UNITED STATES DEPARTMENT OF TRANSPORTATION 

FEDERAL AVIATION ADMINISTRATION 

WASHINGTON, D.C. 

National Business Aviation Association, Inc., 

et al. 

Complainants, 

v. 

Town of East Hampton, NY 

Respondent. 

RECEIVED 

OCT 3 0 2015 

PART 16 DOCKETS 

FAADocketNo.l6-l5-08 

RESPONDENT TOWN OF EAST HAMPTON, NEW YORK'S 

REBUTTAL IN SUPPORT OF ITS 

MOTION TO DISMISS AND ANSWER TO THE COMPLAINT 

Designation of persons to receive service for the Town of East Hampton, New York: 

Elizabeth Vail 

Town Attorney 

Town of East Hampton 

159 Pantigo Road 

East Hampton, NY 11937 

EVail@EHamptonNY.Gov 

W. Eric Pilsk 

Catherine van Heuven 

Kaplan Kirsch & Rockwell LLP 

1001 Connecticut Ave., NW, Suite 800 

Washington, D.C. 20036 

epilsk@kaplankirsch.com 

cvanheuven@kaplankirsch.com 

Telephone: (202) 955-5600 

Facsimile: (202) 955-5616 
INTRODUCTION 

Unable to find any direct legal support for their theory that the Town of East Hampton's 

Local Laws violate the Sponsor Assurances 23 and 25, Complainants offer a mix of rhetoric and 

righteous indignation, propped up by a hodgepodge of out -of-context snippets from a variety of 

sources to support their arguments. But wishful thinking is not enough. Complainants' theories 

fail for the simple reason that they lack any support in the actual law regarding Assurances 23 

and 25. 

First, Complainants continue to argue that Assurance 23 is violated any time an airport 

engages in unjust discrimination. But the FAA has never adopted that "mirror image" theory and 

every authority - including the FAA - that has considered the scope of Assurance 23 and the 

statutes on which it is based, has confirmed that it is intended to prevent airports from granting 

monopolies and imposing anti-competitive conditions on airport users that would create an 

exclusive right. Complainants have failed to present any evidence that the Local Laws create 

such an anti-competitive effect. Accordingly, Complainants' Assurance 23 claim fails, both as a 

matter oflaw, and also for lack of factual support. 

Second, Complainants continue to argue that Assurance 25 bars the Town from spending 

Airport revenue on legal fees to defend the Local Laws. In Complainants' view, the Local Laws 

do not "benefit" the Airport or Airport users because they are born from an "anti-airport agenda." 

Again, however, Complainants cite no law that embodies or even supports that theory. 

Fundamentally, Complainants offer no argument as to why defending airport operating rules 

cannot be considered a proper use of airport revenue. Nor do Complainants attempt to respond 

to the Town's arguments that adopting such a rule would wreak havoc with airport finances and 

management by effectively preventing airports from using airport revenues to defend any action 

2 
that someone claims is illegal or not for the benefit of the airport or airport users. Thus, 

Complainants' Assurance 25 claim also fails as a matter oflaw. 

ARGUMENT 

A. THE ONE-TRIP-PER-WEEK LOCAL LAW IS NOT RIPE FOR REVIEW 

UNDER PART 16. 

Under FAA precedent, Complainants' claims with regard to the One-Trip-Per-Week 

Local Law are not ripe for review because that Local Law has not been applied or enforced while 

its constitutionality is being litigated in federal court. Northwest Airlines, Inc. et al. v. 

Indianapolis Airport Auth., et al., FAA Docket No. 16-07-04, Final Decision and Order at 15 

(Oct. 27, 2009). 

Complainants' arguments that the Local Law remains on the books; that the current 

injunction has been appealed; that the basis for the appeal is distinct from the issues in this Part 

16 proceeding; or that the Town has announced it would enforce this Law if it prevails in the 

litigation, Reply Br. at 2, are immaterial, and none of the cases Complainants cite is to the 

contrary. 

