UNITED STATES DEPARTMENT OF TRANSPORTATION FEDERAL AVIATION ADMINISTRATION

WASHINGTON, D.C.

AIR TRANSPORT ASSOCIATION OF AMERICA, INC. d/b/a AIRLINES FOR AMERICA, ALASKA AIRLINES, INC., AMERICAN AIRLINES, INC., ATLAS AIR, INC., FEDERAL EXPRESS AIRLINES, HAWAIIAN AIRLINES, INC., HORIZON AIR, JETBLUE AIRWAYS INC., SOUTHWEST AIRLINES CO., UNITED AIR LINES, INC., UNITED PARCEL SERVICE CO., and AIR CANADA,
Complainants,

v.

PORT OF PO RTLAND, OREGON,

Respondent. FAA Docket No. 16

- 16

- 04

COMPLAINANTS’ MOTION TO SUPPLEMENT RECORD TO INCLUDE FAA LETTER DATED NOVEMBER 17, 2016 AND RELATED PETITION FOR REVIEW
Designated for service of process:
David Berg Vice President & General Counsel Doug Mullen Associate General Counsel Air Transport Association of America, Inc. d/b/a Airlines for America 1275 Pennsylvania Avenue, N.W. Suite 1300 Washington, D.C. 20004 (202) 626

- 4234 Email: dberg@airlines.org dmullen@airlines.org
Counsel for Complainants

Dated: February 21, 2017 Roy Goldberg Steptoe & Johnson LLP 1330 Connecticut Avenue, N.W. Washington, D.C 20036 (202) 429

- 8028 Email:rgoldberg@steptoe.com1

Pursuant to 14 C.F.R. § 16.23(j ), Complainants Air Transport Association of America,
Inc., d/b/a Airlines for America (“A4A”), Alaska Airlines, Inc., American Airlines, Inc., Atlas
Air, Inc., Fedex Express Airlines, Hawaiian Airlines, Inc., JetBlue Airways, Inc., Southwest

Airlines Co., United Airlines, Inc., United Parcel Service Co., and Air Canada ( the
“Complainants”) respectfully move for leave to supplement their Complaint and Reply in this

case to include: (1) a letter from FAA Chief Counsel Reginald C. Govan, Esq. dated November

17, 2 016
, attached as Exhibit 1 hereto ( the “Govan Letter”); and ( 2 ) a Petition for Review filed
January 13, 2017 in the U.S. Court of Appeals for the Eleventh Circuit challenging the Govan

Letter

- Clayton County, Ga. et al.. v. FAA , No. 17

- 10210 (11th Cir.) (the “Eleventh Circuit
Petition”), and the correspondence attached as Exhibit 2 hereto.

Good cause exists for inclusion of the Govan Letter and the Eleventh Circuit Petition into

the record of this proceeding. None of these documents existed wh en Complain an ts filed their
Complaint and Reply, respectively, on Febr uary 10 , 2016, and May 25, 2016. The Govan Letter
was not issued until six months after Complainants filed their Reply, and only came to the
Complain an ts ’ attention after the filing of the Eleventh Circuit Petition last month.

The Govan Letter is highly relevant to this Part 16 proceeding because it acknowledges
, on behalf of FAA, that one of the key statutes prohibiting diversion of aviation

- generated

revenues

– 49 U.S.C. 47133

– applies not only to airport operators and governmental sponsors,
but also to local governments which do not own or operate an airport
, including the City of

Portland , Oregon . The Govan Letter states:

The FAA disagrees with [the] contention that the federal prohibition on the diversion of aviation fuel tax revenue for non

- aviation purposes only applies to state or local governments who received federal airport improvement grants or are an airport sponsor . We believe federal law prohibits all state and local2

governments from diverting aviation fuel tax revenues for any non

- aviation related purpose. (Letter, at 2) (emphasis added)

The Govan Letter is consistent with statements in the Federal Register notice regarding
revenue diversion issued by FAA on November 7, 2014 (79 Fed. Reg. 66282), including that : (1)
“§ 47133 imposes an obligation on entities that are not airport sponsors”; and (2) although the

“ FAA established policy on reve nue use refers to airport sponsors,

. . . that fact alone does not
deal with the breadth of § 47133, which imposes a federal statutory obligation on certain non

sponsors.” 79 Fed. Reg. at 66,285.

