UNITED STATESDEPARTMENT OFTRANSPORTATION FEDERALAVIATIONADMINISTRATION WASHINGTON,D.C.

National Business Aviation Association, Inc., etal. Complainants,

v. TownofEast Hampton, NY Respondent. 

## RECEIVED OCT 302015 PART 16 DOCKETS FAADocketNo.l6-l5-08

RESPONDENT TOWN OFEASTHAMPTON,NEWYORK'S REBUTTAL IN SUPPORT OFITS MOTIONTODISMISS AND ANSWERTO THE COMPLAINT

Designation ofpersons to receive service for theTown ofEastHampton, New York:

ElizabethVail TownAttorney TownofEast Hampton 159 Pantigo Road East Hampton, NY 11937 EVail@EHamptonNY.Gov W. Eric Pilsk Catherine vanHeuven 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) 955-5616INTRODUCTION 

### Unable to find any direct legal support for their theory that the Town ofEast Hampton's Local Laws violate the SponsorAssurances 23 and 25, Complainants offer a mix ofrhetoric and righteous indignation, propped up by a hodgepodge ofout-of-context snippets from a variety of
sources to supporttheir arguments. Butwishful 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 inunjust discrimination. Butthe FAAhas never adopted that "mirrorimage"theory and every authority

- including the FAA

- that has considered the scope ofAssurance 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 offactual support. Second, Complainants continue to argue that Assurance 25 bars the Town from spending Airportrevenue onlegal fees to defend the Local Laws. In Complainants' view, the Local Laws do not "benefit" theAirport orAirportusers becausethey 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 ofairport revenue. Nor do Complainants attempt to respond to the Town's arguments that adopting such a rule would wreakhavoc with airport finances and management by effectivelypreventing 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 amatter oflaw.

ARGUMENT A. THE ONE-TRIP-PER-WEEKLOCAL LAWIS NOT RIPE FORREVIEW UNDER PART 16. 

### Under FAA precedent, Complainants' claims with regard to the One-Trip-Per-Week Local Law are not ripe for reviewbecausethat Local Law has notbeen applied or enforced while its constitutionality is being litigated in federal court. Northwest Airlines, Inc. et al. v. Indianapolis AirportAuth., 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 ifit 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-WeekLawthatis beingenforced. 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 ofthe allegations related to past injuries "whichmakes this case live." !d. 

### at 275. There are no suchpastinjuries 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 ofGrant Assurances related to the sponsor's ongoing obligationto 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 ofthe 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 orenforced. Finally, the Final AgencyDecision and OrderinNorthwestAirlines 

### 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 NorthwestAirlines, 

### FAA found that where a Landing Fee Rent Credit had not yet been imposed, it was not ripe for review under Part 16. NorthwestAirlines, 

### Final Decision and Order at 15. NorthwestAirlines 

### 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 ofcompliance or noncompliance with the grant
assurances. !d. 

### at 29.

4

### This unusual case inno wayprovides legal authority for FAA to proceed to a decision on the merits ofthe 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 simplypremature 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 alaw has notbeen applied, Part 16 review is not ripe. !d. at 29 (FAA can issue findings and conclusions "only after a presentation ofthe facts and circumstances in effect at suchtime as the charge was actuallyimplementedbythe Appellants.") 1 B. COMPLAINANTS HAVE NOTALLEGED A VIOLATION OF GRANT ASSURANCE 23. 1. Complainants Cannot Avoid Demonstrating a Monopolistic or AntiCompetitive EffectByRelying 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 ofauthority rejecting that theory and requiring 