In Kalicki v. E*Trade Bank, the court found that claims for wrongful foreclosure were 

ripe - even though the underlying foreclosure sale had been rescinded - because Plaintiffs had 

filed an alternative claim for wrongful disclosure related to the resulting emotional distress and 

economic damages. 2015 Cal. App. Unpub. LEXIS 6896 at *18 (Sept. 28, 2015). Here, there is 

no Local Law "alternative" to the One-Trip-Per-Week Law that is being enforced. 

In Weiss v. Feigenbaum, 588 F. Supp. 265 (E.D.N.Y. 1982), the court found that claims 

regarding damages to Plaintiffs related to election were ripe - even though the underlying 

3 
election had been stayed indefinitely - because some of the allegations related to past injuries 

"which makes this case live." !d. at 275. There are no such past injuries here. 

In Town of Fairview. Tx. v. City of McKinney, Tx., FAA Docket No. 16-99-04, Director's 

Determination on Remand (July 26, 2000), the FAA found that there was standing because the 

Complainants had demonstrated a current violation of Grant Assurances related to the sponsor's 

ongoing obligation to avoid the potential safety hazards created by the documented bird hazards 

near the airport. !d. at 22 ("Since McKinney has failed to properly mitigate the bird hazards 

documented at McKinney Municipal Airport, we conclude that McKinney is in noncompliance 

with its Federal obligations regarding the safe and efficient operation and maintenance of the 

airport (Grant Assurance 19) and hazard removal and mitigation (Grant Assurance 20)."). Here, 

there is no existing or ongoing violation because the One-Trip-Per-Week Law has never been 

applied or enforced. 

Finally, the Final Agency Decision and Order in Northwest Airlines does not stand for the 

sweeping proposition that the FAA may issue advisory opinions as Complainants seek here. 

Reply Br. at 2, n. 3. In Northwest Airlines, FAA found that where a Landing Fee Rent Credit 

had not yet been imposed, it was not ripe for review under Part 16. Northwest Airlines, Final 

Decision and Order at 15. Northwest Airlines involved an Airport that had secured a favorable 

decision from the Director (who found that the issue was not ripe for review) but was still 

appealing in order to force the agency to expunge additional guidance provided in dicta on the 

matter found to be not ripe for review. FAA ultimately refused to disavow the additional 

guidance on the issue that was not ripe because the guidance provided in the Director's 

Determination was not a finding or conclusion of compliance or noncompliance with the grant 

assurances. !d. at 29. 

4 
This unusual case in no way provides legal authority for FAA to proceed to a decision on 

the merits of the One-Trip-Per-Week Local Law in the instant case. Moreover, in Northwest 

Airlines the sponsor had agreed voluntarily not to enforce its landing fee rent credit, whereas 

here the One-Trip-Per-Week Law has been enjoined by a federal court pending litigation on its 

constitutionality. It is simply premature for the FAA to offer any guidance on a law whose final 

scope is under judicial review. That uncertainty further underscores the applicability of the 

general rule that when a law has not been applied, Part 16 review is not ripe. !d. at 29 (FAA can 

issue findings and conclusions "only after a presentation of the facts and circumstances in effect 

at such time as the charge was actually implemented by the Appellants.") 1 

B. COMPLAINANTS HAVE NOT ALLEGED A VIOLATION OF GRANT 

ASSURANCE 23. 

1. Complainants Cannot Avoid Demonstrating a Monopolistic or AntiCompetitive Effect By Relying on the Rejected "Mirror Image" Rule. 

To support their Assurance 23 claim, Complainants continue to rely entirely on their 

"mirror image" theory, and strain to avoid the overwhelming weight of authority rejecting that 

theory and requiring a showing of monopolistic or anticompetitive effect to support a claim that 

an exclusive right was granted. Reply Br. at 2-6. Complainants' attempts fail, and they are 

unable to provide any authority to support their position. 

First, Complainants argue that the legislative history cited by the Town "did not actually 

pertain to the meaning of Section 40103(e) and thus [is] of no relevance in this proceeding." 

Reply Br. at 4. This is nonsense. The entire discussion at 83 Cong. Rec. 6729-30 (1938) is 

entirely on point. This could not be made more clear by the comments of Senator Copeland: 

JetAway Aviation. LLC v. Bd. ofComm'rs. Montrose Cty., Colo., FAA Docket No. 16-06-01, Director's 

Determination at 34 (Nov. 6, 2006) also does not support Complainants' ripeness argument. JetAway involved a 

ripe dispute regarding an FBO's ongoing efforts to gain access to the airport and to the use of a Unicorn frequency. 

