Case: 16-72827, 08/25/2016, ID: 10100384, DktEntry: 1-5, Page 1 of 55 

IN TIIE UNITED STATES COURT OF APPEALS 

FOR TIIE NINlli CIRCUIT 

THE CITY OF SANTA MONICA, 

v. 

FEDERAL AVIATION 

ADMINISTRATION, 

Petitioner, 

No.---~ 

Respondent. 

PETITION FOR REVIEW 

Pursuant to 49 U.S.C. § 46110 and Rule 15(a) of the Federal Rules of 

Appellate Procedure, the City of Santa Monica, a municipal corporation duly 

chartered under the Constitution of the State of California, hereby petitions the 

United States Court of Appeals for the Ninth Circuit for review of an order issued 

by Respondent Federal Aviation Administration ("FAA"). Specifically, the City 

seeks review of the Final Agency Decision and Order entered on August 15, 2016, 

and issued by the FAA in National Business Aviation Association, et al., v. City of 

Santa Monica, FAA Docket No. 16-14-04. A copy of the Final Agency Decision 

and Order, along with the underlying Director's Determination it affirmed, is 

attached hereto. 
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Dated: August 25, 20 16 

MARSHA JONES MOUTRJE 

City Attorney 

JOSEPH LAWRENCE 

Assistant City Attorney 

LANCES. GAMS 

IVAN CAMPBELL 

Deputy City Attorneys 

1685 Main Street, Room 310 

Santa Monica, California 90401-3295 

Telephone: (310) 458-8336 

2 

Respectfully submitted, 

Is/ Deanne E. Maynard 

DEANNE E. MAYNARD 

G. BRlAN BUSEY 

MORRJSON & FOERSTER LLP 

2000 Pennsylvania Avenue, NW 

Washington, DC 20006 

Telephone: (202) 887-8740 

DMaynard@mofo.com 

ZANE 0. GRESHAM 

JAMES R. SIGEL 

MORRJSON & FOERSTER LLP 

425 Market Street 

San Francisco, CA 94105 

WILLIAMV. O'CONNOR, JR. 

MORRJSON & FOERSTER LLP 

12531 High BluffDrive, Suite 100 

San Diego, CA 92130 

Counsel for Petitioner City of Santa 

Monica 
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EXHffiiT 1 

Final Agency Decision and Order, National Business Aviation Association, et al. v. 

City of Santa Monica, FAA Docket No. 16-14-04 (Aug. 15, 2016) 
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U.S. Department 

of T ronsportaffon 

Federal Aviation 

Administration 

August 15,2016 

Richard K. Simon 

1700 Decker School Lane 

Malibu, CA 90265 

G. Brian Busey 

Paul Varnado 

James Sigel 

Morrison & Foerster LLP 

2000 Pennsylvania Avenue, NW 

Washington, DC 20006 

Re: Docket No. 16-14-04 

Dear Counsel: 

OffiCe of Airport Compliance 

and Management Analysis 

800 Independence Ave., SW. 

Washington, DC 20591 

Marsha Jones Moutrie 

Joseph Lawrence 

Lance S. Gams 

Ivan Campbell 

Santa Monica City Attorney's Office 

1685 Main Street, Room 31 0 

Santa Monica, CA 90401 

Zane 0. Gresham 

Morrison & Foerster LLP 

425 Market Street 

San Francisco, CA 94105 

Enclosed is a copy of the final decision and order of the Federal Aviation Administration (FAA) 

with respect to the above-referenced matter. 

The FAA Associate Administrator for Airports affirms the Director's Determination, and concludes 

that the Director's analysis and conclusions are supported by a preponderance of reliable, probative, 

and substantial evidence, and is consistent with applicable law, precedent, and FAA policy. 

The reasons for upholding tbe Director's Deterrn.ination are set forth in the enclosed fmal agency 

decision. 

Sincerely, i/ - fD . I il.? 4--$V k i..~ • i.tJJ.Xk.,, 

KeVJ~C. Willis 

Acti g Director, Office of Airport Compliance 

and anagement 

Enclosure 
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CERTIFICATE OF SERVICE 

I HEREBY CERTIFY that on August 15, 2016, I caused to be emailed and placed in the United States 

mail (first class mail, postage paid) a true copy of the Final Agency Decision, to: 

FOR COMPLAINANT 

Richard K. Simon 

1700 Decker School Lane 

Malibu, CA 90265 

rsimon3@verizon.net 

FOR RESPONDENT 

Marsha Jones Moutrie 

Joseph Lawrence 

LanceS. Gams 

Ivan Campbell 

Santa Monica City Attorney's Office 

1685 Main Street, Room 310 

Santa Monica, CA 90401 

Marsha.moutrie@smgov.net 

G. Brian Busey 

Paul Varnado 

James Sigel 

Morrison & Foerster LLP 

2000 Pellllilylvania Avenue, NW 

Washington, DC 20006 

gbusey@mofo.com 

Zane 0. Gresham 

Morrison & Foerster LLP 

4 25 Market Street 

San Francisco, CA 94105 

zgresham@mofo.com 

Copy to: 

FAA Part 16 Airport Proceedings Docket 

FAA Airport Compliance and Management Analysis, 

AC0-100 

/) 

I ----7 A<::..- L- , 'll/Lru~ ' 

' ·nthia L Powe l 

Administrative Officer 

Office of Airport Compliance and Management Analysis 
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UNITED STATES DEPARTMENT OF TRANSPORTATION 

FEDERAl AVIATION ADMINISTRATION 

WASHINGTON, DC 

National Business Aviation Association, Krueger Aviation, 

Inc., Harrison Ford, Justice Aviation, Kim Davidson 

Aviation, Inc., Aero Film, Youri Bujko, James Ross, 

Wonderful Citrus LLC and Aircraft Owners and Pilots 

Association 

Docket No. 16-14-04 

Complainants 

v. 

City of Santa Monica, California 

Respondent 

ASSOCIATE ADMINISTRATOR FOR AIRPORTS 

FINAl AGENCY DECISION 

I. INTRODUCTION 

This matter is before the Federal Aviation Administration (FAA) Associate Administrator tor Airports on 

appeal filed by City of Santa Monica, California, (City/Respondent) owner, sponsor, and operator of the 

Santa Monica Airport (SMO). The City appeals the Director's Determination of December 4, 2015 issued 

by the Director of the FAA Office of Airport Compliance and Management Analysis, pursuant to the 

Rules of Practice for Federally Assisted Airport Enforcement Proceedings found in Title 14 Code of 

Federal Regulations (C.P.R.) Part 16. 

On Appeal, the City asserts that the Director erred in his analysis and the Director's Determination must 

be reversed, and contends that its Airport Improvement Program (AlP) grant assurance obligations expired 

in 2014. [fAA Item 22, pages 10 and 33]. The Complainants filed a Reply to the City's Appeal and 

argue that "the City's appeal and accompanying petition should be denied and the Director's Determination 

should be affirmed, including the finding therein that the City is obligated by the Grant Assurances 

through August 27, 2023." [FAA Item 24, page 15]. 

The Associate Administrator on appeal considers issues accepted in the Director's Determination using 

the following analysis: (1) Are the findings of fact each supported by a preponderance of reliable, 

probative, and substantial evidence contained in the record; (2) Are conclusions made in accordance with 

Jaw, precedent and policy; (3) Are the questions on appeal substantial; and (4) Have any prejudicial errors 

occurred. [14 C.F.R. § 16.33(e)]. 

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ln arriving at a final decision on this Appeal, the FAA has re-examined the record, including the 

Director's Determination, the administrative records supporting the Director's Determination, the City's 

Appeal, and the Complainants' Reply in light of applicable law and policy, and which comprises the 

attached FAA Index of Administrative Record. Based on this reexamination, the FAA concludes that the 

Director's Determination is supported by a preponderance of reliable, probative, and substantial evidence, 

and is consistent with applicable law, precedent, and FAA policy. The Associate Administrator finds that 

the City's Appeal does not contain persuasive arguments sufficient to reverse any portion of the Director's 

Determination. Accordingly, the Associate Administrator affirms the Director's Determination. 

II. THE PARTIES AND SUMMARY OF THE DIRECTOR'S DETERMINATION 

A. Airport 

SMO is a public-use airport owned and operated by the City. SMO serves the role of a general aviation 

airport capable of accommodating a ~ide range of business and personal aircraft, including corporate and 

business jets. The 227-acre airport has approximately 269-based aircraft with approximately 452 average 

aircraft operations per day. The airport is located in a congested air traffic area and serves as a reliever 

airport for Los Angeles International Airport (LAX), which is located seven miles to the south. 

FAA records indicate that the planning and development of SMO has been financed, in part, with funds 

provided by the FAA under the Airport Improvement Program (AlP), authorized by the Airport and 

Airway Improvement Act of 1982 (AAIA), as amended, Title 49 United States Code (U.S.C.) § 47101, et 

seq. Between 1985 and 2003, SMO received approximately $9.7 million in Federal airport development 

assistance. 1 

B. Complainants 

The Complainants include tenants ofSMO and organizations with members who are aviation users of the 

airport. The Complainants desire clarification concerning the expiration date ofSMO's grant assurance 

obligations as determined by the FAA. [FAA Item I]. The Complainants, as provided in the Complaint, 

are: 

The National Business Aviation Association, Inc. (NBAA) is a District of Columbia corporation that 

represents the interests of companies that operate aircraft. According to the NBAA, its membership 

includes more than l 0,000 companies that operate aireraft in conoection with their business or are 

otherwise involved in business aviation. These entities can or do utilize SMO including but not limited to 

Krueger Aviation, Inc. and Kim Davidson Aviation, Inc. 

Krueger Aviation, Inc. (Krueger) is a California corporation engaged in the sale and brokerage of aircraft 

at SMO, where it bas been a tenant for more than 40 years. Krueger currently occupies approximately 

10,000 feet of office and hangar space on two acres that it leases from the City on the south side of SMO. 

It leases office and hangar space to seven sub-tenant businesses and maintains tie-down space for 

approximatel.y 30 aircraft. 

Harrison Ford is an actor, businessman, and pilot. He has been a SMO tenant for 10 years, basing 

both fixed-wing (piston and jet) and rotor aircraft in his north-side hangar. Mr. Ford bas testified 

1 The Associate Administrator is not oddresstng any surplus property oblfgations since these iypes of obUgotion are nof ot issue in this 

cose. 

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before Congress as an advocate for general aviation and regularly flies missions in support of 

humanitarian causes. 

Justice Aviation, a California corporation, is a full service flight school and aircraft rental facility located 

on the south side of SMO. A tenant for 21 years, Justice Aviation currently employs eight flight 

instructors and maintains between 9 and II aircraft for instruction and rental. 

Kim Davidson Aviation, Inc., a California corporation, is an FAA certified Repair Station and a factory 

authorized Cirrus Aircraft service center located on the south side of SMO. It has been a tenant since 

1982, employing a staff of 11. 

Aero Film is a California limited liability company engaged in the production of television commercials. 

It is based at SMO, where it maintains offices and a hangar for two aircraft, a Cessna Citation II and an 

MD 500 helicopter, both of which are used in its business. Aero Film has been a tenant for 11 years. 

Y ouri Bujko, a tenant since 2008, is the owner and pilot of two aircraft, a Mooney Super M20 E and a 

Cessna Crusader, which he maintains for both business and personal use on the south side of SMO. 

James Ross is a recreational flyer who owns a Cessna I 70, based in tie-down space on the south side of 

SMO. He has been a tenant for 18 years. 

Wonderful Citrus, LLC (formerly Paramount Citrus LLCi, together with its affiliates, is the largest 

vertically integrated citrus business in the United States. Paramount Citrus Aviation, based in Bakersfield, 

California, is the business department of the agricultural based companies owned and operated by 

Wonderful Citrus LLC and its related entities_ Wonderful Citrus LLC and Paramount Citrus Aviation are 

jointly referred to herein as "Wonderful." Wonderful has been a user of SMO for more than 10 years, and 

logs approximately 235 monthly operations at SMO in support of its business operations. Wonderful 

relies on SMO as a vitai hub for employee travel to multiple destinations across the western United States. 

The Aircraft Owners and Pilots Association, Inc., (AOPA) is an independent, not-for-profit education and 

advocacy association incorporated in New Jersey and headquartered in Frederick, Maryland. According 

to AOPA, it is the world's largest aviation membership association, representing approximately 370,000 

pilots who fly for personal and business reasons. According to AOPA, more than 6,000 of its members 

are within a 25-mile radius of the City, and many of those members base their aircraft at SMO, including, 

but not limited to, Harrison Ford, Youri Bujko and James Ross. AOPA acts as their representative in this 

proceeding, consistent with FAA precedent. See, e.g., Bombardier Aerospace Corp. v. City of Santa 

Monica, Docket No. 16-03-I 1, Director's Determination, at I n.l and 22 (January 3, 2005). 

C. Summary 

On December 4, 2015, the Director, Office of Airport Compliance and Management Analysis, determined 

that the City remains obligated by the AlP grant assurances until August 27, 2023. The Director based 

this finding on the acceptance of AIP Grant Amendment No.2 (Amendment No.2) on August27, 2003, 

which resulted in additional AlP funds being provided to the City. The Director found that this 

acceptance of the FAA offer of additional grant funds, after the project had been completed, triggers the 

z on January 4, 2016, counsel for the Complainants filed a Notice of Complalnanf Nome Updates advtsing that Paramount Citrus 

LLC has changed to Wonderful Citrus, LLC The caption to thls case has been revised 1o reflect this name change, and to correctly 

identify NBAA- See FAA Item 23_ 

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grant assurances to remain in force for 20 years thereafter, expiring on August 27, 2023. FAA Item 20, 

page 19]. 

Ill. PROCEDURAL HISTORY 

On July 2, 2014, the FAA received a Part !6 Formal Complaint alleging that the City violated 49 U.S.C. § 

47107(a) and airport Grant Assurances. [FAA Item 1}. On July 17, 2014, the FAA issued the Notice of 

Docketing. [FAA Item 2]. On August 14, 2014, the City filed a Motion to Dismiss and on August 28, 

2014, the Complainants filed an Answer to the Motion to Dismiss. [FAA Items 3 and 4]. On October 20, 

2014, the City filed its Answer and on October 30, 2014, The Complainants filed a Reply to the 

Respondent's Answer to the Complaint. [FAA Items 5 and 6]. On November 11, 2014, the City filed a 

Rebuttal to the Reply Brief of Complainants, and on February 19, 2015, the FAA issued a notice 

requesting additional information from the parties regarding useful life. [FAA Items 7 and 8]. 

On March 25,2015, the FAA received information from the Complainants in response to the 

February 19'h notice requesting additional information. [FAA Item 9]. On April 1, 2015, the FAA · 

received information from the City based on the February 19, 2015 request. [FAA Item I 0]. On 

August 6, 2015, a Notice of Extension of Time to issue the Director's Determination to August 21, 

2015 was issued. [FAA Item 16]. This initial extension was followed by three other extension 

notices on August 21, September 21, and October 16, 2015. [FAA Items 17, 18, and 19}. 

On December 4, 2015, the FAA issued the Director's Determination, and on December 23,2015, the 

City filed a Request for Hearing. [FAA Items 20 and 21AJ.3 On January 6, 2016, the Complainants' 

filed a Reply to City of Santa Monica's Request for Hearing, and on January 8, 2016, the City filed 

its Appeal to the Director's Determination. [FAA Items 21 Band 22]. That same day, the City filed 

its Respondent City of Santa Monica's Petition to Supplement. [FAA Item 22A]. On January 28, 

2016, the Complainants filed their Reply of the Complainants to Respondent's Appeal from the 

Director's Determination and to Respondent~s Petition to Supplement the Record on Appeal. [FAA 

Item 24]. On March 28, 20!6, a Notice ofExtension of Time to issue the Final Agency Decision to 

June 15, 2016 was issued. [FAA Exhibit 25) This initial extension was followed by two other 

extension notices on June 22 and August 1, 2016. [FAA Items 26 and 27]. 

IV. BACKGROUND 

On January 31, 1984, the City and the FAA entered into a Settlement Agreement (!984 Agreement) 

setting forth the terms and conditions under which the City would continue to operate SMO. Under the 

Agreement, the City agreed to operate and maintain SMO without derogation of its use as a reliever 

airport until July I, 2015. [FAA Item I, Exhibit 5]. The 1984 Agreement, by its terms, did not address 

obligations after its expiration nor did it release the City from its AIP Grant or Surplus Property Act 

obligations. On June 29, 1994, the City applied for and accepted an AlP grant from the FAA for 

$1,604,700 for planning, airport development, or noise program implementation. (FAA Item 3 Exhibit A, 

page 2]. The grant was issued in 1994 under AlP Grant No. 3-06-0239-06. The projects under the grant 

were completed in two phases, with final inspection in August 1996 (Phase I). [FAA Item 13]. 

