UNITED STATES DEPARTMENT OF TRANSPORTATION

FEDERAL AVIATION ADMINISTRATION

WASHINGTON, D.C.

CHANDLER AIR SERVICE

Complainant,

v.

CITY OF CHANDLER, ARIZONA

Respondent.

FAA Docket No. 16-13-05

RESPONDENT CITY OF CHANDLER, ARIZONA’S MEMORANDUM OF POINTS 

AND AUTHORITIES IN SUPPORT OF ITS MOTION TO DISMISS AND ANSWER

Designation of persons to receive service for the City of Chandler, Arizona:

Kay Bigelow, Acting City Attorney

Chandler City Attorney's Office

P.O. Box 4008

Chandler, AZ 85244-4008 

Kay.Bigelow@chandleraz.gov 

Telephone: 480-782-4645

Facsimile: 480-782-4652 

W. Eric Pilsk

Daniel S. Reimer

Kaplan Kirsch & Rockwell LLP

1001 Connecticut Ave., NW, Suite 800

Washington, D.C. 20036

epilsk@kaplankirsch.com

dreimer@kaplankirsch.com

Telephone: (202) 955-5600

Facsimile: (202) 955-5616
i

TABLE OF CONTENTS

I. INTRODUCTION ............................................................................................................1

II. STATEMENT OF FACTS ...............................................................................................3

A. The Chandler Municipal Airport ..........................................................................3

B. The City Has Engaged In Responsible Planning and Development 

of the Airport.........................................................................................................4

C. Both the City and Chandler Air Service Sell Fuel at the Airport .........................8

D. A City Tax on the Sale of Aviation Fuels Has Been in Effect Since 

1960.....................................................................................................................10

E. The Dispute with Chandler Air Service..............................................................12

III. SUMMARY OF APPLICABLE LEGAL STANDARDS .............................................13

A. Part 16 Jurisdiction .............................................................................................13

B. Standing ..............................................................................................................13

C. Burden of Proof...................................................................................................14

D. Grant Assurance 5, Preserving Rights and Powers............................................14

E. Grant Assurance 22, Economic Nondiscrimination............................................15

F. Grant Assurance 25, Airport Revenue ................................................................16

G. Grant Assurance 29, Airport Layout Plan ..........................................................17

IV. ARGUMENT..................................................................................................................19

A. CAS Lacks Standing to Challenge the City’s Decisions Regarding 

Future Airport Development...............................................................................19

B. CAS Failed to Produce Any Documentary Evidence .........................................19

C. Claims for Violations of ANCA Are Outside the FAA’s 

Jurisdiction Under Part 16. .................................................................................21

D. Assuming Arguendo that the Director Has Jurisdiction Over CAS’ 

ANCA Claim, Ordinance 3888 Does Not Violate ANCA .................................22

E. Ordinance 3888 Does Not Violate Grant Assurance 5 .......................................24
ii

F. The City Has Not Diverted Airport Revenue .....................................................26

G. The City Has Not Unjustly Discriminated Against CAS....................................29

1. The City Does Not Improperly “Subsidize” It Self-Fueling 

Operation With Federal Grant Funds and Airport Enterprise 

Funds.......................................................................................................29

2. The City Does Not Sell Fuel At a Loss to Undercut CAS’s 

Fuel Prices...............................................................................................32

3. The Airport Holds Itself and CAS to the Same Minimum 

Standards.................................................................................................34

V. CONCLUSION...............................................................................................................36
iii

TABLE OF AUTHORITIES

FAA DECISIONS

41 North 73 West, Inc, dba Avitat Westchester v. Westchester Cnty., N.Y., FAA 

Docket No. 16-07-13, Director’s Determination (June 12, 2008), )..................................28

Aero Ways, Inc. v. Del. River & Bay Auth., FAA Docket No. 16-09-12, Director’s 

Determination (Aug. 30, 2010)..........................................................................................13

ALCA, the Cylinder Shop/Wayman Aviation, Suncoast Aviation, and National 

Aviation v. Miami-Dade County, FAA Docket No. 16-08-05, Director’s 

Determination (Aug. 31, 2010)..........................................................................................17

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

Determination (Dec. 15, 2005) ..........................................................................................20

In the Matter of City of Santa Monica, FAA Docket No. 16-02-08, Final Agency

Decision and Order (July 8, 2009).....................................................................................20

Jeff Bodin and Garlic City Skydiving v. Cnty. of Santa Clara, Cal., FAA Docket 

No. 16-11-06, Final Agency Decision (Aug. 12, 2013)...............................................14, 24

JetAway Aviation, Inc. v. Montrose Cnty., FAA Docket No. 16-08-01, Director’s 

Determination (July 2, 2009).............................................................................................17

Delbert Johnson dba Two Dogs Aviation v. Goldsboro-Wayne Airport Auth., FAA 

Docket No. 16-08-11, Director’s Determination (Oct. 9, 2009)........................................15

M. Daniel Carey and Cliff Davenport v. Afton-Lincoln Cnty. Mun. Airport Joint 

Powers Bd., FAA Docket No. 16-06-06, Director’s Determination (Jan. 

19, 2007) ............................................................................................................................13

Northern Air, Inc. v Cnty. of Kent, Mich., FAA Docket No. 16-11-10, Director’s 

Determination (March 28, 2013.........................................................................................17

Pacific Coast Flyers, Inc., Donnya Daubney d/b/a Carlsbad Aircraft Pilot Supply 

& Roger Baker v. Cnty. of San Diego, Cal., FAA Docket No. 16-04-08, 

Director’s Determination (July 25, 2005)..............................................................17, 18, 23

Rick Aviation, Inc. v. Peninsula Airport Comm’n, FAA Docket No. 16-05-18, 

Final Decision and Order (Nov. 6, 2007) ..........................................................................28

Santa Monica Airport Ass’n v. City of Santa Monica, Cal., FAA Docket No. 16-

99-21, Final Agency Decision (Feb. 4, 2003)....................................................................17
iv

SeaSands Air Transp., Inc. v. Huntsville-Madison Cnty. Airport Auth., FAA 

Docket No. 16-05-17, Director’s Determination (Aug. 28, 2006).....................................14

Sun Valley Aviation, Inc. v. Valley Int’l Airport, City of Harlingen, Tex., FAA 

Docket No. 16-10-02, Director’s Determination (Dec. 11, 2012)...............................17, 23

Thermco Aviation, Inc. v. City of Los Angeles, Cal., FAA Docket No. 16-06-07, 

Final Agency Decision (Dec. 17, 2007).............................................................................17

Town of Fairview, FAA Docket No. 16-99-04, Director’s Determination on 

Remand (issued July 26, 2000)..........................................................................................18

STATUTES AND PUBLIC LAWS

49 U.S.C. § 47107..........................................................................................................................26

49 U.S.C. § 47133..........................................................................................................................16

Airport and Airway Improvement Act of 1982, Pub. L. No. 97-248, 96 Stat. 671 (1982)............15

Airport and Airway Safety and Capacity Expansion Act of 1987, Pub. L. No. 100-223, 101 Stat. 

1486 (1987)....................................................................................................................................16

FAA Reauthorization Act of 1996, Pub. L. No. 104-264, 110 Stat. 3213 (1996).........................16

Ariz. Rev. Stat. Ann. § 28-101.......................................................................................................10

Ariz. Rev. Stat. Ann. § 28-8411.....................................................................................................21 

REGULATIONS, ORDERS, AND AGENCY GUIDANCE

14 C.F.R. § 16.1.............................................................................................................................20

14 C.F.R. § 16.23.............................................................................................................................1

14 C.F.R. § 16.29...........................................................................................................................13

14 C.F.R. § 161.5...........................................................................................................................21

FAA, Policy and Procedures Concerning the Use of Airport Revenue, 

64 Fed. Reg. 7696 (Feb. 16, 1999) ..........................................................................................16

FAA, Order 5190.6B, Airport Compliance Manual (Sept. 30, 2009)............14, 15, 16, 17, 21, 23
1

UNITED STATES DEPARTMENT OF TRANSPORTATION

FEDERAL AVIATION ADMINISTRATION

WASHINGTON, D.C.

CHANDLER AIR SERVICE

Complainant,

v.

CITY OF CHANDLER, ARIZONA

Respondent.

FAA Docket No. 16-13-05

RESPONDENT CITY OF CHANDLER, ARIZONA’S MEMORANDUM OF POINTS 

AND AUTHORITIES IN SUPPORT OF ITS MOTION TO DISMISS AND ANSWER

Respondent, City of Chandler, Arizona (the “City”), respectfully submits this 

Memorandum of Points and Authorities in Support of its Motion to Dismiss and Answer, in 

accordance with 14 C.F.R. § 16.23 and the FAA’s Letter Order dated August 28, 2013, in 

response to the Complaint filed by Chandler Air Service (“CAS”).

I. INTRODUCTION

The City is the owner, operator, and sponsor of the Chandler Municipal Airport 

(“Airport” or “CHD”). Chandler Air Service is a fixed base operator (“FBO”) at the Airport.

CAS devotes the majority of its Complaint to the allegation that the City somehow has 

violated federal law and Grant Assurance 5 by engaging in traditional airport planning and 

making decisions about the future growth and development of the Airport that reflect the best 

interests of the Airport and the community. After recounting a long history that demonstrates 

only that the City has been diligent and proactive in planning for the future of the Airport, CAS 

argues that a City ordinance reflecting City plans for possible future improvement of the Airport 
2

runways violates the Airport Noise and Capacity Act of 1990, and that a requirement to use 

voter-approved bond funds for any runway extension violates Grant Assurance 5.

