UNITE D STATE S DEPARTMEN T O FTRANSPORTIO N FEDERA L AVIATIO N ADMINISTRATIO N

WASHINGTON , D.C .

VENIC E JE T CENTER , LLC , - i n ' O Complainant , FAA Docke t No . 16-09-0 5 V . CIT Y O FVENICE , FL , Respondent . 

# EOfcuv ^ SE P 3 ^uu a 

### {PAR T 1 6 DOCKET S '-•3

RESPONDEN T CIT Y O FVENICE , FLORIDA' S MEMORANDU M O FPOINT S AN D AUTHORITIE S I N SUPPOR T O FIT S ANSWE RAN D IT S MOTIO N T O DISMIS S

Robert C . Anderson , Esq . Cit y Attorne y Hal l & Anderson , P.A . 131 4 Eas t Venic e Ave. , Suit e E Venice , FL 3428 5 Telephone : (941 ) 480-099 9 Facsimile : (941)480-144 6 Thoma s R . Devine , Esq . W . Eri c Pilsk , Esq . KAPLA N KIRSC H & ROCKWEL L LLP 100 1 Connecticu t

Av e NW , Suit e 90 5 Washington , D C 2003 6 Telephone : (202 ) 955-5600X56 8 Facsimile : (202 ) 955-561 6 Arthu r P . Berg , Esq . KAPLA N KIRSC H & ROCKWEL L LL P 64 1 Lexingto n Ave . Suit e 140 9 New York , N Y 1002 2 Telephone : (212 ) 328-951 5 Facsimile : (646)514-544 0 Counse l fo r Responden t

Cit y o f Venice , F LTABL E O FCONTENT S

L INTRODUCTIO N AN D STATEMEN T O FTH E CAS E 1 I L STATEMEN T O FFACT S 5 i n . ARGUMEN T 1 4 A . APPLICABL E LA W 1 4 (1 ) Th e FAA i s Concerne dwith a n Airport Sponsor' s Curren t

Complianc e 1 4 (2 ) Th e FAA' s Airpor t

Complianc e Programseek s t o ensur e saf e airports , properl y maintaine d1 5 (3 ) Burde n o f

proo f 1 5 (4 ) Requiremen t

t o Submi t

with th e Complain t

Al l Evidenc e Upo n Which Complainan t Relie s 1 5 B . PRELIMINAR Y ISSUE S 1 6 (1 ) Th e Complainan t

Relie s o n Analyse s o f

Applicabl e Federa l Law That Wer e Base do n Circumstance s Tha t

ar e Different

Tha n th e Actua l Fact s 1 6 a ) Kapla n Kirsc h & Rockwel l LLP Memorandu m1 6 b ) Statement s froman Official at th e loca l FA A AD O Tha t th e Cit y Shoul dApprov e th e VJC/Nade l Hangar

Proposa l 1 8 (2 ) City Action s that

th e Complain t

Call s "Delay " o r

"Stal l Tactics " Ar e Simpl y th e Reasonable , Deliberativ e Action s o f aConscientiou s Publi c Bod y Addressin g Unusua l Circumstance s 2 1 a ) Allegation s o f

Bloc k Votin g an d"Improper " Motivation s o f Cit y Counci l Member s 2 2 C . TH E CITY' S RESPONS E T O SPECIFI C COUNT S 2 4 (1 ) Coun t

I : Venic e Je t

Cente r Has Faile dT o Stat e A Clai mTha t th e City Has Violate d Gran t Assuranc e 1 2 4 a ) Gran t

Assuranc e 1 Does No t

Appl y T o Thi s Cas e Becaus e Th e Disput e Regardin g VJC' s Hangar s Doe s No t Relat e T o th e Application , Acceptanc e an dUs e o f Federal Fund s Fo r

An y Projec t

2 4 b ) Eve n I f

A Sherma n Ac t

Clai mWer e Withi n Par

t 16' s Jurisdiction , Coun t

I o f VJC' s Complain t

Stil l Mus t

B e Dismisse dBecaus e Th e City' s Action s Wer e Govenmienta l Act s Tha t

Ar e Immun e Fro mTh e Sherma n Ac t 2 6

-1

-c ) Eve n i f AA S ha s Jurisdictio n Ove r VJC' s Antitrus t

Claim , An dEve n I

f Th e City I s No t Immun e Fro mAn y Antitrus t Claim , Coun t

I Mus t Stil l B e Dismisse dBecaus e VJ C Ha s Faile dT o Properl y Plea dA Violatio n O f Th e Sherma n Ac t

2 9 d ) Eve n i f

VJC/Receive r

Ca n Overcom e Al l o f

Thos e Hurdles , Coun t

I Mus t Stil l B e Dismisse dBecaus e VJC/Receive r Ha s Faile dT o Presen t

Fact s t o Support

It s Vagu e Antitrus t Clai m3 1 (2 ) Coun t

II : Th e Cit y Ha s No t

Violate dAssuranc e 5 , Preservin g Right s an dPower s 3 2 a ) Substantiv e Standar d3 2 b ) N o Actio n o r

Lac k o f Actio n b y th e City Cite db y VJC/Receive r Has Diminishe dth e City' s Right s an dPower s Necessar y t o Ensur e it s Abilit y t o Compl y with it s Airport Sponso r Gran t Assurance s 3 3 c ) Leas e for

Non-Airport

Propert y 3 6 d ) Th e VJ C Leas e Wa s No t Approve db y th e FAA 3 8 (3 ) Coun t

III : Operating an dMaintainin g th e Airport i n Saf e Conditio n 3 8 (4 ) Coun t

IV : Unjus t

Economi c Discriminatio n 4 0 a ) Substantiv e Standar d4 0 b ) VJ C i s No t

Willin g An dOtherwis e Qualifie dt o Buil dan dLeas e Hangar s at th e Airport 4 1 c ) VJ C Mus t

Compl y with th e Airport' s Minimu mStandards , Whic h Includ e Demonstratin g t o th e City' s Satisfaction , th e Financia l Capabilit y t o Carry Ou t th e Projec t an dCit y Approva l o f

th e Locatio n fo

r Hangar Developmen t

4 1 d ) Requirin g Assuranc e o f Financia l Capabilit y i s aLegitimat e Exercis e o f Proprietary Power s an dDoe s No t

Violat e th e Prohibitio n Agains t Unjus t Economi c Discriminatio n 4 5 e ) Ther e i s N o Curren t Proposa l t o th e Cit y b y a n Entit y Tha t

Wil l Buil dan dOperat e th e Hangar s 4 8 (5 ) Coun t

V : Exclusiv e Right s 4 9 a ) Standar d4 9 b ) Gran t

Assuranc e 2 3 Doe s No t

Preven t th e Cit y Fro mExercisin g an Exclusiv e Righ t t o Provid e Aeronautica l Servic e 5 1 c ) Complainan t

Has Provide dN o Evidenc e Tha t Othe r Tenant s Hav e Bee n Give n Exclusiv e Right s T o Buil dan dLeas e Hangar s 5 1

-11

-D . AFFIRMATIV E DEFENSE S 5 2

(1 ) Firs t Affirmativ e Defense : Th e Complain t Fail s T o Stat e A Rip e Clai mFo r Relief.. . 5 2 (2 ) Secon dAffirmativ e Defense : VJ C Lack s Standin g T o Pursu e Thi s Cas e 5 4 IV . CONCLUSIO N 5 6

-111

-TABL E O FAUTHORITIE S



### Case s Belt s V . CityofEdgewater , 64 6 F . Supp . 1427 , 143 5 (M.D . Fl . 1986 ) 3 1 Cit y o f Columbi av . Omn i Outdoo r Advertising , Inc. , 11 1 S . Ct . 1344 , 135 3 (1991 ) 27 , 2 8 Hailli e v . Ea u Claire , 10 5 S.Ct . 1713 , 171 7 (1985 ) 2 7 Hillma n Flyin g Serv. . Inc . v . Cit y o f Roanoke , 65 2 F . Supp . 1142 , 1145-4 6 (W.D . Va . 1987 ) .. . 2 8 Hoove r v . Ronwin , 10

4 S . Ct . 1989 , 199 5 (1984 ) 2 7 Interfac e Group , Inc . v . Massachusett s Por t Auth. , 81 6 F.2 d9 , 1 3 (1s t Ci r 1987 ) 2 8 Rectri x Aerodrom e Centers . Inc . v . Barnstabl e Municipa l Airpor t Com m'n , 53 4 F.Supp.2 d201 , 204- 5 (D . Mass . 2008 ) 2 8 Tur k v . Richard , 4 7 So.2 d543 , 54 4 (F l 1950 ) 3 1 Unite dState s o f

Americ av . Arthu r

G . Nade l 1 , 2 

### Statute s 1 5 U.S.C . § 1 29 , 3 0 1 5 U.S.C . § § 34-3 6 2 7 1 8 U.S.C . § 20 1 2 5 1 8 U.S.C . §66 6 2 5 4 9 U.S.C . §4010 3 4 9 4 9 U.S.C . § 4710 7 40 , 5 0 Fla . Stat . § 332.08(2)(a ) 27 , 2 8 Fla . Stat . §§332.01-332.1 2 2 7 

### Othe r Authoritie s 4 1 North 7 3 Wes

t Inc . v . Westcheste r

County , Ne w York, FAA Docke t No . 16-07-13 , 200 8 5 0 Adventur e Aviatio n v . Cit y o f La s Cruces , FA A Docke t No . 16-01-14 , 200 3 15 , 16 , 3 9 -iv

-Bosto n Ai r Charte r v . Norwoo dAirpor t

Comm'«. , FA A Docke t

No . 16-07-03 , 200 8 3 5 Buffalo Je t

Ctr. , Inc . v . Niagar aFrontie r Transp. Auth. , FA A Docke t No . 16-98-07 , 199 8 3 4 Flightlin e Aviation , Inc . v . Cit y o f Shreveport , Docke t

No . 16-07-05 , 200 8 4 5 Hous e V . Kingman Airpor t

Auth. , FAA Docke t

No . 13-94-10 , 199 7 4 6 Je t 1 Center , hic . v . Naple s Airport Authority , FA A Docke t

No . 16-04-03 , 200 5 29 , 5 1 Ji mMarty n v . PortofAnacortes , FAA Docke t No . 16-02-03 , 200 3 36 , 5 0 Lytto n V . Sherida n Count

y Bd . O f Count y Com m'rs , Docke t

No . 16-01-16 , 200 2 4 6 M . Danie l Care y an dClif f Davenpor t

v . Afton-Lincol n Count

y Mun . Airpor t

Join t Power s Bd. , FA A Docke t

No . 16-06-06 , 200 7 3 5 NDC , Inc . V

. Cit y o f Beverly , Mass. , FA A Docke t No . 13-93-04 , 200 1 4 6 Northwes t

Airlines , Inc . e t

al . v . Indianapoli s Airpor t Auth. , e t al. , FA A Docke t

16-07-04 , 200 8 5 2 Pacifi c Coas t

Flyers , Inc. , v . Count

y o f Sa n Diego. , FA A Docke t

No . 16-04-08 , 200 5 15 , 36 , 45 , 4 9 Platinu mAviatio n an dPlatinu mJe t Cente r v . Bloomington-Norma l Airpor t Authority , FA A Docke t