By letter dated August 2, I 999, the City asked to amend Grant No. 3-06-0239-06 to reflect modifications 

to the original scope of work under Phase L The letter indicated that the "request would not result in a 

3 The City filed a request for a hearing under 14 C.F.R. Part 16. The Complainants opposed the City's request for a heoring. on 

January 21.2016. the FAA denied the City'srequest. [FAA Item 21C]. 

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change in the total project budget cost under the grant. " [FAA Item 14]. On November 8, 1999, the City 

executed Amendment No. 1. [FAA Item 5, Exhibit 2]. By letter dated September 27, 2002, the City 

requested yet again to amend Grant No. 3-06-0239-06 (II) to "increase participation amount by $240,600 

to a total of$1 ,845,300 to reflect increased cost and changed conditions that occurred during 

construction." [FAA Item 5, Exhibit 4]. However, the FAA replied to the City and indicated that the 

1994 grant was "financially and administratively closed." [FAA item 12]. 

On May 7, 2003, the City submitted a second letter renewing the request for additional funds for the 

project. Notwithstanding that this request was being withheld pending the outcome of an FAA Notice of 

Investigation, the City "implore[ d] the FAA to reconsider this matter and approve" the amendment, so the 

funds can be used to enhance and maintain the Santa Monica Airport. [FAA Item 11]. As a result, the 

FAA agreed to "reopen the grant to amend the grant agreement, thereby increasing the maximum US. 

obligation." [FAA Item 12}. Accordingly, the FAA offered the City a grant amendment that increased 

the federal obligation to $1,845,300. The City accepted the offer on August 27,2003. [FAA Item 5, 

Exhibit 2]. The amendment provided, in part, 

The maximum obligation stated on Page 2, condition I, is hereby increased by $240,600.00, from 

$1,604,700.00 to $1,845,300.00. All other terms and conditions of the Grant Agreement remain in 

full force and effect. [FAA Item 5, Exhibit 2}. 

The Final Construction Report, Airport Improvements, Santa. Monica Airport, AlP Project NoJ-06-0239-

06 (II) provided the timing for Phase II and included a final inspection of the completed work on March 

27,2002. [FAA Item 13]. 

V. APPLICABLE fEDERAl. lAW AND FAA POLICY 

The Federal role in civil aviation is augmented by various legislative actions that authorize programs for 

providing Federal funds and other assistance to local communities for the development of airport 

facilitie.s. 1n each such program, the airport sponsor assumes certain obligations, either by contract or 

by restrictive covenants in property deeds and conveyance instruments, to maintain and operate its 

airport facilities safely and efficiently and in accordance with specified conditions. Commitments 

assumed by airport sponsors in property conveyance or grant agreements are important factors in 

maintaining a high degree of safety and efficiency in airport design, construction, operation and 

maintenance, as well as ensuring the public fair and reasonable access to the airport. 

A. The Airport Improvement Program (AlP) 

Title 49 U.S.C. § 47101, et seq., provides for federal airport financial assistance for the development of 

public-use airports under the AIP established by the Airport and Airway Improvement Act of 1982, 

(AA!A) as amended. Title 49 U.S.C. § 47107, et seq., sets forth assurances to which an airport sponsor 

agrees as a condition of receiving federal financial assistance. Upon acceptance of an AIP grant, the 

assurances become a binding contractual obligation between the airport sponsor and the federal 

Government. The assurances made by airport sponsors in AiP grant agreements are important factors in 

maintaining a viable national airport system. 

B. Airport Sponsor Assurances 

As a condition precedent to providing airport development assistance under AlP, 49 U.S.C. § 47107, et 

seq., the Secretary of Transportation and, by extension, the FAA must receive certain assurances from the 

airport sponsor. Title 49 U.S.C., § 47107(a) sets forth the statutory sponsorship requirements to which an 

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airport sponsor receiving federal financial assistance must agree, the FAA has also identified assurances 

that are necessary to carry out the program. The FAA has statutory authority to enforce compliance with 

the sponsor assurances. 

FAA Order 5190.6, FAA Airport Compliance Manual (Order), provides the assurances for sponsors and 

policies and procedures to be followed by the FAA in carrying out its functions related to compliance with 

federal obligations of airport sponsors. The FAA considers it inappropriate to provide federal assistance 

for improvements to airports where the benefits of such improvements will not be fully realized for the 

duration of their useful life or due to inherent restrictions on aeronautical activities. 

Assurance (B)(l ), which addresses the duration of the grant assurances, provides that "the terms, 

conditions and assurances of the grant agreement shall remain in full force and effect throughout the 

useful life of the facilities developed or equipment acquired for an airport development or noise 

compatibility program project, or throughout the useful life of the project items installed within a facility 

under a noise compatibility program project, but in any event not to exceed twenty (20) years from the 

date of the acceptance of a grant offer of federal funds for the project. However, there shall be no limit on 

the duration of the assurance against exclusive rights or the terms, conditions, and assurances with respect 

to real property acquired with federal funds. Furthermore, the duration of the Civil Rights assurances 

shall be as specified in the assurance." 

C. Appealing the Director's Determination 

A party adversely affected by the Director's Determination may file an appeal with the Associate 

Administrator within 30 days after the date of service of the initial determination. [ 14 C.F .R. § 16.33( c )J. 

The Associate Administrator does not consider new allegations or issues on appeal unless finding good 

cause to do so. [14 C.F.R. § 16.33(f)]. Review by the Associate Administrator is limited to an 

examination of the Director's Determination and the administrative record upon which such determination 

was based. Failure to raise issues and allegations in the original complaint documents may be cause for 

such issues and allegations to be deemed waived and not reviewable upon appeal. 

FAA's Responsibility with Regard to ~n Appeal 

Pursuant to 14 C.P.R.§ 16.33(b)(l), the Associate Administrator will issue a final decision on appeal from 

the Director's Determination, without a hearing, where the complaint is dismissed after investigation; a 

bearing is not required by statute and is not otherwise made available by the FAA; nr the FAA provides 

opportunity for a hearing to the respondent and the respondent waives the opportunity for a hearing as 

provided in subpart E of Part 16. In such cases, the Associate Administrator will use the following 

analysis: 

(1) Are the findings offact each supported by a preponderance of reliable, probative, and substantial 

evidence contained in the record? 

(2) Are conclusions made in accordance with law, precedent, and policy? 

(3) Are questions on appeal substantial? 

(4) Have any prejudicial errors occurred? [14 C.F.R. § 16.33(e); see also, e.g., Ricks v Millington 

Municipal Airport, FAA Docket No. 16-98-19, December 30, 1999, Final Decision and Order, p. 21]. 

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VI. ISSUES ON APPEAL 

The Associate Administrator has identified the following issues to be reviewed on Appeal: 

Issue 1-Whether the Director erred in finding that the City by entering into a 2003 Amendment to 

the 1994 grant agreement, extended the City's grant assurance obligations from 2014 to 2023; 

Issue 2- Whether the Director erred in finding that the Complainants demonstrated that they were 

"directly and substantially affected," as required by 14 C.F.R § 16.23(a); 

Issue 3-Whether the Director erred in finding that Complainants adequately pleaded a claim under 

Part 16 as required by 14 C.F.R. § 16.23(bJ(1); and 

Issue 4-Whether the Director erred in finding that the Complainants complied with the 

requirement under 14 C.F.R § 16.21 to engage in good faith efforts to resolve their complaint 

informally. [FAA Item 22, pages iHii]. 

VII. ANALYSIS AND DISCUSSION 

On Appeal, the City argues that the Director's Determination "is contrary to law, precedent, and policy 

and is arbitrary and capricious and an abuse of discretion." Each of the issues identified in Section VI 

above is addressed in this Section, and in addition the Associate Administrator is addressing, at the outset 

of this Analysis and Discussion, the City's Petition to Supplement the record. [FAA Items 22A and 22B]. 

On January 9, 2016, the City filed a Petition to Supplement the record. The City requests that it be 

permitted to supplement the record with a declaration of Susan McCarthy, former City Manager, and 

requests leave to supplement its petition to include a declaration of Jeff Mathieu, former Airport Director. 

On January !3, 2016, the City filed a Notice of Filing transmitting the declaration of Jeff Mathieu. [FAA 

Items 22A and 22B]. 

The City asserts the declarations from former City employees declare what they "actually understood in 

reviewing and executing the 2003 grant amendment." The City argues that good cause exists to allow this 

new evidence, and that these declarations represent the "first opportunity the City has to refute the 

Director's misstatement that the City 'knew or should have known' that accepting new funds would restart 

the date ofits grant assurances." [FAA Items 22A and 22B]. 

In response, Complainants assert that the City has failed to show any good cause for the submission of 

these declarations at this late date, and the City's request should be denied. Complainants claim the "new 

evidence proffered by the City is irrelevant because the City's contemporaneous-or even earliertmderstandings of the significance of its actions in 2003 are beside the point." [FAA Item 24, page 2]. 

Title 14 C.F.R. §16.33(!) states that "any new issues or evidence presented in an appeal or reply will not 

be considered unless accompanied by a petition and good cause found as to why the new issue or evidence 

was not presented to the Director," and that "such a petition must: (I) Set forth the new matter; (2) 

Contain affidavits of prospective witnesses, authenticated documents, or both, or an explanation of why 

such substantiation is unavailable; and (3) Contain a statement explaining why such new issue or evidence 

could not have been discovered in the exercise of due diligence prior to the date on which the evidentiary 

record closed." 

15 August 2016 Page 7 
Upon review ofthe City's submissions, the Associate Administrator finds that the declarations by former 

City employees McCarthy and Mathieu re-state the position taken by the City that it understood the 2003 

grant to be an amendment and not a new grant. In so doing, the declarations clarify the position of the 

City, and thus the Associate Administrator finds good cause to consider these declarations. Therefore, the 

City's petition is granted, and the declarations are admitted into the record. 

Issue 1-Whether the Director erred in finding that the City by entering into a 2003 Amendment to the 

1994 grant agreement, extended the City's grant assurance obligations from 2014 to 2023. 

The Associate Administrator has organized the City's arguments for Issue 1 under four primary subissues: (a) Plain Language; (b) Consideration; (c) New Obligation Akin to New Grant, and (d) Ambiguity. 

a. Plain Language 

On Appeal, the City contends the "the plain language of the agreements makes clear that the City's grant 

obligations expired in 2014." [FAA Item 22, page 1 0]. The City argues that the "proceeding should begin 

and end with the plain language of the agreements the City signed with the FAA," and that the 

"contractual language provides in no uncertain terms that any obligations the City incurred by executing 

the relevant agreements expired in 2014." [FAA Item 22, page II]. The City claims that Amendment No. 

2, executed in 2003, did not change matters, and expressly left the expiration date in place. [FAA Item 22, 

page 12]. 

In their Reply, Complainants point out that the "City does not dispute that the duration of the obligation 

period is not explicitly addressed by the 2003 grant modification, nor did any language in the 1994 grant 

agreement establish 2014 as an unalterable expiration date." Additionally Complainants argue that "the 

City's language-based argument for the interpretation of the 2003 grant modification is not compatible 

with the factual record or the law," and "instead, the FAA must determine how language in the 

modification should be interpreted." (FAA Item 24, page 4]. 

The Associate Administrator is not persuaded that the plain language of the grant amendment as asserted 

by the City establishes the grant expiration in 2014. On the contrary, a plain reading of the grant 

amendment language that "Ail other terms and conditions of the Grant Agreement remain in full force and 

effect" is reasonably read to apply to the Grant Assurance (B)(l) Duration and Applicability, and the 

conclusion that the City's grant assurance obligation expires in 2023. [FAA Item 3 Exhibit A].· 

The Grant Assurance (B)(I)Duration and Applicability Assurance in addressing the duration of the grant 

assurances provides that: The terms, conditions and assurances of the grant agreement shall remain in full 

force and effect throughout the useful life of the facilities developed or equipment acquired for an airport 

development or noise compatibility program project, or throughout the useful life ofthe project items 

installed within a facility under a noise compatibility program project, but in any event not to exceed 

twenty (20) years from the date of acceptance of a grant offer of federal funds for the project. However, 

there shall be no limit on the duration of the assurances against exclusive rights or the terms, conditions, 

and assurances with respect to real property acquired with federal funds. Furthermore, the duration of the 

Civil Rights assurance shall be as specified in the assurance. 

As tbe Director properly noted, Assurance (B)(!) does not provide a time-certain date on which the 

assurances expire, but rather provides the methodology for determining that date. And more importantly, 

it reflects the FAA's expectation that the benefit to the public extends, in general, for approximately 20 

years. [FAA Item 20, page 13]. 

15 August 2016 Page8 
Nat1onal . Case: 16-728?7 08/?S/2016 ID· 10100384 OktEntrv.: 1-5 PaCJB 14 of 55 BUSiness Aircraft ASSOCiOTIOn, e1 ol v. City of Santd li/lomca, California \f' AA Docket No. 16-14-04) 

The Associate Administrator finds that the Director did not err in fmding that the City by entering into a 

2003 Amendment to the 1994 grant agreement, extended the City's grant assurance obligations from 2014 

to 2023. As discussed below, the acceptance of a new grant offer restarts the 20-year clock. 

The City in its Appeal also claims that the 1994 AlP grant was consistent with the 1984 Settlement 

Agreement [FAA Item 1, Exhibit 5}. The City states that in accordance with the 1984 Settlement 

Agreement, the 1994 Grant Agreement did not "extend or alter the obligation of the City to operate the 

Airport," and "it continued to pennit the City to discontinue or otherwise modif'y operation of the airport 

as of July I, 2015 to serve the best interest ofits residents." [FAA Item 22, pages II and 12]. The City 

adds that "given the June 30, 2015 termination date of the 1984 Agreement, the City considered one of the 

1994 Grant Agreement's most important terms and conditions to be that any obligation imposed by the 

Agreement would expire in2014" and that "Amendment No.2 made clear that this 2014 expiration date 

remained in full force and effect" [FAA Item22, page 13]. 

In 1\.rrther support, the City relies on the declarations submitted by the former City Manager Susan 

McCarthy and the former Airport Director Jeff Mathieu. Ms. McCarthy in her declaration explains that 

she signed Amendment No.2, and that it was the City's policy "to not take any action that could extend 

the time beyond July I, 2015 that the City would be obligated to operate the Airport" [FAA Item 22A]. 

Mr. Mathieu, in his declaration, references a City Staff Report that states "Any acceptance of funds for 

this grant will not bind the City to operate the airport beyond the 2015 date established in the 1984 

Agreement with the FAA." Mr. Mathieu declares that had he been aware that an amendment to the 1994 

grant at,>reement would further obligate the City to operate the Airport past the expiration of the 1984 

Agreement, he would have taken steps to make sure that City staff not execute such an amendment. fF AA 

Item 22B]. 

Complainants contest the City's position that the 1984 Agreement "represented the definite end of the 

City's legal obligation to operate the Airport." [FAA Item 24, page 3]. Complainants point to language in 

the Director's Determination for its position that "federal funding of program improvements intended to 

further this Agreement, executed prior to July 1, 1995' shall not extend the City's obligation to operate the 

Airport. Indisputably, the 2003 grant modification was executed after July 1, 1995." [FAA Item 24, page 

4, and Director's Determination, Item 20, page 18]. 

The Associate Administrator found Ms. McCarthy's and Mr. Mathieu's respective declarations helpful in 

clarifying the City's position that the funds received in 1994 did not extend the City's obligation to 

operate the airport beyond July I, 2015, the date set by the 1984 Settlement Agreement. However, the 

fact remains that the City executed an amendment in 2003 well after the July 1, 1995 date set out in the 

1984 Settlement Agreement. The Associate Administrator is not persuaded by the City's argument that 

the 1984 Agreement arbitrarily controlled the expiration date of an amendment to the 1994 grant when it 

was signed eight years after the July 1, 1995 recognized date. 

The 1984 Settlement Agreement itself makes clear that only those grant agreements executed prior to July 

1, 1995 would not extend or alter obligations. [FAA Item 1, Exhibit 5, pages 8-9]. The amendment at 

issue here concerns the 2003 AIP grant 

Against this background, the Associate Administrator finds that the 1984 Agreement does not set or 

otherwise limit the expiration date or consideration of the 2003 grant amendment to 2014. 