These claims are unavailing for many reasons, including that CAS lacks standing to 

challenge the City’s planning decisions, ANCA-based claims are not reviewable in a Part 16 

proceeding, and Grant Assurance 5 is not implicated by the commitment to use voter-approved 

bond funds. More fundamentally, CAS misapprehends the relationship among the City, the 

FAA, and CAS. The City is responsible for the management, operation, planning, and 

development of the Airport, and it has performed each of these functions admirably. The FAA 

provides funding for eligible planning and development projects but does not dictate to airport 

sponsors whether to lengthen a runway. CAS is a long-standing tenant at the Airport and 

provides aeronautical products and services to Airport tenants and users. But, CAS is not 

responsible for the management of the Airport, and cannot, under the guise of Grant Assurance 

compliance, substitute its judgment for the City’s on the advisability or appropriateness of capital 

projects and the management of the Airport. 

In an apparent effort to give some heft to its Complaint and voice to other long-held 

gripes, CAS also argues in its Complaint that the City has engaged in revenue diversion by 

depositing into the City’s General Fund tax revenues from the sale of aviation fuels, and that the 

City has engaged in economic discrimination in connection with the City’s operation of a

commercial self-service fuel facility. These claims are factually and legally infirm because the 

City’s fuel tax has been in effect since 1960 and, therefore, does not constitute airport revenue, 

and because the City has not discriminated, in any manner, against CAS in connection with the 

City’s operation and improvement of its commercial self-service fuel facility.
3

Although CAS’s Complaint presents a woefully incomplete and inaccurate description of 

past events and lacks a single document in support of CAS’s allegations, the City has thoroughly 

demonstrated herein the failings in CAS’s arguments with reference to attached Declarations and 

documentary evidence. The accurate recitation of the facts, application of FAA precedent on 

Grant Assurance compliance, and documentary evidence demonstrate that the City has been and 

remains in full compliance with its obligations to the FAA under the Grant Assurances. 

Accordingly, the Complaint should be dismissed.

II. STATEMENT OF FACTS

A. The Chandler Municipal Airport

The Chandler Municipal Airport is located in the City of Chandler, approximately three

miles southeast of the city center. Declaration of Lori Quan at ¶ 2, attached hereto as Exhibit A

(“Quan Dec.”). The City began operating the Airport in 1948, and has owned and operated the 

Airport since that time. Id. FAA has classified the Airport as a “regional” and “reliever” airport. 

U.S. Dep’t of Transp., FAA, General Aviation Airports: A National Asset at B10 (May 2012). 

The Airport does not have an Airport Operating Certificate to accommodate commercial 

passenger operations. The Airport served over 197,000 general aviation, rotary, and military 

operations in 2012. Quan Dec. at ¶ 2. The Airport currently is home to approximately 437 based 

aircraft. Id. Over the years, the City has accepted a number of AIP grants for the acquisition of 

property, airport planning, and the construction of a variety of improvements and is currently 

grant-obligated. Id.

The airfield consists of two parallel runways: Runway 4L-22R and Runway 4R-22L. Id.

at ¶ 3. The current Airport Layout Plan is attached as Exhibit 1 to the Declaration of Lori Quan, 

and the current Airport Master Plan is attached as Exhibit 2 to the Declaration of Lori Quan. 
4

Notwithstanding the City’s efforts to make the Airport financially self-sustaining, the 

City provides annual payments to the Airport to assure the Airport does not incur a loss. Id. at 

¶ 11. In FY 2012/13, the City provided a payment of approximately $208,103, and made similar 

payments in previous years.1Id.

B. The City has Engaged in Responsible Planning and Development of the Airport

Runway 4L-22R was built in 1960, at a length of 2,610 feet. Id. at ¶ 3. It was extended 

in several phases in the 1970s and early 1980s to reach its current 4,401-foot length. The 1982 

Airport Master Plan (“AMP”) update recommended constructing a parallel runway, Runway 4R22L, in phases, starting with a runway length of 3,100 feet, expanding to 5,200 feet, and 

ultimately expanding to a length of 6,900 feet. 1982 AMP Update, attached as Exhibit 5 to the 

Declaration of Lori Quan. 

Beginning in the late 1980s, Chandler residents began voicing concerns about increased 

operations at the Airport and the potential for an expanded airport to attract large, commercialservice operations. In 1989, Chandler residents approved a ballot initiative calling for a total ban 

on fixed-winged jet aircraft at the Airport. Ordinance 2122, attached as Exhibit 6 to the 

Declaration of Lori Quan. Recognizing that an outright ban on jet aircraft could raise 

compliance issues, the City Council, on February 8, 1990, passed Ordinance 2212, which 

repealed the ban on jet aircraft and provided instead that the City would not construct runways 

longer than 4,850 feet at the Airport. Id.; Minutes of the Regular Meeting of the Chandler City

 

1

 Over the past several years, the City has provided annual subsidy payments to the Airport as follows: 

FY2006-07 $176,103

FY2007-08 $316,903

FY2008-09 $187,019

FY2009-10 $219,193

FY2010-11 $305,126

FY 2011/12 $151,602

Quan Dec. at ¶ 11. 
5

Council (Nov. 5, 1998) at 27, attached as Exhibit 7 to the Declaration of Lori Quan. Runway 

4R-22L became operational in 1994 and is now 4,870 feet long.

Following a Master Plan Update completed in 1998, which recognized that extending the 

runway could provide many benefits without opening the Airport to large commercial jet aircraft, 

1998 AMP Update at 3-10 – 3-11, Exhibit 3C, attached as Exhibit 8 to the Declaration of Lori 

Quan, the City enacted Ordinance 2912 on November 19, 1998, which allowed for the 

construction of runways up to 6,800 feet. Ordinance 2912, attached as Exhibit 9 to the 

Declaration of Lori Quan. In order to assure public input on any future runway extension, 

Ordinance 2912 also required that the City’s portion of the cost for any runway extension be 

funded through a bond issue and that the bond issue be subject to voter approval. Id. See 

generally Minutes of the Regular Meeting of the Chandler City Council (Nov. 5, 1998) at 25-30, 

attached as Exhibit 7 to the Declaration of Lori Quan; Minutes of the Regular Meeting of the 

Chandler City Council (Nov. 19, 1998) at 20-23, attached as Exhibit 10 to the Declaration of 

Lori Quan. 

In 2000, pursuant to Ordinance 2912, the City submitted to the voters a bond measure to 

fund the expansion of Runway 4R-22L to 6,800 feet. Resolution 3253, attached as Exhibit 11 to 

the Declaration of Lori Quan. In an effort to address concerns that a runway extension could 

allow large commercial operations, the City also passed a resolution clarifying that expansion of 

the runway would not allow the Airport to accommodate large commercial planes. Resolution 

3268, attached as Exhibit 12 to the Declaration of Lori Quan. In a close vote, the bond measure 

failed. Resolution 3329, attached as Exhibit 13 to the Declaration of Lori Quan.

In 2002, a developer, Vestar, submitted an application to rezone 82 acres of land located 

northeast of the Airport from AG-1 (agricultural) to a Planned Area Development, which would 
6

allow for commercial development of the property. Memorandum from the Planning 

Commission to the Mayor and City Council at 1-2, attached as Exhibit 14 to the Declaration of 

Lori Quan. The land was not part of the Airport. Approximately half of the project was to be 

located in the neighboring town of Gilbert, but approximately 82 acres were to be located in the 

City. Id. at 2. In the course of considering that proposal, the Airport manager informed the City 

that approving the development could affect future extension of Runway 4R-22L to the ultimate 

build-out length of 6,800 feet identified in the 1998 Airport Master Plan, because portions of the 

development would be located on what would become the northeasterly portion of the RPZ 

associated with the full extension of Runway 4R-22L. Id. at 3-4. The City Council recognized 

this consequence, but also recognized the potential benefits of the proposed rezoning, 

particularly noting that the requested rezoning presented “the last opportunity for another 

regional commercial center in Chandler anchoring the east side of the City.” Minutes of the 

Regular Meeting of the Chandler City Council (July 24, 2003) at 4, attached as Exhibit 15 to the 

Declaration of Lori Quan. The City balanced these competing interests and determined that, 

even if it allowed the proposed development to proceed, it could still expand Runway 4R-22L to 

“provide additional safety for all aircraft types currently using the airport.” Minutes of the 

Regular Meeting of the Chandler City Council (Aug. 14, 2003) at 6, attached as Exhibit 16 to the 

Declaration of Lori Quan. Accordingly, the City approved the requested rezoning. Id.

Recognizing the effect of the Vestar development on future Airport development, the 

City updated its Airport Master Plan. On January 11, 2007, the City adopted a Master Plan

Update, which recommended a maximum extension of Runway 4R-22L to 5,700 feet, reflecting

the amount of land available for the runway and associated runway safety areas and runway

protection zones. 2007 AMP Update at 4-17, attached as Exhibit 2 to the Declaration of Lori 
7

Quan. The 2007 Master Plan noted that extending Runway 4R-22L to 5,700 feet would 

“accommodate[] a wide range of aircraft while enhancing the level of operational safety at the 

Airport.” Id. The Master Plan also noted that the City had committed to conducting a bond 

election to fund any extension of Runway 4R-22L. Id. at 4-18. Two weeks later, on January 25, 

2007, the City Council authorized another bond measure to fund the proposed expansion of 

Runway 4R-22L. Resolution 4034, attached as Exhibit 17 to the Declaration of Lori Quan. 

Proponents of the measure, including Mr. Walkup, were confident that voters would approve the 

measure. Minutes of the Regular Meeting of the Chandler City Council (Jan. 25, 2007) at 16, 

attached as Exhibit 18 to the Declaration of Lori Quan. The measure failed. Minutes of the 

Special Meeting of the Chandler City Council (May 24, 2007), attached as Exhibit 19 to the 

Declaration of Lori Quan.

On March 5, 2007, the City adopted Ordinance 3888, reducing the maximum anticipated 

runway length from 6,800 feet to 5,700 feet, to reflect the full build-out length identified in the 

2007 Master Plan. Ordinance 3888, attached as Exhibit 20 to the Declaration of Lori Quan. 

Later in 2007, the City amended the ALP to reflect the change in proposed maximum runway

length and submitted the updated ALP and the 2007 Master Plan to the FAA. Quan Dec. at ¶ 3. 