5 
The subject under discussion received attention not only in the Committee 

on Interstate Commerce but also in the Committee on Commerce. I call 

attention to five places in the pending bill where the question of monopoly 

is dealt with in one way or another with the view to its control and 

prevention. 

Now, Mr. President, I ask Senators to tum to page 30, where is found 

another addition made by the Committee on Commerce to the bill. In line 

20 on that page, in the section devoted to the expenditure of Federal funds, 

there is found this provision: 

There shall be no exclusive right for the use of any landing area or air 

navigation facility upon which Federal Funds have been expended. 

I was simply going to say that, running through this bill, in these five 

specific instances particularly, is evidence of the intent of both committees 

to do away with monopoly." 

Jd. at 6730 (available as Exhibit F to Complainants' Reply Brief). The fact that the discussion 

immediately before the statement cited in the Town's prior briefs specifically addresses air 

carrier mergers, Reply Br. at 4, n. 4, does not take away from the larger point that the colloquy as 

a whole expressed Congress' intent to make every effort to remove "anything savoring of 

monopoly" from the entire bill. Jd. at 6729. 

Complainants' attempt to undermine the 1941 opinion of the United States Attorney 

General also fails. Then-Attorney General Jackson was expressly asked for his interpretation of 

Section 303 of the Civil Aeronautics Act of 1938 (the precursor of 49 U.S.C. § 40103(e)). 40 

Op. Atty. Gen. 71 (1941). Attorney General Jackson focused his opinion on the last sentence in 

the section, which states that: "there shall be no exclusive right for the use of any landing area or 

air navigation facility upon which Federal funds have been expended." Jd. He reviewed the 

same legislative history discussed above, and concluded that that: 

6 
The restrictions imposed by section 303 of the Civil Aeronautics Act of 

1938 upon the expenditure of Federal funds upon landing areas and air 

navigation facilities make it clear that the term "exclusive right" as used in 

the section was intended to describe a power, privilege, or other right 

excluding or debarring another or others from enjoying or exercising a like 

power, privilege or right. This meaning is confirmed by the legislative 

history which shows that the purpose of the provision is to prohibit 

monopolies and combinations in restraint of trade or commerce and to 

promote and encourage competition in civil aeronautics .... " 

!d. at 72 (citing 83 Cong. Rec. 6729, 6730) (emphasis added). Complainants alternately reject 

the Attorney General's opinion because: (!) it was issued 75 years ago; (2) if the Attorney 

General was relying on the cited legislative history for the proposition that the purpose of the 

exclusive rights provision is to prohibit monopolies and anti-competitive behavior, he was in 

error; and/or (3) FAA should discount this opinion because it is not binding. None of these 

theories stands. 

Although opinions of the United States Attorney General are not formally binding on the 

courts, see Reply Br. at 4, n. 8, this does not take away from the fact that they remain persuasive, 

helpful, and entitled to a degree of deference. See, e.g., Bahlul v. United States, 767 F.3d I, 25 

(D.C. Cir. 2014) (vacated on other grounds) ("Attorney General opinions [are] not binding but 

'entitled to some deference, especially where judicial decisions construing a statute are 

lacking."') (citing Tel-Oren v. Libyan Arab Republic, 726 F.2d 774, 780 at n.6 (D.C. Cir. 1984) 

(Edwards, J., concurring)). Similarly, the age of an Attorney General Opinion does not diminish 

its applicability. In Bahlul, for example, the D.C. Circuit analyzed a President Andrew Johnsonera Attorney General opinion to assist with determining issues related to the trial of alleged 

terrorists in military tribunals. !d. at 25. Finally, although Complainants would disregard it, the 

FAA itself has already relied on - and accepted - Attorney General Jackson's opinion on the 

scope of the exclusive rights statutes. In the Matter of the City of Santa Monica, FAA Docket 

7 
No. 16-02-08, Final Agency Decision at 47-48 (July 8, 2009). Complainants' attempts to push 

aside any authority that undermines their position are unavailing, and must be rejected. 