No . 16-06-0 9 5 , 37 , 39 , 4 0 Richar dE . Steer e v . Count y o f San Diego , FA A Docke t No . 16-99-1 5 (Dec . 7 , 2004).. . 14 , 40 , 5 2 Ric k Aviation , In c v . Peninsul aAirpor t Comm'«. , FA A Docke t

No . 16-05-18 , 200 7 1 5 Roadhous e Aviatio n v . Cit y o f Tulsa , FA A Docke t

No . 16-05-08 , 200 7 1 5 Sant aMonic aAirpor t

Associatio n v . Cit

y o f Sant aMonica , FAA Docke t

16-99-21 , 200 3 44 , 4 6 Thermc o Aviation , Inc . v . Count y o f Lo s Angeles. , FA A Docke t No . 16-06-07 , 200 7 20 , 38 , 5 4 Wilso n Ai r Cente r LLC , v . Memphi s an dShelb y County Airpor t Auth. , FA A Docke t

No . 16-99-10 , 200 1 15 , 5 2 

### Regulation s 1 4 C.F.R . § 16. 1 2 6 14C.F.R . § 16.2 3 1 5

- V

-1 4 C.F.R . § 16.25 .

1 4 C.F.R . § 16.29 . 5 2 1 5

-VI

-

### I . INTRODUCTIO NAN D STATEMEN T O F TH E CAS E

Th e cas e se t

fort h i n th e Complain t

is , i n essence , a s follows : Th e Cit y decline dt o approv e areques t for permissio n t o buil d4 hangar s at Venic e Municipa l Airpor

t b y th e managin g partne r o f Venic e Je t

Cente r ("VJC") , Albert

Nadel , aman wh o ha s bee n arreste dan dcharge db y th e federal governmen t a s th e mastermin dbehin damassiv e fraud. Cit y Exhibi t

1 {Indictment , Unite dState s o f Americ av . Arthu r

G . Nadel) . Th e federal governmen t assert s that

thi s mini-Madof

f s schem e bilke dapproximatel y 35 0 person s ou t o f "[a] t leas t approximatel y $36 0 million. " Id . at 11-12 . Th e appointmen t o f aReceive r

b y th e U.S . Distric t Court fo r th e Middl e Distric t

o f Florid a(Tampa ) ove r

certai n o f

Mr . Nadel' s assets , includin g th e Venic e Je t

Center , i s premise do n evidenc e that Mr . Nade l ha dinfecte dthos e asset s with th e ill

gotte n gain s o f

hi s illega l scheme . Tha t is , fund s that

wer e actuall y th e propert y o f hi s investo r victim s wer e plowe dint o VJ C an dothe r assets . City Exhibi t

2 (Receiver' s Declaratio n i n Suppor t o f th e Unoppose dMotion t o Expan dth e Scop e o f th e Receivership ) a

t 6-8. ' Mr . Nadel , i n frill knowledg e o f th e fac t that h e ha dimproperl y siphone da t leas t $ 3 millio n o f hi s investors ' mone y int o VJC , requeste dCity permissio n t o buil dfirst one , the n two , the n fou

r 8,00 0 ft. hangar s o n th e VJ C site , fiinding th e developmen t with cash . No t receivin g approva l fromth e Cit y consisten t with Mr . Nadel' s preferre dtimeframe , Mr . Nade l sough t

th e assistanc e o f

th e FAA' s Orland o AD O b y self-righteousl y asserting , apparentl y with n o sens e o f

irony , tha t

th e Cit y was violatin g federal la w b y no t allowin g hi mt o buil dthes e hangars . Complainant' s Exhibi t 10 . Perhap s ou t

o f habit , Mr . Nade l asserte dtha t foregon e gros s

' The Receive

r reportedto th e Cour

t overseeing hi s receivershi

p tha t "money derive dfro

mth e schem

e was usedby Nade

l to purchas e and/or

fun dothe r businesses , including Venic e Je t Center , LLC. " Exhibi

t 2 a t p.6 , ^15 . Specifically , th e Receive r reporte dtha

t Mr . Nade l used$2.7 9 millio n of

stolen funds t

o purchas e VJ

C and , subsequently plowedanothe r $325,00 0 i

n stole n fund s int o VJC through Decembe

r 12 , 2006 . Id . a

t p.8 , \22-23 . Th e receive

r note dfurthe

r tha t "i t i s likel y tha t significantly more mone

y wa s transferredto VJ

C fro mReceivershi

p Entities , andw e continu e to loo k fo r evidenc e o f

additiona l transfers. " Id . -I

-revenu e from1 1 hangar s (notwithstandin g th e fac t that h e sough t

approva l for

4 hangars ) fo

r a3 0 year perio d"woul dad du p t o hundred s o f million s o f

dollars. " Id . a

t 3 . Conservativel y interpretin g "hundred s o f

millions " t o mea n $20 0 million , thi s mean s tha t eac h o f th e hangar s woul dbrin g i n a whoppin g $50,00 0 pe r

month . A n FAA AD O official , understandabl y unawar e o f Mr . Nadel' s notoriou s schem e an dth e illici t fijnding o f

VJ C with stole n money , advise dth e airport that i t shoul dapprov e th e VL

J request . Complainant' s Exhibit s 1 2 an d14 . A Receive r

ha s bee n appointe dfor

Mr . Nadel' s holdings , includin g VJC , with th e expres s charg e fromth e U.S . Distric t Court t o marsha l th e asset s o f

VJ C an dothe r

Nade l holdings , s o a s t o rais e a s muc h cas h a s possibl e t o pay off , t o th e exten t

possible , victim s o f

Mr . Nadel' s fraudulent schemes . Complainant' s Exhibi t 1 (Court Orde r Reappointin g Receiver) . Th e Receiver , o n behal f

o f VJ C ("VJC/Receiver" ) seek s ablanke t approva l fromth e City for a n undetermined , undisclose dthir dpart y t o buil dsom e typ e o f hangar s o n th e site , withou t providin g an y substantiatio n o f th e undetermined , undisclose dthir dparty' s qualification s for buildin g o r

operatin g th e facilitie s o r it s financial abilit y t o d o so , a s require db y th e Airport' s minimu mstandards . Th e Receiver' s avowe dinten t i s t o maximiz e th e valu e o f th e remainin g VJ C leasehol dt o pum p u p th e valu e o f VJC , s o tha t

th e Receive r

can sel l VJ C and , pursuan t t o hi s mandat e fromth e federal distric t court , tak e th e proceed s o f th e sal e of

f Airpor t an dplac e the mi n a fiindfor distributio n t o th e victim s o f Mr . Nadel' s illega l scheme . Without knowin g who , i f

anyone , wil l buil dth e hangars , VJC/Receive r canno t mee t th e City' s Minimu mStandards , whic h require , amon g othe r things , proo f

tha t th e operato r

ha s th e financial capability t o carr y out th e project . Moreover , substantia l question s remai n regardin g th e

^ Althoug h th e Complain t i s i n th e nam e o f

VJC , i t i s importan t

t o distinguis h betwee n VJ C a s it existe dprio r

t o Mr . Nadel' s arrest , whe n Mr . Nade l controlle dVJC , an dVJ C after tha t time , whe n it

ha s bee n controlle db y th e Receiver . T o maintai n that

distinctio n wher e appropriate , th e Cit y wil l refe r t o VJ C a s "VJC/Nadel " for th e perio dprio r

t o th e appointmen t

o f th e Receive r

an d"VJC/Receiver " for th e perio dafter

th e appointmen t

o f th e Receiver .compafibility o f th e hangar

projec t with th e Airport' s Airport Layou t Plan an dothe r

provision s o f th e Minimu mStandards . VJC/Receive r refuse s t o eve n attemp t

t o compl y with thes e requirements , an dinstea dha s filedthi s Complain t seekin g an FA A mandat e fo r th e Cit y t o approv e aprojec t tha t VJC/Receive r

doe s no t inten dt o buil dfor

th e distinctl y non-aeronautica l purpos e o f increasin g revenu e t o th e Receive r

for th e purpose s o f

repayin g th e victim s o f

Mr . Nadel' s fraud. Whil e th e Cit y certainl y doe s no t

objec t t o th e Receive r

seekin g ameasur e o f

justic e for

th e victim' s o f

Mr . Nadel' s fraud, that

doe s no t requir e th e Cit y t o ignor e it s ow n Minimu mStandards . No r doe s tha t purpose , howeve r

worth y i n itself

, requir e th e FA A t o find aviolatio n o f an y federal obligation . A s detaile dbelow , th e City ha s at al l time s complie dwith it s federa l obligations . Th e Receive r

alleges , i n essence , althoug h no t s o starkly , that

failur e o f

th e Cit y t o gran t approva l t o construc t

th e hangar s i n contraventio n o f th e current , FAA-approve dAL P t o VJC/Nade l (a ) whe n Mr . Nade l propose dt o construc t th e hangar s o n th e fals e pretense s that VJ C ha davailabl e fund s t o d o s o (whe n i n fact , suc h fund s wer e no t th e propert y o f

VJC , bu t rathe r the y wer e stole n fromth e victim s o f

Mr . Nadel' s illegal scheme) , o r (b ) whe n th e Receive r

requeste dapprova l s o tha t an undisclosed , undetermine dthir dpart y could , a t a n undisclose dtime , construc t th e hangars , constitute s aviolatio n o f

th e federal antitrus t

law s an dAI P Gran t

Assurance s 1,5 , 19 , 22 , an d23 . Complain t

a t Tn i 73-105 . Th e fiindamental proble mwith th e Complain t i s that i t doe s no t identif y an y tim e tha t

a legitimat e develope r

ha s demonstrate dt o th e City , pursuan t t o th e City' s minimu mstandards , that it i s ready , willing , an dabl e t o buil dth e hangars , an dwil l d o s o i f th e Cit y approve s them . VJC , whe n i t was ru n b y Mr . Nadel , coul dno t d o s o wit h untainte dfiinds. Th e ver y fac t that th e Receive r i s tryin g t o ge t

a s muc h mone y fromth e VJ C operatio n b y sellin g i t of f an dplacin g al l o f

th e proceed s int o afiindfor

th e victim s o f

th e Nade l frauddemonsfrate s that th e fund s availabl e t o VJ Cwer e ill-gotte n gain s o f th e Nade l frau d-an dwoul dnot legitimatel y b e availabl e t o buil dth e hangar s a t an y time . Th e Receiver , i n ^ 58-5 9 o f th e Complaint , assert s tha t h e tol dth e Cit y tha t