The FAA has not formally approved or disapproved either document.

Ordinance 3888 is currently codified at Chandler Municipal Code § 8-10, and it provides

as follows:

8-10. - Extension of runway; physical limitations.

To guarantee to the citizens of the City of Chandler the continued quiet enjoyment 

in and to the homes, schools, churches and work places, the Chandler Municipal 

Airport shall not be permitted to accommodate, in any fashion, aircraft which 

require for takeoff a runway longer than five thousand seven hundred (5,700) feet. 

Extension of the runway shall require voter approved bonds, which specify that 

the bond monies are for the purpose of extending the runway. In addition, the 

Chandler Municipal Airport shall not be designed to accommodate aircraft that 
8

weigh in excess of seventy-five thousand (75,000) pounds maximum gross 

weight, and/or have a wingspan of seventy-nine (79) feet or more.

The City intended Ordinance 3888 to codify City policy regarding anticipated improvements to 

the airfield based on the latest Airport Master Plan. Quan Dec. at ¶ 9. It is not intended, and has 

not been applied, to restrict aircraft operations. Id. The City does not today restrict aircraft 

operations and would not do so if the runway is ultimately extended; the City intends to allow 

any aircraft that can operate on the runway if its certification and performance capabilities allow 

it to do so. Id. The City has not attempted to publish any aircraft operating restriction in the 

Airport/Facility Directory, any other airmen publication, or Airport Rules and Regulations.

C. Both the City and Chandler Air Service Sell Fuel at the Airport

CAS is the sole FBO at the Airport, providing attended fuel sales of both Avgas and Jet A 

fuel (what CAS refers to as “off-the-truck” fuel sales in its Complaint), commercial self-service 

Avgas sales, and a range of aircraft repair, maintenance, and storage services. Id. at ¶¶ 19-20.

CAS leases approximately five acres from the City. Id. at ¶ 4. A copy of the Lease is 

attached as Exhibit 3 to the Declaration of Lori Quan. Aerial photographs of CAS’s leasehold 

showing the location of CAS at the Airport and the location of CAS’s facilities are attached as 

Exhibit 4 to the Declaration of Lori Quan.

The City has endeavored to work cooperatively with CAS to assure that Airport users are 

able to obtain necessary and appropriate aeronautical services from CAS. Quan Dec. at ¶ 31. 

Those efforts include the construction and maintenance of many facilities that directly benefit 

CAS. For example:

 The City built a paved perimeter service road that allows CAS’s fueling trucks to 

get to the heliport located on the Airport without crossing the runways and 

taxiways. 

 The City has improved Airport Boulevard in a way that provides improved 

groundside access to CAS’s facilities. 
9

 The City is in the process of constructing a new parking lot for tenants on the 

north side of the Airport that CAS will have almost sole use of until more tenants 

arrive. 

 The City is in the middle of a bidding process to repair the cracks in the ramp

immediately adjacent to CAS’s self-fueling dispenser and had already made 

temporary repairs to the ramp. 

Id. at ¶¶ 15-17. Although those projects will benefit all Airport users and tenants, they primarily 

benefit CAS at this time because CAS is the only FBO operating at the Airport, and it is the 

primary tenant on the north side of the airfield.

For many years, the City was the only seller of fuel at the Airport, providing a 

commercial self-service fueling facility for Avgas and occasionally providing attended Avgas 

service. Id. at ¶ 19. Starting in 1994, CAS began selling Avgas, providing attended fueling 

services. Since that time, CAS has been the only full-service fuel provider at the Airport. Id. at 

¶ 20. In 1995, CAS began selling Jet A fuel, in addition to Avgas, also providing full-service 

fueling. Id. In 2005, CAS requested, and received, permission to offer a commercial self-service 

fueling option for its customers and began providing that service in late 2005. Id.

CAS is the dominant fuel seller at the Airport. It is the only seller of Jet A fuel, having 

sold approximately 206,793 gallons in FY2012/13. CAS also sold 354,905.40 gallons of Avgas

in FY2012/13. Id. at ¶ 21. In contrast, the City sold 53,594.10 gallons of Avgas at its 

commercial self-service fueling facility in FY2012/13. Id.

The City has adopted a formal process to set its Avgas price, which is incorporated into 

the Airport’s Fee Schedule. Id. at ¶ 22. City of Chandler Aviation Fuel Pricing Process, 

attached as Exhibit 22 to the Declaration of Lori Quan. Pursuant to that process, the City sets a 

minimum base price by calculating what its total costs are, including the price of fuel, a $0.10 

fuel flowage fee, applicable overhead, capital costs, and other allocable costs. Id. Next, the City

surveys Avgas prices offered at other airports in the region, as well as CAS. Id. That survey 
10

helps establish a maximum price based on the regional market. Id. The City then sets a fair, 

competitive price that is above the minimum base price and below the maximum price for

comparable airports. Id. A review of self-service Avgas prices offered by the City and CAS 

over the past year shows that the City’s price is sometimes higher and sometimes lower than the 

price charged by CAS. Id. at ¶ 23. 

D. A City Tax on the Sale of Aviation Fuels has been in effect since 1960

The City first imposed a privilege and use tax on the sale of aviation fuels on January 1, 

1960, pursuant to Chandler City Ordinance No. 273. Declaration of Lee Grafstrom at ¶ 3, 

attached hereto as Exhibit B (“Grafstrom Dec.”). Ordinance 273 imposed a transaction privilege 

(sales) tax on sale of all tangible personal property, except as expressly excluded, at a rate of 

0.5% of the gross sales price. Id. Aviation fuels are tangible personal property, not excepted 

from the tax, and have been subject to the City's tax since 1960.2 Over the 53 years since the tax 

was first adopted, the City’s tax code has been amended and recodified a number of times, but 

none of those amendments or recodifications suspended or affected the applicability of the tax to 

the sale of aviation fuels. Id. at ¶ 4

In 1991, Arizona amended its tax laws to require that any tax applicable to the sale of jet 

fuel be based on the number of gallons sold instead of gross sales price. Id. at ¶ 5. The impetus 

for the law was the concern of airlines (particularly America West) that rapidly fluctuating jet 

fuel prices made it difficult to calculate the applicable tax. Id. The intent was to keep the 

effective tax rate the same as before, but change the method of measuring the tax to avoid the 

accounting complexities caused by fluctuating prices. Id. Local governments agreed to make 

 

2

 CAS has suggested in the past that aviation fuels are excepted from the City tax because the City Code exempts 

from the tax sales of “[m]otor vehicle fuel and use fuel which are used upon the highways of this State and upon 

which a tax has been imposed under the provisions of Article I or II, Chapter 16, Title 28, Arizona Revised 

Statutes.” Chandler City Code § 62-660(j). However, that exclusion applies only to gasoline subject to Arizona’s 

Motor Fuel taxes, which apply only to certain road vehicles, including cars, trucks, and motorcycles. Arizona 

Revised Statutes 28-101(33). Aviation fuels are not subject to that exemption. 
11

similar changes in their transaction privilege and use taxes in order to avoid being expressly 

included in the state legislation. Id. at ¶ 6. The Arizona Department of Revenue provided local 

governments with a detailed formula to use in order to assure that the change in methodology did 

not result in an increase in the actual amount of taxes paid on the sale of jet fuel. Id.

On January 23, 1992, the City adopted Ordinance 2258, which amended the City’s Tax 

Code to remove jet fuel from the general retail classification subject to a 1% tax rate on gross 

sales, to a new jet fuel classification subject to a $0.018/gallon tax rate. Id. at ¶ 7. This new tax

rate did not increase the effective tax rate or impose a new tax; it simply changed the way the tax 

on jet fuel sales was measured. Since 1992, the City has made a number of amendments to the 

Tax Code without changing the applicability of the tax to the sale of aviation fuels. Id. at ¶ 8.

3

 

In 1999, the City recodified the Tax Code by moving the then-existing code language out of 

Appendix C and into Chapter 62. Id. The recodification did not make any substantive changes 

regarding the applicability of the City’s tax to the use and sale of aviation fuels. Id. 

The City has always treated the sale of aviation fuels, both Avgas and jet fuel, as subject 

to the City’s tax. Id. at ¶ 9. Due to changes in the computer systems used to track tax payments 

and receipts, it is not possible to retrieve information prior to 1989 without undue expense. Id. 

Up until approximately early 1994, the City’s management services department took direct 

responsibility for assessing and collecting the tax from the sale of Avgas at the Airport, after 

which time Airport staff took those functions over directly. Id. at ¶ 10. City records show that 

from 1989 (the earliest time for which records are available) through February, 1996, the Airport 

paid taxes to the City for the sale of Avgas. Id. For reasons that are not clear, but which appear 

 

3

 Although not addressed in the Complaint, the City notes that on February 24, 1994, the City adopted Ordinance 

2449, which included an across-the-board increase in the use and privilege tax rates in the amount of 1⁄2%. 

Accordingly, Avgas sales are currently subject to a rate of 1.5% of gross sales, and jet fuel sales are subject to a rate 

of $0.023/gallon.
12

to be due to administrative oversight, the Airport did not pay taxes on the sale of Avgas from

March, 1996, through October, 2006.4Id.

Beginning in approximately February, 2003, CAS reported its aviation fuel sales as 

taxable, but claimed an off-setting deduction based on the flowage fee assessed by the Airport. 

Id. at ¶ 11. Starting in July, 2005, CAS paid tax on its sale of jet fuel for several months, but 

again stopped in February, 2006. Id. The City’s revenue department later audited both CAS and 

the Airport and determined that both owed back taxes on the sale of aviation fuels. Id. at ¶ 12.