Complainants' attempts to dismiss the FAA's decision in Santa Monica as an "outlier," 

Reply Br. at 4, are similarly ineffective, as they are unable to cite any authority supporting this 

argument. In fact, the FAA's decisions affirm that Santa Monica is not an outlier and that the 

"mirror image" theory, if it ever existed, does not mean what Complainants think it means. 

AOPA v. City of Pompano Beach, Fla., FAA Docket No. 16-04-01, Director's 

Determination (Dec. 13, 2005), illustrates this point. In that case, FAA found no exclusive rights 

violation caused by various airport operating restrictions even though the Director found that the 

same operating restrictions violated the sponsor's federal obligation to make the airport available 

on reasonable terms and without unjust discrimination. Specifically, the Director concluded: 

!d. at 44. 

It is unclear from the Complaint or the administrative record how the 

Complainants have construed the existence of an exclusive right based on 

the access restrictions and limitations. It is possible that an exclusive 

violation may result from denying access to certain types and classes of 

aeronautical users, but the Complainants have not made such a case. 

The administrative record does not provide sufficient evidence to 

demonstrate that the restrictions, whether appropriate or not, are applied in 

such a way as to grant an exclusive right benefiting one or more 

aeronautical user at the Air Park. 

More recent FAA decisions confirm that unjust discrimination may indicate an exclusive 

right but does not necessarily do so. Gary R. Ernest v. Leitchfield-Grayson Cty. Airport Bd., 

FAA Docket No. 16-09-01, Director's Determination at 17 (Dec. 17, 2009) (noting that 

unreasonable restrictions "could" create a constructive grant of an exclusive right, but finding no 

such exclusive right); Desert Wings Jet Ctr., LLC, et al. v. City of Redmond, Or., FAA Docket 

No. 16-09-07, Director's Determination at 13 (Nov. 10, 2010) ("may" create an exclusive right); 

8 
Isaac W. Jones, Jr. and Ala. Hang Gliding Ass 'n v. Lawrence Cty. Comm 'n, Ala., FAA Docket 

No. 16-11-07, Director's Determination at 13 (Sept. 19, 2013) (same); Truman Arnold Co. v. 

Chattanooga Metro. Airport Auth., FAA Docket No. 16-11-08, Director's Determination at 18, 

48 (Oct 4, 2013) (recognizing that unreasonable restrictions "may" create a constructive 

exclusive right, but finding no Assurance 23 violation where "the record shows that the 

sponsor's rationale for developing a second FBO was to promote competition ... "). 

In contrast to those decisions, and the clear language in Santa Monica, Complainants 

continue to misconstrue the general statements in pre-Santa Monica decisions to cof\iure a 

"mirror image" theory of exclusive rights that does not exist2 To the extent those decisions can 

be read as Complainants argue, the FAA has held such a reading is incorrect. Santa Monica, 

Final Agency Decision at 51 ("to the extent that those decisions conflict with the instant 

decision, they are incorrect."). Compare Complaint~ 38, citing Bardin v. County of Sacramento, 

California, FAA Docket No. 16-00-11, Director's Determination (Aug. 9, 2001), and id. ~ 38 n. 

6, citing Self Serve Pumps, Inc. v. Chicago Executive Airport, FAA Docket No. 16-07-02, 

Director's Determination (Mar. 17, 2008). In light of the clear language and sound basis of the 

FAA's decision in Santa Monica, and the decades of legislative, executive, and FAA guidance 

supporting that decision, application of "Occam's Razor" to find the simplest answer requires 

Taking an isolated comment in the Town's Answering Brief out of context, Complainants make an 

extended argument about Assurauce 22 in Footnote 4 of their Reply Brief. The Town's only point was that 

Complainants have not presented any evidence to support any of their claims under Assurance 23. Complainants 

have not alleged a violation of Assurance 22; the discussion of this Assurance and related sponsor obligations is 

irrelevaut and misleading. For example, Complainauts allege that the Town's counsel "previously advised the Town 

that access restrictions at HTO were permissible only after the FAA's purported waiver [of Assurance 22] had taken 

effect." Reply Br. at 3, n. 4, citing Answer Br. Ex. E, at 5. The cited "evidence" is a slide from a 2011 PowerPoint 

presentation to the Town, containing the text "Once grant assurances expire, the Town will be free to restrict 

aviation access to the airport" But the slide itself is clearly entitled ''Common Misperceptions'' and was intended to 

convey a very different meauing than that suggested by Complainants. 

