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UNITED STATES OF AMERICA

FEDERAL AVIATION ADMINISTRATION

WASHINGTON, D.C.

FLIGHTLINE GROUND, INC. d/b/a )

FLIGHTLINE FIRST, )

)

Complainant )

)

v. ) DOCKET NO. 16-11-01

)

LOUISIANA DEPARTMENT OF )

TRANSPORTATION AND DEVELOPMENT, )

AS SUCCESSOR TO THE LOUISIANA )

DIVISION OF ADMINISTRATION and THE )

BOARD OF COMMISSIONERS FOR THE )

MANAGEMENT OF THE LAKEFRONT )

AIRPORT; NON-FLOOD PROTECTION )

ASSET MANAGEMENT AUTHORITY, )

AS SUCCESSOR TO THE BOARD OF )

COMMISSIONERS OF THE ORLEANS )

PARISH LEVEE DISTRICT and ORLEANS )

PARISH LEVEE DISTRICT, DIVISION OF )

NON-FLOOD ASSETS )

)

Respondents )

REBUTTAL TO THE COMPLAINANT’S RESPONSE AND AMENDED

RESPONSE AND RESPONSE TO THE AMENDED COMPLAINT

BY THE MANAGEMENT AUTHORITY

COMES NOW Respondent, Non-Flood Protection Asset Management Authority,

successor to the Board of Commissioners of the Orleans Levee District and Division of

Administration, State of Louisiana, the governing the authority of the Non-Flood Assets of

the Orleans Levee District (“OLD”) including the New Orleans Lakefront Airport

(“Management Authority” or “Respondent”), through undersigned counsel, who files the

following rebuttal to Complainant’s response to the answer of the Management Authority

pursuant to §16.23(f) and response to Complainant’s amendments, all pursuant to FAA
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Order dated May 5, 2011:

RESPONSE TO AND REBUTTAL OF COMPLAINANT’S STATEMENT OF FACTS

According to Complainant, the underlying litigation and settlement thereof is nothing

more than a device employed to confer benefits on AeroPremier and Advantage Capital

to the detriment of Flightline. Complainant has now reduced its Part 16 Complaint into a

conspiracy theory which presupposes that the reputable, competent professionals involved

with the underlying litigation and the subsequent settlement agreement were colluding.

This is a slanderous allegation which could not be further from the truth. This allegation is

not only an insult but also a testament to the desperate nature of Complainant’s Complaint.

Complainant’s response is further filled with misrepresentations and outright

falsehoods. For example, the below are a few of the Complainant’s flawed statements

and/or failure to comprehend the significance of the Louisiana Court proceedings:

Complainant continually misrepresents the Settlement Agreement and the

Consent Order, both of which are in evidence and speak for themselves.

Contrary to the representations of Complainant, the OLD did take discovery

in the underlying litigation. 

It is not accepted custom, practice and procedure in the State of Louisiana

to sue the State of Louisiana through the Division of Administration in a suit

where the Orleans Levee District, Division of Non-Flood Assets is the lessor

of the lease which forms the basis of the underlying litigation. 

 Mr. Hodges’ affidavit is similarly flawed as it misrepresents the amount of the

Settlement Agreement and Ms. Sharp’s opinion. As stated in our response
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to the Complaint, Ms. Sharp’s opinion only estimated AeroPremier’s loss of

fuel sales as a result of respondent’s breach of the lease. 

 Also, Mr. Hodges incorrectly assumes that of the 24,000 square feet of office

contained in the NG Hangar, only 8,000 square feet was not improved. None

of the 24,000 square feet of office space was improved pursuant to the

requirements of the lease. All of the office space remains unimproved

although it is anticipated that it will be complete as of the end of this year.

Mr. Hodges’ affidavit is therefore critically flawed. 

 The rest of that affidavit contains legal conclusions which Mr. Hodges is not

qualified to make. Mr. Hodges’ lack of qualifications will be addressed more

fully later in this memorandum.