Pursuant to an audit report dated November 30, 2009, the City assessed the Airport 

$52,757.42 in back taxes and $10,811.77 in interest ($13,189.42 in penalties were waived) for the 

period January 1, 2003 – December 31, 2007. Id. at ¶ 13. The Airport paid that amount to the 

City on March 29, 2010. Id. Pursuant to an audit report dated July 31, 2010, CAS was assessed 

$44,230.93 in tax and $5,696.58 in interest ($4,423.13 in penalties were waived) for the period 

June 1, 2004 - February 28, 2009. Id. at ¶ 14. CAS appealed the assessment, and following the 

appeal, the City and CAS agreed to waive the back taxes and interest. Id. Since 2007, both the 

City and CAS have paid the tax on the sale of aviation fuels to the City. Id. at ¶ 15. A table 

summarizing the total amount of aviation fuels tax collected since FY 2007 is attached. See 

Table Summarizing Collection of Fuel Tax Since FY 2007, attached as Exhibit 8 to the 

Declaration of Lee Grafstrom.

E. The Dispute with Chandler Air Service

The City’s relationship with CAS has, at times, included disagreements on matters of 

policy. Beginning in 2010, CAS began making more pointed complaints and alleged a variety of 

Grant Assurance compliance issues, including issues relating to fuel sales, revenue diversion 

 

4

 Throughout this time, the City collected taxes from the sale of aviation fuels from an FBO at a private airport 

located in the City. Grafstrom Dec. at ¶ 10.
13

relating to fuel taxes, and economic discrimination. Quan Dec. at ¶ 6. Primarily, CAS expressed 

frustration with the failure of the bond measures to provide funding to extend the runway and 

urged the City to repeal Ordinance 3888 and construct the runway extension without voter bond

approval. Id. At times, CAS suggested that it would not pursue its claims of compliance 

violations if the City would repeal or modify Ordinance 3888 to allow the runway extension 

without a vote. Id. However, the City Council declined to take that action. Id.

In late 2010, CAS raised its concerns more formally. By letter dated October 11, 2010, 

CAS, through its legal counsel, raised many of the same issues raised in the Complaint. By letter 

dated November 4, 2010, the City, through the City Attorney’s office, provided detailed 

responses and explained why CAS’s arguments lacked merit. The City did not receive any 

response to that letter until May 24, 2013, when CAS’s legal counsel sent a revised, and 

somewhat shortened, version of its October 2010 letter. Again, the focus of CAS’s letter was on 

the runway extension. And, again, the City responded in detail, explaining why CAS’s 

allegations were without merit. The Complaint followed.

III. SUMMARY OF APPLICABLE LEGAL STANDARDS

A. Part 16 Jurisdiction

FAA’s authority to adjudicate disputes under Part 16 is defined, and limited, by 14 C.F.R. 

§ 16.1(a), which authorizes FAA to adjudicate disputes arising under certain laws and provisions. 

Disputes arising under laws not set forth in Section 16.1 may not be addressed in a Part 16 

proceeding. Final Agency Decision and Order, In re Compliance with Federal Obligations by 

the City of Santa Monica, Cal., FAA Doc. No. 16-02-08, at 29 (July 8, 2009).

B. Standing

In order to establish standing to file a complaint under 14 C.F.R. Part 16, the complainant 

must describe, and support with evidence, how it is “directly and substantially affected” by the 
14

airport sponsor’s alleged noncompliance. 14 CFR §§ 16.23(a), (b)(4). Failure to make such a 

showing warrants dismissal of the complaint for lack of standing.

C. Burden of Proof

14 C.F.R. § 16.29(b) places the burden of proof squarely on the complainant:

[T]he burden of proof rests with the Complainants (who are bringing the action), 

not the Respondent. It is the Complainants’ responsibility to provide a concise 

but complete statement of the facts relied upon to substantiate each allegation.

Director’s Determination, M. Daniel Carey and Cliff Davenport v. Afton-Lincoln Cnty. Mun. 

Airport Joint Powers Bd., FAA Docket No. 16-06-06, at 28 (Jan. 19, 2007) (citing 14 C.F.R. § 

16.23(b)(3)). A complainant must also provide “all documents then available in the exercise of 

reasonable diligence, offered in support of the complaint . . .” 14 C.F.R. § 16.23(b)(2). See also 

Director’s Determination, Aero Ways, Inc. v. Del. River & Bay Auth., FAA Docket No. 16-09-

12, at 15 (Aug. 30, 2010) (“The burden of proof falls upon the Complainant to establish and 

substantiate each allegation made.”); Director's Determination, SeaSands Air Transp., Inc. v. 

Huntsville-Madison Cnty. Airport Auth., FAA Docket No. 16-05-17, at 14 (Aug. 28, 2006) (“the 

Complainant carries the burden to show, by a preponderance of proof, that a sponsor has violated its 

federal grant assurances.”). As demonstrated below, CAS has failed to meet its basic burden of 

proof and production.

D. Grant Assurance 5, Preserving Rights and Powers

Grant Assurance 5 requires airport sponsors to retain sufficient control over the airport to 

enable the sponsor to carry out its federal obligations:

[An airport sponsor] will not take or permit any action which would operate to 

deprive it of any of the rights and powers necessary to perform any or all of the terms, 

conditions, and assurances in the grant agreement without the written approval of the 

Secretary, and will act promptly to acquire, extinguish or modify any outstanding

rights or claims of right of others which would interfere with such performance by the 

sponsor. This shall be done in a manner acceptable to the Secretary. 
15

See generally Order 5190.6B, FAA Airport Compliance Manual, App. A at 5 (Sept. 30, 2009). 

The FAA recently explained that an airport sponsor may violate Assurance 5(a) in two 

circumstances: (i) when it cedes a portion of its authority to a third party, such as a contractor, 

thereby depriving the sponsor of some essential aspect of its authority over the airport; and 

(ii) when an action lacks transparency, or was so misleading or confusing as to indicate a lack of 

understanding of federal obligations. Final Agency Decision, Jeff Bodin and Garlic City 

Skydiving v. Cnty. of Santa Clara, Cal., FAA Docket No. 16-11-06, at 41 (Aug. 12, 2013). The 

FAA made clear that an airport sponsor does not violate Assurance 5 simply by acting in a 

manner that is contrary to its federal obligations, even when the action is a knowing violation of 

another federal obligation. Id. at 42.

E. Grant Assurance 22, Economic Nondiscrimination

Grant Assurance 22(a) establishes the general prohibition on unjust economic 

discrimination:

[The airport sponsor] will make the airport available as an airport for public use on 

reasonable terms and without unjust discrimination to all types, kinds and classes of 

aeronautical activities, including commercial aeronautical activities offering services 

to the public at the airport. 

FAA Airport Compliance Manual, App. A at 10. The prohibition against unjust economic 

discrimination also requires sponsors to provide aeronautical services on the same conditions as 

airport tenants:

In the event the sponsor itself exercises any of the rights and privileges referred to in 

this assurance, the services involved will be provided on the same conditions as 

would apply to the furnishing of such services by commercial aeronautical service 

providers authorized by the sponsor under these provisions. 

Id. at 11. Assurance 22 does not, however, require absolute equality or prohibit all 

discrimination; it prohibits unjust discrimination. Assurance 22’s fundamental requirement is 

that disparate treatment be justified by disparate circumstances. See Director’s Determination, 
16

Delbert Johnson dba Two Dogs Aviation v. Goldsboro-Wayne Airport Auth., FAA Docket No. 

16-08-11, at 36 (Oct. 9, 2009).

F. Grant Assurance 25, Airport Revenue

The prohibition against revenue diversion initially was set forth in the Airport and

Airway Improvement Act of 1982, as follows:

(a) General Written Assurances.—The Secretary of Transportation may approve 

a project grant application under this subchapter for an airport development 

project only if the Secretary receives written assurances, satisfactory to the 

Secretary, that—

(b)(1) ... revenues generated by a public airport will be expended for the 

capital or operating costs of (A) the airport; (B) the local airport system; or 

(C) any other local facilities owned or operated by the owner or operations 

and directly and substantially related to the air transportation of passengers or

property.

Airport and Airway Improvement Act of 1982, Pub. L. No. 97-248, 96 Stat. 671 

(1982), codified at 49 U.S.C. § 47107. In 1987, Congress amended this requirement 

on the use of airport revenue to apply to “all revenues generated by the airport, if it is 

a public airport, and any local taxes on aviation fuel (other than taxes in effect on the 

date of the enactment of the Airport and Airway Safety and Capacity Expansion Act 

of 1987).” Airport and Airway Safety and Capacity Expansion Act of 1987, Pub. L.

100-223, § 109(d), 101 Stat. 1486, 1499 (1987). 

In 1996, Congress imposed the revenue use obligation as a statutory obligation that 

would continue in perpetuity, and, in doing so, captured both the inclusion of certain local taxes 

on aviation fuel and the exclusion of local taxes on aviation fuel in effect on December 30, 1987.

Local taxes on aviation fuel (except taxes in effect on December 30, 1987) or the

revenues generated by an airport that is the subject of Federal assistance may not 

be expended for any purpose other than the capital or operating costs of (1) the 

airport; (2) the local airport system; or (3) any other local facility that is owned or 

operated by the person or entity that owns or operates the airport that is directly 

and substantially related to the air transportation of passengers of property. 
17

FAA Reauthorization Act of 1996, Pub. L. No. 104-264, 110 Stat. 3213 (1996), codified at 49 

U.S.C. § 47133. See also FAA, Policy and Procedures Concerning the Use of Airport Revenue, 

64 Fed. Reg. 7696 (Feb. 16, 1999) (“Revenue Use Policy”) at 7697; FAA Airport Compliance 

Manual ¶ 15.2(b).

