MARSHA JONES MOUTRIE, City Attorney JOSEPH LAWRENCE, Assistant City Attorney 2 LANCES. GAMS, Deputy City Attorney IVAN CAMPBELL, Deputy City Attorney 3 1685 Main Street, Room 310 Santa Monica, California 90401 4 Te l ephone: (31 0) 458- 8336 Facsim i le : (31 0) 451-5862 5 lance.gams@smgov.net 6 Attorneys for Respondent C I TY OF SANTA MON I CA 7 8 9 10 ll 12 13 14 15 16 1 7 18 19 20 2 1 22 23 24 25 26 27 28 UNITED STATES DEPARTMENT OF TRANSPORTATION FEDERAL AV I AT I ON ADMINISTRATION WASHINGTON, D.C. IN THE MATTER OF COMPLIANCE WITH FEDERAL OBLIGAT I ONS BY THE CITY OF SANTA MONICA, CALIFORNIA FAA Docket No. 16- 14- 04 CITY OF SANTA MONICA'S REBUTTAL TO REPLY BRIEF OF COMPLAINANTS Respondent C I TY OF SANTA MON I CA (hereinafter "CITY "), by and through its attorneys of record, respectfully submits the fo ll owing Rebuttal Brief, pursuant to 14 C. F.R. §16. 23(f), to Complainants' Reply to CITY's Answer to the Part 16 Complaint filed by the Nat i onal Business A i rcraft Associat i on, Inc., Krueger Aviation, I nc., Harrison Ford, Justice Aviation, Kim Davidson Aviation, I nc., Aero F i lm, Your i Bujko, James Ross, Paramount Citrus LLC and Aircraft Owners and P i lots Association (hereinafter collectively referred to as "NBAA") with the Federal Aviation Administration (hereinafter "FAA "). As a preliminary matter, C I TY's Answer to NBAA's Comp l aint was filed and served in the absence of a ruling by the FAA on CITY's Motion to Dismiss. As a result, CITY reiterated its "procedural" grounds for dismissal in its Answer as well. But even ifthere had been a decision by the FAA denying the Motion to Dismiss, CITY would have raised those same grounds in its Answer. They are all proper reasons, based upon procedures and defenses contained within the Part 16 Regulations themselves, as to why the Complaint

r r Tvnr.<;ANTA M () N i rA'<; R r-m i TTI\ 1**fH~IFf.**1 should be dismissed. 2 Likewise, and even if the CITY's Motion to Dismiss is denied, such issues remain
3 properly before the Director for purposes of the Director's Determination to come, and if
4 necessary for possible consideration by an FAA hearing officer, the Associate Administrator
5 in making his/her Final Agency Decision, and even for potential appellate review by a Court
6 of Appeals thereafter. What's unexpected is NBAA's surprise at seeing these arguments
7 again, given that defenses raised in a Motion to Dismiss in Federal District Court cases will
8 often reappear in a subsequent Answer to the Complaint. A rejection of an argument at an
9 early pleadings stage of a case will not preclude its later cons id eration and e v en 10 acceptance by the very same jud icial officer. J 1 Similarly , NBAA takes issue with the fact that, in it s Answer to the Complaint , the

1 2 CITY did not address arguments NBAA made in its opposition to the Motion to Dismiss.

1 3 However, as shou ld be fairly e l ementary, CITY's Answer is in response to the Complaint , 14 not to the oppos ition of Complainants to City's Motion to Dismiss and not to the Complaint

1 5 as somehow modified or amended by Complainants' opposition to City 's Motion to Dismiss. 16 Fina lly , CITY believes that it has al r eady advanced many compelling arguments and

1 7 r easons as to why NBAA 's Complaint should be dismissed, and nothi n g in NBAA's Reply 18 brief changes that. However, CITY would be remiss if it didn 't point out a few glaring

1 9 miscues in the Reply . 2 0 I. 2 1 There Has Never Been A Ruling By The FAA Extend ing The Grant Assurance 22 Expiration Date To 2013 23 CITY 's view of the existing landscape queu ing up this current dispute is very
2 4 different than that put forth by NBAA. Most importantly , and contrary to the representations 25 made by NBAA in its Reply, there has never been an administrative "rul in g" by the FAA that