In a letter dated December 6, 2016, FA A Administrator Mich ael Huerta attached and
incorporated by reference the Govan Letter
, and stated:
The FAA believes that Federal law prohibits all state and local governments from using aviation fuel tax revenue for any nonaviation related purpose. The FAA is enforcing Congress’ mandate requiring aviation fuel tax revenues be used exclusively for aviation

- related purposes.
The FAA does not prohibit states or localities from imposing a direct tax on aviation fuel. However, the revenue use restriction u nder title 49 United States Code (U.S.C.), §§ 47107 and 47133, require the tax revenues to be expended for capital and operating costs of an airport or state aviation programs.

(Letter from Michael P. Huerta to Rep. David Scott, attached to Eleventh Circu it Petition).

The Eleventh Circuit P etition is relevant because it provides context to the significance,
meaning of and circumstances relating to the issuance of the Govan Letter. Although the

Eleventh Circuit Petition does not reci te the grounds for th e appeal, it attaches a letter from the
petitioners to the FAA dated September 13, 2016 which stated that the FAA, in its November 7,
2014 Federal Register notice, “could not have intended . . . to apply airport revenue diversion
principles described in 49 U.S.C. § 47133 to taxes imposed by local government entities . . . that
are not project grant recipients and have no ability to spend aviation fuel tax revenues for a3

purpose specified in 49 U.S.C. § 47133.” (Letter, at 1) However, the Govan Letter makes clear
the FAA’s position that airport revenue diversion principles do in fact apply to state and local

gover nments that do not own or operate an airport.
In the pending Part 16 case involving PDX, a primary issue has been raised by the
preliminary FAA determination (by FAA official Randy Fiertz) that the City of Portland fees for

offsite stormwater maintena nce and Superfund cleanup do not constitute unlawful revenue
diversion because they are “operating costs” of PDX. In characterizing the Portland fees as
“operating costs,” Mr. Fiertz stated that the fees arise “as a legal obligation incident to the
airpor t’s possessory interest in land necessary for the provision of aeronautical services.” July

30, 2015 Letter, at 1. In other words, according to Mr. Fiertz, the City of Portland obligates the
Airport to pay the fees, so they are therefore an operating cos t.
Complainants’ Complaint and Reply in this proceeding challenge Mr. Fiertz’ conclusion
that the fees constitute an “operating cost.” Complainants’ three expert witnesses conclude d that

the Portland fees cannot be “operating costs” of PDX because , among other things, the term
“operating costs” is subject to the following restrictions:

Kirk Shaffer: The fees must be for services or facilities provided to the

Airport

. Woody Jackson: Under the current version of OMB A

- 87, the costs that

are the subject of fees must be incurred in order to keep the Airport in “an efficient operating condition .”

Joan Stern: Utility costs which the Airport may seek to fund under

the PDX bond ordinance are limited to costs “for operating, maintaining a nd repairing the Airport.”
In addition, FAA cannot take the position in this proceeding that the Portland fees are
“operating costs” merely because they are imposed on PDX by the City of Portland. Such a
position cannot be reconciled with the Govan Lett er, which recognizes that state and local4

governments are subject to the federal prohibition against diversion of airport revenue. FAA’s
acknowledgement that the ban against airport revenue diversion applies to non

- airport sponsors
(such as the City of Po rtland) means that the FAA cannot absolve an airport (such as PDX)
paying airport

- generated revenues to a municipality (such as the City of Portland) merely
because the municipal government demands the payment of the airport

- generated revenues.

Stat ed otherwise, because the City of Portland must itself comply with the prohibiti on
against revenue diversion, it is untenable, and arbitrary and capricious, for the FAA to take the
position in this case that the payment of airport

- generated revenues to Por tland is an “operating
cost” of the airport merely because the City requires that the money be paid. The Port’s defense

– that the City is making it pay the fees

– cannot be sustained given that the City is violating
federal law in requiring the Airport t o remit the fees to be used for non

- airport purposes.

Section 47133(a), 49 U.S.C. states:
“(a) Prohibition.

— Local taxes on aviation fuel (except taxes in effect on December 30, 1987 ) or the revenues generated by an airport that is the subject of Federal assistance may not be expended for any purpose other than the capital or operating costs of

— (1) the airport ;
(2) the local airport system; or

(3) any other local facility that is owned or operated by the person or entity that owns or operates the airport that is directly and substantially related to the air transportation of passengers or property.” (Emphasis added)

This statutory provision makes clear that neither revenue d erived from aviation fuel taxes n or
airport

- generated revenue may be diverted from airports . Accordingly, the language quoted

above from the Govan Letter could just as easily have stated:5

The FAA disagrees with [the] contention that the federal prohibition on the diversion of airport

- generated revenue for non

- airport purposes only applies to state or local governments who received fe deral airport improvement grants or are an airport sponsor. We believe federal law prohibits all state and local governments from diverting a irport

- generated revenue for any non

- airport related purpose

. Consequently, it is clear that since the City can not divert airport

- generated revenues for a non

airport purpose, the FAA cannot absolve PDX of liability for remitting airport

- generated
revenues to the City merely because the City has obligated PDX to engage in the revenue

diversion.