Complainant bases its entire Amended Complaint and Amended Response to the

Answer of the Management Authority on “newly discovered evidence”. That “evidence,”

which would never be accepted evidence in any court of law as it violates several standard

rules of admissability, is a statement made by a FEMA employee which appeared in an

article in the New Orleans City Business newspaper on April 8, 2011. In that article the

FEMA employee stated that he was “pretty certain” that FEMA funds necessary for the

repair of the National Guard Hangar were not deobligated by FEMA. However, the

attached emails from Ms. Lisa Smeltzer from the State of Louisiana Division of

Administration made it crystal clear that the said FEMA funds were deobligated in

September, 2007 and reobligated in December, 2008. See, Exhibit 1 attached. The FEMA

employee was therefore misinformed and the Complainant based an entire Amended
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Complaint and Amended Response on that misinformation. The pattern of using

misinformation is found throughout Complainant’s filings.

RESPONSE TO AND REBUTTAL OF COMPLAINANT’S LEGAL CONCLUSIONS

Complainant alleges that Respondent violated 49 USC §§47107(a)(1),(a)(5) for

allegedly assessing unjustly discriminatory rates and charges between Flightline and

AeroPremier. In support thereof, Complainant cites a significant amount of information that

was the subject of the underlying litigation. Simply put, Complainant and AeroPremier

have been charged the exact same rates. By definition and by Complainant’s own

documents, there has been no unjust discrimination between the two FBOs. 

Further, there is no document submitted in this proceeding that contends that

Complainant was coerced to accept the rates charged by the Respondent. The Associate

Administrator, in Aerodynamics of Reading, Inc. v. Reading Regional Airport Authority, FAA

Docket No. 16-00-03,p. 20 ruled that:

“...the FAA will not entertain a complaint about reasonableness

of a fee set by agreement when the complaint is filed by one of

the parties setting the disputed fee. [Policy Regarding Rates

and Charges, 61 Fed.Reg. 31994, 32018 (June 21, 1996).]

The gravamen of this complaint is whether the charges assessed to Flightline are

unreasonable.

There is no document in existence in this proceeding or in any correspondence

between the Complainant and the Respondent, and/or the FAA, in which the Complainant

requests to be charged the same rate as AeroPremier. The Associate Administrator, in

Aerodynamics of Reading, Inc. v. Reading Regional Airport Authority, FAA Docket No. 16-

00-03,p. ruled that:
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“In order to establish a claim of unjust discrimination, a

complainant must establish that it requested similar terms and

conditions as other similarly situated airport users and was

denied for unjust reasons.”

The FAA’s Airport Compliance Handbook 5190.6B, see especially p. 9-1 et. seq.,

makes some fairly common sense observations about enforcement of 49 USC §47107

(a)(1),(a)(5); the airport proprietor should establish a system of rates and charges for FBOs,

inter alia, for comparable facilities. The initial rates assessed to Flightline and AeroPremier

were exactly the same. When the Respondent failed to meet its contractual obligation to

AeroPremier, that FBO sued the Respondent in state court for the material breach of failing

to provide an essential part of any FBO operation, to wit, the offices from which to manage

such a facility. That breach of lease was litigated in the State Court proceeding and

ultimately settled through mediation after the OLD was adjudged to have breached the

lease. Complainant chose not to intervene in that State Court proceeding, even though its

allegations herein indicate that Complainant has/had issues with the resolution thereof. 

The Settlement Agreement which Complainant takes issue with was made subject to the

approval of the FAA which has stated that it does not approve or disapprove of such

agreements. The State Court proceeding (underlying litigation) is stare decisis. It seems

a waste of the FAA’s time (if not an abuse of its scarce resources) to reopen the underlying

litigation; therefore, the Respondent urges the Director to dismiss the instant Complaint.

The real problem behind this Complaint may actually involve the independent action

of the Complainant in investing in its facilities well beyond the Minimum Standards imposed

by the Authority. (See minimum standards 150/5190-7 - Minimum Standards for

Commercial Aeronautical Activities). Flightline decided on its own initiative to invest
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substantial capital into its facilities and has created an exceptional FBO. That commitment

of million(s) of dollars to its plant has positioned its company as a premier location, but has

also created a cost basis which may be a disadvantage compared to its competition. That

self-imposed economic disadvantage has been further exacerbated by the low cost, low

service status of AeroPremier. While outside of the purview of this proceeding, the

Authority will consider reviewing and updating its Minimum Standards.