2 6 the City is ob li gated by it s A lP grant assurances until 20231 NBAA's statement that"... the 27 FAA has already determ in ed, in In The Matter Of Compliance With Federal Obligations By
2 8 The City of Santa Monica, Ca lif ornia, FAA Docket No. 16 - 02-08/FAA - 2003-15807 "... that 2 r i TV ( )f.'**~ANTA M()N** **rA'~** I H 'RI I TT/\ I RR I Fr.the Grant Ass u rance obligations extend 'until at least 2023"' (Rep l y, page 2) is a
2 m isstatemen t a t best if n ot comp l e tely f alse. 3 NBAA c it es to th e D i rector' s Determination ( h e r e inaft er "DO") to s upp ort it s
4 contentio n, and admits tha t such statement did not become part o f any finding of or
5 co nclu sio n by th e H ear ing Offi cer or by the Associate Administrator in her F inal Agency
6 Decision And Order. This is because that issue h ad absolutely nothing to do with In The
7 Matter Of Compliance With Federal Obligations By The City of Sa nt a Monica, California,
8 FAA Dock e t No. 16- 02- 08. "As i s not ed e ls e wh e r e, th e scope of th ese pr ocee ding s und e r 9 t h e Part 16 Rules a nd the He aring Order, is limit ed to the consideration of five specific 10 issues. " ( H ea rin g Officer 's Determination, p. 67).

1 1 The Hearing Officer i n that matter correctly framed t h e grava m en of that Part 16

1 2 Comp laint and the i ssue to be dec id ed, as "Whether the implementation of the adopted

1 3 Or dinance prohibit in g Category C and D a i rcraf t by the City o f Sa nt a Mo n i ca is consis t en t

1 4 with the Federal obligation to make its airport avai l able as an airport for public use on

1 5 reasonable t er ms and without unjust discrimination to a ll types, kinds, and c l asses of

1 6 aeronautica l activ i ties- Grant Assurance 22. " (Hearing Officer's Determination, p. 71).

1 7 Similarly, th e F in a l Agency Decision And Order makes no mention anywhere of t hi s 18 s t a t ement from th e DO, l e t a l o n e being a final "concl usion" reac h ed by h er (F in al Agency

1 9 D ecis ion And Order, p. 56), a fact which NBAA adm it s. 20 Mor eo v er, neith er the H ear ing Officer nor the Asso ciate Administrator gave any
2 1 deference to any statements or findings in th e DO, e v e n where i t was on a n i ssue relevant 22 to the proceedings and within the Dir ec tor's authority to m ake. 23 "Th e 'I ss ues' sectio n i s not phrased in a manner that suggests 24 deference to th e Director's Determination. It does not pose questions of 25 whether the Director's D etermi na t ion was suppo rt ed by ev i dence, o r 26 whether it was arbitrary, capricious, o r an abuse of discretion. Rat h e r, the 27 H ear in g Order pr ese nts these matters as de novo i ssues of fact and l aw 28 for th e H earing Officer to r esolve. According l y, the issues pr esen t ed