15 August 2016 Page 9 
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Natrona! Bus1ness AwcrdffAss'oclo'lion, efal v. City o :>anla Mon1ca, CaTiforn1a fCAADocket No. 16-14-04) 

b. Consideration 

On Appeal, the City challenges the Director's finding relative to the need for the City to provide 

something in exchange for the additional funds provided by FAA, namely an exchange of consideration. 

The City claims that the "Director erred in presuming that in 2003 consideration was necessary or even 

relevant." The City asserts that the Director failed to cunsider the possibility that, under general principles 

of contract law, a modification to a preexisting contract of this sort may be affected without consideration. 

[FAA Item 22, page 14]. The City contends that the Supreme Court decisions relied on by the Director 

"do not, however, stand for the proposition that each and every payment of federal funds must be 

supported by consideration," but rather they "instead describe the limits of the federal government's 

power to impose conditions on the recipients of federal funds." [FAA Item 22, page 1 5]. 

The City asserts that "even if the City were required to provide consideration in exchange for the FAA's 

increase in funding, the Director erred in concluding that this consideration must have been the City's 

acceptance of an additional nine years of grant assurance obligations." The City states its promise to "use 

the reimbursement funds to 'enhance and maintain the Santa Monica Airport' was itself beneficial to the 

FAA.'' [FAA Item 22, page 16]. 

The Complainants contend that the Director was correct to conclude that the 2003 grant modification 

required consideration, and that to the extent it did, the 2023 date was the consideration. The 

Complainants claim that '"it is well established that federal government officers lack authority to enter into 

contracts, including modifications, under which the government receives nothing." [FAA item 24, page 

8]. In further support of their position, the Complainants rely on State law in claiming that "in California 

it remains mandatory that contract modifications be accompanied by consideration.~ [FAA Item 24, page 

9]. 

'!1Je Associate Administrator does not find that the Director erred when be concluded that there was 

consideration for the 2003 grant amendment. [Item 20, page 16]. The Associate Administrator agrees 

with the Director that the 1994 old grant had been closed and the second amendment was mutually agreed 

to and signed by both parties, and that there was an AlP grant offer, acceptance and an exchange of 

consideration (emphasis added). 

As discussed in the Background section, the FAA closed the 1994 grant in 2001 and only after the City 

"implored" the FAA to provide the funds did the FAA agree to the City's request for additional funds. 

The receipt of these additional funds is the critical factor here. The Director properly noted "it is clear 

what consideration the FAA provided - additional funding," for new infrastructure, and simply continuing 

to adhere to the grant assurances using the date of the award of the original grant would provide no new 

consideration to support the additional funds provided. Even the City gives tacit acknowledgment that 

consideration could be required in exchange for the FAA's increase in funding, while disagreeing on the 

fonm of the consideration. [FAA Item 22, page 16]. 

The Associate Administrator finds that the Director did not err in finding that the extension of the grant 

assurance obligations until 2023 was appropriate consideration in exchange for additional federal funds 

provided to the City. 

c. New Obligation Akin to New Grant 

15 August 2016 Page 10 
. Case: 16-72827, 08/25/20t6 JD· 101p0384, Dkt[=:ntrv: :),-5, Pag_e 16 of 55 National Bus1ness Alrcrat!Assoc,afron, e al v. City o ,onto Mon1ca, California [rAA Docket No. 16-14-04) 

On Appeal, the City challenges the Director's premise that Amendment No. 2 was akin to a new grant, 

rather than a mere modification of the existing grant agreement. The City explains that "an examination 

of the panoply of laws, policies, practices, precedent, and guidance regarding FAA grant assurances 

reveals no category of modification 'akin to a new grant.' Nothing in the grant assurances themselves, or 

in any agency guidance materials, refer to such a concept" [FAA Item 22, page 23}. The City states that 

"no where does it indicate that, by simply increasing funding for an existing gran!, such an amendment 

may in fact be 'akin to a new grant.'" [FAA Item 22, page 24]. The City claims that the FAA's 

"omissions [in not reporting about the grant Amendment No. 2 in the new AlP Grant Awards or in the 

Grant Histories database] confirm that the agency did not consider the City to have been awarded a new 

grant or anything akin to a new grant in 2003, when the parties executed Amendment No.2." [FAA Item 

22, page 25]. 

The Complainants dismiss this claim as "much ado about nothing," and that it was "presumably not the 

Director's intent to suggest the existence of or create a new FAA funding category." [FAA Item 24, pages 

10 and 11]. 

The Associate Administrator agrees with the Complainants' position on this sub-issue. In no case does the 

Director's one reference to the word "akin" in the phrase that "the Second Amendment was a new 

obligation akin to a new grant" to mean the Director was creating a new category of grant modification. 

The plain meaning of the word "akin" is similar or related, and that is what the Associate Administrator 

surmises was the Director's intent in noting that the 2nd Amendment was a new obligation akin to a new 

grant. 

The Associate Administrator concurs with Director's position that a new obligation of funds via a second 

amendment that was mutually agreed to and signed by both parties, was an AlP grant offer, acceptance 

and an exchange of consideration. The Associate Administrator also wants to make clear that in no case 

did the Director's Determination announce an abrupt and arbitrary change in the FAA's treatment of grant 

obligations, and there is no requirement for notice and comment as argued by the City. 

The FAA's concurrence to increase the federal invesrment into SMO was done through a grant 

amendment to a re-opened AlP grant. This amendment did not have itq own expiration date, but rather 

made direct reference to the required AIP language for such grants, which specifically refers to the useful 

life of the improvements not to exceed 20 years. The issue then is to discuss the impact of the new 2003 

AlP grant amendment upon the expiration date to which the City would be obligated. As noted in the 

grant agreement itself, the date is determined by the(!) useful life of the project and (2) the not-to-exceed 

date of no more than 20 years from acceptance of the grant offer. 

The AlP grant and funds offer referenced here is the 2003 offering. The Associate Administrator fmds that 

the Director properly concluded that the grant assurance obligation maximum duration is 20 years from 

the date of acceptance ofthe grant- August 27,2023, rather than the longer useful life date of March 27, 

2027.4 

d. Ambiguity 

On Appeal, the City claims that the Director's Determination was premised on a misapplication of basic 

contractual principles permitting the FAA to resolve any ambiguity in its fuvor. The City states that "here 

4 The Director's useful life finding was not ra!sed on appeal, and thus is not at l:.sue in thfs decision. 

15 August 2016 Page 11 
Case: 16-72827,08/25/2016 ID· 10lp10384, DktEntr\1: 1-5 PaQR 17 of!'i5 National Bus1ness 7\ircrdtf 7\ssoclofion, ef al v. Cify o S"on1a Monica, caiTforhJa (CAA Dodet No. 16-14-04) 

the FAA drafted both the 1994 Grant Agreement and Amendment No. 2," and that "to the extent that these 

agreements create ambiguity as to the duration of the City's grant obligations, the City's reasonable 

interpretation must prevail over that of the FAA." [FAA Item 22, pages I 7 and 18]. 

The City takes the position that the Director's "newfound rule that certain amendments to grant offers will 

again trigger the grant assurances is ambiguous and procedurally improper," and ''the ambiguity inherent 

in the Director Determination's attempt to shoehorn Amendment No.2 into the category of"new grants' 

is illustrated by its differing treatment of Amendmen! No.1." [FAA Item 22, pages 26 and 27]. The City 

contends that the Director suggested that Amendment No. 1, unlike Amendment No.2, would not have 

restarted the Assurance B(l)'s 20-year clock. [FAA Item 22, page 27, citing to Director's Determination, 

at page 16 ], and the City asserts that the Director cited "two separate and not necessarily congruent 

rationales for this distinction: (I) Amendment No. J continued to provide that there would be 'additional 

work performed'; and (2) Amendment No. 1 'add[ ed] no funds."' [FAA Item 22, page 27]. 

The Complainants assert that the City's argument "that even if the language of the 2003 grant 

modification is not unambiguous it should be construed against the FAA." Complainants represent that 

this argument was fairly considered and properly rejected by the Director, in reliance on the Supreme 

Court's holding in Bennett v. Kentucky Department of Education, 470 U.S. 656,669 (1985), 

distinguishing U.S. v. Seckinger, 397 U.S, 203, 210 (1970). The Complainants claim that "the language in 

the 2003 grant modification must be construed in favor of the FAA," and "for grants that originate in and 

are governed by federal statutes, the standards of construction governing statutory interpretation, not the 

rule of contra proftrentem, are to be applied." [FAA Item 24, pages 4 and 5]. 

The Associate Administrator finds that the City has misconstrned the Director's language as to 

Amendment No. L For clarity it is necessary to include the Director's precise wording, "Unlike the first 

amendment to the grant, changing the description of work but adding no funds, the second amendment 

involved an additional significant obligation of federal funds and no additional work performed or benefit 

to the public other than from the exteusion of the grant covenant.~." [FAA Item 20, page 16]. 

The Associate Administrator is not persuaded by the City's arguments. The Director properly concluded 

that federal grants are a hybrid -partly a contract in terms of voluntary offer, acceptance, and 

consideration, and partly a creature of statute, and properly relied on the Supreme Court's holding in 

Bennett. [FAA Item 20, page 18]. 

Additionally, the Associate Administrator does not find that the Director's Determination was premised 

on a misapplication of basic contractual principles that permitted the Director to resolve an ambiguity in 

FAA's favor. The Associate Administrator finds that the Director did not err in concluding that the 

expiration of the City's grant obligations was based upon its execution of Amendment No. 2 and its 

receipt of additional funds in 2003. As the Director recognized, courts have held that FAA is entitled to 

deference in interpreting its grant assurance obligations.5 [FAA Item 20, page 18]. 

Conclusion Issue 1 

Against this background, the Associate Administrator rejects the City's arguments, and concludes 

that the Director's DeteiT!lination was not arbitrary, capricious, or an abuse of discretion. The 

~See BMI Salvage Corp. v. Federal Aviation Administration. Miomi-Dode County, Florida, U.S. Court of Appeals llfh Circuit No. i 1~ 

12583, {July 19, 20 12), the court found because the FAA's interpretation is not plainly erroneous or inconsistent with the statute, we 

conclude that the FAA's finding that demorrtion is non-aeronautical is entitled to deference. 

15 August 2016 Pagel2 
Case: 16-77R27, 08/25/2016 10· 10100384, DktEntry: l-5, Pag_e 18 of 55 Notional Bus1ness AJrcrCilf 7\ssocJofion, et al v. City of Sonia Mon1ca. California [tAA Docket No. 16-14-04) 

Associate Administrator finds the Director did not misapply the plain language of the Agreements, 

did not reject the plain meaning of the contractual language; or did not make newfound contractual 

interpretations, and finds that all other arguments made by the City are not supported by the 

evidence in the record. Consequently, the Associate Administrator fmds that the Director correctly 

determined that the City, by requesting accepting, and receiving the FAA offer in 2003 for additional 

funds results in the City's grant assurance obligations being extended from 2014 to 2023. 

Issue 2 - Whether the Director erred in finding that the Complainants demonstrated that they were 

"directly and substantially affected" as required by 14 C.F.R § 16.23(a). 

The City takes the position that Complainants have not been "directly and substantially affected by any 

alleged noncompliance," and thus they lack standing. The City also argues that "because the City has not 

engaged in any 'noncompliance' at all·--alleged or otherwise-the Complainants cannot satisfy this 

standing requirement." [FAA Item 22, page 29]. The City also asserts that Complainants "have failed to 

allege any concrete harm whatsoever" and "[i]nstead, they have offered vague and conc!usory allegations 

that their 'business and operations already have been, currently are, and will continue to be adversely 

affected by the City's repeated public announcements' concerning the airport's future." 

The City also states that "even if the City had somehow repudiated the Grant Agreement, the 

Complainants are not themselves parties to that contract, and may complain of such a breach only if it 

somehow injures them." Finally, the City rejects Complainants' assertion and the Director's 

Determination that being "directly and substantially affected" can be related to the "uncertainty" created 

by the City's position with regards to its grant assurances. [FAA Item 22, pages 30 and 31]. 

In their Reply, Complainants state that they are directly and substantially affected. Complainants add that 

"as recognized by the Director's Determination, Complainants are directly and substantially affected by 

the uncertainty created by the City's defiant and unique position that it simply is no longer obligated to 

comply with [Grant Assurance] (B)(l), or any other of the Grant Assurances." Complainants assert that 

"they cannot plan for the future - as they are entitled to do - without the certainty that the City will comply 

with fundamental ground rules," since the City had made clear "its intent to close the Airport at first 

opportunity." [FAA Item 24, page 13). 

The Associate Administrator finds that a review of the record substantiates that Complainants are in fact 

directly and substantially affected by the City's stated position that its grant obligations have expired. As 

correctly noted in the Director's Determination, Complainants' concerns are reasonable and based upon 

directions the City Council has provided to City staff (i.e. directing studies of potential closures) and a 

City Resolution, passed in 1981 but never rescinded, that states the policy of the City is to close the 

airport. [FAA Item 20, pages 9 and10]. 

Moreover, the Director properly recognized that the City is currently appealing an order dismissing a case 

in which the City challenged its Surplus Property Act (SPA) obligations and seeks an order "that the 

United States shall cease and desist from taking any action to require Santa Monica to operate the Airport 

Property as an airport after the 1984 Agreement expires in July of2015." [FAA Item 20, pages 9 andlO]. 

Arguing that it is no longer obligated under the AIP grant assurances; the City has added a great deal of 

uncertainty with measurable and substantial consequences for all airport users. Assuming the assurances 

are in fact in effect, the stability and fundamental ground rules the assurances create are undermined by 

the City's repudiation of its obligations. This is true regardless of whether the Council has taken action 

yet The City appears to lean towards a full or partial closure and elimination of existing aviation uses, 

15 August 2016 Page13 
. Case: 16-728?7 08/25/2016, 10· 10100384, DktEntr\L: 1-5 Paq_e 19 of 55 Nat1onal Bus1ness A1rcraf! AssoCI a lion. e! al v. tily of Santa !VIomca, ca1ifornia 1rAA Docket No. 16-14-04) 

which the City has repeatedly called for. It is important to note that the grant assurances provide uniform 

standards under which to operate and protect the investment of the United States and the rights of airport 

users and tenants. These include the fundamental assurance that the airport will be open for public use on 

reasonable terms. 

The City's assertion that Part 16 standing requires "concrete harm," appears to misrepresent the language 

in 16.23(b)(4). Section 16.23(b)(4) calls for a general description of how a complainant is directly and 

substantially affected by the things done or omitted to be done by the airport sponsor. Flexibility is built 

into this section, and includes an omission of action that causes a direct and substantial impact upon an 

airport user, especially one based at the airport. 

The FAA must make a judgment call in all cases as to whether a sponsor is reasonably meeting its federal 

commitments. ·A sponsor meets its commitments when: (1) the federal obligations are fully understood; 

(2) a program (e.g., preventive maintenance, leasing policies, operating regulations, etc.) is in place that 

the FAA deems adequate to carry out the sponsor's commitments; (3) the sponsor satisfactorily 

demonstrates that such a program is being carried out; and, ( 4) past compliance issues have been 

addressed. [FAA Order 5190.68, paragraph 2.8, page 2--6] Failing to understand its federal obligation is a 

significant omission on the City's part as a means to ensure that SMO remains a viable public airport 

within the meaning and intent of the federal investment at the airport. 

Accordingly, the Associate Administrator finds that the Director properly found that the Complainants 

were directly and substantially affected by the uncertainty of the grant expiration date and have standing 

to bring this Complaint seeking clarification of that date. 

Issue 3-Whether the Director erred in finding that the Complainants adequately pleaded a claim 

under Part 16 as required by 14 C.F.R. § 16.23(b)(1). 

On Appeal, the City argues that "Complainants failed to state a claim under Part 16, and thus have failed 

to establish any basis for the Director's jurisdiction," and Complainants failed to identifY "the specific 

provisions of each Act that [they] [believe] were violated," as required by 14 C.P.R. § 16.23(b)(l). As a 

result, the City claims the FAA cannot "make a determination as to whether an airport sponsor is currently 

in compliance." 

