UNITE D STA T ES OF AMERICA FED ERAL AV IATION AD MI NI STRATIO N

W ASHINGT ON, D.C. FLI GH TLINE GR OU ND , I NC . d/ b/a ) F LI GH TLI N E F IR ST, ) ) Compl ain ant ) ) v . ) DO CK ET NO . 16- 11- 01 ) LOU ISIA NA

D EPAR TMEN T OF ) TRAN SP OR TAT IO N A N D D EV EL OP M EN T, ) AS SUCCESS OR TO T HE LOUISI ANA ) DIVISI ON OF ADMINISTRAT ION and THE ) BOARD OF COMMISSIONERS FOR T HE ) MANAGEMENT OF THE LA KEFRONT ) AIR POR T; N ON -F LOOD PR OTECTIO N ) AS SE T MAN AG EM EN T AUT HO RI T Y, ) AS S UC CE SSORTO THE BOA RD OF ) COMMISSIONERS OF T HE ORLEANS ) PARIS H LEVEE DIST RICT an d ORLEA NS ) PAR ISH LEVE E D ISTRI CT, DI VISI ON OF ) N ON
- F LO OD A SS ETS ) ) Res pondent s )

SU BM ISSI ON OF D OC UM EN TS IN RE SPON SE T O R EQU ESTF ORA DD IT ION A L IN FO RM A TI ON
CO ME S N OW the Non -F loo d P ro t e ct i o n As s e t M a n a g e me n t

A u t h o r i ty , a s su cc ess or to t he Boa rd of

Commis si oners o f the Or lea ns Lev ee D is tr ic t and Or lea ns Lev ee D is tr ic t, Di v is ion of Non -F loo d As set s, Res pondent i n t h e abov e c apti oned mat ter , and for i ts
re spons e to the req ues t of the Fede ra l Av iat ion Admi nis trati on ( FAA ) for addi ti onal in fo rm a ti o n an d do cu m e n ts , re sp e ct f u lly su b m it s t h e fo llo wing: Submiss ion of Relevant Documents The OLD reli ed on the fol low ing documents i n ent er ing i nto t he medi ated Sett lement- 2-

Agreem entw ith Aero Prem ier and Ad v ant age Capita l: 1. T he Ju dgme nt of the Cou rt holding the OLD liable to Ae roPrem ier fo r breach of the l ease. R espon dent = s E x hib itR -1 w hic h has been pr ev iou sl y su bmit ted and i s a ttac hed. 2. The r epor

t of LaPor

te S ehr t Romi g Hand. R espon dent = s Ex hibit R-3 w hich has prev iou sl y

been submi tted and i s a ttac hed. 3. T h e r e p ort of H arold As her . R espon dent = s E x hib itR -4 w hic h has been pr ev iou sl y

su bmit ted a nd i s a ttac hed. 4

. Ce rt a in t a x r e t u rn s wh ic h we re m a d e a va il a b le u n d e r s e a l o f co n f id e n t ia li t y. 5. AeroPremier = s l is t of c ust omers los t becau se of the l ack of a faci li ty

( Bui ldi ng 101)

. See R espon dent = s E x hib itR -7 w hic h i s a ttac hed hereto. 6. The r epor

t of The Av iat ion Group, pr epared after the mediat ed s ettl ement, prov ide deta il ed informati on concer nin g the Sett lementAg re ement an d the jus ti ficat ion therefore. That repor t was f iled in thes e proceed ing s w it h the Res pondent = s rebutt al and i s a ttac hed.