Grant Assurance 25, Airport Revenue, implements the statutory requirements on the use 

of airport revenue and includes a slightly different formulation of its scope by providing that the 

obligations apply to “[a]ll revenues generated by the airport and any local taxes on aviation fuel 

established after December 30, 1987.” Under Section 47107(b), Section 47133(a), and Grant 

Assurance 25, local taxes on aviation fuel that were “in effect” or “established” before 

December 30, 1987 are not considered airport revenue subject to the strict requirements on use.

G. Grant Assurance 29, Airport Layout Plan

Although not cited in the Complaint, CAS’s allegations also implicate Grant Assurance 

29, which requires an airport sponsor to maintain a current airport layout plan that accurately 

reflects airport development and proposed airport development. FAA Airport Compliance 

Manual, Appendix A at 14. The fundamental obligation under Assurance 29 is to develop the 

airport in a manner consistent with the ALP and not to construct facilities not shown on the ALP. 

There is no requirement, however, to build everything shown on an ALP. See generally FAA 

Airport Compliance Manual at ¶ 7.18 (summarizing obligations under Assurance 29); Director’s 

Determination, JetAway Aviation, Inc. v. Montrose Cnty., Colo., FAA Docket No. 16-08-01, at 

23-25 (July 2, 2009) (discussing the role of the ALP and an airport sponsor’s obligations under 

Grant Assurance 29, with reference to prior Part 16 precedent).

More generally, the Director has made clear that airport sponsors have no obligation to 

construct new facilities, or to expand or improve existing facilities, to comply with the Grant 

Assurances:
18

the FAA will not dictate to an airport sponsor the manner in which it should 

expand or improve its infrastructure. In Pacific Coast Flyers, the FAA found it 

must rely on the sponsor's judgment and its proprietary right as the airport sponsor 

to achieve planned development at the airport.

Director’s Determination, Sun Valley Aviation, Inc. v. Valley Int’l Airport, City of Harlingen, 

Tex., FAA Docket No. 16-10-02, at 67 (Dec. 11, 2012) (citing Director’s Determination, Pacific 

Coast Flyers, Inc., Donnya Daubney d/b/a Carlsbad Aircraft Pilot Supply, & Roger Baker v. 

Cnty. of San Diego, Cal., FAA Docket No. 16-04-08 (July 25, 2005)). Similarly, the FAA has 

held that “[a] sponsor is not required to develop any and all parcels of land in a manner 

consistent with the wishes of any one party, but rather may exercise [its] proprietary rights and 

powers to develop and administer the Airport’s land in a manner consistent with the public’s 

interest.” Final Decision and Order, Santa Monica Airport Ass’n v. City of Santa Monica, Cal., 

FAA Docket No. 16-99-21, at 19 (Feb. 4, 2003).5

Consistent with the limited nature of an airport sponsor’s obligations under Assurance 29, 

the FAA recognizes that airport sponsors are not required to build facilities recommended in an 

airport master plan. A master plan is a:

‘vision’ for the future of the airport, [which] plays a role in [the sponsor’s]

decision-making process, and for development of the airport. Having said that, 

the Director also notes that deviating from the MP, to accommodate changing 

airport conditions or new requirements, is not only permissible, but may be 

necessary and expected.” 

Pacific Coast Flyers at 35. 

 

5

 See also Final Agency Decision, Thermco Aviation, Inc. v. City of Los Angeles, Cal., FAA Docket No. 16-06-07, 

at 19 (Dec. 17, 2007) (“the federal obligations [do not] require sponsors to adhere to the location preferences of 

current tenants and subtenants when planning for the future development of the airport.”); Pacific Coast Flyers at 

28; Director's Determination, ALCA, the Cylinder Shop/Wayman Aviation, Suncoast Aviation, and National Aviation

v Miami-Dade County, FAA Docket No. 16-08-05, at 31 (Aug. 31, 2010); Director’s Determination, Northern Air, 

Inc. v County of Kent, Mich., FAA Docket No. 16-11-10, at 23 (March 28, 2013).
19

IV. ARGUMENT

A. CAS Lacks Standing to Challenge the City’s Decisions Regarding Future 

Airport Development

Part 16 requires a complainant to affirmatively demonstrate standing by proving that it 

has been “directly and substantially affected by the things done or omitted to be done.” 

14 C.F.R. § 16.23(b)(4). When an alleged injury is based on the loss of benefits a complainant

anticipates would accrue in the future, a complainant must demonstrate a realistic probability that 

it would realize those benefits. Cf. Director’s Determination on Remand, Town of Fairview, 

FAA Docket No. 16-99-04, at 17 (July 26, 2000) aff’d Final Decision and Order (Jan. 23, 2001) 

(“When a litigant alleges only future injury, as the basis for standing, he must demonstrate a 

realistic danger of sustaining direct injury”). CAS fails to make such a showing.

The only allegation CAS makes regarding future runway development is that it “believes 

the expansion of the Runway will yield economic, safety and noise abatement benefits.” 

Complaint at ¶ 4. But, CAS does not explain how a longer runway would benefit CAS and how 

CAS would be injured in the absence of an expanded runway. Nor does CAS demonstrate that 

the City would necessarily exercise its discretion to extend the runway even if Ordinance 3888 

were found to be noncompliant. Having failed to prove that it has been “directly and 

substantially affected by the things done or omitted to be done” by the City, or that there is any 

“realistic danger” that CAS will be injured as a result of the City’s continued adherence to 

Ordinance 3888, CAS has failed to establish standing to challenge Ordinance 3888.

B. CAS Failed to Produce any Documentary Evidence

In order to prevail, CAS not only bears the burden of proof, but has the obligation to 

produce all documentary and other evidence “necessary for the FAA to determine whether the 

sponsor is in compliance.” 14 C.F.R. § 16.29(b)(1). See also 14 C.F.R. § 16.23(b); discussion 
20

supra at 14. Further, a complaint must “[p]rovide a concise but complete statement of the facts 

relied upon to substantiate each allegation.” 14 C.F.R. § 16.23(b)(3).

CAS has clearly failed to satisfy these basic standards of pleading. There are no 

documents attached to the Complaint to substantiate any assertion of fact.

6

 There are no 

affidavits or other testimonial evidence attached to the Complaint. What CAS offers as a 

complaint is nothing more than an argumentative letter from legal counsel, little changed from a 

letter CAS’s counsel sent to the City in 2010, setting forth vague assertions of fact and opinion. 

It does not constitute evidence, is not supported by evidence, fails to set forth a “concise but 

complete statement of the facts relied up to substantiate each allegation,” and falls well short of 

the clear requirements for a complaint under Part 16. 

The need to require a complainant to present evidence in support of its complaint is selfevident: it prevents complainants from making baseless allegations that require airport sponsors 

to undertake the substantial expense of disproving negatives and responding to unsupportable 

allegations. The importance of enforcing this rule is underscored by the Complaint here, which 

rests ultimately on unsupportable allegations that are readily refuted as factually and legally 

incorrect. For example, 

 CAS alleges that the City did not adopt a tax on aviation fuels until 1999 or 2006, but 

cursory research into City law and practice demonstrates that the City tax on aviation 

fuels has been in effect since 1960 and has been collected since at least the late 1980s.

 CAS asserts that the City requires CAS to carry “branded” aviation fuel without 

citing where that requirement is set forth. In fact, there is no such requirement in the 

Lease, CAS’s Fuel License, Airport Minimum Standards, or elsewhere.

 CAS asserts that the City deliberately prices Avgas below the City’s costs in order to 

undercut CAS’s price. But publicly available City policy requires the City to set its 

 

6

 The only exhibits to the Complaint are copies of correspondence between legal counsel, apparently offered to 

demonstrate reasonable pre-filing efforts to resolve the dispute. None of those letters include any supporting 

evidence.
21

Avgas price above the City’s total cost of fuel, and the City often prices fuel above 

the price charged by CAS.

Although the Complaint should be dismissed outright, the City will respond in detail to 

Complainant’s unsupported allegations in order to demonstrate that the Complaint lacks merit.

C. Claims for Violations of ANCA are Outside the FAA’s Jurisdiction Under 

Part 16

CAS claims that Ordinance 3888 is a “local noise-based restriction[] upon aeronautical 

activity” that is “preempted under the Airport Noise and Capacity Act of 1990.” Complaint at 

¶ 22. As a threshold matter, this claim must be dismissed because claims for violations of

ANCA do not fall under the FAA’s Part 16 jurisdiction. This is readily apparent from the plain 

terms of 14 C.F.R. § 16.1, which does not include ANCA or Part 161 as among laws or 

regulations that may be adjudicated under Part 16.7 As the Director’s Determination in AOPA v. 

City of Pompano Beach, Fla., upon which CAS itself relies, makes clear:

The disposition of complaints involving alleged FAA violations of ANCA are not 

governed by 14 CFR Part 16. [See 14 CFR § 16.1.] Under its 14 CFR Part 16 

jurisdiction, the FAA may investigate an alleged violation of an authority 

expressly listed under 14 CFR § 16.1, . . . . ANCA is not one of the enumerated 

authorities subject to Part 16 jurisdiction and thus Part 16 is not the appropriate 

venue for addressing issues regarding ANCA.

FAA Docket 16-04-01, at 29 (Dec. 15, 2005). Accordingly, the portion of the Complaint 

alleging a violation of ANCA should be dismissed for lack of jurisdiction.8

 

7

 This analysis does not change simply because CAS styles its claim in terms of preemption rather than a violation. 

First, 14 C.F.R. § 16.1 does not confer jurisdiction over preemption claims. Second, the FAA has recognized that 

FAA may consider preemption claims in a Part 16 proceeding if the claim arises from conflicts between local action 

and one of the laws set forth in Section 16.1. Final Agency Decision and Order, In re Compliance with Federal 

Obligations by the City of Santa Monica, Cal., FAA Doc. No. 16-02-08, at 29 (July 8, 2009). Because CAS’s 

preemption claim arises only from alleged conflicts with ANCA, its preemption claim is beyond FAA’s jurisdiction 

under Part 16.