### a showing ofmonopolistic or anticompetitive effect to support a claimthat
an exclusive right was granted. Reply Br. at 2-6. Complainants' attempts fail, and they are unable to provide any authorityto supporttheirposition. First, Complainants argue that the legislative history cited bythe Town "did not actually pertain to the meaning of Section 40103(e) and thus [is] ofno relevance in this proceeding." Reply Br. at 4. This is nonsense. The entire discussion at 83 Cong. Rec. 6729-30 (1938) is entirely onpoint. This could notbemade more clearbythe comments ofSenator 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 anFBO's ongoing efforts to gainaccess to the airport and to theuse ofa Unicorn frequency. 5The subjectunder discussion received attention not onlyinthe Committee on Interstate Commerce but also in the Committee on Commerce. I call attention to five places inthe pendingbill where the question ofmonopoly 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 madebythe Committee on Commerce to the bill. In line 20 onthatpage, inthe section devoted to the expenditure ofFederal funds, there is found this provision: There shall be no exclusive right for the use of any landing area or air navigationfacility uponwhichFederal Funds havebeen expended.
I was simply going to say that, running through this bill, in these five specificinstancesparticularly, is evidence ofthe intent ofbothcommittees to do awaywithmonopoly." 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 carriermergers, ReplyBr. at 4, n. 4, does not take away from the largerpointthat the colloquy as
a whole expressed Congress' intent to make every effort to remove "anything savoring of monopoly" from the entirebill. 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 ofthe Civil Aeronautics Act of 1938 (the precursor of49 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 beno exclusive right for the use ofany landing area or air navigation facility upon which Federal funds have been expended." Jd. He reviewed the
samelegislativehistory discussed above, and concludedthat that:

6The restrictions imposed by section 303 ofthe Civil Aeronautics Act of 1938 upon the expenditure ofFederal funds upon landing areas and air navigation facilities make itclear that the term "exclusiveright" as used in the section was intended to describe a power, privilege, or other right excludingor debarring anotherorothers from enjoying or exercising a like power, privilege or right. This meaning is confirmed by the legislative history which shows that the purpose ofthe provision is to prohibit monopolies and combinations in restraint oftrade or commerce and to promoteandencourage competition in civilaeronautics
...." 

### !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 ofthe 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 ofthe 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 thattheyremain persuasive, helpful, and entitled to a degree ofdeference. 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. LibyanArab Republic, 726 F.2d 774, 780 at n.6 (D.C. Cir. 1984) (Edwards, J., concurring)). Similarly, the age ofan Attorney General Opinion does notdiminish its applicability. InBahlul, for example, the D.C. Circuit analyzed a PresidentAndrewJohnsonera Attorney General opinion to assist with determining issues related to the trial of alleged terrorists inmilitary tribunals. 

### !d. at 25. Finally, although Complainants would disregard it, the FAA itselfhas already relied on - and accepted

- Attorney General Jackson's opinion on the scope ofthe exclusive rights statutes. In the Matter ofthe City of Santa Monica, FAA Docket



### 7No. 16-02-08, Final Agency Decision at 47-48 (July 8, 2009). Complainants' attempts to push aside any authoritythatundermines theirposition are unavailing, and mustberejected. 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 "mirrorimage"theory, ifit ever existed, does notmeanwhat Complainants thinkitmeans. 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 exclusiverights violation causedbyvarious airport operatingrestrictions even though the Director found that the
sameoperatingrestrictions violatedthe sponsor's federal obligationto makethe airport available
onreasonableterms and withoutunjust 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 ofan 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 Complainantshave notmade 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 theAirPark.

More recent FAA decisions confirm that unjust discrimination may indicate an exclusive right but does notnecessarily do so. Gary R. Ernest v. Leitchfield-Grayson Cty. AirportBd., FAA Docket No. 16-09-01, Director's Determination at 17 (Dec. 17, 2009) (noting that unreasonablerestrictions "could" create a constructive grant ofan exclusiveright, 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); 8Isaac W. Jones, Jr. andAla. Hang GlidingAss '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. AirportAuth., 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 secondFBO 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 ofexclusive 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, citingBardin v. County of Sacramento, California, FAADocket No. 16-00-11, Director's Determination (Aug. 9, 2001), and id.