VJC , unde r

th e receivershi p - that

is , th e entity that

filedth e complaint , "VJC/Receiver, " wil l no t buil dth e hangars . Th e Receive r

mad e that

unequivocall y clear

i n alette r

t o th e City Attorney . Cit y Exhibi t 3 (6/25/0 9 Lette r fromReceive r

t o R . Anderson) . Thus , thi s cas e i s unripe , base do n fact s eviden t fromth e Complain t

itsel f FAA (an deve n th e Receiver ) shoul db e thankfu l that th e City di dno t

allo w VJ C t o undertak e aconstructio n projec t that woul dfurther

enmes h th e fraudulent

proceed s o f

Mr . Nade l i n th e VJ C site . Ther e i s n o tellin g whethe r h e woul dhav e actuall y buil t th e hangar s a

t al l o r use dan y additiona l flind s raise di n fiirtheranc e o f hi s illega l schemes , o r

partiall y buil dth e hangzirs , leavin g i n hi s wak e aserie s o f

claim s relate dt o th e sourc e o f fiinds . However , instea do f

bein g gratefu l tha t

mor e stole n mone y fromth e Nade l schem e wa s no t plowe dint o th e VJ C site , th e Receive r asserts , essentially , that

th e Cit y acte dillegall y i n no t furtherin g tha t

scheme . An dnow , th e Receiver , standin g i n th e shoe s o f th e mastermin do f

th e illega l financial scheme , assert s that th e Cit y must , withou t

delay , approv e ahanga r

developmen t pla n devise db y VJC/Nadel , t o b e implemente db y an undetermine dthir dpart y tha t ha s mad e n o showin g t o th e Cit y a s t o it s relevan t busines s experienc e an dfinancial resource s t o devot e t o thi s project . Th e Cit y i s entitled , unde r it s Minimu mStandards , t o ensur e tha t an entit y seekin g t o buil d an doperat e aeronautica l facilitie s a t th e Airport

ha s th e financial resource s availabl e t o complet e th e project . Complainant' s Exhibi t 4 (Venic e Airport

Minimu mStandard s for

Aeronautica l Activities ) at

1 . FA A acknowledge s tha t thi s i s alegitimat e airport interest . Indeed , i n thi s specifi c instance , th e Actin g Associat e Administrato r for Airport s ha s state dtha t

th e City , i n evaluatin g a proposa l for

hangars , i s entitle dt o assur e itsel f tha t th e entity ha s sufficien t

resource s t o buil dthem .Cit y Exhibi t 4 , (Jul y 1 , 200 9 Lette r

fromActin g Associat e Administrato r fo r Airport s Catherin e M . Lan g t o Sen . Me l Martine z a t 1) . N o provisio n o f

federal law require s a

n airport t o accep t withou t examinatio n th e "trus t

me " representation s o f

aknow n co n artist , o r

th e "trus t me " representation s o f

aReceive r

whos e state d criterio n for

selectin g th e entit y t o succee dVJ C i s t o pic k th e on e "mos t

advantageou s for

my Receivership " City Exhibi t 5 (Jul y 21 , 200 9 lette r

fromBurto n W . Wiand , Receiver , t o Robert C . Anderson , Cit y Attorne y an dIsaa c Turner , Cit y Manager ) at 2 , tha t is , th e on e tha t

provide s hi m with th e mos t

mone y t o tak e of

f airport , rathe r

tha n providin g an y benefi t t o th e airport

o r aviatio n users . Th e purpos e o f

th e FA A Complianc e Programi s t o enforc e valuable right s agree dt o b y airport sponsor s in exchang e for federal Airport

Improvemen t

Programfiands . Platinu mAviatio n an dPlatinu mJe t

Cente r v . Bloomington-Norma l Airpor t Authority , FAA Docke t

No . 16-06-09 , 200 7 W L 485432 1 a

t * 5 (Fina l Decisio n an dOrder , Nov . 28 , 2007 ) ("[Th e Airport Complianc e Program ] monitor s th e administratio n o f valuabl e rights , whic h airport sponsor s pledg e t o th e peopl e o f th e Unite dState s i n exchang e for monetar y grant s an ddonation s o f federal property , to ensur e tha t

airport sponsor s serv e th e publi c interest") . Quit e simply , however , ther e i s n o federal aviatio n interes t

i n pumpin g u p th e valu e o f th e VJ C leasehold, s o that th e Receive r

ma y sel l VJ C for th e maximu mamount , an dimmediatel y tak e thos e fund s of f th e airport . H . STATEMEN T O FFACT S Th e Cit y Council , i n evaluatin g th e VJ C hanga r proposal , face dhighl y unusua l circumstance s tha t

change dsignificantl y ove r time , raisin g fundamental question s abou t th e City' s right s an dresponsibilitie s regardin g th e propose ddevelopment . Th e prio r leaseholder

o f th e VJ C parce l intende dt o buil dt-hangar s o n wha t i s no w th e VJ C site . Exhibi t

3 (Minute s o f

Januar y 13 , 200 9 Cit y Counci l Meeting , statemen t o f R . Jemigan , VJC) . -5 -VJ C assume dth e leasehol dfor th e sit e i n May 2006 . Th e origina l proponen t o f th e VJ C hangar project , it s managin g member , Mr . Nadel , ha s bee n accuse db y th e federal governmen t an dth e curren t oversee r o f VJC , th e Receiver , t o hav e grossl y misrepresente dth e financial conditio n o f hi s businesses , stole n fund s frominvesto r clients , an dplowe dsom e o f hi s ill-gotte n gain s int o VJC . City Exhibit s 1 an d2 . Althoug h th e VJC/Receive r assert s that

"[i] n Ma y 2008 , VJ C applie dt o th e Cit y for approval t o construc t

four ne w hangar s o n approximatel y 2. 5 acre s o f vacan t land, " (Complain t

a t ^ 18) , i n fact , ther e i s n o evidenc e i n th e recor dtha t an y suc h applicatio n was mad e a t that time . T o th e contrary , th e Cit y Manage r explicitl y informe dVJC/Nade l o n June , 2008 , that th e propose d hangar projec t woul drequir e approva l b y th e Mayo r an dCit y Counci l an ddirecte dVJC/Nade l t o submi t a"concep t

plan " t o City staf

f wit h sufficien t

technica l detai l t o allo w staf f t o determin e i f ther e wer e an y "fata l technica l flaws" with th e pla n prio r t o Cit y Counci l consideration . Cit y Exhibi t 1 8 (Jun e 23 , 200 8 Lette r fromMarti n Black , Venic e Cit y Manage r t o E.G . Boone) . Thi s correspondenc e demonstrate s clearl y that VJC/Nade l wa s onl y beginning , an dcertainl y ha dno t completed , th e applicatio n proces s b y lat e June , 2008 . Moreover , a s evidence db y letter s fromVJC/Nade l t o th e City , onc e VJC/Nade l bega n correspondin g with th e Cit y o n th e propose dproject , th e request s fo r City approva l change d considerably . In fact , th e VJC/Nade l hangar reques t evolve dfrom1 , t o 2 , the n t o 4 hangars . O n Jim e 13 , 2008 , counse l for VJC/Nade l wrot e t o th e Cit y seekin g aplac e o n th e Jun e 26 , 200 8 City Counci l Meetin g agend a"t o reques t permissio n fromCit y Counci l t o proces s abuildin g permi t applicatio n for

a n eigh t thousan dsquar e foo t

hangar , alon g with necessar y pavin g an dretention. " City Exhibi t

1 7 (Jun e 13 , 200 8 Boon e letter ) a t 1 . (Emphasi s added) . Thi s was followe dshortl y thereafte r b y anothe r

lette r fromVJC/Nadel' s counse l expressin g adesir e "t o mak e on e chang e i n it s lette r t o yo u date dJun e 13 , 2008. " Cit y Exhibi t 6 (Jun e 16 , 200 8 Boon e letter ) at 1 . "Th eapplicatio n wil l b e fo r constructio n o f

tw o 8,000-square-foo t

hangar s rathe r

than on e ... " Id . (Emphasi s added. ) Thi s wa s reaffirme di n aJul y 1 , 200 8 lette r fromcounse l for

VJC/Nade l t o th e Mayo r an d City Counci l member s requestin g permissio n t o procee dwith buildin g permittin g fo r hangar construction . "Th e permi t applicatio n t o b e filedi s t o construc t tw o 8,00 0 squar e foot

hangar building s alon g with necessar y pavin g an dretention . Th e tw o hangar s wil l b e locate do n th e wes t sid e o f th e parce l numbere d1 an d5 o n th e drawing. " Cit y Exhibi t 7 (Jul y I , 200 8 Boon e letter ) a t 1 . Th e lette r

the n note dthat

"W e hav e bee n requeste dt o sho w wher e al l hangar s wil l b e locate do n thi s parce l eve n thoug h furthe r hanga r constructio n permit s wil l b e applie dfo r i f an dwhen th e nee d arises." " Id . (Emphasi s added) . Thus , it i s clear tha t a t thi s point , th e reques t

for City approva l wa s onl y fo r aproposa l t o buil donl y tw o hangars , an dfliture hangar s woul db e buil t onl y //"specifi c deman darose . Throug h th e requiremen t

that VJC/Nade l submi t

aconceptua l pla n for

th e entir e parce l th e City' s Fir e Marsha l wa s abl e t o stud y th e pla n an ddetermin e that th e VJC/Nadel' s pla n ultimatel y t o buil d5 hangar s wa s no t viabl e o n tha t

site . A Jul y 1 , 200 8 emai l fromNanc y Woodley (City Engineer ) t o Mart y Blac k (Cit y Manager) , state dtha t a t meetin g with Jac k

Stevenso n (Fir e Marshal) , Roge r

Jemiga n (VJC ) an dothers , consensu s "wa s t o reduc e th e numbe r o f hangar s from 5 t o 4 thereb y meetin g stat e fire code' s separatio n o f 50 ' betwee n building s o f different occupancy. " Cit y Exhibi t

8 (7/14/0 8 Woodle y Email) . Mr . Jemigan , VJC' s representativ e wh o wa s copie do n th e email, wrot e bac k

t o Ms . Woodley , "Thank s for you r tim e an dyou r

input , i t was greatl y appreciated. " Id . B y Augus t

18 , 2008 , VJC/Nade l sen t alette r t o th e Cit y indicatin g that th e proposa l was for 4 hangars . Cit y Exhibi t

