UNITED STATES DEPARTMENT OF TRANSPORTATION

FEDERAL AVIATION ADMINISTRATION WASHINGTON, DC

Sterling Aviation, LLC ) ) COMPLAINANT ) ) Docket No. 16-09-03 v. ) April 13, 2010 ) Milwaukee County, Wisconsin ) ) RESPONDENT )

DIRECTOR’S DETERMINATION

I. INTRODUCTION

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

filed in accordance with the Rules of Practice for Federally-Assisted Airport Enforcement Proceedings , Title 14 Code of Federal Regulations (CFR) Part 16. 1

Sterling Aviation, LLC (Complainant) filed a fo rmal Complaint pursuant to 14 CFR Part 16 against Milwaukee County, Wisconsin (County or Respondent), sponsor and operator of the General Mitchell International Airport (Airpor t or GMIA). The Complainant alleges the Respondent is engaged in disparat e treatment of similarly situated aeronautical service providers with regard to fueling practices. Specifically, the Complainant alle ges the City is in violation of 49 U.S.C. § 47107(a)(1) and Grant Assurance 22, Economic Nondiscrimination as well as 49 U.S.C. § 40103(e) and Grant Assurance 23, Exclusive Rights

.

With respect to the allegations presented in th is Complaint, under the sp ecific circumstances at the Airport as discussed below and based on the ev idence of record in this proceeding, the FAA finds the Airport is not currently in violation of its Federal obligations. The FAA’s decision in this matter is based on applicable Federal la w and FAA policy, review of the pleadings and supporting documentation submitted by the parties, reviewed by the FAA, which comprises the

Administrative Record reflected in the attached FAA Exhibit 1.

II. PARTIES

In March of 2004, Sterling Aviation Holdings ac quired the stock of Scott Aviation, a company based at GMIA since 1984. [FAA Exhibit 1, Item 1, ¶6 and 7] The business’ name was changed

1 Enforcement procedures regarding air port compliance matters may be found at FAA Rules of Practice for Federally Assisted Airport Enforcement Proceedings (14 CFR Part 16). These enforcement procedures were published in the Federal Register (61 FR 53998, Octobe r 16, 1996) and became eff ective on December 16, 1996.2

to Sterling Aviation and later conv erted to a limited liability cor poration. [FAA Exhibit 1, Item 1, ¶7] Sterling Aviation, LLC is an FAA approved Part 145 Repair Station 2 for airframe, instrument, and radio repairs. [FAA Exhibit 1, It em 1, ¶1] The Complain ant is also a Part 135 charter operator 3 with 13 aircraft listed on its certifi cate. [FAA Exhibit 1, Item 1, ¶1]

General Mitchell International Airport (Airport) is a public-use airport owned and operated by Milwaukee County, Wisconsin. Th e Airport, five nautical m iles south of Milwaukee, is

classified as a medium-hub commercial servi ce airport with 110 based aircraft and 196,045 annual operations. The Airport has five runways and an air traffic control tower. [FAA Exhibit 1, Item 12] The planning and development of the Airport has been financed, in part, with funds provided by the FAA under the Airport Improvement Program (AIP), authorized by the Airport and Airway Improvement Act of 1982, as amended, 49 U.S.C. § 47101, et seq

. Since 1982, the County has accepted $167,812,061 in Federal AIP grants for GMIA. [FAA Exhibit 1, Item 11]

III. BACKGROUND AND PROCEDURAL HISTORY

Factual Background In 1983, Tom Scott founded Scott Aviation, formerly known as (f/k/a) Scott Air Charter; this company moves onto GMIA on or about June 1, 1984. [FAA Exhibit 1, Item 1, ¶6]

On September 11, 1989, Milwaukee County execut es a lease agreement with The Cessna Aircraft Company (Cessna). The initial term is approximately five years 4 and automatically renews, subject to an adjustment of the lessee’s rental payments, for seven additional consecutive terms of five years. [FAA E xhibit 1, Item 1, exhibit A]

On September 1, 1993, the FAA certifies Scott Air Char ter as a Part 145 Aircraft Repair Station. [FAA Exhibit 1, Item 1, ¶6]

On April 17, 1997, Milwaukee County executes a lease agreement with Scott Air Charter, Inc. The lease provides for an initial ten-year term a nd allows the lessee to renew, on the same terms and conditions, for two additional five-year pe riods. [FAA Exhibit 1, Item 1, exhibit C]

In October 2003, the Respondent amends its Sc hedule of Minimum Standards for Commercial

Aeronautical Activities on Milwau kee County’s Airports. [FAA Exhibit 1, Item 1, exhibit B] The Respondent also executes a le ase amendment with Scott Air Charter “for the rights to perform airframe and power plant overhauls, lot sections, inspections and repair services on aircraft engines” at the Airport. [FAA Exhibit 1, Item 17, exhibit C]

2 The term “Part 145” refers to 14 CFR Part 145, Re pair Stations. This regulation prescribes the FAA’s requirements for issuing repair stati on certificates and associated ratings.

3 The term “Part 135” refers to 14 CFR Part 135, Operating Requirements: Commuter and On Demand Operations and Rules Governing Persons on Board Such Aircraft. 14 CFR § 135.1 requires entities conducting commuter and on-demand operations to hold an Air Carrier Certificate or Operating Certificate as prescr ibed by 14 CFR Part 119.

4 Cessna’s lease describes its initial term as running “from the date the agreement is executed until the expiration of five (5) years from the date a City of Milwaukee occupanc y permit is issued for the proposed Cessna hangar facility, or until December 31, 1995, whichever date is earlier.” [FAA Exhibit 1, Item 1, exhibit A, p. 2]3

In March 2004, Scott Aviation is so ld to Sterling Aviation Holdings. 5 [FAA Exhibit 1, Item 1, exhibit D, ¶2] As part of this transaction, St erling assumes two hangar lease agreements from Scott Aviation. [FAA Exhibit 1, Item 7, exhibit B, ¶4] Sterli ng Aviation then enters into agreements with Milwaukee County for the operation of commercial aeronautical activities at GMIA. [FAA Exhibit 1, Item 5, AF2]

At a meeting held on September 13, 2005, repres entatives from GMIA and Sterling Aviation discuss Sterling’s ability to dispense fuel as specified under its lease with regard to its commercial aeronautical operating permits 6 and the Airport’s Minimum Standards. [FAA Exhibit 1, Item 7, exhibit F] A follow up le tter from the Respondent to the Complainant summarizes the Respondent’s views as follows:

“At our meeting, we clarified Sterling’s authority to di spense fuel under these permits and the Schedule of Minimum Standards for Commercial Aeronautical Activities on Milwaukee County’s Airports (Minimum Standards).

1. Under its aircraft charter authority, Sterli ng is authorized to fuel aircraft listed on its FAA charter certificat e when those aircraft ar e being used for FAR Part 135 public charter purposes.

2. Under its aircraft management authority, Sterling is not authorized to fuel aircraft being managed by Sterling.

3. Aircraft, even though they may be on the St erling charter certificate, (FAR Part 91 operation) may not be fueled by Sterli ng when they will be operated by or for the transportation of the aircraft owner.

4. Aircraft that Sterling charters from other operators to augment its charter operation may not be fueled by Sterling.” [FAA Exhibit 1, Item 7, exhibit F, p. 1]

In March 2006, GMIA initiates a compliance audit of Sterling Aviation. The audit finds that Sterling Aviation appears to be fueling Part 91 fli ghts in violation of its lease, handling aircraft that are not owned by Sterling or listed on its Part 135 Certificate, and offering commercial fueling services in conjunction with management of aircraft. [FAA Exhibit 1, Item 5, AF12 and FAA Exhibit 1, Item 7, exhibit B, ¶11] On September 22, 2006, GMIA writes a letter to Sterling Aviation expressing these concerns and requesting more specific in formation needed to begin a formal compliance audit. [FAA Exhibit 1, Item 7, exhibit B ¶12 and FAA Exhibit 1, Item 7, exhibit C] Sterling Aviation ne ver responds to this request. [FAA Exhibit 1, Item 7, exhibit B ¶13]

5 The Record is unclear as to when this transaction occurred. While an affidavit provided by Tom Scott states he sold his business in March of 2004, the Respondent executed a lease amendment with Scott Air Charter dated March 5, 2004. [FAA Exhibit 1, Item 1, exhibit D, ¶ 2 and FAA Exhibit 1, Item 17, exhibit D] This lease amendment authorized Scott Air Charter to perform aircraft mana gement services at GMIA. However, the amendment specifically states, “Permittee agrees that it will not sell, co nvey, transfer, pledge, or assi gn this Agreement of [sic] any part hereof or any rights created hereby. Any attempte d sale, conveyance, transfer, pledge or assignment of the Agreement, or any rights of Permittee hereunder, shall be null and void, and shall be a material breach hereof and this Agreement shall immediately and automatically terminat e at the time Permittee sells, conveys, transfers, pledges or assigns this Agreement.” [FAA Exhibit 1, Item 17, exhibit D, ¶ 7]

6 At this time, Sterling holds Commercial Operating Perm its to perform aircraft ch arter operations, aircraft management services, and power plant and airframe repair se rvices. [FAA Exhibit 1, Item 7, exhibit F, p. 1]4

On January 26, 2007, Sterling Aviation notifies GMIA of its decision to exer cise the first five year lease renewal option. This extends Sterling’s lease th rough March 31, 2012. [FAA Exhibit 1, Item 17, exhibit E]

During 2007, Sterling Aviation and GMIA meet and exchange correspondence discussing Sterling’s fueling rights. [FAA Exhibit 1, Item 5, ¶AF14; FAA Exhibit 1, Item 7, exhibits G, H, and I; and FAA Exhibit 1, Item 18, exhibits A and B] An August 1, 2007 le tter from Sterling to

GMIA states:

“Sterling Aviation seeks to clarify the fuel rights afforded to us by our land lease with the County. It is our desire to perform, and confirm our rights to fuel:

1. Only aircraft listed on our Air Carrier Certificate in which we have either an operating agreement or a lease, regardle ss of whether those flights are conducted under FAR 91 or FAR Part 135 regulations and;

2. Aircraft of other Air Carriers with whom we have contracted with to transport our clients under FAR Part 135 regulations; and

3. Aircraft we are demonstrating to purchase or which have been recently purchased by either ourselves or one of our clients; and which are or will be going through the FAA process of being list ed on our Air Carrier Certificate; and

4. Aircraft in which our FAA approved repair station is performing maintenance. (The same rights afforded Cessna’s Citation’s Service Center in their land lease.)