8

 CAS makes the bald accusation in its Complaint that Ordinance 3888 is “a specific violation of state law” 

(Complaint at ¶ 2) but fails entirely to develop or substantiate this argument. CAS alleged in prior correspondence 

that Ordinance 3888 was drafted to evade the requirements of Arizona law limiting a local government’s authority to 

“restrict or limit the length or width of an airstrip or runway used for the landing and takeoff of an aircraft.” Ariz.

Rev. Stat. Ann. § 28-8411(B)(1). First, allegations about violations of state law plainly are outside the FAA’s 

jurisdiction under Part 16. Second, Section 28–4811(B)(1) does not purport to diminish the City’s authority to 
22

D. Assuming Arguendo that the Director has Jurisdiction Over CAS’ ANCA 

Claim, Ordinance 3888 does not Violate ANCA

CAS claims that Ordinance 3888 violates ANCA because it is a “noise or access 

restriction.” Complaint at ¶¶ 21-22. CAS is incorrect as to the scope and intent of 

Ordinance 3888 and the scope of ANCA.

First, CAS appears to argue that Ordinance 3888 must be a noise-based restriction 

because it uses the language “to guarantee to the citizens of the City of Chandler the continued 

quiet enjoyment in and to [their] homes . . . .” See Complaint at ¶¶ 19, 21. CAS places 

inappropriate emphasis on the words “quiet enjoyment.” Section 3888 uses the phrase “quiet 

enjoyment” in the common law sense of the word to refer to the ability to use one’s property free 

from a wide range of external interference and environmental impact. Although noise is one 

factor, it is by no means the only, or even dominant, factor.

Second, Ordinance 3888 is not a “noise or access restriction” within the meaning of 

ANCA. Pursuant to ANCA, a “noise or access restriction” is a local restriction on the number or

kinds of aircraft operations, such as a curfew, noise budget, noise cap, or noise-based fees. 

14 C.F.R. § 161.5. See generally FAA Airport Compliance Manual, Chaps. 13 & 14 (future 

runway extension projects or other infrastructure development projects are not on in the list of 

airport sponsor actions that are subject to ANCA and other grant obligations relating to airport 

access). But, Ordinance 3888 does not prevent any aircraft capable of operating at the Airport 

from doing so, now or in the future. Quan Dec. at ¶ 9. The only limits on operations are, and 

would be, the limits inherent in an aircraft’s performance capabilities in light of runway length. 

 

define planning goals for the future growth and development of the Airport. Ordinance 3888 is entirely permissible 

as a matter of state law.
23

Id. Every aircraft operating at every airport is subject to those performance limitations in light of 

runway length. Such design capabilities are not “noise and access restrictions.

9

More fundamentally, the decision by an airport proprietor regarding whether or when to 

expand a runway, or any other airport facility, is not a “noise or access restriction” as defined by

ANCA because such a decision does not limit access to an airport; it is a decision on the nature 

of the facility the airport sponsor wishes to operate and the degree of investment it is willing to 

make. The City is not aware of any authority for the proposition that an airport sponsor’s

decision to denote by ordinance the intended full build-out of the airfield somehow constitutes a 

noise and access restriction under ANCA. The only authority CAS cites, Pompano Beach, is 

inapposite because that case involved restrictions on existing operations.

Moreover, CAS’s theory would vastly expand the scope of ANCA while dramatically 

limiting proprietary authority over facility planning and construction. Under CAS’s theory, an 

airport operator would be required to complete a study under FAR Part 161 in conjunction with 

virtually every airport master plan, at least for most general aviation airports, since most 

decisions to expand an airport to a particular size and configuration necessarily leave some 

aircraft unable to use the facility. Indeed, every plan to expand at airport to a certain extent 

necessarily includes a decision not to expand it any farther. CAS’s theory would treat that 

planning decision as a “noise or access restriction” subject to ANCA. That theory has no support 

in ANCA, Part 161, or FAA guidance and fails even a “straight-face test.”

 

9

 CAS may also attempt to argue that the language in Ordinance 3888 that the Airport “shall not be permitted to 

accommodate, in any fashion, aircraft which require for takeoff a runway longer than [5,700 feet]” is intended to 

restrict aircraft operations. That is not the case, however. The City intended Ordinance 3888 to set forth City policy 

on the size and capability of future runway improvements by stating the City’s planning goal for ultimate runway 

length. The City does not construe Ordinance 3888 to restrict in any manner aircraft that may operate on the runway 

at any time. Quan Dec. at ¶ 9. The City has applied Ordinance 3888, and will continue to apply Ordinance 3888, 

such that any aircraft that can operate on the runway, now or at any future length, based on the aircraft’s certification 

and manufacturer’s performance standards, is permitted to do so.
24

E. Ordinance 3888 does not Violate Grant Assurance 5

CAS asserts that Ordinance 3888 violates Grant Assurance 5 because Ordinance 3888 

“deprives the City of its discretion to utilize airport funds generated on the Airport for the 

development of the Airport as provided in the various ALP’s created with federal funds.” 

Complaint at ¶ 23. The central obligation under Grant Assurance 5 is that an airport sponsor 

may not “take or permit any action which would operate to deprive it of the rights and powers 

necessary to perform any or all of the terms, conditions, and assurances in the grant 

agreement . . .” FAA Airport Compliance Manual, Appendix A at 5. 

CAS’s complaint rests on a false premise that the City has an obligation to extend the 

runway and that any limitation on its ability to do so must violate that obligation. CAS does not, 

and cannot, cite any such obligation because none exists. As discussed above, supra at 17 - 18, 

the City is not required to build all improvements depicted on the ALP, nor is it required to build 

all improvements contemplated in its Master Plan. More fundamentally, the City’s exercise of 

proprietary authority regarding what facilities it intends to construct, when it intends to construct 

them, and how it intends to finance them are not subject directly to grant obligations. See 

Director’s Determination, Sun Valley Aviation, Inc. v. Int’l Airport, City of Harlingen, Tex., FAA 

Docket No. 16-10-02, at 67 (Dec. 11, 2012) (citing Pacific Coast Flyers). The City’s obligations 

are simply to assure that Airport development is not inconsistent with the ALP.

That is exactly what the City has done here. The City has regularly updated the Airport 

Master Plan and updated its ALP to reflect the results of that planning. The City has not 

developed the Airport in a manner inconsistent with the ALP. Both the 2007 Airport Master 

Plan and ALP reflect City policy regarding future runway extensions and Airport development. 

None of the terms of Ordinance 3888 regarding future runway construction or financing restrict 

the ability of the City to meet Grant Assurance 29 or any other Assurance. 
25

The FAA recently recognized two circumstances in which an airport sponsor might 

violate Assurance 5: by ceding power to a third party and by acting in a manner that makes clear 

the sponsor does not understand its federal obligations and is thus incapable of meeting its 

obligations. See Jeff Bodin at 41. Ordinance 3888 does neither of those things.

Ordinance 3888 does not cede power to a third party. In Bodin, the Associate 

Administrator recognized that an action by the sponsor’s legislative body, even when in express 

violation of a grant obligation, does not violate Assurance 5 for the simple reason that the 

sponsor retains the authority and power to act in accordance with its grant obligations. In Bodin, 

the airport sponsor had violated its grant obligations by refusing to allow an on-airport parachute 

drop zone despite an FAA finding that a drop-zone would be safe. The Director found that the 

County Board of Supervisors decision violated Assurance 5 because it deprived the County of 

the ability to meets its federal obligations. The Associate Administrator reversed that 

determination explaining:

[The] Board of Supervisors, as representative government of the County, was a 

proper body to vote on this proposal. Though the vote by the Board of 

Supervisors on the Complainant’s proposal appears to have been in contradiction 

to the written Airport Rules and Regulations, the County is the sponsor of the 

airport. Elevation of the decision-making process to a level above that of the 

Airport Director does not alone make the County's decision-making process 

incoherent or improperly cede rights and powers.

Jeff Bodin at 41. Similarly here, the City Council is the appropriate body to approve the 

construction and financing of capital improvement projects at the Airport. The City Council’s 

adoption of Ordinance 3888 does not violate Assurance 5, even if Ordinance 3888 somehow is 

understood to be inconsistent with some other unidentified grant obligation.

The fact that Ordinance 3888 requires voter approval of a bond issue for a runway

extension does not change that analysis. The City Council retains the legal authority to amend 
26

Ordinance 3888, if necessary, to comply with federal obligations. The City has not “ceded” 

anything and is in compliance with Assurance 5. See Jeff Bodin at 42. 

Finally, the City’s decision-making process did not lack transparency, nor was it so 

misleading or confusing as to indicate a lack of understanding of federal obligations. Id. at 41.

To the contrary, the City’s adoption of Ordinance 3888, and the amendments thereto, were 

conducted in public in accordance with City procedures and law for adopting ordinances. The 

terms of the Ordinance are clear and readily understood. More fundamentally, the City has, at all 

times, demonstrated an understanding of its federal obligations by, for example, updating the 

Airport Master Plan and amending the Airport Layout Plan to reflect changes in City policy and 

planning goals with respect to the Airport and the potential runway extension. CAS has not 

provided any evidence that could support an Assurance 5 violation, nor has CAS described any 

conduct by the City that could indicate an Assurance 5 violation.

F. The City has not Diverted Airport Revenue

CAS asserts that the City has illegally diverted airport revenue because the City collects 

and retains a local tax on Avgas and jet fuel. Complaint at ¶¶ 24-32. CAS acknowledges that 

taxes on aviation fuel in effect on December 30, 1987, are not airport revenue but argues that the 

City tax was not “in effect” on December 30, 1987. Id. at ¶ 32. In fact, the City’s tax on 

aviation fuels has been in effect since 1960, and CAS’s argument is wrong in almost every 

particular.