9 (Augus t

18 , 200 8 Venic e Je t

Cente r Letter ) a t 1 . Ther e i s n o indicatio n a s t o ho w deman dros e from 2 t o 4 hangar s i n suc h ashort perio do f time , thu s justifyin gVJC/Nadel' s inten t t o seek approva l o f

th e entir e 4 hangar

proposa l a

t thi s time . Th e City schedule da

n informationa l presentatio n b y VJC/Nade l o n it s hangar proposa l for

th e Augus t

26 , 200 8 meetin g o f

th e Cit y Council . Complain t a t ^ 22 . At that presentation , Mr . Nade l state dthat VJC/Nade l ha d"jus t

recently " applie dfor

approva l o f

constructio n o f

th e hangars . Whil e VJC/Nadel' s attorney s argue dthat th e Cit y shoul dapprov e th e VJC/Nade l hangar proposa l a

t that time , th e City di dno t

d o so , a s it

ha dschedule dth e presentatio n a s a n informatio n ite monly , no t

a n actio n item . Rathe r than pursuin g a

n actio n ite mfor

th e nex t Cit y Counci l meeting , VJC/Nade l submitte d an informal complain t

t o th e FA A AD O o n Septembe r 2 , 2008 . Complainant' s Exhibi t 10 . O n Septembe r

3 , th e AD O advise dth e City that VJC/Nade l ha dfiledth e informal complaint , an do n Septembe r

15 , 2008 , th e Cit y Attorne y replied, o n behal f o f th e City . Complainant' s Exhibi t 11 . In November , VJC/Nade l submitte dpropose dplan s t o constmc t hangar s t o th e City' s Buildin g an dEngineerin g Departments . City Exhibi t 1 0 (11/7/0 8 Buildin g Permi t Application s for hangar s b y VJC) . O n Decembe r

29 , 2008 , th e official a

t th e AD O handlin g th e informal complain t determine d tha t informal resolutio n wa s no t possible , an dtol dVJ C tha t i t wa s free t o file aforma

l Part 1 6 complaint , i f

i t chose . Complainant' s Exhibi t 14 . In th e meantime , th e City obtaine dalega l memorandu mfromKapla n Kirsc h & Rockwel l LLP , concernin g it s obligation s unde r th e gran t assurance s basedo n certai n assume dfacts ; th e factual premis e o f th e memorandu mlate r

prove dt o b e i n incorrec t

i n severa l materia l aspects , a s se t fort h below . I n January , 200 9 th e fundamenta l natur e o f th e project , an dindee do f VJ C itself

, change d dramaticall y whe n Mr . Nade l disappeare dfor aperio do f

tim e an dwa s ultimatel y arreste dan d indicte do n severa l charges , describe dabove . Se e Cit y Exhibi t 1 . Man y o f

Mr . Nadel' s assets , includin g VJC , wer e seize db y aReceiver appointe db y th e U.S . Distric t Court for th e Middl e -8 -Distric t

o f Florid a(Tampa) , fo

r th e purpos e o f

marshallin g an dliquidatin g thos e asset s i n orde r t o rais e mone y to repa y Mr . Nadel' s victims . Mr . Wian dwa s appointe dReceive r ove r VJ C o n Januar y 29 , 2009 . Complain t a t ^ 47 . Accordin g t o paper s filedi n thos e proceedings , th e Receive r ha s discovere devidenc e that Mr . Nade l use dfraudulentl y obtaine dfiind s t o purchas e an doperat e VJC . City Exhibi t

2 . Mr . Wian dwas appointe dReceive r ove r VJ C o n Januar y 29 , 2009 . Complain t

a t ^ 47 . Th e appointmen t

o f areceive r

was a n unprecedente deven t

for th e City , an dth e City Counci l appropriatel y wante dt o mak e sur e i t understoo dth e consequence s o f that action . Th e Cit y Counci l discusse di n ameasure dan ddeliberativ e way , variou s issue s relatin g t o VJ C a s th e unusua l event s surroundin g it s ownershi p unfolded . Th e Counci l als o sough t additional informatio n an d guidanc e i n dealin g with th e situation . I n January , th e Cit y Counci l reviewe dan ddiscusse dth e hanga r projec t an dspecificall y sough t

"additiona l inpu t

fromth e Federa l Aviatio n Administratio n regardin g Venic e Je t

Center' s reques t

t o constmc t

additiona l hangar

spac e o n it s leasehol dan d constraint s o f

th e Airport

Layou t Plan. " Cit y Exhibi t

11 . (Excerp t

fromCity Counci l minute s (Januar y 13 , 200 9 Cit y Counci l Regular Meeting)) . A s aresult , a s discusse dmor e fully below , th e City Attome y wrot e t o th e AD O for guidanc e o n thi s issu e o n Febmar y 4 , 2009 , specificall y inquirin g whethe r

constmctio n o f

th e hangar s woul dviolat e Assuranc e 29 , Complianc e with Airport Layou t Plan , sinc e th e hanga r

developmen t

appeare dt o b e inconsistent with th e ALP , an dth e City i s oblige dt o compl y with Assuranc e 29 , a s wel l a s th e othe r Assurances . Cit y Exhibi t 1 2 (Febmar y 4 , 200 9 Lette r

fromCit y Attome y Robert Anderso n t o R . Henry , FA A ADO) . A t th e Febmar y 10 , 200 9 Cit y Counci l Meeting , th e Counci l discusse dth e Cit y Attomey' s Febmar y 4 , 200 9 lette r

t o th e FAA , negotiatin g with th e Receiver, whethe r th e Cit y i s acreditor , ho w t o preserv e th e right s o f th e City , signin g o r

sublettin g o f

th e leas e withou t

th e consen t

o f th e Council , involuntar y assignment , contactin g th e FA A regardin g othe r designatedhanga r

locations ,whethe r

th e City ha s th e righ t

t o den y th e VJ C reques t

for mor e hangars , clarifyin g issue s wit h th e FAA , ne w circumstance s becaus e o f th e receivership , additiona l hangar s triggerin g ne w leas e negotiations , providin g additiona l informatio n t o th e FAA , informatio n provide dt o outside counci l t o assis t i n renderin g hi s opinion , an dothe r issue s relatin g t o th e hanga r project , a s wel l a s schedulin g aCity Counci l Worksho p o n lon g rang e visio n fo r th e Airport . Cit y Exhibi t 1 1 (Excerp t fromCity Counci l minute s (Febmar y 10 , 200 9 Cit y Counci l Regular Meeting)) . A t th e Workshop , o n Marc h 5 , 200 9 th e Cit y Council , th e City Counci l discusse drelocatio n o f th e VJC , fundin g t o mov e existin g facilities , developmen t o f a n emergenc y pla n i f

th e VJ C i s no t i n operation , workin g with th e VJ C receiver , th e Cit y possibl y operatin g th e VJC , aviatio n fiiel sales , airpor

t lease s an dvertica l improvemen t issues , addressin g adherenc e o f th e ALP , an dcontac t with th e FAA regardin g VJC . Cit y Exhibi t 1 1 (Excerp t

fromCit y Counci l minute s (Marc h 10 , 200 9 Cit y Counci l Airport

Workshop)) . At it s Marc h 10 , 200 9 regular meeting , th e Cit y Counci l discusse d"concem s regardin g th e hangar s bein g propose do n alocatio n identifie dfor othe r purposes , guaranteein g th e applican t ha d financial resource s t o buil dhangars , an dth e cit y havin g avali dleas e with VJC. " City Exhibi t 1 1 (Excerp t fromCity Counci l minute s (Marc h 10 , 200 9 Cit y Counci l Regular Meeting)) . Th e Receiver als o spok e befor e th e Counci l an dquestione dwhethe r afinancial viabilit y claus e was include di n th e buildin g codes . H e als o sai dtha t i t wa s unlikel y h e woul dus e investo r fund s t o constmc t hangars , an dpointe dou t tha t financin g ma y b e forthcomin g fro mapotentia l ne w user . A motio n t o approv e th e VJ C propose dhangar s was defeated . Id . Th e Counci l the n discusse dth e validit y o f th e existin g VJ C lease , i f th e leas e allowe d hanga r constmction , whethe r

o r no t th e lesse e defaulte do n th e lease , an dpossibl e frauddurin g procuremen t

o f VJC , an dfinancial viabilit y o f aVJ C purchaser . Ther e wa s consensu s t o direc t th e Cit y Attome y t o see k

an opinio n fromloca l outsid e counse l expert i n commercia l lease s t o provid e -10

-an opinio n o n whethe r th e VJ C leas e i s vali dan dentitle s VJ C t o constmc t hangars , i f

fraudulent fiind s negat e th e lease , an dth e city' s abilit y unde r th e minimu mstandard s for financial viability . I d In respons e t o th e City' s concem s abou t th e effec t o f th e receivershi p o n th e VJ C leas e an d othe r relate dissues , th e City Attome y reporte da t th e Marc h 24 , 200 9 meetin g that he , th e City Manager , an dth e Mayo r

ha dformulate dquestion s fo r outside counsel . Cit y Exhibi t 1 1 (Excerp t fromCit y Counci l minute s (Marc h 24 , 200 9 City Counci l Regular Meeting)) . O n Apri l 30 , th e Counci l discusse dfiindin g th e purchas e o f VJC , an dreceivin g aVJ C marketin g packe t fromth e Receiver . Cit y Exhibi t

1 1 (Excerp t

fromCit y Counci l minute s (Apri l 30 , 200 9 Strategi c Pla n Workshop)) . A t th e May 12 , 200 9 meeting , th e City Counci l discusse danumbe r o f topic s relate dt o th e VJ C situation , including : alette r an dinformatio n packe t

fromth e Receiver ; issue s relatin g t o a possibl e appraisa l o f

th e leasehold ; delayin g an y appraisa l unti l after issue s regardin g hangar constmctio n wer e explore dan doutsid e loca l counse l provide da n opinio n o n th e VJ C lease ; a possibl e right

o f first refusal i n th e purchas e o f VJC ; th e confidentialit y agreemen t sough t b y th e Receiver ; th e possibl e conflic t betwee n Florida' s sunshin e law s an dth e confidentiality agreement ; protectin g th e City' s interest s an davoidin g potential lawsuits . Cit y Exhibi t 1 1 (Excerp t

fromCity Counci l minute s (May 12 , 200 9 Cit y Counci l Regular Meeting)) . At it s May 26 , 200 9 meeting , th e Cit y Counci l discusse drecen t developments , including : outsid e loca l counsel' s opinion ; Sectio n 4 5 o f th e VJ C leas e concemin g demolitio n an dconstmctio n o f improvements ; additional fact s tha t ha dbee n discovere dsubsequen t t o Ms . Henry' s letter ; requirement s for

submittin g specification s prio r t o hangar

constmction ; submitta l o f concep t plans ; th e nee dfo r

demonstratin g financial viability ; Cit y Counci l approvin g hangar s subjec t t o subsequen t

verificatio n o f

financial viability ; leas e affordin g th e discretio n t o promot e VJC' s sel f