In support of its arguments, the City asserts that it "is currently in compliance" and "has taken no actions 

that would violate its grant assurances, nor has it indicated any immediate intent to do as much." The City 

argues that the Director incorrectly relied on the "theory" that the City repudiated its obligations and that 

the Director's Determination is an "advisory opinion." [FAA Item 22, pages 31-32}. The City adds that 

in SMAA v. City of Santa Monica, Docket No. 16-99·21, Final Decision and Order at 22 (Feb. 4, 2003) the 

FAA stated that "the purpose of a Part 16 investigation process is to determine whether or not an airport 

sponsor is in compliance with its Federal obligations in the current factual situation" and that the Director 

by disregarding this precedent "issued an advisory opinion, one that was outside the jurisdiction conferred 

in Part 16." [FAA Item 22, page 32]. 

In response to the City's argument on Appeal, Complainants assert that they stated a claim under 14 

C.F .R. Part 16. Complainants argue two main points: (1) there is no general prohibition on advisory 

opinions, and (2) 14 C.F.R Part 16 allows the FAA to address current practices that are likely to result in 

future violations. The Complainants rely on the case, JetAway Aviation LLC v. Board of Commissioners, 

Montrose County, Colorado, Docket No. 16-06-01, Director's Determination, p. 34 (November 6, 2006), 

in support of their position that the FAA is not prohibited from resolving a dispute at issue until a violation 

is imminent or has actually occurred. [FAA Item 24, page 14]. 

15 August 2016 Page 14 
. Case: 16-728?7 08/?5/2016 10· 10100384 rlktEntrv.: 1-5 Paue 20 of S5 Nat1onal Bus1ness Alrcraff'AssoCialion. eT 01 v. Cify ofSanla' IV\on1ca, califom1a 1rAA Dod:ei No. 16-14-04) 

As noted in the Director's Determination, the FAA is responsible for enforcing the grant assurances. The 

FAA has recognized that any action that is contrary to the sponsor's grant assurances is within the scope 

of the FAA to review and address. When information contained in the administrative record to a Part 16 

complaint leads the agency to review areas of noncompliance~ whether or not they are alleged by a 

complainant~ the agency will, nonetheless, make a fmding on those areas. All potential grant assurance 

violations are within the scope of the FAA to review and address, whether alleged in a Part 16 complaint 

or identified through any other means. 6 As the Complainants state, the 14 C.F.R. Part 16 process does 

allow the FAA to address current practices or positions that could result in violations. 

In this case, the allegation brought forward by the Complainants is whether Grant Assurance (B)(l ), which 

addresses the duration of the grant assurances, is in effect or when it expires. The City has made clear in 

its filings that it regards its grant obligations to the FAA to have ended on June 29, 2014. By arguing 

repeatedly that the 2003 AlP grant obligations expired in 2014, the City is clearly rejecting not only the 

term, but by implication, all its obligations as well. As such, this is more than alleged or potential noncompliance, it is the stated and official position of the City as the airport sponsor. In that respect, it is not 

a "theory," as the City states, but a legal position on the City's part. Moreover, the Associate 

Administrator disagrees with the City's characterization that the Director's Determination was merely an 

advisory opinion that was outside the jurisdiction of Part 16. 

Stating, as the City does, that it has "not committed a violation of any Act or Grant Assurance" while at 

the same time taking the position that SMO is no longer obligated, is not coherent. There is not a valid 

alternative argument to be made. The Associate Administrator finds that the City cannot in good faith 

reject the applicability of the grant assurances by claiming they have expired and at the same time claim 

that it is in compliance with its federal obligations. [FAA Item 22, page 31]. 

Again it is important to recognize that an airport sponsor meets its federal obligations when:(!) the federal 

obligations arc fully understood; (2) a program is in place that the FAA deems adequate to carry out the 

sponsor's commitments; (3) the sponsor satisfactorily demonstrates that such a program is being carried 

out; and, (4) past compliance issues have been addressed. [FAA Order 5190.6B, paragraph 2.8, page 2"6]. 

This case involves the City's understanding of its federal obligations, including the duration of those 

obligations, Clearly, the City has not fully understood the duration of its AIP obligations. 

The references made by the City to Northwest Airlines Inc., eta/. v. Indianapolis Airport Authority. eta!., 

Docket No. 16-07·04, Director's Determination at 29, 44 (Aug. 19, 2008) and SMAA v. City of Santa 

Monica, Docket No. 16-99-21, Final Decision and Order at 22 (Feb. 4, 2003) are out of context. This is 

because there is no ambiguity concerning the City's position. There is no "hypothetical controversy" or 

"speculation," on the part of the City based on its position that its grant assurances obligations expired in 

2014. The Complainants properly pleaded that they were directly and substantially affected by the 

uncertainty of the grant expiration date in violation of the City's federal obligations 

Accordingly, the Associate Administrator finds that the Director did not err in finding that the 

Complainants adequately pleaded a violation of the City's federal obligations as required by 14 C.F.R. § 

16.23(b)(l), and that issuance of the Director's Determination was within the jurisdiction conferred by 

Part 16 . 

.s .See Boston AirCharterv Norwood Airport Commission, Norwood, Mossochusett.sL FAA Docket No. 16-07-03 {August 14, 2008} (Finoi 

Decision and Order), pages 26--27. 

15 August 2016 Page 15 
. Case: 16-72827 08/?5/2016 ID: 10100384 DktEntrv~ J -5, P.aqe 21 of 55 Nat1onal Buslness7\Jrcrafl ASSOCid!Jon, el al v. City ol' Santa MoniCO, 'CalitOmJa [fAA Docket No. 16-14-04) 

Issue 4 ~ Whether the Director erred in finding that the Complainants complied with the requirement 

under 14 C.F.R § 16.21 to engage in good faith efforts to resolve their complaint informally. 

"!be City takes. the position that the Director "erroneously overlooked" the "Complainants 'failure to 

satisfy their obligation to engage in good faith efforts to resolve the disputed matter" prior to filing their 

complaint."7 The City disagrees with the Director's position that "Complainants are not required to 

conduct continued informal resolution efforts when it appears clear that the City's position on the 

expiration date is longstanding and fixed." The City characterizes the Complainants' correspondence as 

"cursory" letters and that this "cannot have constituted the requisite substantial and reasonable effort to 

achieve resolution." [FAA Item 22, pages 32-33]. 

In addition, the City argues that "Complainants gave the City no opportunity to provide Complainants 

with assurances that might have obviated the need for these proceedings." The City summarizes its 

position on this issue by stating that "Complainants engaged in no real etforts to negotiate with the City 

regarding its plans for the airport" and that "their complaint therefore should have been dismissed." [FAA 

Item 22, pages 32-33). In their Reply, the Complainants state that it engaged in good faith resolution 

efforts. The Complainants cite to the Director's Determination in support of their position that they "are 

not obligated to continue to engage in future communications with an airport sponsor that has for all 

practical purposes signaled that it will not comply with Grant Assurances." [FAA Item 24, page 15]. 

Part 16 addresses pre-complaint resolution at section 16.21. Specifically § 16.21 (a) requires a 

complainant, prior to filing a complaint under Part 16, to initiate and engage in good faith efforts to 

resolve the disputed matter informally with those individuals or entities believed responsible for the 

noncompliance. Section 16.21 (b) requires the complainant or its authorized representative to certify that 

(1) the complainant has made substantial and reasonable good faith efforts to resolve the disputed matter 

informally prior to filing the complaint; and (2) there is no reasonable prospect for practical and timely 

resolution of the dispute. Section 16.21 (c) explains that the certification shall include a brief description 

of the party's efforts to obtain informal resolution that are relatively recent and demonstrated by pertinent 

documentation. The regulation makes clear that there is no required form or process for informal 

resolution, but in each case must meet the requirements. 

In the Director's Determination, the Director denied the City's motion to dismiss the complaint for the 

Complainants' failure to engage in informal resolution. The Director noted that the Complainants were 

not required to conduct continued informal resolution efforts when it appears that the City's position on 

the expiration date is longstanding and fixed. 

The Associate Administrator acknowledges that the Complainants, tlnough counsel as their authorized 

representative, detail in their Part 16 Complaint relatively recent efforts undertaken by the Complainants, 

with supporting documentation, to resolve the matter prior to filing the Complaint. Additionally 

Complainants state that they have fulfilled the requirements of 14 CTR. §16.21. 

Although the Director did not discuss that Complainants made a statement rather than a certification as to 

their good faith efforts under 14 C.P.R. §16.21, the Associate Administrator fmds it is a harmless error in 

the Director's Determination. Accordingly, the Associate Administrator fmds that the Director did not err 

in determining that the Complainants reasonably satisfied their duty to engage in good faith efforts to 

resolve their complaint prior to filing the Part 16 complaint. 

'See 14 C.FX § 16.2l(o). 

15 August 2016 Page 16 
. Case: 16-72R/7 08/?5/2016 ID: 10100384 DktEntrv~ lc5, P.aqe 22 of 55 Nat1onal BuSinessAircraflAssoCial!on, el i::ll v. City ot Santd N\on1ca. 'CalifOrnia lFAA DocKet No. 16-14-04) 

VIII. FINDINGS AND CONCLUSIONS 

The FAA's role in this Appeal is to determine whether the Director erred in findings of fact or conclusions 

oflaw in issuing the Director's Detennination. Specifically, upon an appeal of a Part 16 Director's 

Determination, the Associate Administrator has reexamined the record, including the Dire"'tor' s 

Determination, the administrative record supporting the Director's Determination, the Appeal and Reply 

submitted by the parties, and applicable law and policy. 

Based on this reexamination, the Associate Administrator concludes that the Director's Detennination is 

supported by a preponderance of reliable, probative, and substantial evidence, and is consistent with 

applicable law, precedent, and FAA policy. The Appeal does not contain persuasive arguments sufficient 

to reverse any portion of the Director's Determination. 

Therefore, the Associate Administrator affirms the Director's finding as reasonable and consistent with 

Congressional intent in establishing the AlP. The grant assurances are designed to assure that the FAA 

and the public receive a benefit in retnm for the federal investment. Assurance (B)(1) reflects the FAA's 

expectation that the benefit to the public extends, in general, for approximately 20 years. As a result, the 

Associate Administrator affirms the Director's Determination that the AlP grant obligations for SMO 

expire in 2023. 

ORDER 

ACCORDINGLY, it is hereby ORDERED that (1) the Director's Determination is affirmed, and (2) the 

Appeal is dismissed, pursuant to 14 C.F.R. § 16.33. 

RIGHT OF APPEAL 

A party to this decision disclosing a substantial interest in the final decision and order of the Federal 

Aviation Administration may file a petition for review pursuant to 49 U.S.C. § 46110, in the United States 

Court of Appeals for the District of Columbia Circuit or in the Court of Appeals of the United States for 

the Circuit in which the person resides or has its principal place of business. The petition must be filed not 

later than 60 days after a Final Agency Decision has been served on the party. [ 14 C.F .R. Part 16, § 

16.247(a).] 

Eduardo A. Angeles 

Associate Administrator for Airports 

15 August 2016 Page 17 
. Case: 16· 72R/7 08/75/2016 10· 10100384 DktEntr'L 1·5, P.aqe 23 of 55 Nat1onal Busmess Aircraft ASSOCiaTIOn, e"f Cll v. City of Santd IV\onica, "California [FAA Docket No. 16·14-04) 

INDEX OF ADMINISTRATIVE RECORD 

Docket No. 16-14-04 

EXHIBIT 1 

Item 1- Part 16 Complaint, dated July 2, 2014. 

Exhibit!- City of Santa Monica Inter-Department Memo dated January 23, 1962. 

Exhibit 2- Office of the Attorney General of the State of California, Opinion No. CV 74-317, dated 

May 30, 1975. 

Exhibit 3- City Council Meeting, dated June 23, 1981, Resolution No. 6296. 

Exhibit 4- Newspaper article titled "City rescinds eviction notices to airport firms," undated. 

Exhibit 5 - Santa Monica Airport Agreement, dated January 31, 1984. 

Exhibit 6- City Council Report, City Council Meeting, March 25, 2014. 

Exhibit 7- City of Santa Monica Regular City Council Meeting Agenda, March 25, 2014. 

Exhibit 8- United States Court of Appeals for the District of Columbia Circuit, The City of Santa 

Monica, Petitioner, v. Federal Aviation Administration, Respondent; Final Brief of Petitioner City of 

Santa Monica, dated August 31, 201 0. 

Exhibit 9- United States District Court Central District of California, City of Santa Monica, 

Plaintiff, v. United States of America, Federal Aviation Administration and Michael P. Huerta, in 

official Capacity as Administrator of the Federal Aviation Administration. Defendants; Complaint 

for Declaratory Relief Under the Quiet Title Act and United States Constitution, dated October 31, 

2013. 

Exhibit 1 0 - United States District Court Central District of California, City of Santa Monica, 

Plaintiff, v. United States of America, Federal Aviation Administrationand Michael P. Huerta, in 

official CapacitvasAdministrator of the Federal Aviation Administration, Defendants; Joint Rule 26 

Report of Early Meeting of Counsel, dated January 16,2014. 

Exhibit 11 -Letter from Richard K. Simon to Santa Officials, Rod Gould City Manager, Marsha 

Moultrie City Attorney, and Stelios Makrides Airport Manager, dated June 11,2014. 

Exhibit 12- Letter from Ivan 0. Campbell, Deputy City Attorney, for Santa Monica, to Richard K. 

Simon, dated June 23, 2014. 

Exhibit 13 -Letter from to Richard K. Simon to Ivan 0. Campbell, Deputy City Attorney, for Santa 

Monica, dated June 25,2014. 

15 August 2016 Page 18 
Nat1onal . Case: 16-72R?7 08/?5/2016 ID· 10100384 DktEntriL: 1-5 F.'aqe 24 of 55 Bus1ness AJrcrafl7\ssocJa1Jon, e1 i':il v. City of Santd I'V\onJca, -califoln1a jFAA Docket No. 16-14-04) 

Exhibit 14- Letter from Steven J. Brown, NBAA Chief Operating Officer to The Honorable Pam 

O'Connor, Mayor, City of Santa Monica, dated March 24, 2014. 

Ite~ 2- Notice of Docketing dated July 17,2014. 

Item 3 --City of Santa Monica, Motion to Dismiss the Part 16 Complaint of National Business Aircraft 

Association, et al; Memorandum of Points and Authorities in Support Thereof [Pursuant to 14 C.F.R. 

§16,25(a)(b), dated, August 14, 2014]. Includes Exhibits (A) Grant Agreement, Part V, Assurances, (B) 

Am(;ndments I and 2, and (C) August 12, 2014, Santa Monica Council Meeting, Agenda Item 8-A. 

Exhibit A- Federal Aviation Administration, Grant Agreement, Part I Offer, to the City of Santa 

Monica, California, Sponsor dated June 27, 1994, AIP Project No. 3-06-0239-06, Contract No. 

DTFAOS-94-C-20857, to the City of Santa Monica, California, Sponsor. 

·1. Part II-Acceptance date June 29, 1994 (pageS), signed by officials for the City of Santa 

Monica.· 

2. Application for Federal Assistance submitted June 15, 1994, by the City of Santa Monica. 

3. Part V of the Application for Federal Assistance, the Assurances, Dated October I, 1990. 

Exhibit B- Amendment No. I to Grant Agreement for Project No. 3-06-0239-06, dated November 

8, 1999. Amendment No.2 to Grant Agreement fbr Project No. 3-06-0239-06, dated August 27, 

2003. ' 

Exhibit C -City Council Report, City Council Meeting, August 12, 2014, Agenda Item 8-A, and 

attestation of Vernice Hankins, City Clerk's Office, that the Staff Report is a true and correct copy of 

the Staff Report Item 8-A. 

Item 4- Answer of the Complainants to Respondent's Motion to Dismiss, docketed August 28, 2014. 

Item 5 -City of Santa Monica's Answer to Complaint, and Supporting Exhibits, dated October 20, 

2014. 

Exhibit 1- - Federal Aviation Administration, Grant Agreement, Part I Offer, to the City of Santa 

Monica, California, Sponsor dated June 27, 1994. AlP Project No. 3-06-0239-06, Contract 

No. DTFAOS-94-C-20857, to the City of Santa Monica, California, Sponsor. 

a Part II-Acceptance date June 29, 1994 (page 5), signed by officials for the City of Santa 

Monica. 

b. Application for Federal Assistance submitted June is, 1994, by the City of Santa Monica. 

c. Part V of the Application for Federal Assistance, the Assurances, Dated October 1, 1990. 

d. Current FAA Advisory Circulars for AIP Projects, effective June 1, 1994. 