9 
rejection of Complainants' unsupported "mirror image" theory in favor of the clear and simple 

rule set forth in Santa Monica and the other authority cited by the Town. 

Finally, Complainants' attempts to argue that their "mirror image" theory is not barred by 

traditional rules of statutory construction also fail. The cases they cite simply do not support 

their position. For example, Cohen v. United States, 650 F.3d 717 (D.C. Cir. 2011) is entirely 

inapposite. That case involved the court's review of two statutes, the Anti-Injunction Act (AlA) 

which provides that "no suit for the purpose of restraining the assessment or collection of any tax 

shall be maintained in any court by the person," and the Declaratory Judgement Act (DJA), 

which authorizes declaratory relief except "with respect to Federal taxes." Id. at 722 (citing 26 

U.S.C. § 742l(a) and 28 U.S. C. § 2201(a)). The court concluded that Congress intended the two 

exceptions to be co-terminous, despite the differing language, because Congress did not want to 

provide declaratory relief under the DJA when injunctive relief was barred under the AlA. Id. at 

729. In other words, Congress assured that one statute would not undo what Congress had done 

in another statute. The relationship between the exclusive rights statutes and 49 U.S.C. 

§ 47107(a)(l) is completely different. Unlike in Cohen, where the court construed two statutes 

to mean the same thing such that they would both be effective, here Complainants' advocated 

position would render one statute superfluous. 

Boyer v. B&B Custom Homes, Inc., 796 So. 2d 84 (La. App. 2001) is similarly 

inapplicable. In that case, although the court described the two statues as "mirror images" of 

each other, the court used the phrase differently than Complainants do and underscored that the 

two statutes do different things. "These statutes are, in effect, mirror images of one another in 

that the first establishes worker's compensation as an employee's exclusive remedy against this 

10 
employer, and the second imposes a duty to pay such compensation on the employer. "3 !d. at 86. 

In the Matter of Compliance with Federal Obligations by the Naples Airport Auth., FAA Docket 

No: 16-01-15, Director's Determination (March 10, 2003) is no different. There, the FAA found 

that the provisions of the Airport Noise and Control Act (ANCA) relating to Stage 2 restrictions 

did not supersede - or even repeal by implication - the prior statutory grant assurances. !d. at 

24. Rather, the FAA applied the traditional statutory construction principles and found that the 

two statutes could be harmonized by interpreting ANCA to establish the procedural steps 

necessary for implementing a restriction on operations by Stage 2 aircraft while leaving the 

substantive requirements under the grants in place. !d. at 23. None of those cases supports 

Complainants' theory that two statutes (and two grant assurances) must be read to have the same, 

identical meaning. 

2. Complainants Present No Evidence of a Grant Assurance 23 Violation. 

Complainants bear the burden of presenting all documents and facts supporting their 

various claims. 14 C.F.R. §§ 16.23(b)(2), (3). Yet they provided no facts in the Complaint that 

show how the Local Laws have created an exclusive right at the Airport and the evidence they 

subsequently proffered does not support their claim. First, the fact that air service using non-

"noisy" aircraft exists- and in fact, additional air service using non-noisy aircraft has been added 

-at the Airport only underscores that competition has not been harmed. Complainants' Answer 

to the Motion to Dismiss (July 20, 2015) at 4 (discussing Gotham Air); see also Reply Br. at 5 & 

Ex. G (regarding advertising by Helicopter Flight Services of its ability to use compliant 

aircraft). 

Ellis v. CCA of Tenn., LLC, 2010 U.S. Dist. LEXIS 61837, (S.D. Ind. Jun3 21, 2010), presents the same 

scenario. In that case, the court noted that 848 lAC § 2-3-2 (which identifies a nurse's affirmative responsibilities) 

and 848 lAC § 2-3-3 (which addresses unprofessional conduct and identifies series of prohibited behaviors) are 

"simply mirror images of one another." !d. at *78, n. 3. 