r T TV ()F t:A'NTA**M()NirA'~** R P RI ITTA I RI?IFI<'2 3 4 5 6 7 8 9 10 1 I 12 13 14 15 1 6 17 18 19 20 21 2 2 2 3 2 4 2 5 26 2 7 28 herein are reviewed de novo with regard to the facts and the law, in light of the traditio nal preponderance - of-the-ev id ence standard of proof." (Hearing Officer's Determination, p. 71 ). The comment by the Director in the DO i s pure dicta, and has no precedential va lu e in this matter or any other. Likewise, the two page footnote 4 in NBAA's Reply (at pp. 6-7), which quoted the Agency's Response to First Set of Int errogatories from docket No. 16- 02- 08, is merely the attorneys' rhetoric as to their position on that issue and, again, of no binding or precedential value in this matter. As a result, NBAA 's plea that the FAA in this proceed in g not "reconsider it s position" rings hollow. II. Contracts That Are Unambiguous And Do Not Involve Technical Expertise Are Not Entitled To Agency Deference C I TY does not dispute that there is much l egal a uth ority for the proposit i on that where an issue involves techn i ca l expert i se that falls within an agency's area of authority, the agency is e ntitl ed to deference in its i nt e rpr etat i on of its regulations or the statute which that agency i s cha r ged to admin i ster. For example, the Court of Appeals in City and County of San Francisco v. FAA, 942 F. 2d 1391 (9 1h Cir. 1991) g r anted deference to the FAA in that case, which involved whether the airport proprietor's regulation barring retrofitted a ir craft from operating at San Francisco airport breached the proprietor's grant obligat ion s, because"... as t h e administrative record in this case demonstrates, app l ication of the statute to airport noise regulations r equires technical expert i se. " l d., at page 1396.
S imilarly, an agency may be affo rd ed some deference when an agreement "... included intrin sica lly regulatory terms of a type that the agency frequently emp l oys i ts expertise in reviewing. " Imp eria l Credit Industries, Inc. v. FDIC, 527 F. 3d 959, 969 (9 1h Cit. 2008). rrrv (W <::ANTA MON i rA'<:: Rr.R I I'T 'TA I RRrr.r.2 3 4 5 6 7 8 9 10 1 l 1 2 J 3 14 1 5 1 6 17 18 1 9 2 0 2 1 22 23 2 4 25 2 6 27 However, there is absolutely nothing "technical" about the current dispute, nor does
it involve intrinsically regu l atory terms, such that the FAA shou l d be expected or thought to havesome special expertise which it frequently employs thatcauses it to be better able than the CITY, ora judicial officeror third party, to read the plain language of the documents and determine what itmeans. NBAA has notexp l ained what there is about this issue which involves the technical expertise of the FAA for which the FAA should be afforded deference, because there is nothing. Instead, NBAA asserts only avery broad, omnibus clause which suggests that the FAA's authority extends to "anything doneor omitted to be done by any person in contravention ofany provision ofany Act, as defined in this section, as to matters within the jurisdiction of the Administrator." As such, NBAA has not madeaproper showing that this issue must be left for the FAA to decide. In fact, this issuemay not beone that will, ultimately, be for the F AA to decide. Even
if the Directorwere to rendera decisionon the issue of the expiration date, withouta compelling need for it to doso at this time, and if there isan actual Final Agency De cision in that regard, judicial review wi ll like ly follow. If thatoccurs, the Courtmay agree with the CITY that thereareno ambigu it ies within the language of theagreem e nt andagree w i th the CITY that the grant obligations expired in 2014. Moreover, even if the Court determines that amb i guities exist, it will "... attempt to resolve ambiguities by consulting the Act, the regulations, and the policies behind them. " Stude nt Loan Fund of Ida ho, Inc.v. Department of Educ ation, 272 F.3d 1155, 1162 (9 1h Cir. 2001 ). In itspapers, NBAA has not alluded to anyth ing in the Act, the regulations or the polic ies behind them thats upports the conte ntion that the 2003 Amendment to the 1994 Grant Agreement started the 20y earc l ock to begin to startanew. 2 8 Ill 5 f 'IT V (W "ANTI\ MONirA'" Rr. 'RI I T TAI RRif:J:Ill. 2 NBAA Claims That Its Complaint Has Nothing To Do With Lease Terms, But Its
3 Arguments Suggest Otherwise 4 5 6 7 8 9 1 0 I 1 1 2 13 14 15 1 6 1 7 18 19 20 21 2 2 23 24 25 26 27 28 Although NBAA says that it i s not asking the FAA to "consider proposed lease terms" (Rep ly, page 2), the length of it s leases or lease extensions are c l early things that it wants the Director to infl uence by determining that the Grant obligations continue through 2023. NBAA questions th e lik el ihood of the Santa Monica City Council offering 3 year lease extensions to it s tenants, and i nstead focuses on a different scenar i o by which the leases wou ld be renewed o n a month-to- month basis. I nteresting l y, NBAA would not be sat i sfied with either of these a l ternatives. "As the Complainants a l so noted, eith e r decision would conflict with the City's obligations to offer l eases of adequate duration to Airport tenants." (Rep ly, page 3, footnote 2) Apparent l y, even if the C I TY were to offer 3 yea r lease extensions through 2018, NBAA would compla in to the FAA that the CITY was not honoring it s Grant obligations. However, such begs the question, as the FAA has already settled this issue and has given Airport proprietors s ignific ant discretion in determining the terms and conditions of tenancies and l eases at airports. As the Associate Administrator determined i n Santa Monica Airport Association, et at., v. City of Santa Monica, CA, Docket No. 16-99-2 1, "We find that t h e Director's finding that no entity is 'entitled' to a long term l ease at the location of its choosing and upon its preferred terms and conditions is correct. A sponsor... may exercise is [sic] proprietary rights and powers to develop and administer the Airport's land in a manner consistent with the pub li c's int erest." (Fina l Decision And Order, pag e 19. ) Thus, NBAA' s attempt to influence the l eng th of leases being contemplated by the CITY for tenants at SMO is inappropriate. 6 r T TV ()f.' 1\ANTA M()N f rl\'1\**~FRI TTAI**  11 1? J f;'F2 3 4 5 6 7 8 9 10 II 1 2 13 14 1 5 16 1 7 18 19 2 0 21 22 2 3 24 2 5 26 2 7 2 8 IV. NBAA's Own Argument Supports A Determination By The FAA That The Grant Amendments Did Not Change The Expiration Date Of The Contract That It Entered With The City In 1994 NBAA cites to the Agency's Response to First Set of Interrogatories, dated August 8, 2008, from docket No. 16-02- 08, as background support for i ts argument that amendments to the origina l Grant agreement change the expiration date of that original Grant. "The Airport would have been obligated for the original grant project until 20 years after June 27, 1994 or 2014. But since the project changed under Amendment No. 1 to a different project, the 20 year date is calculated from the date of Amendment No. 1, (2019) since that is when the Airport accepted the federal offer of AlP funds for the project." (Reply, page 7, footnote
4 ) Thus, NBAA argues that a new 2 0 year period began to run on November 8, 1999 ( until 2019), when the CITY and FAA executed Amendment No. 1 to the 1 994 Grant Agre e m e nt. Unfortunately, NBAA's argument, bootstrapped onto the Agency's lawyers' selfserving discovery response, is undercut by evidenc e of the FAA's posi t ion on this issue years ear l ier. "To the extent that Complainants and SMAA seek to prevent the future closure of the Airport or require the City to operate the Airport beyond July 1, 2015, that is a local l and use matter. Since 1994, the City has not accepted FAA grants for airp o rt development. When the City's last grant agreement expires in approximate l y 2014, the AlP grant sponsor assurances will no longer require the City to operate the A i rport as an airport." Santa Monica Airport Association, eta/., v. City of Santa Moni c a, CA, Docket No. 16- 99- 21, Director's Determination, page 23. Why is this statement of great significance as to the issue presented in NBAA's Part 16 Comp l aint? Because that DD was issued on November 22, 2000, more than one year after Am e ndm e nt No. 1 was e xe cuted, and th e