Exhibit 2- Amendment No. 1 to Grant Agreement for Project No. 3-06-0239-06, dated November 8, 

1999. Amendment No.2 to Grant Agreement for Project No. 3-06-0239-06, dated August 27,2003 . 

. Exhibit 3- City Council Report, City Council Meeting, August 12,2014, Agenda Item 8-A, and 

attestation of a City Clerk's Office, that the Staff Report is a true and correct copy of the Staff 

Report Item 8-A. 

15 August 2016 Page 19 
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Exhibit 4 -- Letter from the Manager of the City of Santa Monica to the FAA Airports Program 

Engineer regarding Santa Monica Airport Grant Amendment for Project No. 3-06-0239-06 (II), 

dated September 27, 2002, with attachment L 

Item 6- Reply of the Complainants to the Respondent's Answer to the Complaint dated October 30, 

2014. 

Item 7- City of Santa Monica's Rebuttal to the Reply Brief of Complainants, docketed November ] 3, 

2014. 

Item 8- FAA's Request for Additional Information, dated February 19,2015. 

Item 9 - Complainants' Response to the request for additional information, dated March 25, 2015. 

Item 9A- Complainants' Correction to Response to the request for additional information, dated March 

27, 2015. 

Item 10- City of Santa Monica's Response to FAA's Request for Additional Information Declaration, 

with Exhibit, dated March 25, 2015. 

Item 11 - Letter from the City to the FAA requesting the Grant be reopened and to award additional 

grant money, dated May 7, 2003. · 

Item 12- Letter from the FAA to the City agreeing to reopen grant and disburse additional grant 

money, undated copy. 

· Item 13- Pinal Construction Report, Airport Improvements, Santa Monica Airport, AlP Project No.3-

06-0239-06 (II). 

Item 14 - Letter from the City requesting Amendment No. I to the grant dated August 2, 1999. 

Item 15- Santa Monica Airport, Airport Master Record, 5010. 

Hem 16- Notice of Extension of Time to issue the Director's Determination to August 21,2015, 

dated August 6, 2015. · 

Item 17 ·Notice ofExtens.ion of Time to issue the Director's Determination to September 21, 

2015, dated August 21,2015. 

Item 18- Notice of Extension of Time to issue the Director's Determination to October 15,2015, 

dated September 21, 2015. 

Item 19- Notice of Extension of Time to issue the Director's Determination to December 4, 2015, 

dated October I 6, 2015, 

Item 20 -Director's Determination, dated December 4, 2015. 

15 August 2016 Page20 
Case: 16-72827, 08/25/2016, ID' 10100384 DktEntry: 1-5, Page 26 of 55 

National Business Aircraft Association, eral v. City or Sanfa Mon1ca, California [f-AA Docket No. 16-14-04) 

Hem 21A --Respondent City Request for Hearing and Notice of Appearance, dated December 23, 

2015. 

Item 218 -Complainants' Reply to City of Santa Monica's Request for Hearing, dated January 6, 

2016. 

Item 21C -FAA Order Denying City's Request for Hearing, dated January 21,2016. 

Item 22 -Respondent City of Santa Monica's Notice of Appeal and Appeal's Brief, dated January 

8, 2016. 

Item 22A -Respondent City of Santa Monica's Petition to Supplement, dated January 8, 2016, and 

McCarthy declaration. 

Item 228 -Respondent City of Santa Monica's Notice of Filing, dated January 13, 2016, and 

Mathieu declaration. 

Item 23 ·-Notice of Complainant Name Updates, dated January 4, 20!6. 

Item 24 -Reply of the Complainants to Respondent's Appeal from the Director's Determination and to 

Respondent's Petition to Supplement the Record on Appeal, dated January 28,2016. 

Item 25- Notice of Extension of Time to issue the Final Agency Decision to June 15, 2016, dated 

March 28, 2016. 

Item 26- Notice of Extension of Time to issue the Final Agency Decision to August I, 2016, dated 

June 22, 2016. 

Item 27- Notice of Extension of Time to issue the Final Agency Decision to August 15, 2016, 

dated August 1, 2016. 

15 August 2016 Page21 
Case: 16-72827, 08/25/2016, ID: 10100384, DktEntry: 1-5, Page 27 of 55 

EXHffiiT2 

Director's Determination, National Business Aircraft Association, et al. v. City of 

Santa Monica, FAA Docket No. 16-14-04 (Dec. 4, 2015) 
Case: 16-72827, 08/25/2016, ID: 10100384, DktEntry: 1-5, Page 28 of 55 

U.S. Deportment 

at Tronspor1ation 

federal Aviation 

AdminislraHon 

December 4, 2015 

Via Federal Express 

Richard K. Simon, Esq. 

1700 Decker School Lane 

Malibu, CA 90265 

Rick Cole 

City Manager 

City of Santa Monica 

I 685 Main Street, Room 209 

Santa Monica, CA 90401 

manager@smgov .net 

Marsha Moutrie, Esq. 

City Attorney 

City of Santa Monica 

1685 Main Street, Room 310 

Santa Monica, CA 90401 

Ivan Campbell, Esq. 

Deputy City Attorney 

City of Santa Monica 

1685 Main Street, Room 310 

Santa Monica, CA 90401 

Office of Airport Compliance and 

Management Analysis 

800 Independence Ave., SW. 

Washington. DC 20591 

Re National Business Aircraft Association, Krueger Aviation, Inc., Harrison Ford, 

Justice Aviation, Kim Davidson Aviation, Inc., Aero Film, Youri Bujko, James Ross, 

Paramount Citrus LLC and Aircraft Ovmers and Pilots v. City of Santa Monica, 

California FAA Docket No. 16-14-04 

Dear Counsel: 

Enclosed is a copy of the determination of the Federal Aviation Administration (FAA) with 

respect to the above-referenced matter. We find that City of Santa Monica remains obligated 

by the grant assurances until August 27, 2023. The reasons for the finding are set forth in the 

enclosed Director's Determination. 
Case: 16-72827, 08/25/2016, ID: 10100384, DktEntry: 1-5, Page 29 of 55 

2 

'!be Director's Determination does not constitute a Final Agency Decision and order subject 

to judicial review. [ 14 CFR § J6.247(b)(2)] A party adversely affected by the Director's 

Determination once issued may appeal the initial determination to FAA Associate 

Adillinistrator for Airports pursuant to 14 CFR § !6.33(c) within 30 days after the service of 

the birector's Determination. 

Sincerely, 

' 

':1 J / &- /;:/~i/:2./ -~ .r:Byron K:lluflin;n' ~' · 

Acting Director, Office of Airport Compliance 

and Management Analysis 
16-72827, 08125/2016, ID: 

3 

CERTIFICATE OF SERVICE 

r f\ / t /'\ ,-.. . / ~··'' I HEREBY CERTIFY that on I ·""···-~·r·-·/t;t)i ·~") , I caused to be placed in the 

United States mail (first class maiL postage paid), a true copy of the Director's Determination 

for FAA Docket 16-13-08 addressed to: 

Counsel for Complainant 

John R. Copley, Esquire 

Garofalo Goerlich Hainbach, P.C. 

1200 New Hampshire Avenue, NW 

Suite 800 

Washington, DC 20036 

Counsel for Respondent 

David R. Guin, Esq. 

Batton & Guin 

P.O. Box603 

107 S. Main Street 

Louisburg, NC 27549 

Hand Delivered to: 

FAA Part I 6 Airport Proceedings Docket 

FAA Office of Airport Compliance and Management Analysis 

/, .. / . I . § r. 

f 'I , -:------""' 

~T;-;'~~lia Roberts 

Office of Airport Compliance and 

Management Analysis 
Case: 16-72827, 08/2512016, ID: 10100384, 31 of 

UNITED STATES DEPARTMENT OF TRANSPORTATION 

FEDERAL AVIATION ADMINISTRATION 

WASHINGTON, DC 

National Business Aircraft Association, Krueger Aviation, 

Inc., Harrison Ford, Justice Aviation, Kim Davidson 

Aviation, Inc., Aero Film, Y ouri Bujko, .1 ames Ross, 

Paramount Citrus LLC and Aircraft Owners and Pilots 

Association 

Complainants 

v. 

City of Santa Monica, California 

Respondent 

DIRECTOR'S DETERMINATION 

I. INTRODUCTION 

Docket No. 16-14-04 

This matter is before the Federal Aviation Administration (FAA) based on a formal complaint 

filed in accordance with FAA Rules of Practice for Federally Assisted Airport Proceedings (FAA 

Rules of Practice), Title 14 Code of Federal Regulations (CFR) Part 16. 1 

National Business Aircraft Association, Krueger Aviation, Inc., Harrison Ford, Justice Aviation, 

Kim Davidson Aviation, Inc., Aero Film, Y ouri Bujko, James Ross, Paramount Citrus LLC and 

Aircraft Owners and Pilots Association (Complainants) filed a formal complainant pursuant to 

Title 14 CFR Part 16 against the City of Santa Monica, California, (City) owner, sponsor, and 

operator of the Santa Monica Airport (SMO). 

Complainants allege that the City violated its grant assurance obligations ba<;ed on the City's 

repeated and continued assertions that such obligations will no longer be in efTect after June 29, 

2014. The Complainants' contend that the grant assurances continue Lmtil August 2023. The 

Complainants seek a determination on the date that the grant assurances expire. 

1 Enforcement procedures regarding airport compliance matters may be found at FAA Rules o(Practic!J for 

Federallv Assisled Airport EnfOrcement Proceedings (14 CFR Part 16). These enforcement procedures were 

published in the Federal Register (61 FR 53998, October I 6, I 996) and became effective on December 16, 1996. 
Case: 0812512016, 10100384, of 

With respect to the allegations presented in this Complaint, under the specit!c circumstances at 

SMO as discussed below and based on the evidence of record in this proceeding, FAA findS that 

the City of Santa Monica is obligated under the grant assurances until August 27, 2023. 

The FAA's decision in this matter is based on applicable Federal law and FAA policy, review of 

the pleadings and supporting documentation submitted by the parties and reviewed by FAA, 

which comprises the administrative record reflected in the attached FAA Index. 

H. THE P ARTlES 

Airport 

SMO is a public-use airport owned and operated by the City. The 227-acre airport has 

approximately 269-based aircraft with 452 average aircrail operations per day. The airport is 

located in a congested air tratllc area and serves as a reliever airport for Los Angeles 

International Airport, which is located seven miles to the south ofSMO. The airport's runway is 

4,987 feet long with 40·foot parallel taxiways on both sides of the runway. 

The FAA conducted a General Aviation National Asset Study in May 2012 that designated SMO 

as a regional airport that supports regional economies by connecting communities to statewide 

and interstate markets. 2 

The FAA records indicate that the planning and development of SMO has been financed, in part, 

with funds provided by F A.A under the Airport Improvement Program (AIP), authorized by the 

AirpO!i and Airway lmprovement Act of 1982 (AAIA), as amended, Title 49 United States Code 

(U.S.C.) § 47101, ef seq. Between 1985 and 2003, SMO received approximately $9.7 million in 

Federal airport development assistance. 

Complainants 

The Complainants are tenants of SMO or organi71ltions with members who are aviation users of 

the airport. The Complainants desire clarification concerning the expiration date of SMO's grant 

assurance obligations as determined by FAA. JFAA Item 1] The following descriptions of the 

Complainants are as provided in the Complaint. 

The National Business Aviation Association, Inc, (NBAA) is a District of Columbia corporation 

that represents the interests of companies that operate aircraft. According to the NBAA, its 

membership includes more than 10,000 companies that operate aircraft in connection with their 

business or are othemise involved in business aviation. These entities can or do utilize SMO 

including but not limited to Krueger Aviation, Inc. and Kim Davidson Aviation, Inc. 

Krueger Aviation, Inc. (Krueger) is a California corporation engaged in the sale and brokerage of 

aircrail at SMO, where it has been a tenant for more than 40 years. Krueger currently occupies 

2 See U.S. Department of Transportation Federal Aviation Administration, General Aviation Airports: A National 

Asset, May 2012. 

2 
33 55 

approximately 10,000 feet of office and hangar space on two acres that it leases from the City on 

the south side of SMO. It leases office and hangar space to seven sub-tenant businesses and 

maintains tie-down space for approximately 30 aircraft. 

Harrison Ford is an actor, businessman, and pilot. He has been a SMO tenant for 10 years, 

basing both fixed-wing (piston and jet) and rotor aircraft in his north-side hangar. Ford has 

testified before Congress as an advocate for general aviation and regularly flies missions in 

support of humanitarian causes. 

Justice Aviation, a California corporation, is a full service flight school and aircraft rental facility 

located on the south side ofSMO. A tenant for 21 years, Justice Aviation currently employs 

eight flight instructors and maintains between 9 and 1 1 aircraft for instruction and rental. 

Kim Davidson Aviation, lnc., a California corporation, is an FAA certified Repair Station and 

a factory authorized Cirrus Aircraft service center located on the south side of SMO. It has 

been a tenant since 1982, employing a staff of 11. 

Aero Film is a California limited liability company engaged in the production of television 

commercials. It is based at SMO, where it maintains offices and a hangar for two aircraft, a 

Cessna Citation SII and an MD 500 helicopter, both of which are used in its business. Aero Film 

has been a tenant for ll years. 

Yo uri Bujko is the owner and pilot of two aircraft, a Mooney Super M20 E and a Cessna 

Crusader, which he maintains for both business and personal use on the south side of SMO. He 

has been a tenant since 2008. 

James Ross is a recreational flyer who owns a Cessna 170, based in tie-down space on the south 

side ofSMO. He has been a tenant for 18 years. 

Paramount Citrus LLC, together with its affiliates, is the largest vertically integrated citrus 

business in !he United States. Paramount Citrus Aviation, based in Bakersfield, California, is the 

business department of the agricultural based companies owned and operated by Paramount 

Citrus LLC and its related entities. Paramount Citrus LLC and Paramount Citrus Aviation are 

jointly referred to herein as "Paramount." Paramount has been a user of SMO for more than 10 

years, and logs approximately 235 monthly operations at SMO in support of its business 

operations. Parammmt relies on SMO as a vital hub for employee travel to multiple destinations 

across the western United States. 

The Aircraft Owners and Pilots Association, Inc., (AOPA) is an independent, not-for-profit 

education and advocacy association incorporated in New Jersey and headquartered in Frederick, 

Maryland. According to AOPA, it is the world's largest aviation membership association, 

representing approximately 370,000 pilots who fly for personal and business reasons. According 

to AOPA, more than 6,000 of its members are within a 25-mile radius of the City, and many of 

those members base their aircraft at SMO, including, but not limited to, Harrison Ford, Youri 

Bulko and James Ross. AOPA acts as their representative in this proceeding, consistent with 

FAA precedent. See .. e.g., Bombardier Aerospace Corp. v. City ofSanta Monica, Docket No. 16-

03-11, Director's Determination, at I n.l and 22 (January 3, 2005). 

3 
Case: 16-72827, 08/2512016, 34 55 

HI. BACKGROUND AND PROCEDURAL HISTORY 

l'rocedmral History 

Dated July 2, 2014, FAA received a Part 16 Formal Complainant alleging the Respondent 

violated 49 U.S.C. §47107(a) and airport Grant Assurances. [FAA Item I] 

Dated July 17,2014, FAA issued the Notice of Docketing. [FAA Item 2] 

Dated August 14, 2014, Respondent iiled a Motion to Dismiss. [FAA Item 3] 

Dated August 28, 2014, Complainant filed an Answer to the Motion to Dismiss. [FAA Item 4] 

Dated October 20, 2014, Respondent filed the Answer of the City of Santa Monica, California. 