For the reasons stat ed above, Complainants request that the record in his case be
supplemented with the enclosed Govan Letter (Exhibit 1) and the Eleventh Circuit Petition and
attached correspondence (Exhibit 2).

Respectfully submitted,

/s/ David Berg David Berg Vice President & General Counsel Doug Mullen A ssociate General Counsel Air Transport Association of America, Inc. d/b/a Airlines for America 1275 Pennsylvania Avenue, N.W. Suite 1300 Washington, D.C. 20004 (202) 626

- 4234 Email: dberg@airlines.org dmullen@airlines.org

Dated: February 21 , 2017 /s/ Roy Goldberg Roy Goldberg Steptoe & Johnson LLP 1330 Connecticut Avenue, N.W. Washington, D.C 20036 (202) 429

- 8028 Email: rgoldberg@steptoe.comCERTIFICATE OF SERVICE

I hereby certify that on the 21st day of February, 2017, I caused the foregoing Motion to Supplement of Complainants Air Transport Association of America, Inc. et al. to be served electronically by or via email on the following:
Pablo O. Nuesch, Esq. Spiegel & McDiarmid LLP 1875 Eye Street, N.W. Suite 700 Washington, D.C. 20006 Email: Pablo.nuessch@spie gelmcd.com
Counsel for Respondent Port of Portland

Roy Goldberg

## EXHIBIT 1Case: 17-10210 Date Filed: 01/13/2017 Page: 1 of 6Case: 17-10210 Date Filed: 01/13/2017 Page: 2 of 6Case: 17-10210 Date Filed: 01/13/2017 Page: 3 of 6Case: 17-10210 Date Filed: 01/13/2017 Page: 4 of 6Case: 17-10210 Date Filed: 01/13/2017 Page: 5 of 6Case: 17-10210 Date Filed: 01/13/2017 Page: 6 of 6

## EXHIBIT 2Case: 17-10210 Date Filed: 01/13/2017 Page: 1 of 7Case: 17-10210 Date Filed: 01/13/2017 Page: 2 of 7Case: 17-10210 Date Filed: 01/13/2017 Page: 3 of 7Case: 17-10210 Date Filed: 01/13/2017 Page: 4 of 7Case: 17-10210 Date Filed: 01/13/2017 Page: 5 of 7Case: 17-10210 Date Filed: 01/13/2017 Page: 6 of 7Case: 17-10210 Date Filed: 01/13/2017 Page: 7 of 7Case: 17-10210 Date Filed: 01/13/2017 Page: 1 of 22Case: 17-10210 Date Filed: 01/13/2017 Page: 2 of 22Case: 17-10210 Date Filed: 01/13/2017 Page: 3 of 22Case: 17-10210 Date Filed: 01/13/2017 Page: 4 of 22Case: 17-10210 Date Filed: 01/13/2017 Page: 5 of 22Case: 17-10210 Date Filed: 01/13/2017 Page: 6 of 22Case: 17-10210 Date Filed: 01/13/2017 Page: 7 of 22Case: 17-10210 Date Filed: 01/13/2017 Page: 8 of 22Case: 17-10210 Date Filed: 01/13/2017 Page: 9 of 22Case: 17-10210 Date Filed: 01/13/2017 Page: 10 of 22Case: 17-10210 Date Filed: 01/13/2017 Page: 11 of 22Case: 17-10210 Date Filed: 01/13/2017 Page: 12 of 22Case: 17-10210 Date Filed: 01/13/2017 Page: 13 of 22Case: 17-10210 Date Filed: 01/13/2017 Page: 14 of 22Case: 17-10210 Date Filed: 01/13/2017 Page: 15 of 22Case: 17-10210 Date Filed: 01/13/2017 Page: 16 of 22Case: 17-10210 Date Filed: 01/13/2017 Page: 17 of 22Case: 17-10210 Date Filed: 01/13/2017 Page: 18 of 22Case: 17-10210 Date Filed: 01/13/2017 Page: 19 of 22Case: 17-10210 Date Filed: 01/13/2017 Page: 20 of 22Case: 17-10210 Date Filed: 01/13/2017 Page: 21 of 22Case: 17-10210 Date Filed: 01/13/2017 Page: 22 of 22Case: 17-10210 Date Filed: 01/13/2017 Page: 1 of 6Case: 17-10210 Date Filed: 01/13/2017 Page: 2 of 6Case: 17-10210 Date Filed: 01/13/2017 Page: 3 of 6Case: 17-10210 Date Filed: 01/13/2017 Page: 4 of 6Case: 17-10210 Date Filed: 01/13/2017 Page: 5 of 6Case: 17-10210 Date Filed: 01/13/2017 Page: 6 of 6Case: 17-10210 Date Filed: 01/13/2017 Page: 1 of 2Case: 17-10210 Date Filed: 01/13/2017 Page: 2 of 2Case: 17-10210 Date Filed: 01/13/2017 Page: 1 of 7Case: 17-10210 Date Filed: 01/13/2017 Page: 2 of 7Case: 17-10210 Date Filed: 01/13/2017 Page: 3 of 7Case: 17-10210 Date Filed: 01/13/2017 Page: 4 of 7Case: 17-10210 Date Filed: 01/13/2017 Page: 5 of 7Case: 17-10210 Date Filed: 01/13/2017 Page: 6 of 7Case: 17-10210 Date Filed: 01/13/2017 Page: 7 of 7UNITED STATES COURT OF APPEALS FOR THE ELEVENTH CIRCUIT