It is Sterling Aviation’s position that our existing land leas e with the County allows for all the above fueling rights and we are in possession of the appropriate County issued permits to conduct commerc ial operations at Mitchell Field.” [FAA Exhibit 1, Item 18, exhibit B]

In response, GMIA offers to amend Sterling’s le ase to permit Sterling to fuel aircraft it is demonstrating to purchase and aircraft that had b een repaired at Sterling’s repair station, as long as Sterling’s proposal does not violate the terms of its lease or the Minimum Standards. [FAA Exhibit 1, Item 5, AF13; FAA Exhibit 1, Item 7, exhibit G, pp 2-3; and FAA Exhibit 1, Item 7, exhibit H, p. 2]

On October 10, 2007, the Complainant, through its counsel, writes to the Respondent stating it has the right to fuel the following:

“1. Aircraft listed on Sterling’s Air Carrier Certificate in which it has either an operating agreement or a lease, regardle ss of whether those flights are conducted under FAA Part 91 or FAA Part 135 Regulations;

2. Aircraft of other Air Carriers with whom it has contracted to transport its clients under FAA Part 135 Regulations;5

3. Aircraft that it is demonstrating to purchase or which have been recently purchased by either Sterling or one of its clients; and which ar e or will be going through the FAA process of being listed on Sterling’s Air Carrier Certificate;

and...” [FAA Exhibit 1, Item 7, exhibit I, p. 1]

In June of 2008 GMIA completes a competitive re quest for proposal process to select a second Fixed Base Operator. 7 Sterling Aviation does not submit a proposal. [FAA Exhibit 1, Item 5, ¶AF18 and FAA Exhibit 1, Item 7, exhibit B, ¶19]

In August 2008, the Respondent seeks an a dvisory opinion from the FAA regarding the Complainant’s right to provide into-plane fue ling services. [FAA Exhibit 1, Item 5, ¶AF15 and FAA Exhibit 1, Item 7, exhibit D] In response, the FAA’s Airports Di vision Manager for the Great Lakes Region provides gene ral guidance on self-fueling and en closes a copy of a letter the FAA sent to a Part 135 operator discussing its self-fueling rights in 2003 (AmAv letter). [FAA Exhibit 1, Item 7, exhibit J]

On February 15, 2009, the Complainant’s counsel met with the Respondent’s counsel in an attempt to resolve the issue. [FAA Exhibit 1, Item 1, ¶15 and FAA Exhibit 1, Item 5, ¶15]

On March 30, 2009, the Complainant requests the FAA’s opinion on issues now raised in this formal Complaint. [FAA Exhibit 1, Item 14] The FAA’s Airports Division Manager for the Great Lakes Region responds with information re garding the grant assura nces and the Part 16 complaint process. A copy of the AmAv letter is also enclosed. [F AA Exhibit 1, Item 15]

Procedural History On June 8, 2009, FAA received the Complaint. [FAA Exhibit 1, Item 1]

On June 19, 2009, FAA docketed Sterling Avia tion, LLC v. Milwaukee County, Wisconsin. [FAA Exhibit 1, Item 2]

On June 30, 2009, the Respondent requested additiona l time to file its answer and advised that Complainant had no objection. [FAA Exhibit 1, Item 4]

On July 31, 2009, the Respondent filed an Answ er, Motion to Dismiss, and Memorandum in Support of Respondent’s Motion to Dismi ss. [FAA Exhibit 1, Items 5, 6, and 7]

On August 7, 2009, the Complainant filed a Reply and an Answer to Respondent’s Motion to Dismiss. [FAA Exhibit 1, Items 8 and 9]

On August 20, 2009, the Respondent filed a Rebuttal. [FAA Exhibit 1, Item 10]

On November 12, 2009, the FAA requested additi onal information from both parties and

extended the due date of the Director’s Determin ation to on or before February 12, 2010. [FAA Exhibit 1, Item 13]

7 A fixed-base operator (FBO) is an individual or firm operating at an airport and providing general aircraft services such as maintenance, storage, and ground, and flight instruction. [FAA Order 5190.6B, Appendix Z]6

On December 8, 2009, the Respondent submits addi tional information requested by the FAA. [FAA Exhibit 1, Item 18]

On December 9, 2009, the Complainant submits a dditional information requested by the FAA. [FAA Exhibit 1, Item 17]

On February 12, 2010, the FAA extended the due date of the Director’s Determination to on or before March 12, 2010. [FAA Exhibit 1, Item 21]

On March 10, 2010, the FAA extended the due date of the Director’s Determination to on or before April 16, 2010. [FAA Exhibit 1, Item 22]

IV. ISSUES

Upon review of the allegations and the releva nt airport-specific circumstances, summarized above, the FAA has determined that the following issues require analysis in order to provide a complete review of the County’s compliance with applicable Federal law and policy:

• Whether the Respondent’s refusal to grant th e Complainant the same fueling rights as those purportedly granted to another aeronau tical service provider constitutes unjust

discrimination in violation of 49 U.S. C. § 47107(a)(1) and Grant Assurance 22,

Economic Nondiscrimination

.

• Whether the Respondent has granted an Ex clusive Right to The Cessna Aircraft Company by refusing to recognize the Compla inant as a Specialized Aircraft Repair Service operator in violat ion of 49 U.S.C. § 47107(a )(4) and Grant Assurance 23, Exclusive Rights

.

• Whether the Respondent has granted an Ex clusive Right to The Cessna Aircraft Company by refusing to allow the Complainant the right to fuel its customers, business invitees, and guests in violation of 49 U. S.C. § 47107(a)(4) and Grant Assurance 23, Exclusive Rights

.

V. APPLICABLE LAW AND POLICY

The federal role in civil aviation has been augmen ted by various legislative actions that authorize programs for providing federal funds and othe r assistance to local communities for the development of airport facilities. In each su ch program, the airport sponsor assumes certain obligations, either by contract or by restrictive covenants in property deeds and conveyance instruments, to maintain and operate its airport fa cilities safely and efficiently and in accordance with specified conditions. Commitments assume d by airport sponsors in property conveyance or grant agreements are important factors in maintain ing a high degree of safety and efficiency in airport design, construction, operation and maintenance, as well as ensuring the public fair and reasonable access to the airport.7

The following is a discussion pertaining to the Airport Improvement Program, Airport Sponsor Assurances, the FAA Airport Compliance Program, enforcement of Airport Sponsor Assurances, and the Complaint and Appeal Process.

The Airport Improvement Program

Title 49 U.S.C. § 47101, et seq ., provides for federal airport financial assistance for the development of public-use airports under the Ai rport Improvement Program (AIP) established by the Airport and Airway Improvement Act of 1982, as amended. Title 49 U.S.C. § 47107, et seq

., sets forth assurances to which an airport spons or agrees as a conditi on of receiving federal financial assistance. Upon acceptance of an AIP grant, the assurances become a binding contractual obligation between th e airport sponsor and the federa l government. The assurances made by airport sponsors in AIP grant agreements are important factors in maintaining a viable national airport system.

Airport Sponsor Assurances

As a condition precedent to providing airport development assistance under the Airport Improvement Program, 49 U.S.C. § 47107, et seq. , the Secretary of Transportation and, by extension, the FAA must receive ce rtain assurances from the airpor t sponsor. Title 49 U.S.C. § 47107(a) sets forth the statut ory sponsorship requirements to which an airport sponsor receiving federal financial as sistance must agree.

The FAA has a statutory mandate to ensure that airport owners comply with these sponsor

assurances. 8 FAA Order 5190.6B, Airport Compliance Requirements (FAA Order 5190.6B), issued on September 30, 2009, provides the policies and procedures to be followed by the FAA in carrying out its legislatively mandated functions related to compliance with federal obligations of airport sponsors. The FAA considers it in appropriate to provide federal assistance for improvements to airports where the benefits of such improvements will not be fully realized due

to inherent restri ctions on aeronautical activities.

Two federal grant assurances appl y to the circumstances set forth in this Complaint: (1) Grant Assurance 22, Economic Nondiscrimination and (2) Grant Assurance 23, Exclusive Rights

.

Assurance 22, Economic Nondiscrimination

The owner of any airport developed with federal grant assistance is required to operate the airport for the use and benefit of the public and to make it ava ilable to all types, kinds, and

classes of aeronautical activity on fair and reasonable terms, and without unjust discrimination. Federal Grant Assurance 22, Economic Nondiscrimination deals with both th e reasonableness of airport access and the prohibition of adopting unjustly discrimina tory conditions as a potential

8 See

, e.g. , the Federal Aviation Act of 1958, as amended and re codified, Title 49 U.S.C. §§ 40101, 40113, 40114,

46101, 46104, 46105, 46106, 46110; and the Airport and Airway Improvement Act of 1982, as amended and recodified, Title 49 U.S.C. §§ 47105(d), 47106(d), 47107(k), 47107(l ), 47111(d), 47122.8

for limiting access. Grant Assurance 22 of the pr escribed sponsor assurances implements the provisions of 49 U.S.C. § 47107( a)(1) through (6), and requ ires, in pertinent part:

“...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 ae ronautical activities, including commercial aeronautical activities offering services to the public at the airport. [(a)]

b. In any agreement, contract, lease, or other arrangement under which a right or privilege at the airport is granted to any person, firm, or corporation to conduct or to engage in any aeronautical ac tivity for furnishing services to the public at the airport, the sponsor will in sert and enforce provisions requiring the

contractor to- (1) furnish said services on a reasonable, and not unjustly discriminatory, basis to all users thereof, and (2) charge reasonable, and not unjustly discriminatory, prices for each unit or service, provided that the contractor may be allowed to make reasonable and nondiscriminatory discounts, rebates, or other similar types of price reductions to volume purchasers.

c. Each fixed-base operator at the airport shall be subject to the same rates, fees, rentals, and other charges as are uniformly applicable to all other fixed-base operators making the same or similar uses of such airport and utilizing the same or similar facilities.

d. Each air carrier using such airport shall have the right to service itself or to use any fixed-base operator that is authorized or perm itted by the airport to serve any air carrier at such airport.

f. It will not exercise or grant any right or privilege which operates to prevent any person, firm, or corporation operating aircra ft on the airport from performing any services on its own aircraft with its own employees [including, but not limited to maintenance, repair, and fueling] that it may choose to perform.

g. In the event the sponsor itse lf exercise 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.

h. The sponsor may establish such reas onable, and not unjustly discriminatory, conditions to be met by all users of the ai rport as may be necessary for the safe and efficient operation of the airport.

i. The sponsor may prohibit or limit any given type, kind or class of aeronautical use of the airport if such action is necessary for the safe operation of the airport or necessary to serve the civil aviation needs of the public.”9

Subsection (h) qualifies subsecti on (a), and subsection (i) repres ents an exception to subsection (a) to permit the sponsor to exercise control of the airport sufficien t to preclude unsafe and

inefficient conditions that woul d be detrimental to the civil aviation needs of the public.