Justific ation for Settlement For the FAAto und erstan d the mot iv ation of the OL D to settle th e s t a t e court li ti g ati on i nit iat ed by AeroPremier , it is impor tant to un dersta nd th e factual and procedu ra l antec edents thatl ed to the mediat ed s ettl ement. Unde r the T ransp ortat ion Sta tute and the relevant FAApolicies, Airport Sp onso rs are ent it l ed t o us e th ei r b es t j ud g me ntt o s et tl e l aw s ui ts u s i ng a i r po rt r ev en ue i n c on c ert
w it h tho se stat utor

y and re g ula tor

y obli g ati ons. As ex pla ine d bel ow , bec ause (1 ) the O LD had bee n found l iab le for breach of the l ease w it h AeroPremier , (2) th e OLD faced a- 3-

subs tanti al ri sk

of a l arg e adv erse jud g ment i n the st ate l aw sui t, (3 ) the O LD re cog niz ed tha t its ex pert rep ort covered only one elem entof the da ma ges claimed byAeroPre mie r, lost f uel sale s, and (4) a settle me nt mean t tha t the OLD w ould not have to pay a mo net ary jud g ment, w hic h w oul d hav e al low ed AeroP re mier to offset100% of all amounts due OLD unti l the j udg ment w as pai d, t he OL D decided that itw as re asona ble to set tl e the st ate law sui t i mmediat ely

for rent c re dit s. W hen monet iz ed, t hese credi ts w er e much l ess than the a mounts AeroPremier co uld hav e recov er ed i n i ts law sui t. This se ttl ement w as b e tw een tw o adv ersar ial par ti es in a l aw sui t und er the jurisdiction an d com pet ency of a state cou rt and p ursua nt to the law s o f L ouisian a. T here
w as no c oll usi on and not a sc int il la of ev ide nce has been present ed to prov e c oll usi on. Any
suc h “ cons piracy ” w oul d hav e to, by defini ti on, inv olv e not onl y OLD and AeroPremier , but als o the j udg e of the Stat e of Loui si ana. The set tl ement w as not dis propor ti onate to t he ri sk s i n thi s l aw sui t and di d notpreju dic e any othe r par

ty , i ncl udi ng C omplai nant. AeroPremier

present ed a v er

y st ro ng ca se dur in g t h e s tate cour t l it ig ati on. The li ti g ati on beg an as a breach of leas e di sput e. The all eg ati ons w er e that the Orl eans Lev ee Di str ic t breache d the l ease by faili ng to re pai r AeroPremier ’s hur ri cane damag ed faci li ti es on time and disc ri minat ed agai nstAeroPremier in fav or of si mil ar ly -s it uated les sees at the Ai rp ort, inc lud ing the ins tant Compl ain ant. D ur ing the ear ly st ag es of the l it ig ati on, AeroPremier

obta ine d a p arti al summar y j udg ment for br each of the le ase based on t he OLD ’s failu re to re pai r the facil ity on a ti mely

bas is

. See R espon dent’ s E x hib itR -1

. The basi s for thi s par

ti cul ar cl aim w as that AeroPremier lea sed a larg e hang a r compl ex (B uil din g 101) , ram p s pace, and other faci li ti es from the OLD for u se as AeroPremier = s hang ar , F BO c ust omer ar ea, a nd office s pace. H ow e ver, si nce thi s faci li ty had been- 4-

damag ed by

H ur ri cane Katr ina , t he l ease re q uired th e OLD to re pair Bui ldi ng 101 by Aug ust2009. In the meanti me, AeroPremier w as forced to use a trail er /pre- fabri cat ed box
as a “ t e m p o r a ry” FB O custo me r area and of f ice. Th e OLD did n ot even initiate these
re pai rs by

the beg inn ing of Aug ust2009, w hic h w as w hen t hey w er e s u p p o se d t o be compl eted under

the lea se. AeroPremier al leg ed and prov ide d ev ide nce dur ing medi ati on that itw as los ing cu sto mers di re ctl y bec ause itl ack ed a per manent f a cil ity

. See Respo nde nt’s Exhibit R-7 attach ed. This facility w ill be rea dy for occup ancy on Feb ruary 1, 20 12. AeroPremier ’s ex per

t w it ness , an acc ountantnamed H arold As h e r, o p ined that AeroP remie r lost b etween $2 million an d $3 .5 m illion as a result of the OL D’s contract brea ches. He fu rther op ined thathad AeroPre mie r fa iled as a result of th e OLD’s action s, the l oss es w oul d hav e ex ceede d $5 mil li on. See Res pondent ’s Ex hib itR -4