ELBERT PARR TUTTLE COURT OF APPEALS BUILDING 56 Forsyth Street, N.W. Atlanta, Georgia 30303

David J. Smith Clerk of Court January 18, 2017 For rules and forms visit www.ca11.uscourts.gov

L'Erin Frances Barnes Fincher Denmark & Minnifield, LLC 8024 FAIROAKS CT JONESBORO, GA 30236

- 2528

William Hollis Buechner Jr. Freeman Mathis & Gary, LLP 100 GALLERIA PKWY SE STE 1600 ATLANTA, GA 30339

- 5948

Steven M. Fincher Fincher Denmark & Minnifield, LLC 8024 FAIROAKS CT JONESBORO, GA 30236

- 2528
Jack Reynolds Hancock Freeman Mathis & Gary, LLP 661 FOREST PKWY STE E FOREST PARK, GA 30297

Arash Ali S abzevari Freeman Mathis & Gary, LLP 661 FOREST PKWY STE E FOREST PARK, GA 30297
Appeal Number: 17

- 10210

- A Case Style: Clayton County, Georgia, et al v. Federal Aviation Administratio Agency Docket Number: FAA 2013

- 0988

This Court requires all co unsel to file documents electronically using the Electronic Case Files ("ECF") system, unless exempted for good cause.
Pursuant to Rule 15(c) of the Federal Rules of Appellate Procedure, you are hereby served with the following document which has been fil ed in this court:

Case: 17-10210 Date Filed: 01/13/2017 Page: 1 of 2Petition for Review
Every motion, petition, brief, answer, response and reply filed must contain a Certificate of Interested Persons and Corporate Disclosure Statement (CIP). Appellants/Petitioners must file a CIP within 14 days after t he date the case or appeal is docketed in this court; Appellees/Respondents/Intervenors/Other Parties must file a CIP within 28 days after the case or appeal is docketed in this court, regardless of whether appellants/petitioners have filed a CIP. See Fed. R.App.P. 26.1 and 11th Cir. R. 26.1

- 1.
On the same day a party or amicus curiae first files its paper or e

- filed CIP, that filer must also complete the court's web

- based CIP at the Web

- Based CIP l ink on the court's website. Pro se filers (except attorneys appearing in particular cases as pro se parties) are not required or authorized to complete the web

- based CIP.
Please use the appellate docket number noted above when making inquiries. See Fed.R. App.P. 16 and 17 as to the composition and time for filing of the record.
Attorneys who wish to participate in this appeal must be properly admitted either to the bar of this court or for this particular proceeding pursuant to 11th Cir. R. 46

- 1. In additi on, all attorneys (except court

- appointed counsel) who wish to participate in this appeal must complete and return an appearance form within fourteen (14) days. Application for Admission to the Bar and Appearance of Counsel Form are available on the Internet at www.ca11.uscourts.gov . The clerk may not process filings from an attorney until that attorney files an appearance form. See 11th Cir. R. 46

- 6.

Clerk ’s Notes : Certified List or Agency Record is due forty

- four (44) days from the date of this letter to this court.

Sincerely,

DAVID J. SMITH, Clerk of Court
Reply to: Denise E. O'Guin, A Phone #: (404) 335

- 6188

Enclosure(s)

DKT

- 8 Agency

Case: 17-10210 Date Filed: 01/13/2017 Page: 2 of 2