In all cases involving restrictions on airport use imposed by airport owners for safety and efficiency reasons, the FAA will make the final determination on the reasonableness of such restrictions when those restrictions deny or limit access to, or use of, the airport. [ See FAA Order 5190.6B, ¶14.3.]

FAA Order 5190.6B describes the responsibilities under Assurance 22 assumed by the owners or sponsor of public use airports de veloped with federal assistance. Among thes e is the obligation to treat in a uniform manner those users making th e same or similar use of the airport and to make all airport facilities and services available on r easonable terms without unjust discrimination. [ See FAA Order 5190.6B, Chapter 9]

The owner of an airport developed with federal assistance is required to operate the airport for the use and benefit of the public and to make it available to all types, kinds, and classes of aeronautical activity on reasonable terms, and without unjust discrimination. [ See FAA Order 5190.6B, Sec. ¶9.1.(a)]

Assurance 23, Exclusive Rights

Title 49 U.S.C. § 40103(e), provides that “[a] pers on does not have an exclusive right to use an air navigation facility on which G overnment money has been expended.”

Title 49 U.S.C. § 47107(a)(4), similarly provides that “a person providing, or intending to provide, aeronautical services to the public wi ll not be given an exclusive right to use the airport...”

Grant Assurance 23, Exclusive Rights , of the prescribed sponsor assurances implements both statutory provisions requ iring, in pertinent part, that the sponsor of a fe derally obligated airport:

“...will permit no exclusive right for the use of the airport by any person providing, or intending to provide, aeronaut ical services to th e public...and that it will terminate any exclusive right to c onduct an aeronautical activity now existing at such an airport before the grant of any assistance under Title 49, United States

Code.”

An exclusive right is defined as a power, privilege, or other right excluding or debarring another from enjoying or exercising a like power, privilege, or right. An exclusiv e right can be conferred either by express agreement, by the imposition of unreasonable standards or requirements, or by any other means. Such a right conferred on one or more parties, but excluding others from enjoying or exercising a simila r right or rights, would be an exclusive right. [ See FAA Advisory

Circular 5190-6 Exclusive Rights at Fede rally Obligated Airports , January 4, 2007]10

Therefore, it is FAA’s policy that the sponsor of a federally obligated airport will permit no exclusive right for the use of the airport by any person providing, or intending to provide, aeronautical services to the public and will not, either directly or indirectly, grant or permit any person, firm, or corporation, the exclusive right at the airport to c onduct any aeronautical activities. FAA Order 5190.6B clarifies the appli cability, extent, and duration of the prohibition against exclusive rights under 49 U.S.C. § 40103(e) with regard to airpor ts developed with FAAadministered grant assistance a nd Federal property conveyances.

The exclusive rights prohibition rema ins in effect as long as the airp ort is operated as an airport. FAA takes the position that the grant of an ex clusive right for the c onduct of any aeronautical activity on such airports is regarded as contrary to the requirements of the applicable laws, whether such exclusive right results from an express agreement, from the imposition of unreasonable standards or requireme nts, or by any other means.

The FAA Airport Compliance Program

The FAA discharges its responsibilities for en suring airport owners’ compliance with their federal obligations through its Airport Comp liance Program. The FAA’s airport compliance

efforts are based on the contract ual obligations an airport owne r accepts when receiving federal grant funds or the transfer of federal propert y for airport purposes. These obligations are incorporated in grant agreements and instruments of conveyance in order to protect the public’s

interest in civil aviation and to en sure compliance with federal laws.

The FAA Airport Compliance Program is designed to ensure the availability of a national system of safe and properly maintained public-use airp orts operated in a manner consistent with the airport owners’ federal obliga tions and the public’s investment in civil aviation.

The Airport Compliance Program does not control or direct the opera tion of airports. Rather, it

monitors the administration of the valuable ri ghts pledged by airport s ponsors to the people of the United States in exchange for monetary gran ts and donations of federal property to ensure that the public interest is be ing served. FAA Order 5190.6B sets forth policies and procedures for the FAA Airport Compliance Program. FA A Order 5190.6B is not regulatory and is not controlling with regard to air port sponsor conduct. Rather, it establishes th e policies and procedures to be followed by FAA personnel in carrying out the FAA’s responsibilities for ensuring airport compliance. It provides basi c guidance for FAA personnel in interpreting and administering the various continuing commitments made to the United States by airport owners as a condition of receiving a grant of federal funds or the conveyance of federal property for airport purposes. FAA Order 5190.6B analyzes the various obligations set forth in the standard airport sponsor assurances, addres ses the nature of those assuran ces, addresses the application of those assurances in the operati on of public-use airports, and fa cilitates interpretation of the assurances by FAA personnel.

The FAA Compliance program is designed to achieve voluntary compliance with federal obligations accepted by owners a nd/or operators of public-use airports developed with FAAadministered assistance. Therefore, in addres sing allegations of noncompliance, the FAA will make a determination as to whether an airport sponsor is currently in compliance with the11

applicable federal obligations. Consequently, the FAA will consider th e successful action by the airport to cure any alle ged or potential past violation of a pplicable federal obligation to be grounds for dismissal of such allegations. [ See e.g. Wilson Air Center v. Memphis and Shelby County Airport Authority , FAA Docket No. 16-99-10 (Augus t 30, 2001) (Final Decision and Order) ( Wilson )]

FAA Order 5190.6B outlines the standard for compliance, stating, “A sponsor meets commitments when: (1). The federal obligati ons are fully understood ; (2). A program (e.g., preventive maintenance, leasing policies, opera ting regulations, etc.) is in place that the FAA deems adequate to carry out the sponsor’s co mmitments; (3). The sponsor satisfactorily demonstrates that such a program is being carried out; and (4). Past comp liance issues have been addressed.” [ See FAA Order 5190.6B, ¶2.8.(b.)]

Enforcement of Airport Sponsor Assurances

The Federal Aviation Act of 1958, as amended (F AAct), 49 U.S.C. § 40101, et seq., assigns the FAA Administrator broad responsib ilities for the regula tion of air commerce in the interests of safety, security, and development of civil aeron autics. The federal role in encouraging and developing civil aviation has b een augmented by various legisl ative actions, which authorize programs for providing funds and other assistance to local communities for the development of airport facilities. In each such program, the airport owner or sponsor assumes certain obligations, either by contract or by restrictive covenants in property deeds and conveyance instruments, to maintain and operate its airport facilities safely, efficiently, and in accordance with specified conditions. Commitments assu med by airport owners or sponsors in property conveyance or grant agreements are important fact ors in maintaining a high degree of safety and efficiency in airport design, construction, opera tion and maintenance, as well as ensuring the public reasonable access to the airport. Purs uant to 49 U.S.C. § 47122, the FAA has a statutory mandate to ensure that airport owners co mply with their federal grant assurances.

The Complaint and Appeal Process

Pursuant to 14 CFR § 16.23, a person directly and substantially affected by any alleged noncompliance may file a complaint with the FAA. The complainant(s) shall provide a concise but complete statement of the facts relied upon to substantiate each allegation. The complaint(s) shall also describe how the complainant(s) direc tly and substantially has/have been affected by the things done or omitted by the respondent(s). [ See , 14 CFR § 16.23(b)(3-4)]

If, based on the pleadings, there appears to be a reasonable basis for further investigation, the FAA will investigate the subject matter of the Comp laint. In rendering its initial determination, the FAA may rely entirely on the Complaint and the responsive pleadings provided. Each party

shall file documents that it considers sufficien t to present all relevant facts and arguments necessary for the FAA to determine whet her the sponsor is in compliance. [ See , 14 CFR § 16.29]

The proponent of a motion, request, or order has th e burden of proof. A party who has asserted an affirmative defense has the burden of proving th e affirmative defense. This standard burden12

of proof is consistent with the Administrative Procedures Act (APA) and federal case law. The APA provision [ See , 5 U.S.C. § 556(d)] states, “(e)xcept as otherwise provided by statute, the proponent of a rule or order has the burden of proof.” [ See also

, Director, Office Worker’s Compensation Programs, Department of Labor v. Greenwich Collieries , 512 US 267, 272 (1994)

and Air Canada et al. v. Depa rtment of Transportation , 148 F3d 1142, 1155 (DC Cir, 1998)] Title 14 CFR § 16.229(b) is consistent with 14 CFR §16.23, which requires the Complainant to submit all documents then available to support his or her complaint. Similarly, 14 CFR § 16.29 states that, “(e)ach party shall file documents th at it considers sufficient to present all relevant facts and arguments necessary for the FAA to dete rmine whether the sponsor is in compliance.”

Title 14 CFR § 16.31(b), in pertinent parts, provides that “(t)he Director's determination will set forth a concise explanation of th e factual and legal ba sis for the Director's determination on each claim made by the complainant.” In accordan ce with 14 CFR § 16.33(b) and (e), upon issuance of a Director’s determination, “a party adversely affected by the Director's determination may file an appeal with the Associate Administrator within 30 days after the date of service of the initial determination;” however, “(i)f no appeal is filed within the time period specified in paragraph (b) of this section, the Director's determination become s the final decision and order of

the FAA without further action. A Director's dete rmination that becomes final because there is no administrative appeal is not judicially reviewable.”