**~** 38 n. 6, citing SelfServe Pumps, Inc. v. Chicago Executive Airport, FAA Docket No. 16-07-02, Director's Determination (Mar. 17, 2008). In light ofthe clear language and sound basis ofthe FAA's decision in Santa Monica, and the decades oflegislative, 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 oftheir claims under Assurance 23. Complainants have not alleged a violation ofAssurance 22; the discussion ofthis Assurance and related sponsor obligations is irrelevaut andmisleading. Forexample, Complainauts allege thatthe Town's counsel "previouslyadvised theTown that access restrictions atHTO werepermissible only after the FAA'spurported waiver [ofAssurance 22] had taken effect." ReplyBr. at 3,n. 4, citing AnswerBr. 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 itselfis clearly entitled ''CommonMisperceptions'' and was intended to conveyaverydifferentmeauing thanthat suggestedbyComplainants. 9rejection ofComplainants' unsupported "mirror image" theory in favor ofthe clear and simple rule set forth in SantaMonica and the other authority citedbythe Town. Finally, Complainants' attempts to argue that their "mirrorimage" theory is notbarredby 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 oftwo statutes, the Anti-InjunctionAct (AlA) whichprovides that "no suit for thepurpose ofrestrainingthe assessment or collection ofanytax shall be maintained in any court by the person," and the Declaratory Judgement Act (DJA), which authorizes declaratory reliefexcept "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 declaratoryreliefunder the DJAwhen injunctivereliefwas barredunderthe AlA. Id. at 729. In other words, Congress assured that one statute would notundo 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 positionwouldrender 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 ofone another in that the first establishes worker's compensation as an employee's exclusive remedy against this

10employer, andthe secondimposes a dutyto pay such compensation onthe employer."3 !d. at 86. In the Matter of Compliance with Federal Obligations by the NaplesAirportAuth., FAA Docket No: 16-01-15, Director's Determination (March 10, 2003) is no different. There, the FAA found that the provisions ofthe Airport Noise and Control Act (ANCA) relatingto 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' theorythat two statutes (and two grant assurances) mustberead to havethe same, identicalmeaning. 2. Complainants Present No Evidence ofaGrantAssurance 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 theyprovided 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 infact, additional air serviceusingnon-noisy aircrafthas been added -atthe Airport onlyunderscores that competitionhas notbeenharmed. Complainants' Answer to the Motionto Dismiss (July20, 2015) at 4 (discussing GothamAir); see also ReplyBr. at 5 & Ex. G (regarding advertising by Helicopter Flight Services of its ability to use compliant aircraft).

Ellis v. CCA ofTenn., 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 ofprohibited behaviors) are "simplymirror images ofone another." !d. at *78, n. 3. 11

### Second, the fact that NBAA members filed affidavits to support amotion for preliminary injuuctionin the federal lawsuit, inwhich they alleged irreparableinjuryto theirbusinesses, 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 showingbyPlaintiffs ofseveral factors, including "irreparableharm." 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 oftheirbusinesses"). But, as the Townhas 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 ofcompetition, 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 rightto compete free ofencumbrances,however, so long as competition as awhole is not significantly affected."). This point is illustrated in JetAway Aviation, LLC v. Bd. ofCty. 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

### JetA way from providing FBO serv1ces as of the same date of the successful bidder

- was unreasonable and unjustly discriminatory, and that the Countyhad 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 ofa competitive enterprise" and found that it had, andthus had not created an exclusiveright. !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 inJetAway, 

### the Complainants here mayperceive an "incrediblyunevenplaying field" that gives some operators an "unfair economic advantage," JetAway, 

### Director's Determination at 31, 

### butthat is not proofofan exclusiveright.

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 ofaparticular aircraft at HTO, norhas it arguedthat 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 coulduse 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 newequipment. Complainants make much ofthe fact that the Town's Airport Directorreleased July and August 2015 data on September 15, 2015,but provided anupdate a week later uponnoticing 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 bythe AirportDirector is preliminary and does notrepresentthe complete "season" as defmed inthe Local Laws. Answer Br. at 9, 22. As Complainants are aware, the Local Laws include a provision requiring the Town to evaluate the effectiveness ofthe Local Laws "as soon as practical after September 30, 2015" and committing to share the results ofthe 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 whenthat comprehensive analysis is complete. 13C. THERE IS NO VIOLATION OF GRANTASSURANCE 25. Complainantsraise no new arguments regardingtheir Assurance 25 claimbut continueto 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 FAAhas consistentlytaken the position that airport revenue maybeused for legal expenses "onlyifthe 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 AirportRevenue states succinctly: Lobbying fees and attorney fees to the extentthese fees are for services in support ofanyactivity orprojectfor which airportrevenues maybeused under this Policy Statement. See SectionVI: ProhibitedUses ofAirport Revenue. 64 Fed. Reg. 7696,7718 (February 16, 1999) (hereinafter "AirportRevenuePolicy")6 Intum, SectionVI states that: Revenue diversion is the use ofairport revenue for purposes otherthan the capital or operating costs ofthe 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 ofpassengers or property, unless that use is grandfathered under 49 U.S.C. § 47107(b)(2) and theuse does not exceedthe limits ofthe '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 ofairport revenue for legal fees ispermissible so long as the fees are related to "the capital or operating costs ofthe airport,