As explained above, supra at 10-13, the City collects a tax on the sale of aviation fuels

pursuant to a specific tax that was first adopted in 1959 and placed in effect in 1960. Although 

that tax has been recodified and changed in several ways (not material here) over the years, the 

tax has been in effect and applicable since 1960. Grafstrom Dec. at ¶ 3-4. As a result, the tax 

revenue is not airport revenue under 49 U.S.C. § 47107(b) and § 47133(a). 
27

CAS’s attempts to change that basic fact are unavailing. First, CAS argues that a lack of 

enforcement of the tax prior to 2006 shows that the tax was not “in effect.” As a factual matter, 

this is not true. The City had, at different times over the years, collected taxes on aviation fuel 

sales from the City’s fuel sales at the Airport, from CAS, and from aviation fuel sellers at Stellar 

Airpark, also located in the City. Grafstrom Dec. at ¶¶ 10-11. Although the City concedes it did 

not always enforce the tax, the tax was in effect and was not first applied to aviation fuel sales in 

2006. Id.

Second, Section 47133(a) applies to taxes “in effect” on December 30, 1987, not to taxes 

“enforced or collected” as of that date. As detailed above, the City’s tax was in effect prior to 

December 30, 1987, and had been “established” prior to December 30, 1987. The City’s tax is 

therefore, not subject to the prohibition against revenue diversion regardless of the City’s 

inconsistent enforcement. 

Third, CAS argues, based on its seemingly cursory review of the City Tax Code, that the

tax applicable to jet fuel sales tax was not implemented until 1999. Complaint at ¶ 31. This is 

simply incorrect. As detailed above, the City’s tax became effective in 1960, and it has applied 

to the sale of all non-excepted goods, including Avgas and jet fuel sales, since then. Grafstrom 

Dec. at ¶ 4. In 1999, the City recodified its Tax Code without making any substantive changes 

regarding the tax at issue here. Id. at ¶ 8. But, the tax itself has existed since 1960 and is,

therefore, grandfathered pursuant to Section 47133(a).

Fourth, CAS suggests that because “the City failed to implement a specific Avgas sales 

tax and is instead relying upon its general sales taxing power,” the tax on Avgas somehow falls 

outside Section 47133(a)’s grandfather provision. Complaint at ¶ 31. But the grandfather 

provision is limited only by the effective date of the tax, not the source of power for the tax, and 
28

covers “any local taxes on aviation fuel” in effect before December 30, 1987 (emphasis added). 

The grandfather provision is not limited to taxes specific to aviation fuel. The City’s tax is 

clearly a tax on aviation fuel that was established before December 30, 1987, and, therefore, is 

not airport revenue. Moreover, CAS’s argument proves too much. If the application of a 

generally applicable tax to aviation fuel sales is not subject to grandfathering because it is not a 

“local tax on aviation fuel,” then it follows that such taxes are not airport revenue for the same 

reason. Just as local sales taxes on the sale of other goods in an airport are not airport revenue, 

so would local taxes that happen to apply to the sale of aviation fuels not be airport revenue. The 

plain terms of Section 47133(a) do not support such a reading, and the FAA should reject CAS’s

argument on that basis.10

Finally, CAS argues that allowing public entities to apply general sales taxes to aviation 

fuel sales would allow them to “evade” Assurance 25, presumably by enforcing a tax for the first 

time after December 30, 1987. Complaint at ¶ 32. The factual premise is false here because the 

City has always applied its tax to aviation fuel sales. Supra at 10-13. Moreover, Congress 

carefully made the revenue diversion rules applicable only to local taxes not “in effect” prior to 

December 30, 1987. By its plain terms, Section 47133(a) allows a local government to collect 

taxes on aviation fuel sales provided that the tax was in effect prior to December 30, 1987. If the 

tax was in effect, it is not airport revenue. That does not “evade” the law, but complies with the 

law. To be sure, if a new tax were created, or if an old tax were amended to apply for the first 

 

10

 The City also notes that all taxes on aviation fuel sales are in effect paid to the Airport because the City makes an 

annual payment to the Airport that exceeds the total amount of fuel taxes collected. The City makes an annual 

payment to the Airport pursuant to a formula to cover any shortfall between Airport revenues and Airport expenses. 

Quan Dec. at 11. Over the past six years, the amount of the City’s subsidy payment has far exceeded the total 

amount of fuel taxes collected. For example, in FY 2011/12, the City collected $28,982.16 in taxes on the sale of 

aviation fuels (Avgas and Jet A) at the Airport. Grafstrom Dec. at ¶ 16. The City’s subsidy payment in that same 

year was $151,602. Quan Dec. at ¶ 11. If all or some of the aviation tax had been paid into the Airport Enterprise 

Fund, the subsidy payment would have decreased by a corresponding amount. Accordingly, the Airport does 

receive the full financial benefit of the taxes on aviation fuel sales.
29

time to aviation fuel sales, the analysis might be different. But that is not the case here, where 

the tax has been “in effect” and applicable to the sales of aviation fuel since 1960. The tax is 

clearly permitted as a grandfathered local tax on aviation fuel and is not subject to the prohibition 

against revenue diversion pursuant to 49 U.S.C. § 47133(a) and Assurance 25.11

G. The City has not Unjustly Discriminated Against CAS

CAS claims that the City “economically discriminates” against CAS by providing a 

commercial self-service fueling facility that is “subsidized” by “federal grant monies and airport 

enterprise funds” and by selling fuel at a loss. Complaint at ¶ 33. CAS also claims that the City

improperly holds CAS’s fueling operations to a higher standard than the City’s self-fueling 

operation. Complaint at ¶ 36. None of CAS’s allegations has merit. 

1. The City does not Improperly “Subsidize” its Self-Fueling Operation with Federal 

Grant Funds and Airport Enterprise Funds

CAS argues that the City improperly uses public monies to “improve and maintain” its 

self-service fueling facility, while CAS must use its own money, thus placing CAS at a 

competitive disadvantage due to different cost structures. Complaint at ¶¶ 33, 35. Specifically, 

CAS asserts that the City unjustly discriminated against CAS because the City replaced the 

pavement at the City’s self-fueling facility but did not replace the pavement at CAS’s fueling 

facility. Complaint at ¶ 35. CAS’s theory appears to be Assurance 22’s obligation that an 

airport sponsor provide services on the same terms and conditions as competing airport tenants 

 

11

 CAS suggests that it is subject to double taxation by having to pay a fuel flowage fee and the tax. Complaint at 

¶26. CAS also suggests that the City treats CAS unfairly by not assessing the flowage fee on City sales of fuel. Id. 

Both assertions are false. First, the CAS Lease makes clear that CAS must pay all applicable taxes and all 

applicable fees relating to the services it provides. Lease ¶ 14 p. 16, Exhibit 3 to the Declaration of Lori Quan. 

CAS cannot argue that lease terms to which it agreed are discriminatory. See 41 North 73 West, Inc, dba Avitat 

Westchester v. Westchester Cnty., N.Y., FAA Docket 16-07-13 at 26-27 (June 12, 2008) (Director’s Determination), 

aff’d, Final Agency Decision (Sept. 19, 2009); Final Decision and Order, Rick Aviation, Inc. v. Peninsula Airport 

Comm’n, FAA Docket No. 16-05-18, at 15 (Nov. 6, 2007) (refusing to overturn an agreed-upon lease term just 

because tenant discovered that lease term is not favorable). Second, the City does pay a flowage fee to itself. When 

it sets the minimum price of Avgas, it includes the cost of the $0.10 flowage fee. Quan Dec. at ¶ 22. All proceeds

from the sale of fuel are treated as airport revenue and kept on the Airport. Accordingly, the City does assess and 

collect the flowage fee for its own fuel sales.
30

requires an airport sponsor to match improvements to its own commercial facilities by paying for 

and providing equivalent improvements to similar commercial facilities of airport tenants on land 

leased by the tenant. CAS cites no legal authority for that understanding of Assurance 22, and 

the City is not aware of any such authority. The requirement that an airport sponsor conduct its 

own commercial operations on the same terms and conditions it applies to similar operations by

tenants does not require a sponsor to assure that the physical facilities of tenants are identical to 

its own. CAS’s view also ignores the central purpose of Assurance 22 to prohibit unjust 

discrimination. But that rule does not require identical treatment in all circumstances. 

Reasonable conduct can justifiably affect different entities in different ways without running 

afoul of Assurance 22. See supra, 15. A review of the facts here make clear that the City’s 

actions were reasonable and justified and did not result in any unjust discrimination.

First, the pavement project CAS describes was not a pavement maintenance project, nor 

was it a project to improve the competitiveness of the City’s self-service fuel facility. The 

project was part of a larger project to improve storm water drainage by, among other things, 

replacing an open water storm water ditch with an underground culvert and catch basin systems

as well as a stilling basin and dry well west of Airport Boulevard. Quan Dec. at ¶ 14. The 

purpose of the project was to make land west of the control tower developable. Id. As part of 

that project, the pavement around the City’s self-service fuel facility was contoured to direct any

accidental fuel releases into a lined retention basin to keep it isolated from storm water 

discharge. Id. The project was completed in 2010. Id.

It was certainly reasonable for the City to construct necessary storm water drainage 

improvements that also required replacing the pavement at the City’s fuel facility in order to 

protect the environment. CAS has not identified any comparable need for the City to make any 
31

comparable changes to the pavement surrounding CAS’s fuel facilities. Accordingly, the City 

did not unjustly discriminate against CAS and did not violate Assurance 22.

Further, CAS does not present any evidence that the improved pavement at the City’s 

self-fueling dispenser has altered CAS’s competitive position or harmed it in any way. As noted 

above, CAS outsells the City by a wide margin, undercutting any claim of competitive 

advantage. Further, the only way CAS could be harmed by the City paving its fuel farm is if 

CAS was “forced” to pay for a similar improvement in order to remain competitive. In fact, 

however, CAS has not done so. In the past eight years, the City is not aware that CAS has 

undertaken any capital improvement projects relating to its fuel facility. Id. at ¶ 18. Thus, CAS 

has not been “forced” to increase its cost basis as a result of publicly-funded projects by the City. 