11 
Second, the fact that NBAA members filed affidavits to support a motion for preliminary 

injuuction in the federal lawsuit, in which they alleged irreparable injury to their businesses, is in 

no way evidence that the Local Laws create an anti-competitive effect at the Airport. See Reply 

Br. at Exhibit H. These are entirely different standards. Entry of a preliminary injunction is 

warranted upon a showing by Plaintiffs of several factors, including "irreparable harm." Fed. R. 

Civ. P. 65. This can be demonstrated by a showing of economic injuries to Plaintiffs' 

businesses. Petereit v. S.B. Thomas, Inc., 63 F.3d 1169, 1186 (2d Cir. 1995) (remanding with 

instructions that the plaintiffs "may show that the lost profits ... are of such magnitude as to 

threaten the viability of their businesses"). But, as the Town has previously argued, preserving a 

competitive market does not require protecting individual competitors; it only requires 

preserving fair access to the relevant market. Answer Br. at 23, citing Brunswick Corp. v. 

Pueblo Bowl-0-Mat, Inc., 429 U.S. 477, 488 (1977) (the antitrust laws were enacted for the 

protection of competition, not competitors); see also Clorox Co. v. Sterling Winthrop, Inc., 117 

F.3d 50, 51 (2d Cir. 1997) ("The antitrust laws do not guarantee competitors the right to compete 

free of encumbrances, however, so long as competition as a whole is not significantly affected."). 

This point is illustrated in JetAway Aviation, LLC v. Bd. of Cty. Comm 'nrs of Montrose 

Cty., Colo., FAA Docket No. 16-06-01, Director's Determination (Nov. 6, 2006), in which an 

uusuccessful bidder for FBO services at the Montrose Regional Airport in Montrose County, 

Colorado, filed a request to become a second FBO at the Airport and announced its desire to be 

able to commence operations on the same date as the successful bidder for the initial 

procurement process. The Couuty asserted that it needed additional time to review the 

application, and, among other things, to consider the need to conduct a formal procurement 

process. JetAway filed a Part 16 complaint, alleging that the County's delay - preventing 

12 
J etA way from providing FBO serv1ces as of the same date of the successful bidder - was 

unreasonable and unjustly discriminatory, and that the County had granted an exclusive right to 

the successful bidder. The FAA found that although the two entities were being treated 

differently, there was no exclusive right. !d. at 31. Rather, FAA looked to whether the County 

"intended to provide the public with the benefits of a competitive enterprise" and found that it 

had, and thus had not created an exclusive right. !d. 

Here, the fact that some operators have compliant aircraft and some do not is not 

evidence of an anti-competitive effect4 The Local Laws do not prevent any aircraft from 

operating at the Airport. They do not prevent any operator from using the Airport. No user is 

given any preferential right to use the Airport. No operator is prevented from competing for 

business at the Airport using compliant aircraft. Although operations by "noisy" aircraft are 

restricted at certain times, there is no evidence that the ability to access the Airport has 

evaporated. 5 As in JetAway, the Complainants here may perceive an "incredibly uneven playing 

field" that gives some operators an "unfair economic advantage," JetAway, Director's 

Determination at 31, but that is not proof of an exclusive right. 

4 Despite Complainants' argument to the contrary, Reply Br. at 6, the Town does not require operators to 

procure compliant aircraft. Unlike the situation in Santa Monica, the Town has not attempted to preclude all 

operations of a particular aircraft at HTO, nor has it argued that all noisy aircraft should operate at alternate airports. 

Compare Santa Monica, Director's Determination at 45-46 and AOPA, Director's Determination at 37 

("presumption that aeronautical users could use other nearby airports to conduct these activities does not relieve the 

City to accommodate these activities ... "). The fact that there may be times when these aircraft cannot operate 

neither prevents Complainants from operating noisy aircraft at authorized times, nor requires Complainants to 

procure new equipment. 