-11

-interest ; goo dfait h obligations ; th e Cit y purchasin g VJC ; claim s o f th e City intentionall y lowerin g th e valu e o f

th e VJC ; demonstratin g anee dfor additiona l hangars ; approvin g additiona l hangar s a s part o f th e Join t Automate dCapita l Improvemen t Progra m(JACIP) ; hangar utilization ; FAA acknowledgin g th e nee dfor additiona l hangars ; th e leas e no t bein g clear

i n definin g obligation s o f parties ; an dth e Receive r

no t respondin g t o th e City' s reques t for financial data . City Exhibi t 1 1 (Excerp t fromCity Counci l minute s (May 26 , 200 9 Cit y Counci l Specia l Meeting)) . At th e Jun e Counci l Meeting , th e Counci l discusse dPar t 1 6 an dPar

t 1 3 procedures ; th e validit y o f

th e VJ C lease ; propose dhangar locatio n an dth e lac k

o f communicatio n with Mr . Wiand ; informal communication s with aVJ C official , Mr . Jemigan , o n propose dhangar locations , wit

h n o definitiv e response ; astaf f technica l revie w o f

conceptua l plans , althoug h final drawing s woul db e requeste dan dsubmitte dt o Counci l for approval ; submittin g ahangar concep t t o FA A includin g informatio n o n wh y th e City di dno t favo r approval ; lessenin g th e city' s exposur e t o potentia l lawsuits ; dealin g with th e actua l purchase r versu s conditional approva l fo r propose dconstmctio n t o enhanc e propert y value ; Mr . Wiand' s lac k o f communicatio n with th e City ; an dFA A directive s regardin g hangar

approval . Cit y Exhibi t

1 1 (Excerp t

fromCit y Counci l minute s (Jun e 9 , 200 9 Regular Meeting)) . Als o a t th e Jun e 9 Cit y Counci l meeting , amotio n t o rescin dth e Counci l actio n o f Marc h 10 , 200 9 denyin g hangar

constmctio n failed . Cit y Counci l the n directe dth e Cit y Manager an dth e Cit y Attome y t o engag e i n goo dfait h negotiation s with th e Receive r i n a n attemp t t o resolv e conflict s an dreac h amutuall y beneficia l outcome . Id . Cit y Official s me t with th e Receiver , Mr . Wiand , o n Jun e 19 , 200 9 t o discus s potentia l amicabl e resolutio n o f th e dispute . Se e Complain t ^ 67 . A t th e Jul y 1 4 Meeting , th e Counci l discusse dengagin g counse l t o assis t i n defendin g agains t apotential Part

1 6 complaint ; th e fac t

that th e Complain t

ha dnot bee n serve do n th e City , -12

-th e meetin g betwee n th e Receive r an dth e Cit y Manage r

an dCity Attomey , with areport b y th e Cit y manage r

that Mr . Wian dmay possibl y sho w interes t i n settlemen t

term s that

includ e 1 ) th e city approvin g constmctio n o f th e four hangar s an drelate dconstmctio n a s submitte do n th e sit e plan , 2 ) th e VJ C demonstratin g financial capabilit y prio r t o th e issuin g o f

buildin g permits , 3 ) consideratio n o f aspecifi c lan dswap proposa l t o constmc t hangar s o n th e opposit e sid e o f th e taxiway , an d4 ) consideratio n o f

givin g th e City th e right

o f first refusal regardin g sal e o f

th e VJC . Th e City Manage r state dthat

th e Receive r

advise dtha t

h e wa s goin g t o file th e Par t 1 6 complain t

an dwoul d litigat e for

damage s du e t o hangar

constmctio n no t

bein g approved . Th e Cit y Manage r requeste d specifi c directio n fromCounci l regardin g th e propose dsettlemen t terms . Cit y Exhibi t

1 1 (Excerp t fromCity Counci l minute s (Jul y 14 , 200 9 Cit y Counci l Regula r Meeting)) . Th e City further

discusse dit s interes t

i n acquirin g th e VJ C leasehold ; th e appraisa l bein g o n hold ; settlin g thi s issue ; settlemen t discussion s with Mr . Wiand ; includin g th e valu e o f th e hangar s i n asettlemen t

offer ; validit y o f

th e hanga r

constmctio n request ; th e Receive r statin g h e ha s n o intentio n o f

buildin g hangars ; financial documentatio n no t bein g provide db y th e Receiver ; problem s with th e lease ; th e eventua l owne r o f th e VJ C constmctin g th e hangars ; acquirin g additiona l option s fromMr . Wiand ; consideratio n o f aspecifi c lan dswap proposa l t o constmc t hangar s o n th e opposit e sid e o f th e taxiway ; an dconsiderin g givin g th e cit y th e right o f first refusal regardin g sal e o f

th e VJC . Id . Th e Counci l vote dt o engag e outsid e counse l t o assis t i n th e Part

1 6 defense , an ddi dno t approv e amotio n t o authoriz e th e Cit y Manage r an dCit y Attome y t o discus s with th e Receive r pursuin g constmctio n o f

th e four hangar s a s submitte dan dVJ C demonsfratin g financial capability prio r t o issuanc e o f

th e buildin g permits . Th e Counci l als o di dno t approv e amotio n t o authoriz e th e Cit y Manager

an dth e Cit y Attome y t o discus s with th e Receiver approvin g constmctio n o f th e four hanger s a s submitted , demonstratin g financia l capability prio r t o issuanc e o f

th e buildin g -13

-permit , an dalan dswap proposa l t o constmc t hangar s o n th e opposite sid e o f th e taxiway , wit

h th e inten t t o com e to amutuall y acceptabl e agreemen t for approva l b y th e Cit y Council . Th e Counci l approve damotio n t o discus s litigatio n strategy an dsettlemen t a t aprivat e Attomey-Clien t sessio n i f th e Par t 1 6 Complain t

i s served . Id . A s thi s summary o f

th e City Counci l deliberation s an daction s shows , th e Council , i n addressin g th e highl y unusua l circumstance s surroundin g VJ C an dit s hangar proposal , engage din a serie s o f thoughtfiil , deliberativ e discussion s an dsough t critica l informatio n an dguidanc e o n ho w t o navigat e throug h th e thicke t o f comple x issues . Th e City Counci l wa s entitle d- an dduty-boun d- t o explor e th e variou s circumstance s options , an dthei r implication s for

th e City , rathe r

tha n actin g rashly . An dthroughou t

th e process , th e Counci l sough t t o achiev e amutuall y agreeabl e resolutio n with th e VJC/Receiver . Cit y Official s als o me t

with Mr . Wian do n Augus t 10 , 200 9 an dmad e aspecifi c proposa l t o resolv e th e issue . Th e Cit y ha s no t ye t hear dbac k

fromMr . Wian di n respons e t o th e City' s proposal . III . ARGUMEN T A . APPLICABL E LA W (1 ) Th e FA A i s Concerne dwit h a n Airpor t Sponsor' s Curren t

Compliance . In investigatin g allegation s o f gran t assuranc e violations , FA A i s conceme dwith th e airport sponsor' s curren t

complianc e o r

lac k o f compliance . Richar dE . Steer e v . Count y o f San Diego , FA A Docke t

No . 16-99-1 5 (Dec . 7 , 2004) , 200 4 W L 319820 9 at *9 , *16 , *21 , *22 . Thus , eve n i f a n airport sponso r has , i n th e past , violate dagran t assurance , a s lon g a s i t

ha s correcte di t

b y th e tim e FA A make s it s determination , th e airpor t wil l not b e foun di n violation . Id . a t *9 , *1 6 (^citin

g Wilson Ai r

Cente r LLC , v . Memphi s an dShelb y Count y Airpor t Auth. , FA A Docke t

No . 16-99-10 , -14

-200 1 W

L 108534 8 a

t * 4 (Final Agenc y Decisio n an dOrder , Aug . 30 , 2001 ) (actio n b y th e airport t o cur e an y violatio n o f

federal obligation s i s ground s for dismissa l o f

th e cas e agains t

th e airport) . (2 ) Th e FAA' s Airpor t Complianc e Progra mseek s t o ensur e saf e airports , properl y maintained . Th e Airpor

t Complianc e Progra

mi s "designe dto ensure th e availabilit y o f anational systemo f saf e an dproperl y maintaine dpublic-us e airport s operate din amanner consisten t

wit h th e airpor

t owners ' Federal obligation s andth e public' s investment in civi l aviation. " Pacifi c Coas t Flyers , Inc. , v . Count y o f Sa n Diego. , FAA Docke t No . 16-04-08 , 200 5 WL 190051 5 a t *2 0 (Director' s Determination , Jul y 25 , 2005) . (3 ) Burde n o f

proo f I t i s wel l establishe dthat

th e Complainan t

i n aPar t 1 6 proceedin g ha s th e burde n o f pleadin g an dprovin g it s case . Adventur e Aviatio n v . Cit y o f La s Cruces , FA A Docke t No . 16-01

- 14 , 200 3 W L 2269692 3 a t *1 5 (Fina l Decisio n an dOrder , Sept . 9 , 2003) ; se e als o Ric k Aviation , In c V . Peninsul aAirpor t

Comm'n. , FAA Docke t

No . 16-05-18 , 200 7 W L 145039 8 a t *1 4 (Director' s Determination , May 8 , 2007 ) ("Th e proponen t o f amotion , request , o r

orde r ha s th e burde n o f proo f " ) (4 ) Requiremen t

t o Submi t

wit h th e Complain t

Al l Evidenc e Upo n Whic h Complainan t

Relie s 1 4 C.F.R . § 16.2 3 require s that th e complainan t

submi t al l document s the n availabl e t o support hi s o r he r complaint . "Pursuan t

t o 1 4 CF R§ 16.23(b)(2) , th e Complainan t wa s require dt o submi t al l o f it s pleading s an dothe r

documentatio n i n support o f it s cas e s o tha t

i n renderin g th e Director' s Determination , th e FA A woul dhav e th e entir e recor dbefor e it. " Roadhous e Aviatio n v . Cit y o f Tulsa , FA A Docke t

No . 16-05-08 , 200 7 W L 196616 0 at *1 1 (Fina l Decisio n an dOrde r Jun e 26 , 2007) . Se e als o Boc aAirport , Inc . v . Boc aRato n Airpor t Auth. , FA A Docke t

No . 16-04-02 , 200 4 W L 528475 1 at

*1 0 (Fina l Decisio n an dOrder , Nov . 29 , 2004) . Also , 1 4 C.F.R . § 16.29(b)(1 ) •15