Title 14 CFR § 16.247(a) defines procedural recour se for judicial review of the Associate

Administrator’s final decision a nd order, as provided in 49 U. S.C. § 46110 or section 519(b)(4) of the Airport and Airway Improvement Act of 1982, as amended, (AAIA), 49 U.S.C. § 47106(d) and 47111(d).

VI. ANALYSIS AND DISCUSSION

Prior to the filing of this Comp laint, both parties sought the F AA’s informal guidance on matters related to self-fueling. Below is a discussion of those exchanges.

Review of FAA’s Informal Guidance to Both Parties

In August of 2008, the Respondent requested info rmal guidance regarding its responsibilities under Grant Assurance 22(d) and (f). [FAA Exhi bit 1, Item 7, exhibit D] The FAA’s Manager of the Airports Division for the Great Lakes Region responded by letter advising of general guidance on self-fueling. [FAA Exhi bit 1, Item 7, exhibit J] This letter specifically states that Grant Assurance 22(d) “allows an air carrier to se rvice itself or to use a ny fixed-base operator that is authorized or permitted by the airport to serv ice an air carrier.” The letter notes that Grant Assurance 22(f) “prohibits an airport from restri cting a corporation’s right to perform services on

its own aircraft but there must be evidence that there is adequate ownershi p interest in the aircraft to qualify as ‘ own aircraft ,’ for the purposes of this Assu rance.” To further explain how self-fueling rights may be practiced by Part 135 op erators, the FAA enclosed a copy of a letter sent to AmAv, Inc. (AmAv letter), in 2003. This letter notes that wh en a corporation lacks adequate ownership interest in an aircraft, th at particular aircraft does not qualify as the corporation’s “own” aircraft for the purposes of Grant Assurance 22(f). The Director reaffirms this guidance.13

In March of 2009, the Complainant requested th e FAA provide informal guidance on issues similar to the questions now before th e Director. [FAA Exhibit 1, Item 14] The FAA’s Manager of the Airports Division for the Great Lakes Re gion responded by letter. [FAA Exhibit 1, Item 15] In addition to discussing th e obligations contained in Grant Assurance 22(d) and (f), as was explained to the Respon dent, the letter stated:

“For an airport sponsor to offer a tenant the right to expand its self-fueling activity to aircraft that it does not own, lease, rent, or operate for its exclusive use, would be outside the definition and protection of Assurance 22. This could lead to allegations that an airpor t sponsor was acting in an unjustly discriminatory manner towards its tenant s that have the right to sell fuel commercially.” [FAA Exhibit 1, Item 15]

The FAA also enclosed a copy of the AmAv le tter to further explain how self-fueling rights apply to Part 135 operators. The Dire ctor reaffirms this guidance.

It is important to clarify that issues raised in this Complaint do not pertain to the Complainant’s right to self-fuel under Grant A ssurance 22(d) or (f). Grant A ssurance 22(d) protects an air carrier’s right to service its own aircraft. Grant Assurance 22(f) explicitly protects the rights of individuals and corporations to perform services, such as fueling, on their own aircraft with their own employees. The Director notes this distin ction due to previous documented requests for informal guidance from both pa rties regardi ng self-fueling.

Issues Identified for Analysis and Discussion

Issue 1: Whether the Respondent’s refusal to grant th e Complainant the same fueling rights as those purportedly granted to a similarly situated aeronautical service provider constitutes unjust discrimination in violation of 49 U.S.C. § 47107(a)(1) and Grant Assurance 22, Economic

Nondiscrimination.

As noted above and previously explained to the Complainant, when an airport sponsor allows a tenant to expand its self-fueling acti vities to aircraft it does not ow n, lease, rent or operate for its exclusive use, it offers a privilege outside its obl igations contained in Gr ant Assurance 22(d) and (f). The extant Complaint thus centers around a privilege negotiated and ar ticulated in one lease between the Respondent and an aeronautical service provider at the Airport.

In 1989, GMIA entered into a lease with Cessna. [FAA Exhibit 1, It em 1, exhibit A] This lease allows Cessna to fuel its “customers, business in vitees, and guests only”. [FAA Exhibit 1, Item 1, exhibit A, p. 9] Eight years later, in 1997, Sco tt Air Charter, Inc. entered into a lease which limits its fueling rights to self-fueling. [FAA E xhibit 1, Item 1, exhibit C, p. 6] In March of 2004, the Complainant acquired Scott Air Charte r’s stock and assumed the 1997 lease. [FAA Exhibit 1, Item 1, ¶6]14

Given the time which has elapsed since the Co mplainant’s lease was executed and renewed 9 – 12 years – the Director relies on a principle involving a rent disparity issue from Penobscot Air Services v. Knox County , FAA Docket No. 16-97-04 (September 25, 1997) (Director's Determination)( Penobscot DD ):

“The purpose of the grant assurances is to protect the public interest in the operation of Federally obligated airpor ts. The purpose is not to provide alternative or supplementa l rights to those normally available to commercial tenants in disputes with their landlords, i.e. negotiation or commercial litigation under applicable state and local laws. The FAA does not consider that Congress intended grant assurances and the FAA co mpliance process to provide a device by which a commercial aeronautical tenant c an abrogate an otherwise valid commercial lease with a sponsor becaus e the operations under the lease are less profitable than the tenant anticipated. Such use of the grant assurances would be especially inappropriate in a case lik e this, where the complainant did not negotiate directly with the sponsor but elected to assume a prior tenant’s lease through acquisition.” [ Penobscot DD , at page 24, citing to Sky East Services, Inc. and Hampton Air Transport System. Inc. v. Suffolk County, New York
, FAA Docket Nos. 13-88-6 and 13-89-1]

Aerodynamics of Reading, Inc. v Reading Regional Airport Authority , FAA Docket No. 16-00- 03, (July 23, 2001) (Final Decision and Order) at 16, ( Aerodynamics FAD ) states that it is “incumbent upon the Complainant to prove its a llegations of unjust discrimination by providing

evidence that similar terms and conditions were re quested and were subse quently denied without adequate justification.”

In this instant complaint, the Complainant pr ovides no evidence to support that it requested fueling rights similar to those granted to Cessn a when the Complainant acquired the Scott lease in 2004. The Complainant provides no evidence to support it requested additional fueling rights, similar to Cessna, when it exercised a five-y ear lease renewal option in 2007. Agreeing to contract terms with the Respondent, and then comp laining later that the contract terms are not similar to Cessna’s, does not mean the Co mplainant has been treated in an unjustly discriminatory manner. The Director has rou tinely found in favor of the airport sponsor in complaints where an aeronautical tenant has negotiated a rental agreement that requires a particular payment and rate schedule, commen ces doing business and earning profits, and then complains that the deal was unfair. Under this type of scenario the Director has rejected buyer’s remorse as a rationale or justification to suppor t an argument that terms previously negotiated and accepted should be now altered. Absent any evidence to demonstrate that the Complainant objected to the terms of the lease or was denied access to pertinent information during negotiations, the Director concludes that there can be no unjust discrimination. [ See Adventure Aviation v City of Las Cruces, New Mexico , FAA Docket No. 16-01-14, (August 7, 2002) (Director’s Determination) at 13 ( Adventure ) and 41 North 73 West, Inc. dba Avitat Westchester

9 Scott Air Charter’s lease expired on March 31, 2007. [FAA Exhibit 1, Item 1, exhibit C] Sterling Aviation exercised an option to renew the lease for an additional five-year term. Sterling’s notice exer cising its renewal option requested changes to Section 12, “Eminent Domain” and to Exhibit B. [FAA Exhibit 1, Item 1, exhibit C and FAA Exhibit 1, Item 17, exhibit E]15

v Westchester County, New York , FAA Docket No. 16-07-13, (J une 12, 2008) (Director’s Determination) at 25 ( Avitat )]

The Complainant describes its history and Scott’s hist ory of fueling all aircraft listed on its Part 135 certificate despite whether they were flown for Part 135 or Pa rt 91 operations. [FAA Exhibit 1, Item 1, ¶6 and ¶14; FAA Exhibit 1, Item 1, exhi bit 4, ¶2; FAA Exhibit 1, Item 8, exhibit A, ¶ 3 and 8; and FAA Exhibit 1, Item 9, exhibit A, ¶3 and 8] The Respondent disputes that it was aware of this practice and states that it “never gave permission to Scott Aviation to engage in those fueling practices.” [FAA E xhibit 1, Item 10, exhibit B, ¶3]

Had the Respondent known that Scott Aviati on/Sterling was exercisi ng fueling rights beyond those authorized by its lease, the Airport may have exposed itself to allegations of unjust

discrimination from other tenants. The R ecord indicates the Re spondent met with the Complainant to discuss its fueling activities and clarify its specific lease terms in September of 2005. [FAA Exhibit 1, Item 5, AF11 and FAA Exhib it 1, Item 7, exhibit F] Taking steps to ensure its compliance with its Federal obligations demonstrates th at the Respondent is striving to achieve the standard of compliance as stated in Section V of this Determination. Most importantly, the fact that the Respondent has ch osen to enforce the terms of the lease by limiting the Complainant’s fueling rights to self-fueling do es not constitute a grant assurance violation.

Against this background, it is si mply unreasonable for the Director to find that the Respondent has unjustly discriminated against the Complaint based on the fact that two aeronautical users have been granted different fueling rights. [ See Avitat at 25] As stated in Rick Aviation, Inc. v. Peninsula Airport Commission , FAA Docket No. 16-05-18, (May 8, 2007) (Director’s Determination) at 17, (November 6, 2007) (Final Agency Decision) at 15 ( Rick Aviation ), “The FAA will not step in to overturn a lease provisi on simply because the aeronautical tenant has discovered the provision the tenant agreed to has created an undesira ble position for the tenant.”

With that said, recognizing that future negotia tions between both parties will hinge upon whether or not Sterling is similarly situated to Cessna, the Director will address this issue. The Complainant’s March 30, 2009 letter 10 raised this issue and requ ested FAA guidance in response to the following questions:

“Is Sterling similarly situated to Cessna?”