Based on the above procedural and substantive arguments, the Respondent

respectfully requests that the Director dismiss the instant Complaint.

The Complainant asserts that the Respondent violated 49 USC §47107 (a)(13) and Grant

Assurance 25a by “diverting” Airport revenue to AeroPremier and Advantage Capital (page

43, inter alia, of the April 5 response; it is assumed that in the section marked “conclusion”,

Complainant has “consolidated” his many points into a few cogent thoughts). The statutory

language cited is totally inapposite to the allegation of diversion; the cited subsection

addresses the obligation of an airport to attempt to be self-sustaining. Grant Assurance

25a, however, speaks to revenue diversion and in an effort to resolve this allegation

expeditiously, the basis for dismissal of this charge will be stated here.

The revenue diversion language of the Act was enacted to prohibit airports from

siphoning revenues created on airports to local governments. If the legislative history was

not abundantly clear, then referral to the FAA’s rulemaking proceeding,

http://www.faa.gov/airports/resources/publications/federal_register_notices/media/obliga

tion_final99.pdf and/or Handbook 5190.6B would further clarify the inapplicability of this

provision. Perhaps the most explicit FAA pronouncement that this statutory policy is

focused on airport-to-local government transactions can be found at the Handbook ¶ 15.14,
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p.9, which states;

Prohibited uses of airport revenue include direct or indirect

payments that exceed the fair and reasonable value of those

services and facilities provided to the airport.

The issue in the instant proceeding is payments being paid by the tenant to the Airport.

The Director should dismiss this element of the Complainant’s prayer.

Complainant alleges that the Respondent has failed to meet its statutory obligation to make

the Lakefront Airport self-sustaining, 49 USC §47107(a)(13)(A) and Grant Assurance 24.

On a parallel level, it is alleged that the Authority has failed to maintain and operate the

airport in violation of 49 USC § 47107(a)(7). The Respondent admits that it suffered

through the most severe natural disaster that has occurred in the history of New Orleans,

the State of Louisiana and the Gulf Region, Hurricane Katrina. The FAA must take judicial

notice that the Respondent’s inability to forecast the incredible havoc wrecked on the

airport was consistent with the level of preparation of the mayors, governors and relevant

federal officials of the entire region. Given those facts, the Complainant’s allegations fail

to rise to the level of a violation of §§47107(a)(13)(A) or (a)(7). The FAA, in its statement

of Policy on Rates and Charges, 61 Fed.Reg. 31994 (June 21, 1996), see p. 32021, where

the following guidance is set:

At some airports, market conditions may not permit an airport

proprietor to establish fees that are sufficiently high to recover

aeronautical costs and sufficiently low to attract and retain

commercial aeronautical services. In such circumstances, an

airport proprietor’s decision to charge rates that are below

those needed to achieve self sustainability in order to assure

that services are provided to the public is not inherently

inconsistent with the obligation to make the airport as selfsustaining as possible in the circumstances.

The above language establishes that the Authority’s management does not fail either
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of these statutory mandates.

The Complaint includes allegations that the grant by the Respondent to AeroPremier

the right to sublease some of its leased space is a violation of a litany of grant assurances

and statutory provisions cited by Complainant. If granting the right to sublease space is a

violation of the statute, there are a number of airports around the country in violation.

THE RELEVANCE of MAI CREDENTIALS TO THIS PROCEEDING

The Complainant argues that the Respondent has violated the statute by the prices

(or as it has termed it, “the economic benefits” granted to AeroPremier). In support thereof,

the complaint includes lengthy text and even more exhaustive affidavits that opine on this

contention. The expertise cited is largely based on professional credentials, to wit MAI. The

educational, experiential and examination requirements for this designation are impressive

and demonstrate the designee’s ability to determine the value of property. The instant

proceeding is not about the value of the Lakefront Airport, the land value of the buildings

occupied by the FBOs or even of the buildings themselves. The issues in this proceeding

relate to the economic impact of the Respondent’s failure to deliver offices to AeroPremier

and the impact of that material breach on the ongoing business of the FBO. An MAI would

be useful if the Authority was selling the airport, which it is not. The value of the MAI

designation is at best tangential to this proceeding. It would be more relevant if the expert

proffered as credentials leadership of a AAAE committee on Rates and Charges or an FAA

advisory panel on unjustly discriminatory rates. That expertise is not part of the package

included in this complaint.
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FACTUAL REBUTTAL - THE ATTACHED REPORT PREPARED

BY THE AVIATION GROUP (TAG) PROVIDES HARD EVIDENCE 

THAT RESPONDENT IS IN COMPLIANCE WITH THE STATUTE,

REGULATIONS AND GRANT ASSURANCES.