-require s eac h part y t o file document s that it consider s sufficien t

t o presen t

al l relevan t

fact s an d argumen t necessar y for

th e FA A t o determin e whethe r th e sponso r

i s i n compliance . Tha t subsectio n specificall y provide s that i n renderin g th e Director' s Determinatio n "th e FA A ma y rel y entirel y o n th e complain t

an dth e responsiv e pleading s provide dunde r thi s subpart. " Id . Boc a Airport , Inc. , 200 4 W L 528475 1 a t *10 . Th e Directo r

i s unde r n o obligatio n t o investigat e beyon d th e pleadings . Adventur e Aviation , 200 3 W L 2269692 3 a t *15 . B . PRELIMINAR Y ISSUE S (1 ) Th e Complainan t Relie s o n Analyse s o f

Applicabl e Federa l La w Tha t Wer e Base do n Circumstance s Tha t ar e Differen t

Tha n th e Actua l Facts . a ) Kapla n Kirsc h & Rockwel l LLP Memorandu m At th e outset , i t

i s importan t

t o understan dtha t

th e Kapla n Kirsc h & Rockwel l LLP memorandu m(Complainant' s Exhibi t 13 ) provide s avery genera l explanatio n o f th e City' s obligation s unde r

th e Gran t

Assurance s but

doe s no t addres s th e particular

issue s presente db y VJC' s complaint . Specifically , th e memorandu mdoe s no t addres s th e specifi c issu e raise dher e a s to whethe r

th e Cit y i s i n violatio n o f th e Gran t Assurance s b y refusin g t o approv e apropose d projec t that doe s no t compl y with th e City' s minimu mstandards . Indeed , th e memorandu m explicitl y state s tha t

i t i s no t addressin g whethe r

th e propose dprojec t

doe s o r doe s not compl y wit

h thos e minimu mstandards . Whil e th e memorandu mreache s th e unremarkabl e conclusio n that airport proprietor s mus t generall y permi t

aeronautica l developmen t o n an airport

leasehold , i t

doe s not addres s (an dcounse l wa s no t aske dt o address ) th e mor e particular questio n o f

whethe r a n airport proprieto r

mus t approv e an leasehol dimprovemen t that doe s not compl y with th e applicabl e minimu mstandards . A s detaile dbelow , th e Gran t Assurance s impos e n o suc h requiremen t an dth e Cit y acte d appropriatel y i n refiasin g t o approv e VJC/Receiver' s request . •16

-Moreover , a s mor e informatio n ha s becom e available , it ha s becom e clear

that a t leas t thre e importan t factual assumption s upo n whic h th e memorandu mrest s ar e i n fac t materiall y differen t than assumed . First , th e memorandu massume dthat aready , willing , an dabl e FBO , with th e abilit y t o compl y wit

h al l o f th e applicabl e requirements , includin g th e City' s Minimu mStandards , was prepare dt o buil dth e propose dhangar s i n question . W e no w kno w that VJC/Nade l coul dno t accuratel y represen t

that i t ha dth e financial resource s t o buil dth e hangars . Thus , a s discusse di n mor e detai l below , VJC/Nade l coul dno t compl y with th e City' s minimu mstandard s fo r th e hangar project . Moreover , VJC/Receive r ha s state dunequivocall y that it doe s not inten dt o buil dth e hangar s (Complain t

^ 59 , City Exhibi t

3) , an di n an y even t

ha s no t satisfie dth e City that

i t ha s availabl e th e necessar y financial resource s t o d o so . Second , th e memorandu massume dtha t th e curren t

AL P designatedth e are awher e VJ C intende dt o buil dth e hangar s a s availabl e for "genera l aeronautica l development. " Complainant' s Exhibi t 1 3 a t p . 8 an dp . 1 2 o f

14 . Th e memorandu mwen t o n t o say that , "i f

th e AL P alread y depicte dsom e othe r

aeronautica l use , th e Cit y woul dhav e apotentia l justificatio n for refiisin g t o allo w developmen t

that conflict s with th e us e show n o n th e ALP. " Id . a t p . 1 2 o f 14 . A s w e no w know , th e propose dhanga r site i s designate da s "Termina l Area " o n th e ALP , excep t for aportio n o f th e site designate da s "Futur e Apron. " Cit y Exhibi t 1 3 (Curren t

FAA-approve dALP). ^ In fact , on e o f th e propose dhangar s woul dencroac h significantl y o n th e are ashow n o n th e AL P a s "Futur e Apron. " Cit y Exhibi t

1 4 (Schemati c o f

VJ C Propose dHangar s overlai do n ALP )

^ Th e Cit y ha s mad e numerou s request s t o th e AD O fo r asigne dcop y o f

th e ALP . A s o f

th e dat e o f

thi s filing, i t

ha s no t bee n provide dt o th e City . Th e Cit y believe s tha t th e AL P attache da s Cit y Exhibi t 1 3 i s th e AL P tha t

th e FA A ultimatel y signed . -17

-Third , th e memorandu mwas base do n th e premis e that othe r operator s ha do r

woul db e give n th e right

t o buil dan dleas e ou t

t o othe r aeronautica l user s th e type s o f hangar s that

VJ C sough t t o buil dan dleas e out . Id. , a t p 8- 9 o f 14 . Ther e is , i n fact , n o evidenc e that othe r entitie s hav e o r wil l b e give n thi s right. b ) Statement s froman Officia l a t th e loca l FA A AD O Tha t th e Cit v Shoul d Approv e th e VJC/Nade l Hangar Proposa l Th e initia l determination s b y th e AD O official (Complainant' s Exhibit s 1 2 an d14 ) were , mos t likely , base do n th e sam e ultimatel y discredite dpremis e tha t VJC/Nade l ha dth e abilit y t o compl y wit

h th e Airport

Minimu mStandard s applicabl e t o th e project , includin g sufficient financial resource s t o carry ou t

th e project . Whil e thi s assumptio n was no t unreasonable , it

simpl y tume dou t no t t o b e tme . Therefore , th e advic e that th e airport

shoul dapprov e th e propose dhangar s tume dou t t o b e incorrect . Th e AD O official' s respons e t o th e inquir y fromth e Cit y Attome y concemin g th e apparen t conflic t betwee n th e FAA-approve dAL P an dth e propose dhanga r developmen t

i s mor e perplexing . Whe n th e Venic e Cit y Attome y aske dwhethe r approva l o f

th e hangar s contrary t o th e curren t FAA

approve dAirport

Layou t Plan (ALP) , whic h depict s "Termina l Area " an d"futur e apro n area " use s fo r th e propose dhanga r

site , woul drais e apotential proble mo f complianc e with Gran t

Assuranc e 29 , whic h preclude s airpor t sponsor s fromallowin g developmen t inconsisten t

with th e AL P (City Exhibi t 1 2 (Febmar y 4 , 200 9 Lette r fromR . Anderso n t o RHenry) , th e AD O official state dthat "w e assum e thi s constmctio n woul dals o b e approved " i f presente dt o FAA for

a n AL P amendment , an dtha t "FA A ha s eve n processe da'pe n an dink ' chang e t o th e 200 0 AL P incorporatin g hangar s i n th e vicinity " o f

th e propose dhangar

cite , an dfurther

state dtha t

th e City "thi s proposa l shoul db e forwarde dt o thi s offic e withou t further delay. " Complainant' s Exhibi t 1 6 at 2 .

-18

-Thi s wa s apeculiar respons e i n ligh t

o f th e fac t tha t FA A Orde r

5190.6A , Airport Complianc e Requirements , Octobe r 2 , 198 9 ("Complianc e Handbook" ) i n discussin g th e nee dt o avoi dconstmctio n that

i s inconsisten t

with th e approve dAL P i n violatio n o f Gran t Assuranc e 29 , gav e a s a n exampl e o f

prohibite ddevelopment , avery similar circumstance , i.e. , placemen t o f a corporat e hangar

o n asit e dedicate do n th e AL P for future apro n an dtaxiway . Complianc e Handboo k

a t ^ 4-17(f) , cite di n City Exhibi t 1 2 (Febmar y 4 , 200 9 Cit y Attome y lette r to R . Henry) . Moreover , i n ligh t

o f th e fac t that FA A "doe s no t

buil dairports " o r

tel l sponsor s ho w t o m n thei r airports , th e FA A presumabl y canno t forc e a n airport t o seek arevisio n t o it s AL P t o allo w constmctio n o f

hangar s t o b e rente dou t

t o individua l users o n asit e i s labele d"termina l area " o r "fliture apron " —especiall y whe n th e approve dAL P depict s a n are afor fiiture hangar s o n th e interio r o f th e airport , acros s ataxiway fromth e VJ C site . Exhibi t 13 , (FA A Approve dALP) . Give n th e similarit y betwee n th e situatio n a t th e Airport

an dth e exampl e i n th e Complianc e Handboo k

o f propose ddevelopmen t

that coul dno t

b e undertake n i n ligh t

o f th e curren t

FAA

approve dAL P (hangar

o n are areserve dfiiture apro n an dtermina l are avs . corporat e hangar o n are a reserve dfor

future apro n an dtaxiway) , it i s difficul t

t o understan dwh y th e AD O official di dno t a t leas t analyz e th e circumstance s an dexplain , i f possible , ho w the y wer e materiall y different . Th e fac t that th e FA A ma

y approv e a

n AL P revisio n i f

th e Cit y sough t

on e beg s th e questio n o f what happen s i f

th e Cit y doe s not

see k suc h a n AL P revision . In an y event , th e Cit y believe s that th e advic e receive dfromth e AD O official wa s inconsisten t

with FAA' s publishe dguidance , an dbelieve s that FA A mus t

appl y th e guidanc e t o th e curren t circumstance s at

th e Airport , a s i t

ha s i n othe r

cases . Fo r

instance , FA A ha s hel dthat : th e AL P reflect s th e agreemen t betwee n th e FA A an dth e airport owne r a s t o th e specifi c operationa l an dsupport functiona l usage . It

als o reflect s th e agreemen t betwee n FA A an dth e airport owne r a s t o th e propose dallocatio n o f area s o f th e -19

-airpor t t o specifi c operationa l an dsupport functional usage . Th e approve dALP thu s become s a

n importan t

instrumen t

fo r controllin g th e subsequen t developmen t

o f airpor t facilities . An y constmction , modification , o r improvemen t

that i s inconsisten t

with suc h apla n require s FA A approva l o f arevisio n t o th e ALP . [FAA Orde r

5190.6A , Sec . 4-17(a) ] Boc aAirport , Inc . v . Boc aRato n Airpor t Auth. , FA A Docke t