“Would it be unjust discrimination to deny Sterling the same or similar fueling rights as Cessna?” [FAA Exhibit 1, Item 14, p.5]

The Complainant states:

“The complaint centers on unjust discri mination related to the disparate treatment of similarly situated aeronautic al service providers’ ability to fuel aircraft. Both Sterling and The Cessna Aircraft Company (‘Cessna’) are Part

10 The Respondent’s counsel via letter dated June 29, 2009, advised it responded to Complainant’s March 30 letter by letter of May 29. [FAA Exhibit 1, Item 3] Counsel further advised that on the date this matter was docketed, June 19, 2009, the Complainant sent a letter in response to the May 29 letter.16

145 Repair Stations and GMIA’s website lis ts both as providers of ‘Aircraft Maintenance.’ While Milwaukee County has granted Cessna a broad right to fuel aircraft of ‘its customers, business inv itees and guests,’ the airport sponsor is attempting to deny Sterling the same right to fuel aircraft that they maintain for

their customers.” [FAA Exhibit 1, Item 1, p. 1]

The Respondent:

“Admits that Sterling is a Part 145 Repair Station, that Sterling provides Aircraft Charter Services, and that Sterling and Cessna are liste d on the employment page of GMIA’s website as companies that pe rform aircraft maintenance, but denies that the County holds Cessna out to the public as an aircraft maintenance provider...” [FAA Exhibit 1, Item 5, ¶2]

“Denies that Cessna and Sterling are similarly situated.” [FAA Exhibit 1, Item 5, ¶4]

The Complainant argues that when an airport s ponsor offers a privilege to one aeronautical service provider, Grant Assurance 22 compels that airport to offer that sa me privilege to other similarly situated aeronautical service providers. Grant Assuran ce 22 at (c), (h) and (i) provides that an airport may treat dissimilar aeronautical us ers of the airport dissimilarly. This limits the Director’s analysis to whether or not the Respondent is treati ng the Complainant in an unjustly discriminatory manner.

The Complainant relies on a standard cited from Kent J. Ashton v. City of Concord, North

Carolina , FAA Docket No. 16-99-09, (July 3, 2000) (Final Decision and Order) at 18 ( Ashton ):

“The FAA will determine that the airport is acting in a manner that is unjustly discriminatory if they find that ‘another en tity, in a similar si tuation, was unjustly

denied a similar situation. ” [FAA Exhibit 1, Item 1, ¶2]

However, this statement only recognizes half of the standard used by the FAA in determining whether or not an airport sponsor has engaged in unjust economic discrimination. As noted in Penobscot Air Service LTD v. County of Knox Board of Commissioners , FAA Docket No. 16- 97-04, (September 25, 1997) (Record of Determination) at 22 ( Penobscot ROD ), “Assurance 22, Economic Nondiscrimination prohibits only unjust discrimination among users. Differences in treatment including rental rates, are permissible as long as th ose differences are not unjust.” 11
As a result, the FAA has long held that in order to sustain a finding of unjust economic discrimination, a complainant must establish that it requested similar terms and conditions as other similarly situated airport users and was denied for unjust reasons. [ See Aerodynamics of Reading, Inc. v Reading Regional Airport Authority , FAA Docket No. 16-00-03, (December 22, 2000) (Director’s Determination) at 19 ( Aerodynamics DD )]

11 The U.S. Court of Appeals upheld this finding in Penobscot Air Services, Ltd. V. FAA , 164 F.3d 713, 726 (1 st Cir. 1999).17

In Ashton , the Associate Administrator upheld the s ponsor’s distinctions and variations in services as reasonable because they reflected dissimilar uses of the airport and were drawn in pursuit of appropriate goals. [ See Ashton at 18] The Respondent correctly describes this twopronged test in its Memorandum in Support of Re spondent’s Motion to Dismiss. [FAA Exhibit 1, Item 7, p. 6] Incidentally, applying this te st will allow the Director to answer the two questions related to similarly situated te nants and unjust discriminatory treatment.

Prong 1: Are Sterling and Cessna similarly situated? The Director will analyze evidence in the R ecord which discusses the Complainant’s and Cessna’s use of the Airport and the business models they utilize. This evidence includes leases, commercial operating permits, the Respondent ’s Schedule of Minimum Standards for

Commercial Aeronautical Activitie s, and descriptions of both aerona utical service providers.

Leases

GMIA entered into leases with Cessna and the Complainant. Both leases:

• include dated terms and renewal provisions;

• describe how the lessee may use the airport property leased;

• stipulate fueling rights; and

• note specific prohibitions and lim itations imposed on the lessees.

The Complainant’s lease was for an initial term of ten years (from Ap ril 1, 1997 to March 31, 2007) 12 , and provided the lessee with the right to re new for two additional periods of five years on the same terms and conditions. [FAA Exhibit 1, Item 1, exhibit C, p. 2] Cessna’s lease provided for an initial term of approximately five years 13 and automatically renews, subject to an adjustment of the lessee’s rental payment, for seve n additional terms of five years. [FAA Exhibit 1, Item 1, exhibit A, p. 2]

Both leases are specific about how the lesse e may use its leasehold. The Complainant is provided “the right and privilege to engage in and perform Aircraft Charter and Air Taxi

Services” as defined in GMIA’s Minimum Standard s. [FAA Exhibit 1, Item 1, exhibit C, p. 2] The lease also specifically permits the Complain ant to use its leasehol d “for the purpose of storage, repair, fueling, maintenance, and operati on of the Lessee’s owned or leased aircraft.” [FAA Exhibit 1, Item 1, exhibit C, p. 2] Cessna’s lease is:

“for the purpose of storing, servicing, repairing and performing maintenance of aircraft, aircraft assemblies, aircra ft accessories, radios and electronic equipment and any components th ereof; for the sale or le ase of aircraft, aircraft assemblies, aircraft radio and electr onic equipment and components or parts thereof; and, for the business and operations offices and shops in connection with the purposes authorized herein;” [FAA Exhibit 1, Item 1, exhibit A, p. 3]

12 The Complainant acquired Scott Air in March of 2004 and assumed the existing lease. [FAA Exhibit 1, Item 1, ¶7]

13 Cessna’s lease describes its initial term as running “from the date the agreement is executed until the expiration of five (5) years from the date a City of Milwaukee occupanc y permit is issued for the proposed Cessna hangar facility, or until December 31, 1995, whichever date is earlier.” [FAA Exhibit 1, Item 1, exhibit A, p. 2]18

The leases discuss specific rights and respons ibilities associated with fueling. The Complainant’s lease allows it to utilize the exis ting aviation fuel and oil storage and dispensing

facilities in its leasehold areas or to install additional or replacement facilities at a location approved by the Airport Director “to serve its requirements only”. [FAA Exhibit 1, Item 1, exhibit C, p. 6] The Compla inant’s lease further states:

“Lessee agrees that it shall not sell or fu rnish aviation fuels and oil to others, except to those who own, lease, rent or operate aircraft for exclusive use of Lessee, it being expressly understood t hat the permission granted herein is intended to authorize storage of said produc ts for use in airplanes owned, leased, rented or operated exclusively by or for Lessee.” [FAA Exhibit 1, Item 1, exhibit C, p. 8]

Cessna’s lease states, “[a]viation fuel storage and dispensing facili ties to serve the requirements of Lessee and its customers, business invitees , and guests only, may be installed on Lessee’s premises.” [FAA Exhibit 1, Item 1, exhibit A, p. 9]

Both leases require the lessee to provide monthl y reports to the Airport Director regarding the

aviation fuels and oil delivere d to its respective leasehold. 14 [FAA Exhibit 1, Item 1, exhibit A, pp 9-10 and FAA Exhibit 1, Item 1, exhibit C, p. 7] Cessna is required to pay fuel flowage fees based on its monthly reports. [FAA Exhibit 1, Item 1, exhibit A, p. 10] However, the Complainant has the option of paying fuel flowag e fees or executing a separate agreement to pay landing fees. [FAA Exhibit 1, Item 1, exhibit C, p. 8] The Complainant elected to pay landing

fees. [FAA Exhibit 1, Item 7 exhibit B, ¶14and FAA Exhibit 1, Item 18, p. 2]

Both leases contain specific prohibitions and limitations. The Complainant must obtain the Airport Director’s consent before storing aircraft in its hangar for any purpose other than those specifically contemplated in the lease. [FAA Exhibit 1, Item 1, exhibit C, pp 3-4] Cessna is prohibited from engaging in any practices normally considered those of an FBO. [FAA Exhibit 1, Item 1, exhibit A, p. 3] Both lessees must obtain Milwaukee County’s approval before engaging in any business or activity not specifically authorized or contemplated within the lease. [FAA Exhibit 1, Item 1, exhibit A, pp 8-9 a nd FAA Exhibit 1, Item 1, exhibit C, p. 9]

Commercial Operating Permits

The Respondent now requires tena nts engaged in airside commerc ial activities to obtain a commercial operating permit, even if the tenant ’s lease permits that activity. Commercial operating permits serve the following purposes:

“...they (a) inform GMIA management of the scope and location of commercial activities being conducted on the air port; (b) require insurance and indemnification for the protection of th e airport and its tenants, users and the public; (c) inform a permittee of airpor t security requirements and other rules

14 GMIA notes that this requirement is usually only enforced on charter operators during an audit or when there is

some reasonable basis to conclude that a lease violation may exist. [FAA Exhibit 1, Item 18, p.2]19

and regulations; (d) ensure that a perm ittee has entered into an agreement for appropriate airport space from which to conduct its activities; (e) prohibit discrimination by a permittee; and (f) refl ect the requirements of GMIA’s grant assurance obligations.” [FAA Exhibit 1, Item 18, p. 1]

The Complainant holds commercial operating permits to conduct aircraft charter and air taxi services, and airframe and engine maintenance and repair and/or modification. [FAA Exhibit 1, Item 17, exhibit A and B] Cessna is not requ ired to obtain any commercial operating permits

because it does not offer commercial services to the general public. [FAA Exhibit 1, Item 18, p. 2]

Respondent’s Schedule of Mini mum Standards for Commercial Aeronautical Activities

In October of 2003, the Respondent adopted new Minimum Standards for 11 different aeronautical activities and special requiremen ts for subtenants at GMIA. The Minimum Standards define two different types of aeronautical repair activities:

1. Airframe and Engine Maintenance and Repair and/or Modification

2. Specialized Aircraft Repair Services [FAA Exhibit 1, Item 1, exhibit B, Index]

The Complaint inaccurately describes the Mi nimum Standards applicable to both the Complainant and Cessna. The Complainant states:

“ Both Sterling and Cessna meet the requireme nts to provide Specialized Aircraft Repair Services as defined by the GMIA Minimum Standards.” [FAA Exhibit 1, Item 1, ¶ 2]

“Sterling exceeds the Minimum Standards for a Specialized Aircraft Repair Service operator, which is the same minimum standard applied by Milwaukee County to Cessna. An attempt by Milwaukee County to claim that Sterling is not such a service provider w ould contradict their granti ng of the right to perform maintenance on other people’s airplanes Sterling’s predecessor, Scott Air Charter, Inc. (Scott Air), and would be in conflict with Milwaukee County’s own listing of Sterling as a provider of ‘A ircraft Maintenance’ on their website.” [FAA Exhibit 1, Item 1, ¶ 5]

“GMIA Minimum Standards provide for two different categori es of maintenance and repair. Airframe and Engine Ma intenance And Repair and/or Modification requires Part 145 Class 1 and 3 airframe ra tings as well as a Class 1 powerplant rating. Neither Sterling nor Cessna hold such ratings. Rather both Cessna and Sterling hold Limited Ratings for specifi c makes and models. By nature of the Part 145 Limited Rating both Sterling and Cessna would meet the GMIA Minimum Standards for Specialized Aircraft Repair Services.” [FAA Exhibit 1, Item 1, ¶ 10]20

However, the Respondent’s Answer states:

“...neither admits nor denies because of in sufficient knowledge or information the allegation that Sterling m eets the requirements to pr ovide Specialized Aircraft Repair Services under the Minimum Standar ds; denies that Cessna meets the requirements to provide Specialized Airc raft Repair Services under the Minimum Standards because Cessna performs maintenance only on Cessna’s Citation model aircraft; and states that neither St erling nor Cessna is licensed to perform, or has applied for a license to perform, Specialized Aircra ft Repair Services.” [FAA Exhibit 1, Item 5, ¶ 2]

“...Sterling is not licensed to perform, and has not applied for a license to perform, Specialized Ai rcraft Repair Services...” [FAA Exhibit 1, Item 5, ¶ 5]

“...neither admits nor denies because of in sufficient knowledge or information the allegation that both Sterling and Cessna would meet the Minimum Standards for Specialized Aircraft Repair Services; and st ates that neither entity is licensed to perform, or has applied for a license to perform, Specialized Aircraft Repair

Services.” [FAA Exhibit 1, Item 5, ¶ 10]

While the Complainant may believe it met GMIA’s Minimum Standards for specialized aircraft repair services, nothing in the Record indicates that the Complainant has requested such designation from the Respondent. Nothing in the Record indicates that Cessna has sought such designation. However, the Record does establis h that the Complainant is authorized by the Respondent to perform airframe and engine maintenance and repair and/or modification activities because it holds a commercial operating permit for this activity. [FAA Exhibit 1, Item 5, ¶1 and FAA Exhibit 1, Item 17 exhibit B]

Descriptions of Both Aer onautical Service Providers

The Complaint offers the following descriptions and comparisons:

“Sterling is an FAA approved Part 145 Re pair Station for airframe, instrument and radio repairs. Sterling is also a Pa rt 135 charter operator with 13 aircraft listed for operation on its Part 135 certificat e. Some of these aircraft are owned by private individuals who have contract ed with Sterling to maintain their aircraft. Sterling provides thes e owners excellent maintenance and an opportunity to minimize thei r costs of ownership by lis ting their aircraft with Sterling’s Part 135 certificate for charte r when not in use by the owners.” [FAA Exhibit 1, Item 1, ¶1]

“Cessna is a FAA approved Part 145 Repair Station specializing in the repair of Cessna Citation aircraft.” [FAA Exhibit 1, Item 1, ¶2]

“While both Sterling and Cessna perf orm maintenance to the high standards imposed under Part 145, Cessna is not required to meet the additional21

maintenance standards of Part 135 for all of its customers.” [FAA Exhibit 1, Item 1, ¶3]

The Respondent offers the following descriptions:

“...admits that Sterling is an FAA-a pproved Part 145 Repair Station...”

“Admits that Sterling is a Part 135 charter operator with 13 aircraft listed on its FAR Part 135 Charter Certificate...” [FAA Exhibit 1, Item 5, ¶1]

“...Cessna specializes in the repair of Ce ssna Citation aircraft ; states that the only activities Cessna is permitted to perform are maintenance and warranty work on Cessna Citation aircraft, sales of Citation aircraft (and parts, equipment and accessories)...” [FAA Exhibit 1, Item 5, ¶2]

Sterling’s website describes its business as:

“Sterling Aviation is a privately held, full-service corporate aviation firm specializing in aircraft management, air charter, aircraft maintenance, and acquisition support of aircraft for private tr avel. Sterling holds certifications as an FAA Part 135 on-demand air carrier and an FAA Part 145 repair station.” [FAA Exhibit 1, Item 7, exhibit E, p. 1]

The Cessna Aircraft Company, on its website, describes its facility at GMIA as:

“The Milwaukee Citation Service Center is located at General Mitchell International Airport and is dedicated to the suppor t of Citation aircraft in the upper Midwest.” [FAA Exhibit 1, Item 16]

In its second pleading, the Complainant a dds the following desc ription of Cessna:

“The Cessna Aircraft Company is a charter operator and has been for the last 21 years, Cessna holds FAA Certificate Nu mber CNQA918C. In fact, Cessna’s

“CitationShares” 15 program, a division of Cessna Aircraft Company according to the CitationShares website, holds FAA Certificate Number Z5FA890K. According to FAA records as of August 5, 2009, these two certif icates account for 93 aircraft available for charter from Cessna.” [FAA Exhibit 1, Item 8, AF8, Item 9, pp. 2-3]

To support this statement, the Complainant provides an affidavit by Robert Gort, President and Chief Operation Officer of Sterling, which states:

“I have regularly seen CitationShares pr ogram aircraft on the Cessna ramp at

General Mitchell Interna tional Airport (“GMIA”).” [FAA Exhibit 1, Item 8, exhibit A, ¶ 6]

15 Cessna’s “CitationShares” program is now known as “CitationAir by Cessna”. [FAA Exhibit 1, Item 19, p.1]22

The Complainant also provides airline certification information on the Cessna Aircraft Company and CitationShares Management, LLC, as prin ted from the FAA’s website. [FAA Exhibit 1,

Item 8 exhibits B and C and FAA Exhibit 1, Item 9, exhibits B and C] Additionally, the Complainant provides information from Citatio nShares’ website entitled “Company Overview”

which states:

“CitationShares, a division of Cessna Ai rcraft Company, offers the best in fractional jet ownership, jet card memb ership and whole aircraft management.” [FAA Exhibit 1, Item 8, exhibit D and FAA Exhibit 1, Item 9, exhibit D]

The Respondent’s Rebuttal notes:

“Sterling does not offer a shred of evid ence to show that Cessna operates charter services or aircraft management services out of its Service Center at GMIA.” [FAA Exhibit 1, Item 10, p. 3]

In furtherance of this position, the Respondent provided an affidavit fr om the General Manager

at the Milwaukee Citation Service Center who st ates that “Cessna does not operate aircraft charter or fractional ownership management servi ces for CitationShares pr ogram aircraft, or any other aircraft, out of the Serv ice Center at GMIA.” [FAA Exhibit 1, Item 10, exhibit A]

The Cessna Aircraft Company is a large corpora tion engaged in numerous sectors of the aviation industry, including, but not limited to, fractional ow nership and charter services. However, the Record does not support the Complainant’s claim that The Cessna Aircraft Company is engaged in these activities at GMIA. In fact, when the Director reviewed the website page submitted by the Complainant as an exhibit (FAA Exhibit 1, Item 8, exhibit D and FAA Exhibit 1, Item 9, exhibit D) in support of this argument, the Di rector accessed the link labeled “Contact Us” and was directed to a mailing address in Greenwich, Connecticut. [FAA Exhibit 1, Item 19, p. 3] Furthermore, Cessna’s lease with the Respondent does not contemplate, nor does it permit, Cessna to conduct aircraft management or char ter activities at GMIA. As the Complainant originally noted, “Cessna is a FAA approved Part 145 Repair Station specializing in the repair of Cessna Citation aircraft.” [FAA Exhibit 1, Item 1, ¶2] Therefore, based on the Cessna employee’s statement and absent any evidence to th e contrary, it is reasonabl e to deduce that any CitationShares aircraft on Cessna’s ramp, as w itnessed by Robert Gort, were visiting the Cessna Citation Service Center for maintenance or repairs.

Conclusion of Prong 1

The Respondent originally envisioned two different types of aeronautical service providers, and this is reflected in the respectiv e lease agreements. The Complainan t’s lease describes an aircraft charter and air taxi service provide r with the right to self-fuel a nd maintain its owned or leased aircraft as guaranteed by Grant Assurance 22(d) a nd (f). Cessna’s lease is more descriptive of an aeronautical repair station and aircraft sales business.23

While both leases require their re spective lessees to pay a ground re nt, the Complainant, as an air carrier, was given the choice to pay either a fuel flowage fee or landing fees. Cessna is required to pay a fuel flowage fee, and reports provided by the Respondent indicate it has done so. [FAA Exhibit 1, Item 18, exhibit D]

Sterling’s operations have evol ved beyond those originally contem plated in the lease it assumed from Scott. At present, St erling advertises itself as a “ full-service corporate aviation firm specializing in aircraft manageme nt, air charter, aircraft ma intenance, and acquisition support of aircraft for priv ate travel.” [FAA Exhibit 1, Item 7, exhibit E, p. 1] The Record supports that it is currently authorized by GMIA to pr ovide charter services and perform maintenance. [FAA Exhibit 1, Item 17, exhibits A and B] The Co mplainant states that it is indeed engaged in these activities. [FAA Exhibit 1, Item 1, ¶1 ] The Record of evidence, including the Complainant’s initial description of Cessna, indicates that Cessna’s activities have consistently been limited to the sale, repair, and maintenance of Cessna Citation aircraft. While there is some overlap between the activities of these two entities – both repair and maintain aircraft – these activities have always been a complimentary component to Sterling’s Part 135 charter requirements. Sterling’s business model and wide ranging menu of services is quite different from the Cessna Citation Service Center at GMIA. Therefore, the Director finds that Sterling is not similarly situated to Cessna.