. Pursuantto Lou isi a n a Civ il C ode Article 1997 : “An obligor in bad faith is liable for all the da ma ges, forese eabl e or n o t, t hat a re a di re ct cons eq uence of his fail ur e to per form.” As the law per mits , t he ex per

t’ s c alc ula ti on i ncl uded m o re than j ustl ostcu sto mers thatco uld be iden tif ied by nam e, an d also to ok into accou nt lo s t m a rke t share a nd o the r identif iable losses. T he FAA ’s Dece mb er 6 , 201 1 request for m ore informa tion cite s the OL D’s ex pert
re po rt t h a t s h o w s a l o s s o f a me r e $ 2 0 0 , 0 0 0

. S e e R e s p o n d e n t ’ s E x h i b i t R
- 3

. W h i le the OLD eng ag ed th is ex per t, the O LD w as conc er ned t hat it s ow n ex per t’ s re por t onl y co v er ed project ed lostf uel sale s. Amo ng the OLD’s con cerns w as tha t the OLD’ ex pert repo rt did
n o t in clu d e th e fo llo wing:

• Th e l o s s o f other rev enue s treams g e n e ra te d al ong w it h the l oss of fuel- 5- re v enue: In addi ti on to prov idi ng f uel , an FBO also ear ns subs tanti al re v enue th ro u gh t h e pro visio n of m a in te n a n ce , o f

f ice ren t, ha n g a r

fe e s, de ta ili n g, cate ring, renta l cars, travel serv ice fees, g roun d sup port, and tie down fe es. The OLD ’ ex per

t repor t di d noti ncl ude t hese other rev enue s our ces .

• The OL D ex per

t’ s repor t c ompar ed AeroPremier to one c ompeti ng F BO - Flig htline ; the re w as no comp arison t o t he o the r FBO, Odyssey /La ndm ark Avi ation . Th is w as imp ortan t beca use Ae roPrem ier arg ued thatthe Airpo rt’s
a c t io n s a ls o p la c e d A e ro P re m ie r a t a d is a d va n t a ge wit h re s p e c tt o O d ys s e y/ Landmar k. This F BO a lso o p e n e d a new off ic e and hang ar , l eav ing AeroPremier

as the onl y FBO at the Ai rp ort operati ng out of a tr ailer. OLD’s
ex per t repor t di d notco nsi der the addi ti onal mar ketsh ar e tha t Ae ro Premier coul d hav e tak en from O dy ss ey /Landmar k.

• The OLD ’s e x per t repor t di d notaddress w hen t he Ai rp ort w oul d c omplet e re pai rs to the hang ar

/off ic e compl ex . The r epor t i denti fies Apr il 2012 as the end of damag es per iod

. But ev en i f repai rs w er e c omplet ed by thatti me, there w oul d be si g nific ant resi dual eff ect s for an extended per iod of time on rev enu e cau sed b y

ope ning an off ice 2 y ears, 8 m ont hs late . Th ese damag es coul d hav e extended and mayin f actextend many y ears b ey ond the e v entual renov ati on c omplet ion . So me of t hese neg ati v e effect s c oul d be virt u a ll y irreversible

.

• The OLD ’s ex per t repor t di d nottak e i nto a cc ount th e cumulat iv e effectof bein g the only FBO at N ew Orlean s Lake f ront Airpo rt not ha v ing a first class off ic e/c ust omer ar ea. Each month of del ay resul ted in cus tomers d eci din g- 6- to go to a com pet itor w ith an of f ice w ith a resulta nt loss of f utu re custom ers and rev enue.

• AeroP remie r also argued tha t due to th e Airport’s actio ns, Ae roPrem ier lost Gulf Coast Aviation as a f uel, of f ice, ma inten ance , and tie-down custom er. T he a ppro x ima te loss for f iv e y ears w as estim ate d at $288 ,00 0; th e tot al loss for 10 y ears w as estim ate d at $4 48, 000 . AeroPrem ier also argued th at it lost Flig ht Aca dem y

of New Orleans as a cu stom er. T he tota l loss for f iv e y ears
w as est imat ed atapprox imat ely $214, 000.