[FAA Item 5] 

Dated October 30, 2014, Reply of the Complainants to the Respondent's Answer to the 

Complaint. [FAA Item 6] 

Dated November II, 2014, Respondent Filed the Rebuttal to the Reply Brief of 

Complainants. [FAA Item 7] 

Dated February 19, 2015, FAA Requested Additional Information. [FAA Item 81 

Dated March 25, 2015, FAA received information from Complainants based on February 

request to Respondent for additional information. [FAA Item 9] 

Dated April 1, 2015, FAA received information from Respondent based on February request 

to Complainant for additional information. [FAA Item 10] 

Dated May 7, 2003, Letter from the City to FAA requesting the Grant be reopened and to award 

additional grant money. [FAA Item II] 

Undated Letter from FAA to the City agreeing to reopen the grant and disburse additional grant 

money. [FAA Item 121 

Final Construction Report, Airport Improvements, Santa Monica Airport, AlP Project NoJ-06· 

0239-06 (ll). [FAA Item 13] 

Dated August 2, 1999, Letter from the City requesting Amendment No. Ito the grant dated 

August 2, 1999. [FAA Item 14] 

Santa Monica Airport, Airport Master Record, 5010. [FAA Item 15] 

Dated August 6, 2015, Notice of Extension of Time to issue the Director's Determination to 

August 21,2015. [FAA Item 16] 

4 
Case: 35 55 

Dated August 21,2015, Notice of Extension of Time to issue the Director's Determination 

to September 21,2015. [FAA Item 17] 

Dated September 21,2015, Notice of Extension of Time to issue the Director's 

Determination to October 15,2015. FAA Item 18] 

Dated October 16, 2015, Notice of Extension of Time to issue the Director's Determination 

to December 4, 2015. [FAA Item 19] 

Factual Background 

SMO is a 227-acre airport located in a highly congested air traffic area, and is an important 

reliever airport for the Los Angeles International Airport (LAX), which is located just 7 miles to 

the south. As a reliever for LAX, SMO serves a vital and critical role as a general aviation 

reliever airpmt by diverting aircraft away from the air carrier airporl~ and other more heavily 

used airports located in the Los Angeles area. SMO serves the role of a business airport capable 

of accommodating a wide range of business and personal aircraft, including corporate and 

business jets. 

The City and FAA entered into a Settlement Agreement on January 31, 1984, ( 1984 Agreement) 

setting forth the terms and conditions under which the City would continue to operate SMO. 

Under the Agreement, the City agreed to operate and maintain SMO without derogation of its 

use as a reliever airport until July I, 2015. The 1984 Agreement, by its terms, did not address 

obligations after its expiration nor did it release the City from its AlP Grant or Surplus Property 

Act obligations. 

Relevant Grant History 

On June 29, 1994, the City applied for and accepted an AlP grant from FAA for $1,604,700 for 

planning, airport development, or noise program implementation. [FAA Item 3 exhibit A, 2] 

The grant was issued in 1994 under AlP Grant No. 3-06-0239-06. 

The projects under the grant were completed in two phases. The Final Construction Report, 

Airport Improvements, Santa Monica Airport, AlP Project No.3-06-0239-06 provided the timing 

for phase I. [FAA Item 13] 

• Bid Opening- October 2, 1995 

• Preconstruction Conference- February 5, 1996 

• Work Started (Construction)- March 6, 1996 

• Work Substantially Completed (Construction)- June 11, 1996 

• Final Inspection- August 23, 1996 

By letter dated August 2, 1999, the City asked to amend Grant No. 3-06-0239-06 to reflect 

modifications to the original scope of work under Phase L The letter indicated that the "request 

5 
Case: 16-72827, 0812512016, 10: 10100384, 36 55 

would not result in a change in the total project budget cost under the gran/ .. , [FAA Item 14] 

On November 8, 1999, The City executed Amendment No. l. [FAA Item 5 exhibit 2] 

By letter dated September 27, 2002, the City requested to amend Grant No. 3-06-0239-06 (II) to 

"increase participation amount by $240,600 to a total of$7,845,300 to r~flect increased cost 

and changed conditions that occurred during construction. "' [FAA Item 5 exhibit D] 

FAA replied to the City and indicated that the 1994 grant was "f1nancially and administratively 

closed." [FAA Item 12] 

On May 7, 2003, the City submitted a second letter renewing the request for additional funds for 

the project. Notwithstanding that this request was being withheld pending the outcome of an 

FAA Notice of Investigation, the City "implore[ d] the FAA to reconsider this matter and 

approve" the amendment. [FAA Item II] 

FAA agreed to "reopen the grant to amend the gran/ agreement, thereby increasing the 

maximum U.S. obligation. " [FAA Item 12] Accordingly, FAA offered the City a grant 

amendment that increased the Federal obligation to $1,845,300. The City accepted the offer on 

August 27, 2003. [Item 5 exhibit B] The amendment provided, in part, 

The maximum obligation stated on Page 2, condition 1, is hereby increased by 

$240,600.00, from $1,604,700.00 to $1 ,845,300.00. All other terms and conditions of the 

Grant Agreement remain in full force and effect. 

The Final Construction Report, Airpmt Improvements, Santa Monica Airport, AlP Project No.3-

06-0239-06 (II) provided the timing for Phase II as follows: [FAA Item 13] 

• Bid Opening- July 30 and August 3, 2000 

• Project Award- June 24,2001 

• Pre-construction meeting- August 16, 2001 

• Work Started (Construction)- September 24, 2001 

• Work Substantially Complete (Construction)- February 20, 2002 

• Final Inspection- March 27, 2002 

IV. APPLICABLE FEDERAL LAW AND FAA POLICY 

The Federal role in civil aviation is augmented by various legislative actions that authorize 

programs for providing Federal funds and other assistance to local communities for the 

development of airport facilities. In each such program, the airport sponsor assumes certain 

obligations, either by contract or by restrictive covenants in property deeds and conveyance 

instruments, to maintain and operate its airport facilities safely and efficiently and in 

accordance v;ith specif1ed conditions. Commitments assumed by airport sponsors in property 

conveyance or grant agreements are important factors in maintaining a high degree of safety 

and efficiency in airport design, construction, operation and maintenance, as well as ensuring 

the public fair and reasonable access to the airport. 

6 
37 55 

A. The Airport Improvement Program (AlP) 

Title 49 U.S.C., § 47101, et seq., provides for Federal airport financial assistance for the 

development of public-use airports under the AIP established by the Airport and Ainvay 

Improvement Act of 1982, (AAIA) as amended. Title 49 U.S.C., § 47107, eT seq., sets forth 

assurances to which an airport sponsor agrees as a condition of receiving Federal financial 

assistance. Upon acceptance of an AlP grant, the assurances become a binding contractual 

obligation between the airport sponsor and the Federal Government. The assurances made by 

airport sponsors in AlP grant agreements are important factors in maintaining a viable national 

airport system. 

B. Airport Sponsor Assurances 

As a condition precedent to providing airport development assistance under AlP, 49 U.S.C., 

§ 47107, et seq., the Secretary of Transportation and, by extension, FAA must receive certain 

assurances from the airport sponsor. Title 49 U.S.C., § 47107(a) sets forth the statutory 

sponsorship requirements to which an airport sponsor receiving Federal financial assistance must 

agree, FAA has also identified assurances that arc necessary to carry out the program. The FAA 

has statutory authority to enforce compliance with the sponsor assurances. F Ai\ Order 5190.6, 

FAA A irporr Compliance Manual (Order), provides the assurances for sponsors and policies and 

procedures to be followed by the FAA in carrying out its functions related to compliance with 

Federal obligations of airport sponsors. The FAA considers it inappropriate to provide Federal 

assistance for improvements to airports where the benefits of such improvements will not be 

fully realized for the duration of their usefu1life or due to inherent restrictions on aeronautical 

activities. 

Assurance (B)( I), which addresses the duration of the grant assurances, provides: 

The terms, conditions and assurances of the grant agreement shall remain in full 

force and ~/feet throughout the useful life of the facilities developed or equipment 

acquiredfor an airport development or noise compatibility program project. or 

throughout the useful life of the project items installed within a facility under a 

noise compatibility program project, but in any event not to exceed twenty (20) 

years from the date of the acceptance ofa grant offer ofFederalfundsfor the 

project. However, there shall be no limit on the duration of the assw·ance against 

exclusive rights or the terms, conditions, and assurances with respect to real 

property acquired with Federalfimds. Furthermore, the duration of the Civil 

R ig,hts assurances shall be as specified in the assurance. 

V. ANALYSIS AND DISCUSSION 

Motion to Dismiss 

The City filed a motion to dismiss based on ( 1) the Complaint failed to state a claim because it 

does not state a "specific provision" of the Act that the City has violated, (2) the Complainants 

Jack standing, (3) FAA lacks jurisdiction to grant the relief requested, and ( 4) the Complainants 

7 
38 55 

failed to engage in good faith efforts to resolve this matter informally. The City filed its motion 

on August 18,2014, and the City's motion remains pending. Accordingly, the City filed its 

answer. 14 CFR § 16.26(b)(5). The Director hereby denies the motion for the reasons set forth 

below. 

Failure to State a Claim 

The pleading requirements for Part 16 are set forth in § 16.23 requiring the Complainant to state, 

"the specific provisions of each Act that the Complainant believes were violated." An "Act" is 

defined to include a grant assurance. 3 The Director agrees that the Complaint is not clear in 

terms of the specific Act violated. Nevertheless, the provision is not jurisdictional and to the 

extent the Director can understand the basis of the Complaint, dismissal is not mandatory. ln this 

case, the Complainants have asked the Director to clarify the expiration date of the grant 

assurances. The expiration date is set forth in assurance (B)(l). 

The Complainants argue the assurances remain in effect until 2023. The City contends they 

expired in June 2014. [FAA Item 1] FAA construes the Complaint to argue that the City's 

interpretation violates and/or undermines the grant agreement as a whole and, in particular, grant 

assurance (B)(!) both of which are "Acts." 

The City argues that regardless of its position on the expiration date, it has "not committed a 

violation of any Act or Grant Assurance, nor has the City failed to take action that it is required 

to take under any Act or Grant Assurance. " [FAA Item 3 page 3J However, the City has made 

clear in its answer that it regards its grant obligations to the FAA to have ended on June 29, 

20 J 4. [FAA Item 5 page IS] 

For purposes of this motion to dismiss, we assume, without here deciding, that the 

Complainants' expiration date is correct. Kowal v. MCJ Communications Corp., !6 F.3d 1271, 

1276 (D.C. 1994) (on motion to dismiss, Complaint is construed liberally and plaintiff granted 

the benefit of all inferences than can be derived from the facts alleged). The City's statement 

then constitutes a repudiation of the contract. Grant assurances are both contractual and statutory 

in nature, and contract law may guide FAA decisions. City and County of San Francisco v. FAA, 

942 F.2d 1391, 1396 (9'11 Cir. 1991). Both California and 9'h Circuit case law support the 

position that where a sponsor has expressly repudiated the grant agreement, FAA need not wait 

for an actual instance of nonperformance to occur before addressing the issue. Taylor v. 

Johnston, 539 P.2d 425,430 (Cal. 1975); First National Mortgage Co. v. Federal Realty 

Investment Trust, 631 F.3d I 058, I 069 (9111 Cir. 2011); see also Roehm v. Horst, 178 U.S. 1, 19 

( 1900). This reasoning is particularly persuasive when the remedy sought is limited to 

establishing whether the grant obligation is currently in effect and when it expires. 

3 "Act" is defined as "a statute listed in § l 6.1 and any regulation, agreement, or document of conveyance issued or 

made under that statute." 14 CFR § 16.3 (emphasis provided). The Airport and Airway Improvement Act of 1982, 

49 U.S.C. §471 OJ et seq., as amended and recodified, is a listed statute. 14 CFR § 16.1(a)(5). The grant assurances 

are part of an "agreement ... made under that statute," and thus constitute an "Act" under Part 16. 

8 
55 

Finally, the determination of whether a sponsor is reasonably meeting its Federal obligations is a 

"judgment calL" FAA Order 5190.6b, ,[ 2.8(c). An important element of compliance is that 

"[the] federal obligations are fully understood." I d. This case involves not just the 

understanding of a particular assurance, but whether, as Complainants argue, any assurances 

apply at all. [FAA Item 4 page 7] A determination on whether the assurances are in effect 

therefore assures both current and future compliance. Although we "Will not consider future 

events or consequences under Part 16, the issue here posed is one in dispute now. Moreover, we 

may in limited circumstances, consider a case where the current situation portends the high 

likelihood of a future violation. See JetAway Aviation LLC v. Montrose County, Docket No. 16-

06-01, Director's Determination at 34 (Nov. 6, 2006). 

We find that the Complaint is adequately pleaded and the Director is readily able to determine 

which "Acts" the Complainants claim are violated. The City has clearly declared what it 

considers the expiration date of the grants to be, and the Complainants allege the City is wrong. 

If the date proffered by the Complainants were correct, the City's declaration would constitute an 

express repudiation of the contract. FAA ±1nds that in the unusual case in which the sponsor 

expressly and unequivocally declared that the grant agreement expired, and where a reasonable 

counterargument exists, it is well within FAA's authority to rule upon this limited but threshold 

issue by clarifying the expiration date. We decline to dismiss this Complaint on the grounds that 

it fails to state a claim. 

Standing 

To have standing under 14 CFR Part 16, a party must be "directly and substantial(v affected by 

any alleged noncompliance .. , The Complainants include tenants and users of the airport, all of 

whom allege they will be directly and substantially affected if the City is not grant obligated. 

[FAA Item I pages 2-3] For instance, the Complaint alleges that Krueger Aviation, Inc. is 

engaged in the sale and brokerage of aircraft at SMO and has been a tenant for 40 years. It 

leases approximately l 0,000 feet of office and hangar space from the City on the south side of 

SMO. Complainant National Business Aviation Association (NBAA) represents companies that 

operate aircraft for business purposes. These members include Krueger among others. With the 

exception ofNBAA, the Complainants pay fees (including landing fees) and/or rent to the City 

for use ofSMO. 

FAA finds that the Complainants are directly and substantially affected by the City's stated 

position that its grant obligations have expired. For a motion to dismiss we construe the 

Complaint in favor of the Complainants and note that the Complainants have pied that the City, 

but for Federal obligations, would likely close all or part of the airport. It is the City's stated 

view, ongoing litigation notwithstanding, that most if not all of these obligations ended in July 

2015. 

FAA finds Complainants' concerns to be reasonable based upon directions the City Council has 

provided to City staff (i.e. directing studies of potential closures) and a City Resolution, passed 

in 1981 but never rescinded, that states the policy of the City is to close the airport. [FAA Item 1 

page 6] In addition, the City is currently appealing an order dismissing a case in which the City 

challenged its Surplus Property Act (SPA) obligations. In that case, the City sought an order 

9 
of 

''that the United States shall cease and desistfi·om taking any action to require Santa Monica to 

operate the Airport Property as an airport after the !984 Agreement expires in July of 2015. " 

[FAA Item 1 exhibit 8] 

In the unique context of this case, F A.A. finds that the Complainants are harmed by the 

uncertainty involving the grants. Assuming the Complainants are correct that the assurances will 

expire in 2023, that would still provide an additional 8 years during which Complainants, 

regardless of how Surplus Property Act issues are resolved, could rely upon the airport 

remaining open in conformance with the assurances. The assurances provide uniform standards 

under which to operate that protect the investment of the United States and the rights of users 

and tenants. These include the fundamental assurance that the airport will be open for public use 

on reasonable terms. AssLU11ing the assurances are in fact in effect, !be stability and fundamental 

ground rules the assurances create are undermined by the City's repudiation, particularly given 

the current position of the City Commission, which, regardless of whether the Council has taken 

action yet, appears to lean towards a full or partial closure4 We find the Complainants are 

directly and substantially affected by the uncertainty of the grant expiration date and have 

standing to bring this Complaint seeking clarification of that date. 

Jurisdiction 

Part 16 jurisdiction is established by 14 CFR § 16.1. Section 16. I provides: 

The provisions of this part (16] govern all Federal Aviation Administration (FAA) 

proceedings involving Federally assisted airports ... instituted by ... filing a complaint 

with FAA under the following authorities. 

Among the listed authorities are "[t]he assurances and other Federal obligations contained in a 

grant-in-aid agreement issued under the Airport and Airway Improvement Act of 1982 (AA!A), 

as amended and recodified, 49 U.S.C. 47107 et seq., specifically section 51l(a), 49 U.S.C. 

47107, and 49 U.S.C. 47133." 

The FAA is responsible for enforcing !be grant assurances. Any action that is contrary to the 

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

contained in the administrative record to a Part 16 complaint leads the agency to review areas of 

noncompliance - whether or not !bey are alleged by the Complainant- the agency will, 

nonetheless, make a finding on those areas. See for example, M Daniel Carey and Cliff 

Davenport v. Afton-Lincoln County Municipal Airport Joint Powers Board, FAA Docket No. 16-

06-06, (January 19, 2007) (Director's Determination), Issue 7. All potential grant assurance 

violations are within the scope ofF AA to review and address, whether alleged in a Part 16 

complaint or identified through any other means. See Boston Air Charter v Norwood Airporr 

"See March 25, 2014, City Council Meeting minutes FAA Item 1 page 6 and exhibit 6. Also, see City Council 

meeting minutes dated October 27, 2015 ("direct staff to look at commencing the CEQA visioning process to do 

things with the airport other than current uses~~). 