Prong 2: Are the Respondent’s reason s for the disparate treatment unjustly discriminatory?

Although the Complainant fails the first of the two-prong test need ed to establish a violation of Grant Assurance 22, the Director will discuss the second prong in order to answer this question posed by the Complainant:

“Would it be unjust discrimination to deny Sterling the same or similar fueling rights as Cessna?” [FAA Exhibit 1, Item 14, p.5]

The FAA has long held that aeronautical user s agreeing to different rights, restrictions, responsibilities and terms in their agreements with an airport sponsor may necessarily support the conclusion that the parties are not simila rly situated for the purposes of finding unjust

economic discrimination. [ See Penobscot Air Services, Ltd. V. FAA , 164 F.3d 713, 726 (1 st Cir. 1999) ( Penobscot ); Aerodynamics FAD at 13; Adventure at 13; and Avitat at 30] As discussed at great length above, the Complainant accepted differe nt terms when it assumed the Scott lease in 2004 and made no attempts to renegotiate its fueli ng rights when it requested to extend the lease in 2007. Because the Complainant fails to establis h that it is similarly situated, the Director

cannot find that it has been trea ted in an unjustly discriminatory manner. Whatever reasons or motivations the Respondent had for granting Cess na its fueling privilege no longer matters because the Complainant, at the time it assumed the Scott lease in 2004 and exercised its right to extend the term of its lease in 2007, made no attemp t to negotiate a change to its lease with the County concerning fueling. There is nothing in the Record to de monstrate that the Complainant submitted a petition or any other written request to expand its right to fuel in 2004 or 2007.24

Recognizing that the two parties may revisit this matter in future lease negotiations, the Director offers the following observations:

• An airport’s prime obligation is to serve the interest of the aerona utical using public. [ See United States Construction Corporati on v. City of Pompano Beach, Florida , FAA Docket No. 16-00-14, (July 10, 2002) (Final Agency Decision) at 21. GMIA must remain mindful of this in developing mini mum standards and leases. However, the Director has consistently conc luded that Grant Assurance 22 does not require an airport sponsor to offer lease rates and terms that are identical to other leases negotiated at different points in time. As a result, a s ponsor is permitted to pursue agreements that more nearly serve the interests of the public with more recent leaseholders. [ See

, Penobscot ; Wilson at 12-13; Santa Monica Airport Associa tion, Krueger Aviation, Inc.

and Santa Monica air Center v. Ci ty of Santa Monica, California , FAA Docket No. 16- 99-21, (February 4, 2003) (Final Decision and Order) at 17; Aerodynamics FAD at 11;

and Rick Aviation at 28]

In going forward, the Respondent should eval uate whether or not special fueling privileges serve the interest of the aeronautical using public. As discussed in its Memorandum in Support of Respondent’s Motion to Dismiss, the Respondent is concerned that providing addi tional fueling privileges to the Complainant could impact the long-term viability of its Fixed Base Op erator. [FAA Exhibit 1, Item 7, p. 10] The Respondent states that the Complainant has cons istently “refused to provide any records” related to its fueling activities. [FAA Exhi bit 1, Item 7, p. 10 and Item 18, p. 2] Given that these reports are required in the Complainant’s lease, the Respondent may wish to enforce this provision to ensure compliance w ith the minimum standards and the rights of

other aeronautical users as reflected in their agreements with the County.

• A tenant’s history and relationship w ith the airport sponsor matter. [ See Rick Aviation at 16] The Record documents the Complainant’ s claim that fueling was exercised outside those articulated in its current lease. [FAA Exhibit 1, Item 1, ¶6 and 14; FAA Exhibit 1, Item 1, exhibit 4, ¶2; FAA Exhibit 1, Item 8, exhibit A, ¶ 3 and 8; and FAA Exhibit 1, Item 9, exhibit A, ¶3 and 8] The Compla inant was unresponsive to the Respondent’s request for information needed to conduct an audit. 16 [FAA Exhibit 1, Item 7, exhibit B, ¶14 and FAA Exhibit 1, Item 18, p. 2] The Respondent can consider these factors in future contract offers and negotiations.

• An airport sponsor is not oblig ated to provide application as sistance or inc ubate business development proposals. [ See Atlantic Helicopters Inc./C hesapeake Bay Helicopters v Monroe County, Florida , FAA Docket No. 16-07-12, (D ecember 3, 2008) (Director’s Determination) at 35] To address the i nherent friction among competing aeronautical service providers and promote the orderly development of th e airport, the FAA encourages airport management, as a matter of prudence, to establish minimum standards to be met by all who would engage in a comm ercial aeronautical activity at the airport. [See FAA Order 5190.6B, ¶10.4] Once the ai rport sponsor has established minimum

16 In Rick Aviation , the Director described a sponsor’s audit of its tenant as, “common and acceptable business practices.” [ See Rick Aviation at 37]25

standards, it should apply them objectively and uniformly to all similarly situated onairport aeronautical activities and services. [FAA AC 150/5190-7, section 1.1.] [ See Flightline v. Shreveport , FAA Docket No. 16-07-05 (March 7, 2008) (Director’s Determination) at 16 and Gina Michelle Moore, indivi dually, and d/b/a Warbird Sky Ventures, Inc. v. Sumner County Regional Airport Authority , FAA Docket No. 16-07-16, (February 27, 2009) (Director’s Determination) at 44]

The Record indicates the Complainant’s hi story of evolving its business model and proposing new ventures. [FAA Exhibit 1, Item 1, ¶14; FAA Exhibit 1, Item 1, exhibit 4, ¶4 and 5; FAA Exhibit 1, Item 7, exhibit B, ¶5 and 6; FAA Exhibit 1, Item 7, exhibit G; and FAA Exhibit 1, Item 7, exhibit H] The Respondent can require the Complainant to adapt its future business plans to better conform to the requirements outlined in the Airport’s Minimum Standards.

• An airport sponsor has a fundamental responsib ility to ensure that aeronautical business activities can be conducted safely and do not di minish the existing and planned use of the Airport. 17

As noted above, the Respondent never cons ented to fueling practices beyond those described in the Scott lease. [FAA Exhib it 1, Item 10, exhibit B, ¶3] An affidavit provided by Steven A. Wright, Airport Prope rties Manager at GMIA raises additional

concerns:

“Sterling’s hangars are currently locate d in a row of hangars designated for based corporate aircraft storage near the intersection of Taxiway ‘P’ and Taxiway ‘B.’ Taxiway ‘B’ is used by large commercial airline aircraft. Safety concerns increase as more aircraft use these taxiways. For this reason, GMIA’s long term Master Plan anticipates that Ge neral Aviation support activities will be located away from the intersecti on of Taxiway ‘P’ and Taxiway ‘B.’

If Sterling succeeds on its Complaint and is allowed to fuel a large number of aircraft that Sterling neith er owns nor controls, as if Sterling were an FBO, then safety concerns are likely to arise as a result of the increased taxiing activity of General Aviation aircraft mixed with the larger airline aircraft already using the taxiways near Sterling’s facilities.” [FAA Exhibit 1, Item 7, exhibit B, ¶22 and 23]

The Director reviewed these concerns with a Senior Engineer in the FAA’s Great Lakes Region. The engineer noted that the cumulative impact of significant, additional fueling activities on Taxiway P could re sult in capacity and congestion concerns for the air traffic control tower. [FAA Exhibit 1, Item 20]

17 Grant Assurance 19, Operation and Maintenance requires, in pertinent part, “[t]he airport and all facilities which are necessary to serve the aeronautical users of the air port, other than facilities owned and controlled by the United States, shall be operated at all times in a safe and serviceable condition and in accordance with the minimum standards as may be required or prescribed by applicable Federal, state and local ag encies for maintenance and operation.”26

Grant Assurance 22 at (h) and (i) provides that an airport sponsor may treat dissimilarly, dissimilar aeronautical uses of the airport. This is especially true when it comes to matters of safety and the airpor t’s operational efficiency. [ See FAA Order 5190.6B ¶11.5.c] The Respondent is obligated 18 to ensure that any future rights negotiated with the Complainant do not create an adverse impact on safety or limit the future utility of the airport as planned.

Conclusion of Prong 2

The Complainant cannot establish that it is sim ilarly situated. This effectively precludes the Director from finding unjust disc rimination. Grant Assurance 22 permits an airport sponsor to

treat dissimilar aeronautical uses of the airport in a dissimilar manner.

Conclusion of Issue 1

The Complainant and Scott Aviation assumed and exercised broader fueling rights than those contained in its actual lease with the Responde nt for over 20 years. Once the Respondent became aware of this situation, it took steps to en force the terms stipulated in its lease with the Complainant. This does not constitute a violat ion of Grant Assurance 22, and the Director will not abrogate a valid lease simply because the Co mplainant now realizes that it does not contain the explicit rights it desires.

In order to sustain a finding of unjust economic discrimination, a complainant must establish that it requested similar terms and c onditions as other similarly situ ated aeronautical users and was denied for unjust reasons. First and foremost , the Complainant agreed to more limited fueling rights when it assumed the Scott lease in 2004 and again when it exercised its option to extend its lease in 2007. Secondly, even if the Complainant had petitioned the County to expand its fueling rights in 2004 or 2007 and was deni ed, the Director does not find the Complainant to be similarly

situated to the Cessna Citation Service Center. The Record identifies the Complainant as an

aircraft charter and taxi servic e provider and aircraft mainte nance facility. Moreover, the Complainant’s own website describes a broade r offering of services, and contradicts its agreement with the County. Last ly, the Respondent may treat di ssimilar users in a dissimilar

manner when its distinctions are reasonable. The Director dismisses the Complainant’s allegations with regard to Grant Assurance 22, Economic Nondiscrimination

.