The Complainant has filed a plethora of allegations and conclusions. The hundreds

of pages of pleadings filed herein by the Complainant rely heavily on interpretations and

extrapolations from the litigation in Louisiana upon which the Settlement Agreement is

based. The Complainant’s “experts”, who wrote the conclusory text, did not bring to this

proceeding extensive, direct experience operating and managing FBOs. Their perspective

does not relate to trying to impress a prospective tenant by walking her/him through the

FBO lobby or hangar. They have never endured the demands of the marketplace when

the competitor FBO has a price advantage. On the other hand, the principals of TAG have

years of hands on experience doing the actual work of running an FBO and that is the issue

in this proceeding.

In further contrast, the Respondent hired an independent consultant, TAG, to

examine all the facts of this proceeding and their charge included the development of

information outside of the Louisiana litigation. TAG examined the traffic data before and

after Katrina. They examined the airport plan. They assessed the actual into plane rates

offered by the FBOs. They tracked the history of the FBOs on the Airport and traced the

trends of the various companies that preceded the events at issue. In order to understand

the actions of the Authority, TAG measured the impact of Katrina on the region and the

Airport. They set, as a criteria for measuring the Respondent’s performance and of the

management’s decisions on the FBOs, their knowledge of other comparable airports. They

did independent economic and financial analyses.
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In short, TAG completed an independent, objective review of the actions at issue.

Their addressed each of the issues, cognizable by the FAA under the statute or the

regulations. As to each and every complaint, TAG’s report assesses the facts and refutes

that there were violations. In summary, TAG provided evidence, not conclusions, of how

the Respondent complied with all of its obligations.

Respondent reiterates its position that this Complaint should be summarily

dismissed.

Respectfully submitted this 2 day of June, 2011. nd

GERARD G. METZGER (APLC)

BY: s/Charles T. Curtis, Jr. 

GERARD G. METZGER (LSBA #9468)

EMAIL: gerry@metzgerlawfirm.com

CHARLES T. CURTIS, JR. (LSBA #4677)

EMAIL: ccurtis@metzgerlawfirm.com

829 BARONNE STREET

NEW ORLEANS, LA 70113

TELEPHONE: (504) 581-9322

FACSIMILE: (504) 581-2773

AND

J. E. MURDOCK, III

5034 NEBRASKA AVE.

WASHINGTON, D.C. 20008

TELEPHONE: (202) 333-5986

ATTORNEYS FOR RESPONDENT,

NON-FLOOD PROTECTION ASSET

MANAGEMENT AUTHORITY 
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CERTIFICATE OF SERVICE

I hereby certify that I have this day served the foregoing Answer on the following

persons at the following address via electronic mail:

Office of the Chief Counsel

Attn: FAA Part 16 Airport Proceedings Docket

AGC-610

Federal Aviation Administration

800 Independence Ave., S.W.

Washington, DC 20591

Email: 9-AWA-AGC-Part-16@faa.gov

Alan Armstrong, Esq.

2900 Chamblee-Tucker Road

Building 5, Suite 350

Atlanta, GA 30341

Email: alan@alanarmstronglaw.com

Counsel for Complainant,

Flightline Ground, Inc. d/b/a Flightline First

Brandon Brown, Esq.

1201 Capital Access Road

Baton Rouge, LA 70804

Email: brandon.brown@la.gov

Counsel for Respondent,

Louisiana Department of Transportation and Development

Dated this 2 day of June, 2011. nd

 s/Charles T. Curtis, Jr. 

CHARLES T. CURTIS, JR.

Counsel for Respondent, Non-Flood Protection 

Asset Management Authority