10 
Case: 72827, 08/25/2016, ID: 10100384, 41 55 

Commission, Norwood, Massachusetts, f"AA Docket No. 16-07-03 (August 14, 2008) (Final 

Decision and Order), pages 26-27. 

Section 16.1 is very broad and conveys jurisdiction where a complaint is filed under any of the 

listed authorities. Here, the Complaint has been tiled under the authority of"[t]he assurances 

and other Federal obligations contained in a grant-in-aid agreement issued under the Airport and 

Airvvay Improvement Act of 1982 (AAIA)." Therefore, we find jurisdiction exists. 

Failure to Engage in Good Faith Effort to Resolve 

The City argues that the Complainants have failed to engage in good faith efforts to resolve this 

matter informally as required by 14 CFR § 16.21. The Complainants counter that they have 

exchanged letters with the City on this subject of the Complaint. Complainants' letter of June 

11,2014, raises the issue of the grant expiration date and oilers to meet with the City and to 

utilize a mediator. [FAA Item I exhibit II] The Deputy City Attorney's reply, in the final 

sentence, informs Complainants' counsel that should he wish to discuss this ftuiher, "you are 

welcome to contact me." [FAA Item 1 exhibit 12] 

Despite this offer, the City's response does not directly respond to Complainants' concerns and 

does not respond in any credible way to the Complainants' offer to meet or mediate. The letter 

merely states that "regardless(){ when the Grant Assurances expire . .. years of formal and 

informal processes and proceedings lie ahead " [FAA ltem I exhibit 12] As both parties point 

out, the status of SMO is a contentious issue that has been the subject of significant past and 

present litigation. 

The expiration date itself has been disputed since at least 201 1. City ofSanta Monica v. FAA, 

631 F. 3d 550, 552 (D.C. 2011). The City's position on the expiration date is clear and unlikely 

to be voluntarily reversed. The Complainants are not required to conduct continued informal 

resolution efforts when it appears clear that the City's position on the expiration date is 

longstanding and fixed. 

Accordingly, the motion to dismiss is denied on all grounds. 

VI. Issue 

Whether the City's Grant Assurance obligations expired on June 29, 2014 or expire on 

August 27,2023. 

The Legal Effect of the 2008 Director's Detenninationln re City of Santa Monica, CA 

At issue in this case is the expiration date of the City's AlP grant obligations. The Complainants 

argue that: 

"this issue already has been the subject of an FAA ruling pursuant to Part 16. In re City 

of Santa Monica, California, docket nos. 16-02-08/F AA-2003-15807, FAA explained: In 

2003, the City requested, and FAA approved a grant amendment for $240,600, increasing 

II 
Case: 16-72827, 0812512016, 10: 10100384, 42 55 

its AlP grant total to $10.2 million ... This was the last AlP-funded project at SMO to 

date. As a result, SMO is obligated under its AlP grant assurances until at least 2023. 

Director's Determination, at 13 (May 27, 2008) (emphasis added; footnote and citation 

omitted)." 

The Complainants "concur with the FAA's position as stated in the Director's Determination, 

and urge FAA to maintain that position in this proceeding." [FAA Item 6 page 6]. 

In contrast, the City contends, "there has never been an administrative "ruling" by FAA that the 

City is obligated by its AlP grant assurances until 2023. " The City states that the issues in the 

prior Directors Determination had nothing to do with the expiration date of the grant assurances. 

[FAA Item 7 page 2] 

The date was at issue in administrative litigation that culminated in a ruling from the U.S. Court 

of Appeals for the DC Circuit. See City of Santa Monica v FAA, 631 F.3d 550 (DC 2011 ). In 

that case, the court found that it could resolve the material issues without determining the grant 

expiration date, which it noted remained disputed. !d. at 552. The FAA accordingly accepts the 

City's contention that the 2008 administrative determination is not dispositive, and this 

Director's Determination constitutes a fresh examination of the issue based on the record before 

us now. 

The Expiration Date is determined by the earlier of the Useful Life of the project and the NotTo-Exceed Date of No More Than 20 Years from Acceptance ofthe Grant Offer 

The FAA may approve a project grant application "only if" it receives written assurances 

"satisfactory to the Secretary." Title 49 U.S.C. § 47!07(a). To modify the assurances or to 

require compliance with an additional assurance, FAA must publish notice in the Fed em! 

Register and provide an opportunity for comment. Title 49 U.S. C. § 47017(a). The assurances 

in effect at the time the City of Santa Monica entered into its grant, on June 27, 1994, were 

noticed in the Federal Register on February 3, 1988. 53 Fed. Reg. 3104 (Feb. 3, 1988). 

Between February 3, 1988 and June 27, 1994, fAA amended the grant assurances twice. Neither 

affected the provision on duration. 5 

These covenants are not contractual terms open to negotiation, but vital legal requirements 

imposed by statute. "The conditions Congress imposed on the grant to local airport proprietors 

of money from the Airport and Airway Trust Fund are designed in part to insure the maintenance 

of conditions essential to an efficient national air transport Jystem, including access to airports 

on a reasonable and nondiscriminatory basis. " City and County of'San Francisco v. FAA, 942 

F.2d 1391, 1395 (9'h Cir. 1991). 

5 See 53 Fed, Reg. 3436! (Sept. 6, 1998); 54 Fed. Reg. 35748 (Aug. 29, 1989); A change noticed on June 10, 1994 

also did not affect the duration provision, and in any event only took effect on July I I, I 994, so it does not apply to 

the assurances as they existed on June 27, 1994. See 59 Fed. Reg. 30076. 

12 
Case: 16-72827, 08/2512016, ID: 10100384, 

The Duration of the Grant Assurances Fall into Three Categories 

The duration of the assurances is provided in the assurances themselves. The assurances fall into 

three categories in terms of duration. first are the assurances for which there is "no limit" on 

duration. These assurances never expire so long as the airport is operated as an airport. Included 

in this category are "the assurances against exclusive rights [and] the terms, conditions, and 

assurances with respect to real property acquired with Federal funds." Grant Assurance (B)(!) 

Second are the civil rights assurances the duration of which is specified in the assurance 

themselves. Generally, the civil rights assurances also extend to the period during which the 

airport is used as an airport. 

Third, are all the other remaining assurances. The date that this order seeks to determine applies 

to the third category. 

Assurance (B)(!) provides: 

The terms, conditions and assurances ofthe grant agreement shall remain in full 

force and effect throughout the useful life of the facilities developed or equipment 

acquired for an airport development or noise compatibility program project, or 

throughout the useful life of the project items installed v.~thin a facility under a 

noise compatibility program project, but in any event not to exceed twenty (20) 

years from the date of the acceptance of a grant offer of federal funds for the 

project However, there shall be no limit on the duration of the assurance against 

exclusive rights or the terms, conditions, and assurances with respect to real 

property acquired vvith federal funds. Furthermore, the duration of the Civil 

Rights assurances shall be as specified in the assurance. 

Assurance (B)(!) does not provide a time-certain date on which the assurances expire, but rather 

provides the methodology for detennining that date. 

The issue in this matter arises because on August 27, 2003, the parties executed an amendment 

that increased the Federal grant amount by $240,600.00. At issue is the significance of this 

amendment. 

Complainants argue that when the City accepted $240,600 of additional funds in 2003 it 

extended the not-to-exceed date to 2023. [FAA Item 3 exhibit B] 

The useful life for this project 

For the assurances at issue here, the expiration date is provided by the methodology specified in 

Assurance (B)(l ). Under (B)(!), the expiration date is a function of useful life, but is capped by 

a not -to-exceed date that is tied to the date the sponsor accepted an offer ofF ederal funds. Thus, 

there are two dates at play. In this Determination, we v.~ll refer to these dates as the not-toexceed date and the useful lite date. 

13 
44 55 

For useful life (B)(!) provides, 

the grant agreement shall remain in full force and effect throughout the useful life 

of the facilities developed or equipment acquired for an airport development or 

noise compatibility program project, or throughout the useful life of the project 

items installed within a facility under a noise compatibility program project ... 

Useful life commences from the point that the improvement is placed in service. There is no 

disagreement among the pruties on when useful life commenced for this project The parties 

agree that grant Amendment No. 2 funded a blast walL They similarly agree that the wall was 

submitted for final inspection on March 27, 2002, and having passed final inspection, that is the 

date it was put into service. Based on the consensus position of the parties, FAA agrees that the 

blast wall was placed in service on March 27, 2002. With the service date determined, we now 

tum to useful life. 

The FAA's presumptive useful life is 20 years.6 The City has provided no position or opinion on 

the useful life of the blast wall, but the engineer notes that approximately 13 years of service 

have produced no apparent wear.

7 [FAA Item l 0] 

The Complainants suggest a useful life in excess of25 years. This position is based on the 

opinion of a civil engineer, hired by the Complainants, who inspected the wall in 2015. This 

engineer noted that a similar blast wall at Bob Hope Airport has been in service for at least 30 

years. The engineer testified that he had prior experience and responsibility with regard to the 

"condition and potential of airport structures." Declaration of Leopold Klabbers. [FAA Item 9] 

A similar blast wall at Bob Hope Airport was part of the structures !or which he had 

responsibility and he testified that he also had a role in a "slight[] modifijcation]" to the wall that 

occurred shortly after its construction. 

Weighing all the testimony and particularly noting the static nature of the blast wall, the 

testimony of an engineer experienced with such walls, the useful life of a similar wall, lack of 

any apparent wear, and no contrary position set forth by the City, we accept the position of the 

Complainants and find the blast wall to have a useful life of 25 years. 8 

As the maximum duration of this assurance is 20 years from the date of acceptance of the grant 

used for this project, that date rather than the longer useful life date governs. Thus, the useful 

life ends on March 27,2027. 

6 FAA Order 5190.63, p.4-3. 

7 The City provided testimony of a civil engineer in its Public Works Department, but the engineer concludes that he 

does not know what the useful life is. Th.e engineer did note that the blast wall "appears ro be in a similar 

condition" from when "it was installed and began its usefitllife 13 years ago in 2002." 

8 Complainants actually argue for a useful life in excess of25 years, but fail to support or adequately limit such an 

open-ended assertion. 

14 
Case: 16-72827, 0812512016, ID: 10100384, 45 55 

Not to exceed date 

In determining the expiration date, (B)(I) provides that the expiration dates arc "not to exceed 

twenty (20) years from The date of the acceptance of a grant offer of Federal fonds for the 

project." Upon acceptance of an offer of Federal funds for an AlP project, the assurances 

become a binding contractual obligation between the airport sponsor and the Federal 

Government. 

On June 29, 1994, the City of Santa Monica accepted an AlP grant for a project at SMO. The 

grant agreement attached the standard set of grant assurances. Had nothing else happened, the 

not-to-exceed date for the grant assurances would have been June 29, 2014, the date that the City 

argues is, in fact, the actual expiration date. 

Complainants, however, observe that this is not the last date on which grant funds were accepted 

by the City. On September 27, 2002, the City Manager wrote to FAA and indicated that the City 

"requests to amend the Federal Grant for Project No. AlP 3-0600239-06(11) to increase 

participation amount by $240,600 to a total of$1,845,300 to reflect increased costs and changed 

conditions which occurred during construction." [FAA Item 5 exhibit 4] This was a 15 percent 

increase to the original amount of the grant. 

According to a subsequent letter from the City dated May 7, 2003, the City's request was not 

approved due to an ongoing FAA investigation. In addition, FAA considered the grant closed as 

of October 19, 2001. [FAA Item 12] The May 7, letter reiterated the City's request for 

additional funds and "implore[ d) FAA to reconsider this matter and approve the requested grant 

reimbursement so the .funds can he used to enhance and maintain the Santa Monica Airport. " 

The letter indicated that the "requested reimhursementfunds represent a substantial amount of 

revenue that could be utilized for much-needed and differed airfield maintenance projects. '·" 

[FAA Item 11 J Based on this letter, FAA wrote to the City and agreed to "reopen the grant to 

amend the grant agreement, thereby increasing the maximum US. obligation" [FAA Hem 12] 

On August 27, 2003, FAA and the City executed "Amendment No.2 to Grant Agreement for 

Project No. 3-06-0239-06." The amendment provided "in consideration oft he ben~fits to accrue 

to theparties hereto" the parties "mutually agree that said Grant Agreement be and is hereby 

amended as follows: The maximum obligation ... is hereby increased by $240.600.00 .... " 

The amendment did not have its own provision on the expiration date but provided that "[a]ll 

other terms and conditions of the [original} Grant Agreement remain in full force and ejfect." 

[FAA Item 3 exhibit B] 

Complainants argue that when the City sought and accepted $240,600 of additional funds in 

2003, a 15 percent increase from the original grant, it extended the not-to-exceed date to 2023. 

[FAA Item I page 7] 

The City argues that the original 1994 grant agreement governs the expiration date and that 

under that agreement upward and dovmward adjustments in the grant amount were 

contemplated, and that nothing suggested that "additional phases or amendments to the 

Agreement or the final audit" would constitute a separate agreement that would restart the notto-exceed date. [FAA Item 5 page 18] 

15 
16-72827, 08125/2016, 10100384, 

The City also states that, "lhe City's very, reasonable interprelation of the contract taken from the 

plain and express language within/he four corners of those documents must control and, 

therefore, the FAA's determination must be that City's obligations ended pursuant to the 

Agreement in June 2014 . . , [FAA Item 5 page 4] 

Additionally, the City asserts that ifthere is any ambiguity in the documents then "both .federal 

and state law dictate that such ambiguity must be interpreted against the drafter of the contract." 

[FAA Item 5 pages 4 and 5] 

Consideration for the Second Amendment 

'fhe Director disagrees with the City's assertions. Unlike the first amendment to the grant, 

changing the description of work but adding no funds, the second amendment involved an 

additional significant obligation of federal funds and no additional work performed or benefit to 

the public other than from the extension of the grant covenants. All AlP grants require that the cost 

of the project be shared between the Federal Government and the airport sponsor, Title 49 U.S.C. 

47109. This section of law requires that the airport sponsor, the City in this instance, absorb a 

minimum percentage of the cost of the project The agency is in no way obligated to provide 

increased funding if there is an ovemm; on the contrary, grant recipients should expect to cover 

such overruns as part of its contribution to the project. Instead, in this instance the grant recipient 

requested the additional funds in order to free up resources for other airfield maintenance projects. 

The City makes a number of arguments based on standard principles of contract law, but ignores 

the most fundamental principle of contract law-the need for an exchange of consideration. This 

principle applies to grant agreements just as much as to procurement contracts. See, e,g, Jackson 

v. Birmingham Board of Education, 544 U.S. 167 (2005). In this matter, the work for which the 

1994 grant had been provided had been completed and the grant closed. The City realized it had 

incurred an overrun, and implored FAA to provide additional funding. The FAA agreed to do so, 

and provided the funding. 

It is clear what consideration FAA provided, additional timding. The only consideration for the 

amendment provided by the City, however, would be the continued applicability of the grant 

assurances using the date of the si&med second amendment as the starting date. Adherence to the 

conditions Congress sets in exchange for receiving grant funds has repeatedly been held to be the 

necessary consideration for the contract that is a grant agreement. ld, see also, Pennhurst State 

School and Hospital v. Halderman, 451 U.S. l, 17 (1981 ). Simply continuing to adhere to the 

grant assurances using the date of the award of the original grant would provide no new 

consideration to support the additional funds provided. 

The Second Amendment was a new obligation akin to a new grant 

The City argues that there was nothing to indicate that the second amendment would have the 

effect of extending the expiration date of these assurances, or be the equivalent of a new grant 

16 
47 55 

The second amendment, however, bore every indicia but one of being a new contract: the old 

grant had been closed; the second amendment was mutually agreed to and signed by both parties; 9 

there was an offer, acceptance and an exchange of consideration. Under these circumstances, the 

Government Accountability Office has held that the funds provided for the amendment are for in 

essence the award of a new grant. 41 Comp. Gen. 134 (1961). 10 

The only arguably contrary indicator was the agreement that the tenns and conditions of the 

original grant would remain in torce. 11 As the scope of work for which the funds were provided 

was unchanged, and the assurances are statutory requirements the lanhrnage or which does not 

change from grant to grant, this statement is neither surprising nor incorrect. It is the amount of the 

grant that was enlarged rather than the scope of what the grant was for. When a grant is enlarged 

beyond the scope of the original such that a new financial obligation is made, it "must be 

considered as giving rise to a new grant." 39 Comp.Gen. 296, 298 (1959). 12 

The City understood the requirements of the statutorily required grant assurances 

The City argues, in essence, that there was no meeting of the minds for the second amendment. 