Issue 2: Whether the Respondent has granted an Exclusive Right to The Cessna Aircraft Company by refusing to recognize the Complai nant as a Specialized Ai rcraft Repair Service operator in violation of 49 U.S.C. § 47107(a)(4) and Grant Assu rance 23, Exclusive Rights.

The Complainant states:

18 Grant Assurance 29, Airport Layout Plan , requires an airport to “keep up to date at all times an airport layout plan of the airport showing... the location and nature of all existing and proposed airport facilities and structures... The sponsor will not make or permit any changes or alterations in the airport or any of its facilities which are not in conformity with the airport layout plan as approved by the Secretary and which might, in the opinion of the Secretary, adversely affect the safety, utility or efficiency of the airport.”27

“Milwaukee County’s implicit refusal to rec ognize the fact that Sterling meets the requirements to provide Specialized Aircra ft Repair Services, as defined by the Minimum Standards, is a violation of Grant Assurance 23, Exclusive Rights.” [FAA Exhibit 1, Item 1, ¶5]

As noted above, the Record contains no evid ence to establish that the Complainant requested such designation from the Responde nt. The Complainant provides no evidence to establish that Cessna is recognized as a Sp ecialized Aircraft Repa ir Service operator. In fact, the Respondent states that neither party is, nor has applied to be, a Specialized Aircraft Repair Service operator . [FAA Exhibit 1, Item 5, ¶ 10]

In a Part 16 investigation, the Director weighs the documentation and information submitted to the Record by a preponderance of evidence. Here, the record does not show that another party similarly situated to th e Complainant received preferential treatment denied to the Complainant in similar situations

. [ See Richard M. Grayson and Gate 9 Hangar, LLC v. DeKalb County, Georgia , FAA Docket No. 16-05-13, (February 1, 2006) (Director’s Determination) at 11] The Record fails to substantiate Complainant’s claim. As such, the Director dismisses this allegation.

Issue 3: Whether the Respondent has granted an Exclusive Right to The Cessna Aircraft Company by refusing to allow the Compla inant the right to fuel its customers , business invitees, and guests in violation of 49 U.S.C. § 47107(a) (4) and Grant Assurance 23, Exclusive Rights.

The Complainant states:

“Milwaukee County expressly granted Cess na the right to fuel ‘customers, business invitees, or guests’ with no reference to the Minimum Standards. The refusal to grant a similar right to Ster ling is a grant of an exclusive right to

Cessna .” [FAA Exhibit 1, Item 1, ¶5]

The Respondent denies the allegation that it has granted an exclusive right to Cessna. [FAA Exhibit 1, Item 5, ¶5]

In the Complainant’s second pleadin g, it clarifies that its allegati ons related to Grant Assurance 23 are dependent upon its allegations regarding Grant Assurance 22. The Complainant states:

“...Sterling has establishe d that Cessna and Sterling are similarly situated entities, yet the County prefers to grant Cessna the exclusive right to fuel ‘its customers, business invitees and guests.’ This dissimilar treatment amounts to both a violation of Assurance 22 and 23.” [FAA Exhibit 1, Item 9, p. 6]

The Complainant cites Maxim United, LLC v. Board of Co unty Commissioners of Jefferson County, Colorado, FAA Docket No. 16-01-10, (April 2, 200 2) (Director’s Determination) (Maxim) in support of this reasoning. In Ma xim, the Complainant sought self-fueling rights similar to those granted to other tenants. The Complainant then successfully established that it28

was similarly situated to two other tenants with contemporaneous leases . Lastly, because only Maxim was prohibited from self-f ueling, the Director found that a constructive exclusive right was granted to the group of other tenants who were allowed to self-f uel during this same period.

The extant case is quite different . Sterling seeks to obtain a right to fuel aircraft that is not provided for by its lease with the County. Fueling is a privilege gr anted by an airport sponsor to a prospective aeronautical service provider. It is not a right that may be exercised at will by a prospective service provider. Secondly, the Complainant consented to limited rights to fuel

when it assumed Scott’s lease in 2004 and then extended that leas e in 2007. Most significantly, the Complainant has not established that it is sim ilarly situated to any other aeronautical service provider exercising broader fueli ng rights. Given these stark di fferences, the Director does not view the findings made in Maxim as applicable to this Determination.

Grant Assurance 23, Exclusive Rights , prohibits an airport sponsor from granting to one entity the right to provide a particul ar aeronautical service to the public while preventing other similarly situated entities from offering the same aeronautical service. FAA Order 5190.6B defines an exclusive right as, “a power, privilege, or other right excluding or debarring another from enjoying or exercising a like power, priv ilege or right.” [FAA Order 5190.6B, ¶8.2.]

FAA Advisory Circular 150/5190-6, Exclusive Rights at Fede rally-Obligated Airports , notes that the exclusive rights prohibiti on has existed since 1938. Its purpose “is to prevent monopolies

and combinations in restraint of trade and to promote competition at federally-obligated airports. This Advisory Circular further states “[s]ignificant to understa nding the exclusive rights policy, is the recognition that it is the impact of the activity, and not n ecessarily the airport sponsor’s intent, that constitutes an exclusive rights violatio n.” Therefore, the Director will analyze the impact of Cessna’s broader fueling rights.

The Complainant asserts the gravamen of the Co mplaint is that “both Sterling and Cessna are still similarly situated aeronautical service pr oviders with regard to their repair service classification at GMIA...” [FAA Exhibit 1, Item 1, ¶2] Scott Air was certified as a Part 145 Aircraft Repair Station on September 1, 1993; th is is approximately four years after Cessna executed its lease. [FAA Exhibit 1, Item 1, ¶6] Scott Air’s leas e was amended so that it could perform aircraft engine repairs and maintenance services in October of 2003. [FAA Exhibit 1, Item 17, exhibit C] Sterling executed its most recent Commercial Operating Permit to perform airframe and engine maintenance and repair services on June 2, 2009. [FAA Exhibit 1, Item 17, exhibit B] The fact that Cessna may fuel its customers, business invi tees, and guests has not precluded the Complainant from offering competi ng aircraft maintenance and repair services with gross revenues in excess of one million doll ars in 2008. [FAA Exhibit 1, Item 1, ¶2 and FAA Exhibit 1, Item 8, exhibit A, ¶4]

GMIA’s Minimum Standards prescribe requirem ents for FBOs under the operating category of line services. [FAA Exhibit 1, Item 5, AF7] FBOs providing line services are the only aeronautical service providers authorized by the Minimum Standards to sell fuel commercially to the general public. [FAA Exhibit 1, Item 1, exhi bit B, p. 1 and FAA Exhibit 1, Item 5, AF7] Although only one FBO is currentl y operating at the Airport, th e Respondent solicited for a29

second FBO which was selected in June 2008. 19 [FAA Exhibit 1, Item 5, AF17 and AF18] The Complainant opted not to respond to this solicitation and states that it has no desire to operate an FBO. [FAA Exhibit 1, Item 5 AF18; FAA Exhibit 1, Item 8, AF 18; FAA Exhibit 1, Item 8, exhibit A, ¶3] Given that one FBO is permitted to sell fuel commercially and GMIA took steps to establish a second FBO, the Director cannot c onclude that Cessna has an exclusive right to

fuel aircraft it does no t own or lease.

Cessna’s fueling rights are conveye d through its lease. However, there is nothing in the Cessna lease which would prohibit the Re spondent from conferring the sa me or similar privilege to another aeronautical service provider. The Compla inant acquired a lease w ith different terms as compared to Cessna. An airport sponsor does not have an obligation to award new rights requested by its aeronautical tena nts, especially if such rights would not be consistent with the airport’s minimum standards or violate the contr act rights of other aer onautical tenants. [ See

, Penobscot ; Wilson at 12-13; Santa Monica Airport Association, Krueger Aviation, Inc. and Santa Monica air Center v. City of Santa Monica, California , FAA Docket No. 16-99-21, (February 4, 2003) (Final Decision and Order) at 17; Aerodynamics FAD at 11; and Rick Aviation at 28]

Cessna enjoys a privilege which may be unique at this time. But the plain language contained in

the lease does not bar other ae ronautical service providers fr om potentially securing the same type of privilege. Moreover, the impact of this privilege has not precluded other FBO aeronautical service providers fr om providing competing services or engaging in the commercial

sale of fuel under the Minimum Standards. Therefore, the Record, by a preponderance of reliable and probative document ation and information, does not support the allegation that the Respondent has granted an exclusive right in violation of Grant Assurance 23.

VII. CONCLUSION

Upon consideration of the entire Record here in, the applicable law and policy, and for the reasons stated above, the Dir ector finds and concludes:

(1) The Respondent’s refusal to grant the Compla inant the same fueling rights as those granted to another aeronautical service provider does not constitute unjust discrimination in violation of 49 U.S.C. § 47107( a)(1) or Grant Assurance 22, Economic

Nondiscrimination

. (2) The Respondent has not granted an Exclusiv e Right to The Cessna Aircraft Company by refusing to recognize the Complainant as a Spec ialized Aircraft Repair Service operator.

This does not constitute a violation of 49 U.S.C. § 47107(a)(4) or Grant Assurance 23, Exclusive Rights

. (3) By refusing to allow the Complainant the right to fuel its customer s, business invitees, and guests, the Respondent has not granted an Exclusive Right to The Cessna Aircraft Company in violation of 49 U.S.C. § 47107(a)(4) or Grant Assurance 23, Exclusive Rights

.

19 GMIA selected Mercury Aviation’s FBO proposal; however, Mercury Aviation has yet to begin construction of its new facilities due to economic uncertainties. [FAA Exhibit 1, Item 5, AF18]30

ORDER

Accordingly, it is ordered that:

1. The Complaint is dismissed; and

2. All motions not expressly granted in this Determination are denied.

RIGHT OF APPEAL

This Director’s Determination is an initial ag ency determination and does not constitute final agency action and order subject to judicial review. [14 CFR 16.247(b)(2).] A party to this Complaint adversely affected by the Directo r’s Determination may appeal the initial

determination to the FAA Associate Administra tor for Airports pursuant to 14 CFR 16.33(b) within thirty (30) days after service of the Di rector’s Determination.

April 13, 2010

Director Date Office of Compliance and Field Operations