• The OLD ex per t re p o rt a ls o w as all eg ed to hav e fail ed to co nsi der AeroPremier ’s los t profits for not bei ng abl e to subl ease of f ice sp ace. AeroPremier ’s pos it ion w as that itw oul d hav e l eased se v eral thous and sq uare feet of the hang ar /off ic e faci li ty

and an addi ti onal st ru ctu re ( Bui ldi ng 103 and N G O ff ic e) eac h y ear w it h a p ro fit marg in of at l east$3 p sf. The tota l fo r fi v e y e a rs w a s e s t i ma t e d a t$ 3 1 5 , 0 0 0 ; fo r 1 0 y e a rs a t$ 7 65,000. Othe r points raised include d prosp ective suble ase te nan ts for app rox ima tely 35,000 sq uare fee t of of fice spac e. In ad dit ion to Gul f Coas t Av iat ion , AeroPremier

al leg ed i t w as unabl e to acc ommodate a si g nific ant n umber of prosp ective tena nts, inclu ding an aviation m ainte nan ce scho ol and repair shop , Flig ht Aca dem y

of New Orlean s (they w ere tenan ts in AeroP remie r’s north han gar but mo v ed to Flightline’s mo re convenien t space nea r the ma in ter minal ), a mov ie stu nt c ompany , w h ich wa n ted t o uti li z e off ic e and
w ar ehous e s pace to br ing i n ce le b rities i n the ir ai rc ra ft to prepare for upco min g mo v ie stun ts. AeroP remie r believes had the space bee n available- 7- to l ease, i t w oul d hav e l eased mostof it

.

• AeroP remie r also argued tha t it w as harm ed by having its use of its leaseho ld redu ced b y

a n una uth oriz ed structu re (Building 105) be ing on its leaseh old and from the F li g htl ine se lf-se rvice pump, w hic h may hav e enc ro ached on the leaseh old. Italleged tha t it w as also harme d by not having equal acce ss (a s o ther

F BOs ) to area s o u tside of its l easeh old . There w as no cal cul ati on/es ti mate of thi s d amag e i n the OLD ’s ex per t repor t. Base d on the fact ors ex pla ine d abov e, an d ev en us ing the OLD ’s l oss numbers for fuel- re v enue c alc ula ti ons, AeroPremier ’s l oss es w er e al leg ed to be a min imu m of $2 mil li on up to $3.5 million. T he OL D’s ex pert rep ort also w as alleged to conta in oth er f law s, such
as the w ay

ex pense s w er e c alc ula ted a nd th e w ay the damag e per iod w as deter mined. The OLD Benefitted From the Settleme nt Had th e issue of

the amo unt of

dam ages - the only q uest ion rem aining in the b reach of contractl it ig ati on - g one t o trial , Ae roPr emier ’s recov er y may hav e been based on ide nti fiabl e l ostcu sto mers or cont ra cts , proje cte d rev enue an d mar ketsh ar e l ost , and any award by

the cou rt w ould likely

have req u ir e d t h e O L D to pay AeroPrem ier an award in
cas h. Any fair ev alu ati on of t he set tl ement, then, must cons ide r that the OL D der iv ed si g nific ant benefit from the g ra nti ng of rent credi ts pay abl e ov er a per iod of yea rs. F or e xa m p le , t h e O L D re t a in e d a r e ve n u e s t re a m f ro m A e ro P re m ie r a ll o f wh ic h wo u ld h a ve been l ostfor a si g nific ant per iod of t ime based on th e amountof monetar y damag es the
cour t w oul d hav e aw arded Ae ro Premier . The v alu e of thes e i ntang ibl e s m u s t b e c o n si dered in ev alu ati ng the set tl ement, w hic h benef it ted b oth s ide s. M or eov er , Adv antag e C api tal Par tners i nv est ed in AeroP re mier based on the v ar iou s c ontract ual r ig hts AeroPremier hadSahuque R eal t y C o. v. E m pl oyer

s C om m ercial

U ni on I ns. C o. , 32 7 S o.2d 56 3 (La

. A pp 4 C i r. 19 76 ), 1 c e rt. d e n . 3 3 0 S o .2 d 6 1 7 (L a .); Lou- C on, I nc. v. G ul f Bl dg. Ser vi ces, I nc. , 2 87 S o.2d 1 92 (L a.A pp . 4 C i r. 19 73 ), c ert