The City Manager and the City Attorney executed this amendment on August 29, 2003. The 

amendment was signed during a period in which there was an ongoing FAA investigation13 of 

the City's ban on categol)' C and D aircraft- a ban that FAA alleged, and which the U.S. Court 

of Appeals for the D.C. Circuit affirmed, violated the very assurances here at issue. City of 

Santa Monica v. Federal Aviation Administration, 631 F.3d at 559 (D.C. Cir. 2011). 

Moreover, in prior attempts to close the airport or to consider closing the airport, the City was 

reminded in formal opinions from both the City Attorney and the California Attorney General 

()Typically. purely adminisu·ative changes to an agreement can be signed only by the Government and do not require 

mutual agreement. See 48 CFR 43.1 03(b) (this particular regulation concerns procurement contracts, but 

demonstrates the general distinction between bilateral and unilateral changes). 10 GAO focuses on the requirement in these circumstances to use funds current in the year the amendment is made 

rather than funds current in the year the original grant was made. The AlP is funded e-ntirely with "no year'' funds, 

i.e., funds available until expired, so it is not possible to compare the funds used when the second amendment was 

made to the funding used when tl1e grant was originally awarded. It is the principle that under these circumstances 

the second amendment is in essence a new grant, rather than the type of funds used, which is relevant to this 

decision. In this particular GAO decision, additional funds were needed to complete the work, so completion ofthe 

work was sufficient consideration for the additional funds. In the matter at hand, however~ the work had already 

been completed, and thus the need fbr additional consideration. 

11The City also mentions the fact that the grant number remained the same. {FAA Item 5 page 19]. The same grant 

number was used because the funds were for work already completed under that grant number. The Director finds 

that the use of the same AlP grant number for the second amendment does not obscure the fact that a new obligation 

of funds were made, consideration for which was an extension in the applicability of the grant assurances. 

"Another GAO case establishes the principle that ifthe bona fide need for the project remains the same, the 

purpose of the grant remains the ,~arne and the scope of the project remains the same, then the amendment is not 

equivalent to a new grant. 58 Comp. Gen. 676 (1979). Here, the purpose and scope of the projecl remained the 

same, but the bona fide need had already been met. The work had been completed, but additional funds beyond 

what had been originally agreed to were provided. 13 See Letter from Bob Trimborn, Airport Manager to William Withycombc, FAA Regional Administrator (May 7, 

2003) (reference FAA's Notice of Investigation, Docket No. 16-02-08). 

17 
Case: 08/25/2016, ID: 10100384, 

that Federal funding comes with reciprocal obligations that require the airport to remain open.

14 

Because of the controversy that surrounded the City's Federal obligations both at the time of the 

amendment and well before, the City knew or should have known that by seeking, and accepting 

additional Federal funds, congressionally mandated assurances would continue to apply. As the 

City offered no other consideration for the significant increase in funds, it knew or should have 

known that acceptance of these new funds would restart the date of that these assurances would 

apply. 

Settlement Agreement 

The City's argument that its intent is con~o>ruent with the Settlement Agreement is also rejected. 

The Agreement itself makes clear that only those grant agreements executed prior to July 1, 1995 

would not extend or alter operational obligations. Settlement Agreement, p. 8-9. The 

amendment at issue here is from 2003. Moreover, the Settlement Agreement itself 

acknowledged that Federal statute would control. [!d. at 91 That statute, 49 U.S.C. 47107, 

requires compliance with the relevant grant assurances for a period of not more than 20 years 

from t11e date the grant was accepted. As the second amendment was a new obligation of funds 

without a commensurate increase of scope of the grant, other than from an extension in the grant 

assurances, it is reasonable to interpret the additional grant funds as the beginning of a 20-year 

grant obligation period based on the City's acceptance. 

Interpretation of the Grant Assurances 

The City argues that the plain language of the grant supports its pnsition and that if there is any 

ambiguity the rule of contra proferentem applies. Federal grants, however, are a hybrid- partly a 

contract in terms of voluntary offer, acceptance and consideration, and partly a creature of statute 

in terms of the conditions imposed by Congress in exchange for the funds. In Bennett v. Kentucky 

Department of Education, 470 U.S. 656, 669 (1985), the U.S. Supreme Court expressly addressed 

this issue. In that case it was argued that the contractual aspects of Federal grants meant that the 

doctrine of contra projerentem should apply to resolve any ambiguities. The Court held that as 

grants originate in and are governed by Federal statutes, the rules governing statutory interpretation 

apply. 

Consistent with this opinion, subsequent courts have held that FAA is entitled to deference in 

interpreting the 1,rrant assurance obligations. In BMI Salvage Corp. v. Federal Aviation 

Administration, Miami-Dade County, Florida, U.S. Court of AppeaL~ IF" Circuit No. 11-12583, 

(July 19, 2012), the court found "[b]ecause the FAA's interpretation is not plainly erroneous or 

inconsistent with the statute, we conclude that the FAA's tlnding that demolition is nonaeronautical is entitled to deference." 

Under the plain language of assurance (B)( 1 ), the not-to-exceed date is linked to "a offer" and 

not limited to the original offer. With the work for which the grant funds were originally 

provided completed, and the grant itself closed, additional consideration was needed for the 

additional funding. General reference to the additional consideration was in the language of the 

14 California Attorney General Opinion, CV 74-317 (May 30, I 975); Opinion of the City Attorney (Jan. 23, 1962). 

18 
Case: 16-72827, 0812512016, ID: 10100384, 49 55 

second amendment--FAA "has determined it to be in the interest of the United States" and that 

the second amendment was entered into "in consideration of the benefits to accrue to ... [both] 

parties .... " That consideration was, as it usually is for grants, agreement by the grant recipient 

to be bound by the statutory grant covenants. The applicable assurance at issue continues until 

throughout the useful life of the project but no later than 20 years from the date of that 

acceptance, August 27, 2003. 

The Director's finding here yields a reasonable outcome and is consistent with Congressional 

intent in establishing the AlP. The grant assurances arc designed to assure that FAA and the 

public receive a benefit in return for the Federal investment. Assurance (13)(1) reflects t11e 

FAA's expectation that the benefit to the public extends, in general, for approximately 20 years. 

In this matter, the usefu1life would be longer, but the grant assurance is not to exceed 

20 years from acceptance of the new grant funds. The continued applicability of the 

relevant grant assurances until August 27,2023, is consistent with the useful life of the 

project and the public benefit resulting from the project. Under the City's approach, the 

applicable grant assurances would have expired in 2014, yielding only 12 years of use 

and benefit from the improvements that were completed in 2002; a result at odds with the 

conditions, intent and purpose of the FAA's grant program. 

All other arguments made by the City have been considered and are not supported by the law or 

the facts. 

VII. Findings and Conclusions 

Upon consideration of the submissions of the parties, the entire record herein, the applicable law 

and policy, the Director, Airport of Compliance and Management Analysis, finds and concludes 

that the City remains obligated by the grant assurances until August 27, 2023. This finding is 

based on the acceptance of Amendment No.2 on August 27, 2003, resulting in additional AlP 

funds provided to the City. This acceptance ofF AA offer of additional grant funds, after the 

project had been completed, triggers the grant assurance under (13)(1) to remain in force for 20 

years from August 27, 2003. 

ORDER 

ACCORDINGLY, the Director finds that the Respondent City of Santa Monica remains 

obligated by the grant assurances until August 27, 2023. 

19 
ID: 10100384, DktEntry: 1-5, 50 55 

RIGHT OF APPEAL 

This Director's Determination is an initial agency determination and docs not constitute final 

agency action and order subject to judicial review. [14 CFR 16.247(b)(2)] A party to tlus 

Complaint adversely afTected by the Director's Detennination may appeal the initial 

determination to FAA Associate Administrator for Airports pursuant to 14 CPR 16.3 3(b) within 

thirty (30) days after service oftbe Director's Determination. 

/fi--frrn~n~{."fl~fi~;~'-; 

£·A~ting Director, Office 'c1Ximo1t Compliance 

and Management Analysis 

I 

20 
Page 51 55 

INDEX OF ADMINISTRATIVE RECORD 

National Business Aircraft Association, 

Krueger Aviation, inc., Harrison Ford, 

.Justice Aviation, Kim Davidson Aviation, 

Inc., Aero Film, Y ouri Bujko, James Ross, 

Paramount Citrus LLC and Aircraft Owners 

and Pilots Association 

Complainants 

v. 

City of Santa Monica, California 

Respondent 

Docket No. 16-14-04 

EXHIBIT l 

Item 1-Pa1i 16 Complaint, dated July 2, 2014. 

exhibit! -City of Santa Monica Inter-Deprutmcnt Memo dated January 23, 1962 

exhibit 2- Office of the Attorney General of the State of California, Opinion No. CV 

74-317, dated May 30, 1975 

exhibit 3-City Council Meeting, dated June 23, 1981, Resolution No. 6296 

exhibit 4- Newspaper article titled "Cily rescinds eviction notices to airport firms", 

undated 

exhibit 5- Santa Monica Airport Agreement, dated January 31, 1984 

exhibit 6 -City Council Report, City Council Meeting, March 25, 2014 

exhibit 7 ""City of Santa Monica Regular City Council Meeting Agenda, March 25,2014 

exhibit 8- United States Court of Appeals for the District of Columbia Circuit, The City 

of Santa Monica, Petitioner, v. Federal Aviation Administration, Respondent; Final Brief 

of Petitioner City of Santa Monica, dated August 31,2010 

21 
ID: 10100384, DktEntry: l-5, 52 of 

exhibit 9- United States District Court Central District of California, City of Santa 

Monica, Plaintiff, v. United States of America, Federal Aviation Administration and 

Michael P. Huerta, in oi1icial Capacity as Administrator ofF ederal Aviation 

Administration, Defendants; Complainant for Declaratory Relief Under the Quiet Title 

Act and United States Constitution, dated October 31, 2013 

exhibit I 0 -United States District Court Central District of California, City of Santa 

Monica, PlaintiH~ v. United States of America, Federal Aviation Administration and 

Micha.el P. Huerta, in ofticial Capacity as Administrator of the Federal Aviation 

Administration, Defendants; Joint Rule 26 Report of Early Meeting of Counsel Dated 

January 16, 2014 

exhibit 1 l ·-Letter from Richard K. Simon to Santa Ofticials, Rod Gould City Manager, 

Marsha Moultrie City Attorney, Ste1ios Makrides Airport Manager, dated June 11, 2014 

exhibit 12- Letter from Ivan 0. Campbell, Deputy City Attorney, for Santa Monica, to 

Richard K. Simon, dated June 23, 2014 

exhibit 13- Letter from Steven J. Brown, NBAA Chief Operating Officer to The 

Honorable Pam O'Connor, Mayor, City of Santa Monica, dated March 24, 2014. 

Item 2 ···~Notice of Docketing dated July 17, 2014. 

Hem 3 --City of Santa Monica, Motion to Dismiss the Part I 6 Complaint of National Business 

Aircraft Association, ET AL; Memorandum of Points and Authorities in Support Thereof 

[Pursuant to 14 CFR. §16.25(a)(b), dated, August 14, 2014]. Includes Exhibits (A) Grant 

Agreement, Part V, Assurances, (B) Amendments 1 and 2, and (C) August 12,2014, Saota 

Monica Council Meeting, Agenda Hem 8-A. 

15 AlP 

exhibit A- Federal Aviation Administration, Grant Agreement, Part I Offer, to the City of 

Santa Monica, California, Sponsor dated June 27, l994,AIP 15Project No. 3-06-0239-06, 

Contract No. DTFAOS-94-C-20857, to the City of Santa Monica, Califomia, Sponsor. 

1. Part 1!-Acceptance date June 29, 1994 (pageS), signed by officials for the 

City of Santa Monica 

2. Application for Federal Assistance submitted June 15, 1994, by the City of 

Santa Monica. 

3. Part V of the Application for Federal Assistance, the Assurances, Dated 

October I , 1990 

exhibit B- Amendment No. I to Grant Agreement for Project No. 3-06-0239-06, dated 

November 8, 1999. Amendment No.2 to Grant Agreement for Project No. 3-06-0239-

06, dated August 27, 2003 

22 
Case: 16· Page of 

exhibit C- City Council Report, City Council Meeting, August 12,2014, Agenda Item 8-

A, and attestation ofVernice Hankins, City Clerk's Office, that the Staff Report is a true 

and correct copy of the Staff Report Item 8-A. 

Item 4- Answer of the Complainants to Respondent's Motion to Dismiss, docketed August 28, 

2014. 

ItemS- City of Santa Monica's Answer to Complaint, dated and Supporting Exhibits dated 

October 20, 2014. 

exhibit 1-- Federal. Aviation Administration, Grant Agreement, Part I OtTer, to the City 

of Santa Monica, California, Sponsor dated June 27, 1994. AlP Project No. 3-06-0239-

06, Contract No. DTFAOS-94-C-20857, to the City of Santa Monica, Califomia, Sponsor. 

a. Part ll-Acceptance date June 29, 1994 (page 5), signed by officials for the 

City of Santa Monica. 

b. Application for Federal Assistance submitted June 15, 1994, by the City of 

Santa Monica, 

c. Part V of the Application for Federal Assistance, the Assurances, Dated 

October 1, 1990. 

d. Current FAA Advisory Circulars for AlP Projects, effective June I, 1994. 

exhibit 2- Amendment No. I to Grant Agreement for Project No. 3-06-0239-06, dated 

November 8, 1999. Amendment No, 2 to Grant Agreement for Project No. 3-06-0239-

06, dated August 27, 2003. 

exhibit 3 City Council Report, City Council Meeting, August 12,2014, Agenda Item 8-A, 

and attestation of a City Clerk's Office, that the Staff Report is a true an correct copy of 

the StafJ Report Item 8-A. 

exhibit 4- Letter from the Manager of the City of Santa Monica to the FAA Airports 

Program Engineer regarding Santa Monica Airport Grant Amendment tor Project No.3-

06-0239-06 (I!), with attachment I dated September 27, 2002. 

Item 6 - Reply of the Complainants to the Respondent's Answer to the Complaint docketed 

October 30,2014. 

Item 7- City of Santa Monica's Rebuttal to the Reply Brief of Complaints, docketed 

November 13, 2014. 

Item 8- The FAA's Request for Additional Information, dated February 19, 2015. 

Item 9- Complainant's Response to the request for additional information, dated 

March 25, 2015. 

23 
16~ Page 54 of 55 

Item 10- City of Santa Monica's Response to FAA's Request for Additional Information 

Declaration, with Exhibit, date April!, 2016. 

l.tem 11 -Letter from the City to FAA requesting the Grant be reopened and to award additional 

grant money, dated May 7, 2003. 

Item 12- Letter rrorn FAA to the City agreeing to reopen grant and disburse additional grant 

money, undated copy. 

Item 13 - Final Construction Report, Airport Improvements, Santa Monica Airport, AlP Project 

No.3-06-0239-06 (!!). 

Item 14- Letter from the City requesting Amendment No. 1 to the grant dated August 2, 1999. 

Item 15 - Santa Monica Airport, Airport Master Record, 501 0. 

Item 16- Dated August 6, 2015, Notice of Extension of Time to issue the Director's 

Determination to August 21,2015. 

Item 17 -Dated August 2 I, 2015, Notice of Extension of Time to issue the Director's 

Determination to September 21, 2015. 

Item 18 ·Dated September 21, 2015, Notice of Extension of Time to issue the Director's 

Determination to October 15, 2015. 

Hem 19 - Dated October 16, 2015, Notice of Extension of Time to issue the Director's 

Determination to December 4, 2015. 

24 
ID: 10100384, DktEntry: Page of 55 

CERTIFICATE OF SERVICE 

I hereby certify that I filed the foregoing with the Clerk of the Court for the 

United States Court of Appeals for the Ninth Circuit via by using the appellate 

CM/ECF system on August 25, 2016. 

I certify that one copy of the foregoing was served via hand delivery on 

August 25, 2016 on each of the following: 

Michael P. Huerta 

Administrator 

Federal Aviation Administration 

800 Independence A venue, SW 

Washington, D.C. 20591 

Assistant Chief Counsel 

Office of the Chief Counsel 

Federal Aviation Administration 

800 Independence Avenue, SW 

Washington, D.C. 20591 

I eetiify that one copy of the foregoing was served via UPS overnight mail 

on August 25, 2016 on: 

Richard K. Simon 

1700 Decker School Lane 

Malibu, CA 90265 

Dated: August 25, 2016 

sf-3684576 

Is/ Deanne E. Maynard 

Deanne E. Maynard