Moreover, the City has not hesitated to repair Airport pavement at CAS’s request when 

there is a need to do so. For example, in late 2012, CAS complained of extensive cracking on 

the “San Tan Apron,” which is immediately adjacent to CAS’s fuel pumps, and expressed its 

concern that the cracks limited access to its pumps. Id. at ¶¶ 16-18. The City responded 

promptly and explained that the cause of the cracking was the nature of the soils beneath the 

pavement (the San Tan Ramp sits on an environmental cap) and that the City was in the process 

of implementing a $300,000 rehabilitation of the entire San Tan Ramp to address that problem. 

That project is largely funded with AIP and state grants. Id.

In late 2012, the City worked with CAS to effect a temporary solution by filling the 

cracks immediately adjacent to the pumps with hot mix. Id. The City has put the entire San Tan 

Ramp project out for bid and expects to award the bid in October, 2013, with work to be 

completed early in 2014 (barring any unforeseen circumstances). Id. The City treats CAS fairly 

and without discrimination. 
32

Similarly, CAS fails to account for the substantial benefits it receives from other 

improvements provided by the City and funded with public funds. The City is in the process of 

building a new parking lot next to CAS to serve CAS and other tenants in that portion of the 

Airport. Id. at ¶ 15. At present, CAS is the only tenant in the area and has virtually sole use of 

the parking lot, which it uses as its primary parking lot. Id. As part of the same project, the City

reconfigured Airport Boulevard so that it runs almost directly to CAS’s facility, providing CAS’s 

customers better access. The City also brought water and sewer hookups to CAS, although CAS 

has chosen to remain on a septic system. Id. In 2010, the City constructed a paved perimeter 

road to the south side of the airfield, which allows CAS’s fuel trucks (and Airport maintenance 

and emergency vehicles) to reach the heliport without crossing active runways or taxiways. Id. 

Those projects were also funded, in part, with grants and public funds, and CAS has benefitted 

directly from those projects. Id. 

Finally, the City provides a substantial annual payment to the Airport, which allows the 

Airport to maintain its current schedule of rents and other charges. Id. at ¶ 11. Accordingly,

CAS does benefit, directly and substantially, from projects funded in substantial part with public 

funds. There can be little dispute that CAS’s competitive position has been enhanced by the 

overall pattern of expenditures for capital projects at the Airport, and its complaint of unjust 

discrimination with respect to one project is overwhelmed by the weight of the benefits CAS 

does receive.

2. The City does not Sell Fuel at a Loss to Undercut CAS’s Fuel Prices

CAS asserts the City economically discriminates against CAS by selling fuel at a loss or 

at a price deliberately set below CAS’s price. Complaint at ¶¶ 33, 37. These allegations are 

simply false, and CAS does not provide any evidence to support its contentions. As a general 

matter, it is clear that the City does not impair CAS’s ability to compete with the City. First, 
33

CAS is the sole provider of Jet A fuel at the airport, so the City does not compete in that market. 

Second, in Fiscal Year 2012/13, the City sold 53,594.10 gallons of Avgas at its commercial selfservice fueling facility. In contrast, CAS sold 354,904.40 gallons of Avgas, almost seven times 

more than the City. Quan Dec. at ¶ 21. Whatever competition there may be, CAS seems to be 

winning.

Moreover, CAS is simply incorrect that the City’s Avgas prices are set in an 

inappropriate manner. First, a review of Avgas fuel prices over the past year shows that the 

City’s price for Avgas is very similar to, and often higher than, CAS’s prices. Id. at ¶ 23. CAS 

is simply incorrect to assert otherwise. Second, CAS is also incorrect when it alleges that the 

City sets its fuel prices to “break even, or allow a slight loss.” The City sets its fuel price using a 

sophisticated, multi-factor analysis that requires the City to set a price above its costs, 

specifically including capital costs, fuel flowage fees, taxes, cost of fuel, and other overhead. Id.

at ¶¶ 22-23. The final price is set based on the Airport’s judgment of a fair and competitive price 

above the City’s costs. Id.

The City does not understand what “monthly and quarterly reports” CAS believes show 

that the City “allows a slight loss” on its fuel sales. Complaint at ¶ 33. Although the City

reports all revenue and expenditures associated with the Airport, it does not individually report 

the profits on fuel sales. Quan Dec. at ¶ 26. The fuel pricing policy is designed to insure the City

has consistently made money from its fuel sales. Id. The City also makes available Airport 

Quarterly Reports, which provide a “Snap Shot” of whether projected fuel sales volumes are 

above or below projections, but those reports do not show profits or losses on fuel sales. Id. In

fact, the City has consistently made money on its fuel sales. Id.
34

3. The Airport Holds Itself and CAS to the Same Minimum Standards

CAS alleges that the City’s fuel facilities “fall[] far short of the formal minimum 

standards it requires of [CAS].” Complaint at ¶ 36. Once again, CAS does not support its 

assertions with any evidence or any citation to the minimum standards it claims were violated. 

Nor could it, because the City does not operate as an FBO and so its commercial self-fueling 

service is subject to different standards than CAS’s FBO operation. In any event, the evidence 

demonstrates that CAS’s specific allegations are not true. 

CAS asserts that the City requires CAS to “carry branded fuel while the City does not.” 

Id. The City has carefully reviewed its Lease with CAS, CAS’s Fuel License, and the Airport’s

Minimum Standards and cannot find any reference to a branded fuel requirement. Quan Dec. at 

¶ 25. The current and former Airport Managers are also not aware of any such requirement and 

are not aware of any attempt to require or compel CAS to carry branded fuel. Id. From the 

Airport’s perspective, CAS is not required to sell branded fuel.

CAS appears to believe it is “required to carry branded fuel in order to meet the City’s 

mandated insurance requirements.” Complaint at ¶ 36. Although the City agrees that CAS’s 

lease does require it to carry a certain level of insurance, that insurance requirement does not 

include a branded fuel requirement. Quan Dec. at ¶ 25. It may be the case that CAS has chosen 

to acquire branded fuel to take advantage of insurance coverage that fuel sellers often provide, 

rather than pay separately for its own insurance coverage. But, that is a business decision by

CAS, not a requirement imposed by the City.

12

Finally, CAS asserts that the City’s filtering and sump mechanisms fail to meet the 

standards the City requires CAS’s filtering and sump mechanisms to meet. Complaint at ¶ 36. 

 

12

 The City selects its Avgas vendor through a request for quotes on the spot market. In recent months, Epic Fuels 

has won many of those bids. CAS also sells Epic Fuels. Quan Dec. at ¶ 24
35

Again, however, CAS provides no specific details about how the City’s filtering and sump 

mechanisms are substandard, what the applicable standards are, or how the City allegedly holds 

CAS to a different standard. In fact, the City holds itself and CAS to generally applicable 

standards of state law; the City does not impose additional requirements on CAS. Quan Dec. at 

¶ 30. Under those laws, the City is subject to more rigorous requirements because it uses 

underground fuel storage tanks while CAS uses above-ground tanks. Id. The City’s sump and 

filtering mechanisms for its self-fueling facility, as well as the underground fuel tanks, are 

regularly inspected by state authorities and have passed those inspections. Id. at 29. Based on a 

review of the available records, the City is not aware of any instance in which its filtering or 

sump facilities have failed an element of inspection. Id.

CAS also asserts that the City’s filtering and sump mechanisms are “obsolete and 

outdated,” which CAS claims is clear from a “cursory glance.” Complaint at ¶ 36. But CAS 

provides no details of what such a “cursory glance” would reveal, or what specifically is 

“obsolete and outdated” about the mechanisms. The City has inspected the filtering and sump 

mechanisms. Although they are not in mint condition, they are functional and operating within 

their design limits and projected useful life. Quan Dec. at ¶ 29. Moreover, CAS fails to describe 

how it has been harmed by the alleged condition of the City’s facilities. In fact, the City has not 

required CAS to make any changes to its facilities, Id. at ¶ 30, so it is difficult to see how CAS 

has been harmed.

Although CAS’s assertions are vague and unsupported, CAS has asserted in the past that 

the City uses a filter on the fuel pumps that includes a warning label that says “not for use with 

aviation fuel.” Id. at ¶¶ 27-28. Based on this, CAS has argued that the City is somehow in 

violation of Assurance 22. 
36

CAS’s argument ignores the facts, which the City has explained to CAS more than once. 

Id. The City’s fuel tank is located approximately 225 feet from the dispenser. As the fuel leaves 

the tank, the fuel passes through a primary filter that is rated for use with Avgas and carries no 

warning to the contrary. Id. Because of the distance to the dispenser, the City has for many

years used a secondary filter at the dispenser. This secondary filter is not required, but is used a 

precautionary measure. Id. Fundamentally, CAS cannot be the victim of unjust discrimination 

because the City has held itself to a higher standard than it does CAS.

Moreover, the City has used the same filter for many years without issue, and it has 

passed every inspection. Id. at ¶ 29. Recently, the manufacturer added the Avgas warning, but 

did not change the specifications of the filters. Id. Airport staff contacted the manufacturer and 

confirmed that using the filter as a secondary filter for Avgas is appropriate and within the 

filter’s specifications. Furthermore, the filters are replaced regularly and are neither obsolete nor 

outdated. Id. The City notes that it is considering changing the secondary filters it uses to a type 

that does not contain the warning regarding aviation fuel. Id. Because the City has not required 

CAS to install a secondary filter, or make any changes to its filtering system, CAS has failed to 

state a claim on unjust discrimination under Assurance 22.

V. CONCLUSION

For the foregoing reasons, and for the reasons set forth in the Answer of the City of 

Chandler, the City respectfully asks FAA to dismiss the Complaint and find the City to be in 

compliance with its federal obligations.