No . 16-00-10 , 200 1 W L 43861 9 at *2 3 (Director' s Determinatio n Apr . 26 , 2001) , aff'd . Fina l Decisio n an dOrde r Mar . 30 , 2003 . Thi s indicate s that

th e AL P designation s are , i n fact , significant , an dshoul dno t b e dismisse d a s casuall y a s th e AD O official did . FAA ha s state da s much :

Continue dadherenc e t o a n AL P i s acomplianc e obligatio n o f th e airport

owner . Th e conversio n o f

an y are ao f

airport lan dt o asubstantiall y different us e fromthat

show n i n a n approve dlayou t

pla n coul dadversel y affec t th e safety , utility , o r

efficienc y o f th e airport . [FA A Orde r

5190.6A , Sec . 4-17(f) ] I d An di t

i s u p t o th e airport

sponso r t o determin e th e cours e o f airport development , withi n th e contex t

o f th e approve dALP . "Airport sponsor s retai n th e prerogativ e t o develo p thei r airport s i n an y manne r

that meet s thei r

federal obligation s an di s consisten t with th e approve dAirport Maste r Plan an dAirpor t

Layou t Pla n for that airport. " Thermc o Aviation , Inc . v . Count y o f Lo s Angeles. , FA A Docke t

No . 16-06-07 , 200 7 WL 189382 1 at *2 5 (Director' s Determination , Jun . 21 , 2007 ) aff'd . Fina l Decisio n an dOrde r Dec . 17 , 2007 . FAA shoul dfollo w it s ow n preceden t an dAirpor t

Complianc e guidanc e t o determin e her e that th e conflic t

betwee n th e VJ C propose dconstmctio n o f hangar s o n th e propert y with th e use s show n o n th e FA A approve dAL P require s dismissa l o f th e Complaint .

-20 -(2 ) Cit y Action s tha t th e Complain t

Call s "Delay " o r

"Stal l Tactics " Ar e Simpl y th e Reasonable , Deliberativ e Action s o f aConscientiou s Publi c Bod y Addressin g Unusua l Circumstance s Th e VJC/Receive r

complain s a

t variou s point s in th e complain t o f supposedl y imprope r dela y b y th e City i n no t

approvin g th e hangar s a s quickl y a s VJC/Receive r woul dlike . Complain t a t TfT I 49 , 56 , 66 . VJC/Receive r characterize s a s "stal l tactics " th e City' s inquirie s int o whethe r involuntar y receivershi p o f VJ C invalidate dit s leas e wit h th e City , an dwhethe r

th e apparen t conflic t betwee n th e propose dhangar developmen t

an dth e current , FAA-approve dALP cause dan y complianc e issu e wit

h respec t t o Gran t Assuranc e 29 . However , thes e ar e legitimat e concems , an d i n fact , i f th e City ha dno t

explore dthem , i t

coul dwel l b e considere dno t t o hav e fulfille dit s dutie s with respec t

t o it s stewardshi p o f

th e Airport

propert y an dit s federal obligations , respectively . Th e on e dela y tha t

i s inexplicable , however , i s th e 7-mont h gap betwee n (a ) th e tim e th e AD O officia

l informe dVJC/Nade l that th e AD O coul dno t

assis t i n th e informal resolutio n o f th e case , an dVJ C wa s therefor e free t o file aformal Part 1 6 complain t

at an y time , an d(b ) th e dat e i n Jul y 200 9 whe n VJC/Receive r actuall y filedth e complaint.' * Moreover , th e Receive r filedhi s motio n t o exten dth e Receivershi p t o includ e VJ C i n January 26 , 2009 , s o h e ha s delaye d6 month s i n filing th e Par

t 1 6 claim . An y assertion s b y VJC/Receive r that delay s i n addressin g th e hangar issu e constitut e a

n "intentiona l interference " with areceivershi p asset , a s wel l a s assertion s that

" * I t i s difficul t

t o determin e whe n VJC/Receive r actuall y filedth e Complaint , because , conU-ar y t o Part 1 6 rules , it submitte dan undate dCertificat e o f Service , whic h merel y state s that o n "thi s day " th e Complain t wa s mailed . Sectio n 16.15(a ) require s that

al l filings includ e asigne dcertificat e o f service , specifyin g th e dat e an dmanne r o f service . Th e Complain t

itself , whic h incorporate dth e Certificat e o f Service , wa s als o undated . Sectio n 16.13(e ) require s that eac h documen t b e signe db y th e perso n filing th e documen t o r an authorize drepresentative . Eve n acursor y revie w o f th e Complain t

reveal s tha t

VJ C ha s no t

complie dwith thes e requirements . Th e Complain t i s no t separatel y signed . Th e onl y signatur e appear s unde r th e Certificat e o f

Service . Becaus e Section s 16.13(e ) an d 16.15(a ) eac h requir e asignature , th e singl e signatur e unde r th e Certificat e o f

Servic e i s inadequate . Th e absenc e o f a signatur e i s no t

trivial . Th e signatur e serve s a s aformal certificatio n o f th e fiindamental accurac y an dpropriet y o f th e complain t unde r th e law an dfact s o f

th e case . Lik e Federa l Rul e o f Civi l Procedur e Rul e 11 , Sectio n 16.13(e ) serve s t o protec t th e integrit y o f

th e Part 1 6 process . Give n thes e defects , i t

appear s tha t

FA A shoul dno t

hav e dockete dth e Complaint , an dinstea dshoul dhav e require d VJC/Receive r

t o correc t

thes e defect s befor e FA A dockete dit . -21

-mor e than a30-day extensio n o f tim e for th e City t o respon dt o th e Complaint , therefor e ring hollow . a ) Allegation s o f Bloc k Votin g an d"Improper " Motivation s o f Cit v Counci l Member s Man y paragraph s o f

th e Complain t

(e.g. , ^ 3-7 , 23-24 , 27 , 29-33 , 62-63) , an da considerabl e amoun t

o f th e attache dexhibits , whic h includ e email s an dreport s o f publi c statement s b y individua l Counci l members , explor e th e purporte dmotivation s o f asuppose dfour-membe r votin g bloc k

o f th e City Council . Thes e ar e largel y extraneou s t o th e fiindamental issue s o f thi s case . However , th e City i s compelle dt o addres s the mi n brie f First , a s discusse dmor e thoroughl y belo w i n Sectio n C(l)(d) , unde r Florid alaw , th e City Council , a s th e dul y electe dgovemin g bod y o f th e Cit y o f

Venic e acts officiall y a s abody , b y recorde dvote . Thus , th e statement s o f individua l Counci l member s outsid e o f thei r formal role s a s votin g member s ar e no t

legall y significant . Second , th e Complain t

implie s tha t

ther e i s somethin g imprope r abou t th e fac t tha t som e o f th e Counci l member s liv e somewha t near th e Airport . Som e member s d o liv e i n th e genera l vicinity o f th e Airport , althoug h ther e i s n o evidenc e i n th e recor dthat th e member s cite di n th e Complain t al l liv e withi n amil e o f

th e Airport , a s alleged . Complain t at ^ 29 . Whil e som e Counci l member s hav e campaigne do n platform s tha t directl y addresse dAirport issues , other s di dnot . A s simpl y on e example , ther e i s n o evidenc e i n th e recor dtha t on e o f suppose dmember s o f

th e allege dvotin g block . Counci l Membe r

Moore , eve r

ra n o n aplatformadvocatin g limitation s o n Airport development . Moreover , eve n i f

othe r Counci l Member s di dm n o n platform s relatin g t o airport developmen t

issues , ther e i s n o evidenc e i n th e recor dtha t th e Counci l member s hav e not take n -22 -thei r

officia l dutie s seriousl y o r

that the y hav e acte dimproperly . Indeed , i n dismissin g acomplain t agains t action s b y on e o f

th e Counci l members , th e Stat e o f Florid aCommissio n o n Ethic s pu t th e issu e int o prope r

perspective : "Whil e reasonabl e mind s may differ a s t o whethe r

reducin g airport

fiinctionality i s goo dpubli c policy , i t

i s unquestionabl y publi c policy , an da s suc h i s withi n th e purvie w o f

th e Cit y Counci l t o Determine . Accordingly , th e allegation s regardin g Respondent' s vote s an dothe r efforts , a s aCounci l member , regardin g th e Airport Maste r Plan , th e Chang e i n engineerin g firms, an dth e like , ar e legall y insufficien t t o alleg e aviolatio n o f

Sectio n 112.313(6) , Florid aStatutes. " Cit y Exhibi t

1 5 (In re : Su e Lang , Publi c Report an dOrde r

Dismissin g Complaint , Decembe r 10 , 2008 ) a

t 3 . Wit h respec t t o th e implicatio n i n th e Complain t that thos e Counci l member s wh o live dnear th e airport

too k actio n for

thei r persona l benefit , th e Commissio n state dtha t "Th e chang e in Airport activitie s canno t

b e sai dt o b e persona l t o th e Respondent , becaus e th e perceive dbenefit—reductio n i n nois e an dai r

traffic—woul db e share db y everyon e i n th e surroundin g area . Indeed , accordin g t o th e Complainant , Th e Responden t campaigned , an dwa s elected , o n thi s platform. " Id . a t 4 . "Nothin g i n th e complain t suggest s tha t

th e effec t o f Airport Developmen t

o n traffic , noise , o r propert y values wil l b e an y differen t for th e Responden t

tha n for an y o f th e resident s i n th e surroundin g neighborhoods. " Id . a t 5 . Thus , th e City' s complianc e with it s gran t assurance s mus t

b e judge do n th e actions , o r lac k o f actions , o f

th e Cit y Counci l a s awhole , no t b y th e action s o r

statement s o f

an y particular individua l Counci l members . Se e Boc aAirport , Inc . v . Boc aRato n Airpor t Auth. , FAA Docke t

No . 16-04-02 , 200 4 W L 528475 1 a t *1 5 (Fina l Decisio n an dOrder , Nov . 29 , 2004) .