. de n. 29 0 S o.2d 89 9 (La

. ) and ce rt

. de n. 29 0 S o.2d 90 1 (La

. ).

- 8- under i ts FBO Leas e and other ag re ements al leg e d wit h t h e OLD

. This C ompany = s inv est ment t ur ned s our , al leg edl y a s a r e su lt of the b re ach of the l ease, prompti ng Adv antag e to file it s o w n c lai m for damag es ag ain st the OLD that w as ult imat ely resol v ed by the set tl ement. Cer

tai n tax retur ns w er e made av ail abl e to undersi g ned c ounse l under seal of confide nti ali ty

sh ow ing l o ss e s whic h far ex ceede d the amount of rentcredi ts attribu tab le to Ad v ant age’s losses. W it h l iab il ity

es tabl is hed, the l it ig a ti o n w oul d hav e c ome dow n to a c re dib il ity determ in a ti o n b y

the cour t on the c ompeti ng ex per t repor ts. W here l iab il ity

i s s how n, a claim w i l l n otb e r ej ec te d me r el y b ec au s e of u nc er

ta i nt y a s t o th e am ou nto f dam ages. W here damag es canno t be p re c i s e l y or mathemat ic all y

dete rmi ned, the c our

t i s v est ed w it h
mu ch discretion in makin g awards for dam ages. AeroPrem ier presen ted a respon sible 1
ex per t repor t - one that took int o acc ount all of the s our ces of re v enue k now n to hav e been dam aged atthe tim e the report w as w ritten. T he OLD’s expert report focuse d exclusiv ely on fuel sal es and fail ed to ac countfor o ther rev enue s treams. It w ould be inap prop riate for the FAAto secon d gue ss the Sp onso r’s decision to set tle
ra ther than r is k a factual dete rmi nati on on damag es by the jud g e i n the st ate c our t l it ig ati on. Th e C om pl ain t Sho ul d Be Di smis sed Last ly , as st ated in it s Answ er , the C omplai nant’ s C omplai nt s houl d be dis mis sed becau se itdi d notco mply w it h the req uirements of §16.21 “P re -C omplai nt resol uti on” as follows:- 9- Pr ior to fili ng a C omplai nt un der thi s p art, a person direct ly and subst ant ially

a f f ecte d by the alleged no ncom pliance shall ini ti ate a nd eng ag e i n g ood faith e fforts to resol v e the di sput ed matter i nformal ly

w it h tho se ind iv idu als or entiti es bel iev ed re spons ibl e for th e nonc ompli ance. These efforts at i nformal resolut ion may include , w ithou t limitat ion, at the parties’ ex pense , m e dia ti on, a rb it ra ti on, o r the u se of a di sput e re sol uti on board, or

othe r form of thi rd par ty as si sta nce. .. A Compl ain t und er

thi s p art w il l not b e c onsidered unl ess the person or

auth or iz ed represent ati v e fil ing the Compl ain t cer ti fies that subs tan ti a l and reason abl e g ood fait h efforts to re sol v e the di sput ed matt er i nformal ly

pr ior to fili ng the Compl ain t hav e been made a n d tha t t here appea rs no reaso nab le prospe ct for time ly resolution o f

t he d ispute . Th is cer ti fi c a t i o n s hal l inc lud e a b ri ef desc ri pti on of the par ty 's efforts to ob tai n i nformal resol uti on b ut shal l not inc lud e i nformati on on monet ar