Complainants make much of the fact that the Town's Airport Director released July and August 2015 data 

on September 15, 2015, but provided an update a week later upon noticing that there were some data inaccuracies in 

the September 15 report. Reply Br. at 1, n. 1. As the Town stated in its Answer Brief, the July and August data 

reported by the Airport Director is preliminary and does not represent the complete "season" as defmed in the Local 

Laws. Answer Br. at 9, 22. As Complainants are aware, the Local Laws include a provision requiring the Town to 

evaluate the effectiveness of the Local Laws "as soon as practical after September 30, 2015" and committing to 

share the results of the evaluation with the public at a public meeting. The Town, through its noise consultant, 

HMMH, is currently conducting that post-season analysis, including compiling final operational data on the 2015 

season. Accordingly, the Town reserved the right in its Answer Brief, to supply the formal report and full season 

data when that comprehensive analysis is complete. 

13 
C. THERE IS NO VIOLATION OF GRANT ASSURANCE 25. 

Complainants raise no new arguments regarding their Assurance 25 claim but continue to 

rely on rhetoric and the theory that the Town may not use airport revenue to defend the Local 

Laws because those laws advance an "anti-airport agenda." For example, Complainants argue 

that FAA has consistently taken the position that airport revenue may be used for legal expenses 

"only if the legal expenses implicate a purpose that benefits an airport and its users." Reply Br. 

at 6 (emphasis in original). But this is not the case; the FAA has never set forth a "benefits the 

airport and its users" rule, and such a rule would be contrary to the law. FAA's Policy and 

Procedures Concerning the Use of Airport Revenue states succinctly: 

Lobbying fees and attorney fees to the extent these fees are for services in 

support of any activity or project for which airport revenues may be used 

under this Policy Statement. See Section VI: Prohibited Uses of Airport 

Revenue. 

64 Fed. Reg. 7696,7718 (February 16, 1999) (hereinafter "Airport Revenue Policy") 6 In tum, 

Section VI states that: 

Revenue diversion is the use of airport revenue for purposes other than the 

capital or operating costs of the airport, the local airport system, or other 

local facilities owned or operated by the airport owner or operator and 

directly and substantially related to the air transportation of passengers or 

property, unless that use is grandfathered under 49 U.S.C. § 47107(b)(2) 

and the use does not exceed the limits of the 'grandfather' clause. 

Id. at 7720. 

Contrary to Complainants' assertion, there is no obligation to demonstrate that the legal 

expenses actively "benefit" the airport and its users. Rather, the use of airport revenue for legal 

fees is permissible so long as the fees are related to "the capital or operating costs of the airport, 

6 See also FAA Order 5190.68 at 1J 15.9(d) ("A sponsor may use airport revenue to pay lobbying and 

attorney fees to the extent these fees are for services in support of airport capital or operating costs that are otherwise 

allowable."). 

14 
the local airport system, or other local facilities owned or operated by the airport owner or 

operator and directly and substantially related to the air transportation of passengers or property." 

Id. at 7720. Complainants offer no response to the Town's argument that the use of airport fees 

to defend its airport operating rules are, by definition, appropriate uses of airport revenue. 

Complainants attempt to bolster their argument that legal fees must "benefit" the airport 

and its users by citing a narrow excerpt from the Airport Revenue Policy. But their citation is 

entirely out of context and inapplicable. Complainants cite the Policy at page 7711 for the 

proposition that "exception to airport revenue use requirements could not be invoked for 

purposes alleged to be generally 'beneficial to the taxpaying citizens of the sponsoring 

govermnent."' Reply Br. at 6, n. 13. But that statement is in the section of the Preamble entitled 

Policies Requiring the Requirement for a Self-Sustaining Rate Structure, which section 

specifically addresses the exception authorizing the use of property at less than fair market value 

(FMV) for community or charitable purposes or recreational use. See 64 Fed. Reg. at 7710-11. 

In that context, the FAA states that: 

Qualified uses [under the community use exception] could include park or 

recreational uses or other public service functions. However, such use 

would be subject to special scrutiny to ensure that the requirements for 

below-FMV community use is satisfied. The community use provision of 

the Final Policy does not apply to airport property used by a department or 

subsidiary agency of the sponsoring govermnent seeking an alternative 

site for the sponsor's general govermnental purposes at less-thancommercial value. For example, a city cannot claim the community use 

exception for a nominal value lease of airport property for a municipal 

vehicle maintenance garage. Such usage, while beneficial to the taxpaying 

citizens of the sponsoring govermnent, would be difficult to justifY as 

benefiting the airport by improving the airport's acceptance in the 

community. 

