 

### I told you in our meeting, the FAA crafted such an exception 

## a number of years ago to prevent precisely the type of problem that would face the City of Bend in this situation. I am enclosing with this ·- letter a copy of the FAA bulletin that outlines**th~** two conditions that must be met for a City. to deny an FBO to a qualified operator.

' ' , - I I believe that both conditions are present in the present case. As we discussed, current FBO ProAir is already struggling in its bus.iness atthe Bend Municipal Airport given the. dramatic reduction of private air service during the national recession. By adding a new FBO,.the City will impact l)egatively in a significant fashion the current FBO'sbusiness

.

. When ProAir has fewer airplanes to park and fuel, and thus service, the amount of leased ·

space utilized by ProAir will be greatly rectuced, This precisely meets the second criteria of 49 U.S.C. 

### § 47107.

· I would ask that you bring this exception to the attention of the City Council in their consideration of the current FBO lease request from Leading Edge Avii;ttion. The FAA rules and procedures provide the City of Bend protection from exactly the type of dama!Je to an ·existing FBO that would be caused by the addition of one or more subsequent FBOs such as Leading Edge Aviation. · · Please call me with any questions you might have.

. 

### . sincerely,

# .~**.** 

## .,----

.. · 

## ----.-

. . ... :::.-----. .

### -"'--~"-

. .
. .

_, ' ' . ' ---:-·--- ' . MARTIN 

## E: HANSEN MEH/kas

· Enclosure

cc.: Clients • • • ' t '09/30/2009 5190.68

exclusive right These airport sponsors must engage m such activities usmg their own employees.20 8.6. Airports Having a Single Aeronautical Service Provider. \Vhere the sponsor has not entered into an express agreement, commitment, understanding, or an apparent :illtent to exclude oilier reasonably qualified ente!],rises, tl1e FAA does not consider tl1e presence of only one· provider engaged in an aeronautical activity as a violation of the exclusive rights proillbitioll.2J The FAA will consider the sponsor's willingness to make the anvort available to additional reasonably qualified providers. (See paragraph 8.9.b of this chapter.)
8.7. Denying Requests by Qualified Providers.

a. Conditions for DeniaL The assurance prohibiting the granting of an exclusive right does not penalize a sponsor for continuing an existing single provider when both of the following conditions exist: (1). It can be demonstrated that it would be unreasonably costly, burdensome, or impractical for more than one entity to provide the service, and (2). The sponsor would have to rednce the leased space that is currently being used for an aeronautical purpose by the existing provider in order to acconnodate a second provider. In the

· case of denying additional providers, fue sponsor must have adequate justification and

documentation of fue facts supporting its decision acceptable to the FAA.
Bolli conditions must be met. (See 49 U.S.C. § 47107(a)(4)(A and B).)
b. Demonstrable Need. VilJlen fue service provider has space in excess of its reasonable needs and the sponsor clalins it is justified based on the service provider's future needs, the FAA may find the sponsor in violation of fue exclusive rights prohibition if fue service provider is banlcing land and/or facilities that it cannot put to gainful. aeronautical use in a reasonable period of time and/or the vacant property controlled by the service provider denies a competitor from gaining entry onto the airport. 

## A sponsor may exclude an incumbent on-airport service provider from responding to a requestfor proposals based on the sponsor's desire to increase competition in ailport sen,ices. That action is not a violation of Grant Assurance 22, Economic Nondiscrimination, since the sponsor is taking a necessarJI step to preclude the granting of an exclusive right

20 An aeronautical user exercising its right to self-service or self-fuel is also required to use its OVi'll employees and · equipment. 21 See 49 U.S. C. §§ 40!03(e) and 47107(a)(4). 

### Page 8-6

# Certificate of ServiceCertificate of Service

I hereby certify that I have today, the 7th day of May, 2015, caused the foregoing
Rebuttal to be served electronically, on the following:
Leonard 

### D. Kirsch, Esq. McBreen & Kopko 500 North Broadway Jericho, NY 11753 lkirsch @mklawnyc.com
Martin E. Hansen, Esq. Francis, Hansen & Martin LLP 1148 NW Hill St. Bend, OR 97701 meh @francishansen.com Attorneys for Complainants

# ~b'V**~** Pablo 0. Niiesch