y or othe r set tlement offers made butnot ag re ed upo n in w riting by all parties. Base d up on th e four corne rs of the Com plainta nd u pon informa tion a nd b elief , the re hav e been no ac tual “ g ood fait h efforts” to re sol v e the se is sues betw een F li g htl ine and the Spons or , and thus the Compl ain t mus t be dis mis sed. Ev en th oug h i n D ecember 2009, Fl ig h tl ine i nit iat ed w hat s eems t o hav e been a Par t 13 compl ain t abo ut a re ntal i ss ue inv olv ing AeroPremier , F li g htl ine ’s Par t 13 compl ain t does not just ify the commenc ement of a Par t 16 act ion w it hout further effort t o s eek a resol uti on of the is sues present ed i n the Com plaint . Mere allegation s of informa l discussion s do not constitute a good faith e f fort to resol v e i ss ues, but cons ti tute an u n warranted effort t o prev ent o r del ay the impl ementati on of the Sett lement

. Conclusion In further respon se to t he FAA

for a ddi ti onal i nformati on, R espon dent re it erates the sta temen ts made i n i ts or ig ina l Answ er to the C omplai nt reg ardin g j ust ific ati on for the set tl ement w it h AeroPremier , s peci fical ly found on p ag es 14, 15, 16 and 17. Res pondent- 10-

als o req uest s t hat t he F AA re- ex amine the repor t pr epared by

The Av iat ion Group ( TAG) atta ched to Respo nde nt’s rebu ttal. Res pondentreit erates i ts posi ti on th at t his C omplai nt be su mmari ly di smi ss ed. Res pectfully

su bmit ted t his 5 day

of Janua ry , 201 2. th

GERA RD G. M ETZGER (A PLC)
BY : s/C har les T . C ur ti s, Jr . GER A RD G. M ETZ GER

( LSB A #9468) EM A IL : gerry @me tzgerlaw firm.com CH A RL ES T . C URTI S, J R. ( LSB A #4677) EM A IL : ccurtis @me tzgerlaw firm.com 829 B A RO NN E ST RE ET NE W OR LEA NS , L A

70113 TEL EPH ON E: ( 504) 581- 9322 FACS IM IL E: ( 504) 581- 2773 A ND J. E . M UR DO CK , I II 5034 N EB RASK

A A VE. WASH IN GT ON , D .C . 20008 TEL EPH ON E: ( 202) 333- 5986 A TTORNEYS F OR RESPONDENT, NO N- FL OOD PR OT EC TI ON ASSET MA NAGEMENT A UTHORITY- 11- CERTIFICA

TE OF SERVICE I hereby ce rt ify thatI hav e thi s d ay

se rv ed th e foreg oin g Submi ss ion of Doc uments in Res ponse to Req uest for Addi ti onal Informati on on the follo w ing persons at the fol low ing add ress v ia electron ic mail: Off ic e of the Chi ef Couns el Attn : F AA P art 16 Ai rp ort Proceed ing s D ock et AGC -6 10 Fede ra l Av iat ion Admi nis trati on 8 0 0 I n d e p e n d e n c e Av e . , S

. W. W ashi ng ton, DC 20591 Email : 9- AW A- AGC -P art- 16@faa.g ov
Al a n Arm st ro n g, E sq. 2900 C hamble e- Tucker R oad Bui ldi ng 5, Sui te 35 0 Atl anta, GA 30341 Email : ala n@al anar mstrong law .co m Cou nsel for C omplai nant, Flig htline Ground , Inc. d/ b/a Flig htline First
Br a n d o n Bro wn, Es q. 1201 C api tal Ac ces s R oad Baton Rou g e, LA

708 04 Email : brandon.b ro w n@la .g ov Cou nsel for R espon dent, Loui si ana D epar

tment of Transp ortati on and Dev elo pment Dat ed th is 5 day

of Janua ry , 201 2. th

s/C har les T. C urti s, Jr

.

CHARLES T . CURTIS, JR. Cou nsel for R espon dent, N on- Fl ood Protec ti on A s s e tMa n a ge m e n tA u t h o ri t y