6 See also FAA Order 5190.68 at 1J 15.9(d) ("A sponsor may use airport revenue to pay lobbying and attorneyfees to the extent these fees are for services in support ofairport 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 substantiallyrelated to the airtransportation ofpassengers orproperty." Id. at 7720. Complainants offer no response to the Town's argument that the use ofairport fees to defend its airport operatingrules are, bydefinition, appropriate uses ofairportrevenue. 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."' ReplyBr. at 6, n. 13. Butthat statement is in the section ofthe Preamble entitled Policies Requiring the Requirement for a Self-Sustaining Rate Structure, 

### which section specifically addresses the exception authorizing theuse ofproperty at less than fair market value (FMV) for community or charitable purposes or recreational use. See 

### 64 Fed. Reg. at 7710-11. Inthat context, the FAA states that: Qualifieduses [under the communityuse 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 communityuse provision of the Final Policydoes not applyto airport propertyusedby 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 abenefitto the community when seekingto relyonthe communityuse exception to

15

### the self-sustaining requirement) has absolutely nothing to do with the question of when the payment oflegalfees may constituterevenue 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 ofairport revenue to acquire land for
an office park. As the Town has explained, the purchase ofland 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 notbepaid for this prohibiteduse ofairport revenue. Butthis is
no "concession." As the Town argued in its Answer, the use ofairport revenue to acquire land for a non-aeronautical purpose completelyunconnected to the operation ofthe airport is entirely different than the payment oflegal fees to defend airport operating rules. The situations are simplynot comparable, and nothing intheIG'sreport supports Complainants' theoryhere. Finally, Complainantscontinue their tortured analysis ofthe 1995 LAXII 

### decision and conflate DOT's discussion ofwhen attorney fees may be included in the rate base and when attorney fees maybepaid with airport revenue. DOT's discussion ofthe de minimus 

### amount of the fees relates to the rate base discussion, not the conclusions about when attorney fees maybe paidwith airport revenue. DOT was clear that airport revenues couldbe spent to defend charges of revenue diversion, even when the revenue diversion charges were upheld. Second Los Angeles InternationalAirportRates 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 ofthe Policy, FAA has merely explained that the lease ofairport property at below fair market value for road maintenance equipment storage would not be eligible for the community use exception ifsuch storage pnrposes didnot "directlysupportthe operationofthe airport." 64 Fed. Reg. at 7721. 16(Dec. 22, 1995). IfComplainants are so concerned with the Town's legal expenses, they should stop filing cumulativelitigation and raisingbaseless theories requiring the Townto respond. CONCLUSION For the reasons set forth above, FAA should find that the Town is not in violation of SponsorAssurances 23 and 25 and dismiss the Complaint. Respectfullysubmitted this 30thday ofOctober, 2015.

Elizabeth Vail TownAttorney TownofEastHampton !59Pantigo Road East Hampton, NY 11937 EVail@EHamptonNY.Gov

17 W. EricPilsk CatherinevanHeuven KaplanKirsch & Rockwell LLP 1001 ConnecticutAve., NW, Suite 800 Washington, D.C. 20036 epilsk@kaplankirsch.com cvanheuven@kaplankirsch.com Telephone: (202) 955-5600 Facsimile: (202) 955-5616CERTIFICATEOFSERVICE 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 andAnswerto the Complainton the following parties as follows: Via HandDelivery: Office ofthe ChiefCounsel Attn: FAAPart 16 Airport Proceedings Docket, AGC-610 Federal AviationAdministration 800 Independence Avenue, SW Washington, D.C. 20591 Via Emailand U.S. Mail: SteveBrown ChiefOperating Officer Nationa! Business AviationAssociation, Inc. 1200 G Street, NW Suite 1100 Washington, D.C. 20005
Datedthis 30th day ofOctober, 2015.

18 W. EricPilsk