Id. at 7711. This analysis of an entirely distinct issue (the requirement for a sponsor to 

demonstrate a benefit to the community when seeking to rely on the community use exception to 

15 
the self-sustaining requirement) has absolutely nothing to do with the question of when the 

payment oflegal fees may constitute revenue diversion7 

Similarly, Complainants continue to rely on the 1998 Department of Transportation 

Inspector General (IG) Report on Diversion of Airport Revenue, August-Richmond County 

Commission (No. AV-1998-093), which involved the use of airport revenue to acquire land for 

an office park. As the Town has explained, the purchase of land for economic development is 

clearly not an airport purpose, and thus not an eligible airport revenue expense. Town Answer 

Br. at 30. In their Reply Brief, Complainants conclude that the Town has now "conceded" that 

FAA found that legal fees could not be paid for this prohibited use of airport revenue. But this is 

no "concession." As the Town argued in its Answer, the use of airport revenue to acquire land 

for a non-aeronautical purpose completely unconnected to the operation of the airport is entirely 

different than the payment of legal fees to defend airport operating rules. The situations are 

simply not comparable, and nothing in the IG's report supports Complainants' theory here. 

Finally, Complainants continue their tortured analysis of the 1995 LAX II decision and 

conflate DOT's discussion of when attorney fees may be included in the rate base and when 

attorney fees may be paid with airport revenue. DOT's discussion of the de minimus amount of 

the fees relates to the rate base discussion, not the conclusions about when attorney fees may be 

paid with airport revenue. DOT was clear that airport revenues could be spent to defend charges 

of revenue diversion, even when the revenue diversion charges were upheld. Second Los 

Angeles International Airport Rates Proceeding, Docket No. OST-95-474, Final Decision at 49 

7 Indeed the cited portion of the Preamble to the Policy does not even stand for the proposition that 

Complainants assert (i.e., that the community service exception to the self-sustaining requirement "could not be 

invoked for pnrposes alleged to be generally 'beneficial to the taxpaying citizens."') See Reply Br. at 6, n. 13. 

Rather, as explained in the actual text of the Policy, FAA has merely explained that the lease of airport property at 

below fair market value for road maintenance equipment storage would not be eligible for the community use 

exception if such storage pnrposes did not "directly support the operation of the airport." 64 Fed. Reg. at 7721. 

16 
(Dec. 22, 1995). If Complainants are so concerned with the Town's legal expenses, they should 

stop filing cumulative litigation and raising baseless theories requiring the Town to respond. 

CONCLUSION 

For the reasons set forth above, FAA should find that the Town is not in violation of 

Sponsor Assurances 23 and 25 and dismiss the Complaint. 

Respectfully submitted this 30th day of October, 2015. 

Elizabeth Vail 

Town Attorney 

Town of East Hampton 

!59 Pantigo Road 

East Hampton, NY 11937 

EVail@EHamptonNY. Gov 

17 

W. Eric Pilsk 

Catherine van Heuven 

Kaplan Kirsch & Rockwell LLP 

1001 Connecticut Ave., NW, Suite 800 

Washington, D.C. 20036 

epilsk@kaplankirsch.com 

cvanheuven@kaplankirsch.com 

Telephone: (202) 955-5600 

Facsimile: (202) 955-5616 
CERTIFICATE OF SERVICE 

I hereby certify that I have this 30th day of October, 2015, served the foregoing 

Respondent Town of East Hampton, New York's Rebuttal in Support of Its Motion to 

Dismiss and Answer to the Complaint on the following parties as follows: 

Via Hand Delivery: 

Office of the Chief Counsel 

Attn: FAA Part 16 Airport Proceedings Docket, AGC-610 

Federal Aviation Administration 

800 Independence Avenue, SW 

Washington, D.C. 20591 

Via Email and U.S. Mail: 

Steve Brown 

Chief Operating Officer 

N a tiona! Business Aviation Association, Inc. 

1200 G Street, NW 

Suite 1100 

Washington, D.C. 20005 

Dated this 30th day of October, 2015. 

18 

W. Eric Pilsk