r JTY (W**~A** NTA M()**rA·~** l?r::'Rl iTTA I RR I Rf'.'Director stated that the Grant was set to expire in 2014 despite Amendment No. 1 being
2 executed in 1999! 3 4 5 6 7 8 9 10 I 1 1 2 13 14 IS 1 6 1 7 L8 19 20 21 22 23 24 25 26 27 2 8 In conc lu sion, Complainants want the FAA to believe that the CITY has acted in a manner consistent with a "... blanket rejection of the e ntir e Grant Assurance Program.... " This is not the case. Inst ead, CITY simply believes that it has fulfilled its obligations to the Federal government pursuant to th e Grant Agreement, including the Amendments thereto. As a result, CITY respectfully requests that the Director either dismiss the Complaint in its entirety, or make a finding that the CITY's grant obligat i ons pursuant to the Grant Agreement expi r ed on June 29, 2014. Dated : November 13, 2014 BY**~=** Mft:RSHA JONES MOUTRIE JOSEPH LAWR ENCE LANCES. GAMS IVAN CAMPBELL Attorneys for Respondent CITY OF SANTA MONICA / r iTV nf:'<::ANTA MnN i rA'<::Rf.'RIITTAl RRIFFPROOF OF SE RVIC E STATE OF CA LIFORNIA, COUNTY OF L OS ANGE L ES

I, Br ad ley C. Michaud, dec lare: Ia me mpl oyed in the Co unty of Los Ange les, S ta te of Ca li forni a. My business ad dr ess is

1 685 Ma in S tr ee t, Santa Monica, Ca liforni a 9040 I. la m over the age of e i ghteen years and no ta pa rty to the ac tion in which tbi s serv ice is m ade. On November 13, 2014, Ise rved the d ocu ment(s) desc rib ed as CITY OF SAN TA MONI CA's REBUTTAL TO R E PLY BRIEF OF COMPLA I NANTS on the i nte res te d parti es in thi s act ion by enc los ing the d ocume nt( s) ina sca le denve lop e a ddr esse d as fo llows: Richard K. Simon, Esq. 1700 De cl<cr Schoo l Lane Malibu, CA 90265 rs imon3 @vc rizon.nct Office of the C hi ef Co un se l Attention: FAA Part 16 Docl <e t C ier i < AGC-600 Federal Aviat ion Admin is tration 800 Independence Avenue SW Washington, DC 20591 9-AWA-AGC-Part-l6 @ fa a.gov IBl BY MAIL: Ia m "readi ly fa mili ar" with thi s f irm 's practice for th e co ll ect ion and the processing o[ co rr espondence for ma iling wi th t he Un it ed States Po s tal Service. In the ordinary co ur se of busi ness, the co rr esponde nce wo ul d be deposi t edw i th the United States Postal Serv ice at 1 685 Main Street, Santa Monica, Ca li fornia 90401, wi th pos ta ge thereon

f ully p re paid the sa me d ay on which the co rr espon dence was p lace d forco ll ectio n and mailing at the firm. Fo ll owing o rdin ary bu s ine ss p r act ices, Ip l aced for co llec ti on an d mailing w ith the U nit ed Sta tes Postal Service suc henve lope a t 1 685 Main Street, Santa Monica, Cal i fo rnia 9040 1. IBl COURTESY COPY TO COMPLA I NANT 'S COUNSEL BY ELECT RON I C DELIVERY
0 [ State] I declare under pena lty of petju ry und er the laws o f the State of California that tbe above is true a nd co rr ect. IBl [Federal] I declare that Iam emp l oyed in th e office of a member of the Bar of thi s Court at whose direction the se rvice was m ade. Exec ute don November 13, 2014, a t Sa nta. Monica, Ca l iforn ia. **haud**