-23 -C . TH E CITY' S RESPONS E T O SPECIFI C COUNT S

(1 ) Coun t

I : Venic e Je t

Cente r Ha s Faile dT o Stat e A Clai mTha t th e Cit y Ha s Violate dGran t

Assuranc e 1 . In Coun t I o f it s Complaint , Venic e Je t Cente r (VJC ) allege s that

Respondent , City o f Venice , ha s violate dGran t Assuranc e 1 , complianc e with Federa l Law . VJC' s theor y i s that th e City' s reftisa

l t o gran t VJ C permissio n t o buil dadditiona l hangar s o n VJC' s leasehol di s an illegal restrain t o f trad e i n violatio n o f

unspecifie dprovision s o f federal antitms t

law , an dtherefor e a violatio n o f

Gran t Assuranc e 1 . Thi s clai mfail s for four independen t

reasons . First , Gran t

Assuranc e 1 onl y applie s t o federal law s relatin g t o th e "application , acceptanc e o r us e o f Federa l fiinds " fo

r aparticular

project . Becaus e th e City' s reflisal t o approv e VJC' s hangar projec t di dno t relat e i n an y wa y t o th e application , acceptanc e o r us e o f federal fiinds. Gran t Assuranc e 1 simpl y doe s no t apply . Second , eve n i f

Gran t Assuranc e 1 someho w doe s appl y to thi s matter , VJC' s clai mmus t stil l fai l because , a s agovernmenta l entit y exercisin g it s governmenta l authorit y th e Cit y i s immun e froman y allege dviolatio n o f th e antitms t

laws . Third , eve n i f

Gran t Assuranc e 1 applies an deve n i f th e Cit y i s no t

immune , VJ C ha s faile dt o stat e aclai mthat th e City ha s violate dth e antitms t

law s b y no t

approvin g VJC' s reques t t o buil dadditional hangar s o n it s leasehold . Fourth , eve n assumin g VJ C ca n surmoun t thos e barriers , i t

ha s faile dt o provid e sufficien t evidenc e t o support

it s claim .

a ) Gran t

Assuranc e 1 Does No t

Appl y T o Thi s Cas e Becaus e Th e Disput e Regardin g VJC' s Hangar s Does No t Relat e T o th e Application . Acceptanc e an dUs e o f

Federa l Fund s Fo r

An y Project . Gran t Assuranc e 1 provide s tha t th e Airport

Sponso r "wil l compl y wit h al l applicabl e Federa l laws , regulations , executiv e orders , policies , guidelines , an drequirement s a s the y relat e t o th e application , acceptanc e an dus e o f Federa l fund s fo r

thi s projec t

" Complainant' s Exhibi t 2 a t p . 1 . (Emphasi s added) . B y it s terms , Gran t Conditio n 1 doe s no t

appl y t o ever y federal law -24 -that

ma y b e violated . I

t applies onl y t o federal law s that relat e t o "th e application , acceptanc e an d us e o f Federa l fiinds for

thi s project. " Indeed , th e lis t o f illustrativ e statute s i n Gran t Assuranc e I itsel f doe s no t includ e th e Sherman Ac t o r an y othe r

antitms t law ; th e example s al l relat e t o th e actua l us e o f

fiind s o r t o project-specifi c requirements , suc h a s complyin g with Nationa l Environmenta l Polic y Ac t (NEPA) . Th e FA A ha s confirme dthi s limite dapplicabilit y o f Gran t Assuranc e 1 i n Boc aAirport , Inc. , 200 4 W L 5284751 . I n that case , acomplainan t

allege dthat

crimina l activity , includin g th e receip t o f bribe s i n violatio n o f

1 8 U.S.C . § § 66 6 an d201(b) , improperl y influence dth e airport' s selectio n o f

a n entity t o develo p part

o f th e airport . Th e complainan t allege dthat

member s o f

th e airport authorit y ha dviolate dcertai n federal law s prohibitin g th e acceptanc e o f bribes . Th e FAA affirme dth e Director' s decisio n t o dismis s th e complaint , includin g specificall y th e allege d violatio n o f

Gran t Assuranc e 1 base do n violation s o f th e anti-briber y statute. Th e FA A foundthat Gran t Assuranc e 1 incorporate s onl y thos e law s tha t ar e a"requiremen t

for an y progra mo r

activity receivin g Federa l financial assistance. " Id . at 12 . Becaus e agenera l statut e barrin g briber y i s no t a specifi c requiremen t

for an y progra mreceivin g federal fiinding , th e FAA determine dtha t allegation s o f

briber y wer e beyon dth e jurisdictio n o f aPar t 1 6 complaint . Id. ^ Coun t I o f VJC' s complain t

suffer s th e sam e fatal flaw a s th e briber y clai mi n Boc aRaton . Complianc e with th e Sherma n Ac t o r othe r federal antitms t

law s i s no t

a"requiremen t

for an y progra mo r

activit y receivin g federal financial assistance. " No r d o the y fall withi n th e limite d

' Similarly , i n connectio n vrit h apropose dse t

o f modification s t o th e gran t assurances , th e FA A propose dt o make Gran t Assuranc e 1 agran t

conditio n applicabl e onl y t o th e specifi c grant . Notic e o f Modificatio n o f

Airpor t Improvemen t Progra mGran t

Assurance s an do f

th e Opportunit y t o Comment , 6 9 Fed . Reg . 52057 , 5205 8 (Aug . 24 , 2004) . Th e Notic e mad e clear

tha t th e propose dchange s wer e "no t intende dt o chang e th e manne r i n whic h gran t

agreemen t obligation s ar e enforced. " Id . Althoug h th e propose dchange s wer e neve r adopted , th e proposa l reflect s th e FAA' s imderstandin g tha t

Gran t Assuranc e 1 applie s onl y with respec t t o aparticula r

gran t awar dan di s no t

arestrictio n o n al l conduc t b y agran t

recipient . -25 -jurisdictiona l scop e o f Par t 1 6 a s set fort h i n 1 4 C.F.R . § 16.1 . The y ar e genera l economi c regulatio n that

i s simpl y beyon dth e scop e o f Part 16 . Moreover , eve n i f

th e Sherman Ac t

o r othe r federal antitms t

law s conceivabl y coul db e constme da s fallin g withi n th e scop e o f Par t 16 , VJ C ha s no t

an dcanno t

alleg e fact s that

woul d brin g th e allege dviolatio n her e withi n th e scop e o f Gran t Assuranc e 1 . VJC' s complain t relate s solel y t o th e City' s refiisa l t o approv e certai n hangar s VJ C propose dt o constmc t o n it s leasehold . Nothin g abou t

that actio n relate s t o th e City' s application , acceptanc e o r us e o f Federa l funds . Indeed , n o aspec t

o f VJC' s hangar

projec t was t o b e funde dwith Federal fiind s an dn o aspec t o f th e leas e with VJ C involve s th e us e o f Federal funds . Th e City' s actio n wa s adiscretionar y decisio n regardin g aprivat e lesse e an ddi dno t relat e i n an y wa y t o th e City' s us e o r receip t o f Federa l funds . O n thi s basi s alone . Coun t 1 shoul db e dismissed . A s with th e complainan t

i n Boc aRaton , VJ C attempt s t o us e Gran t Assuranc e 1 a s atoo l t o convert th e narro w Part

1 6 proces s int o an unbounde dfommfor th e litigatio n o f

an y allege d violatio n o f

an y federal statut e b y a

n airport sponsor , eve n i f

ther e i s n o connectio n betwee n th e allege dmisconduc t

an dth e application , receip t o r us e o f federal gran t

fiands . Th e expres s term s o f Gran t Assuranc e 1 an dPar

t 1 6 prohibi t

suc h aresult . Fo r

th e sam e reason s th e Directo r an dFAA dismisse dth e briber y claim s i n Boc aRaton , th e Directo r shoul ddismis s VJC' s antitms t claim s i n Coun t I o f it s Complaint . b ) Eve n If

A Sherma n Ac t

Clai mWer e Withi n Par

t 16' s Jurisdiction , Coun t

I o f VJC' s Complain t

Stil l Mus t

B e Dismisse dBecaus e Th e City' s Action s Wer e Governmenta l Act s Tha t

Ar e Immun e Fro mTh e Sherma n Act . Eve n i f VJC/Receiver' s federal antitms t clai mwer e justiciabl e i n aPart 1 6 proceeding . Coun t I mus t b e dismisse dbecaus e th e Cit y i s immun e fromsui t unde r th e Sherma n Act . A s a matte r o f law , therefore , th e FA A shoul ddismis s Coun t I o f VJC' s Complaint .

-26

-Here , th e Cit y i s clearl y immun e fromantitms t claims . Th e City i s immun e froman y clai m fo r damage s pursuan t

t o th e Loca

l Governmen t

Antitms t Act , 1 5 U.S.C . § § 34-36 . Th e City i s als o immun e fromclaim s for

injunctiv e o r

othe r relie f pursuan t t o th e stat e actio n immunit y doctrine , whic h provide s that

action s b y o r

pursuan t t o Stat e law ar e immun e fromchalleng e unde r th e antitms t laws . A s th e Suprem e Court state d" 'an y actio n that

qualifie s a s stat e actio n i s Ups o facto '

. . . exemp t

fromth e operatio n o f

th e antitms t

laws. ' " Cit

y o f Columbi av . Omni Outdoo r Advertising , Inc. , 11 1 S . Ct . 1344 , 135 3 (1991 ) (quotin g Hoove r v . Ronwin , 104 S . Ct . 1989 , 199 5 (1984)) . Action s b y loca l govemment s ar e considere d"stat e action " a s lon g a s th e activit y at issu e wa s authorize db y stat e law . Here , Florid alaw clearl y authorize s citie s t o leas e lan da t o r for airport s an dt o manag e th e us e o f airport property . Fla . Stat . § 332.08(2)(a ) ("T o adop t an damen d al l needfu l mles , regulations , an dordinance s for th e management , govemment , an dus e o f an y propertie s unde r

it s control....") ; § 332.08(3 ) ("t o leas e o r assig n for

ater mno t

exceedin g 3 0 year s t o privat e parties , an y municipa l o r stat e govemmen t

o r th e nationa l govemment , o r an y departmen t

o f eithe r thereof , fo r operatio n o r

us e consisten t

with th e purpose s o f

§ § 332.01-332.12 , space , area , improvements , o r equipmen t

o n suc h airport s .. . an dt o confe r th e privilege s o f concession s o f

supplyin g upo n it s airport s goods , commodities , things , services , an dfacilitie s ....") . Th e ke y issu e unde r th e stat e actio n immunit y doctrin e i s whethe r th e allegedl y anticompetitiv e conduc t

i s th e exercis e o f

a"'clea r articulatio n o f

astat e polic y t o authoriz e anticompetitiv e conduct' . . . " Omni Outdoo r Advertising , 11 1 S.Ct . at 135 0 (quotin g Hailli e v . Ea u Claire , 10 5 S.Ct . 1713 , 171 7 (1985)) . It i s not necessar y that

th e stat e specificall y o r

expressl y permit s anticompetitiv e conduct ; i t i s sufficien t

i f "suppressio n o f

competitio n i s a'foreseeabl e result ' o f wha t th e statut e authorizes. " Id . (quotin g Haillie , 10 5 S.Ct . a t 1718) . I n Omn i Advertisin g -27 -th e Cour

t conclude dthat

zonin g law s necessaril y limi t th e abilit y t o compete , includin g specificall y th e ability o f

ne w entrant s t o locat e i n thei r desire dlocation , an dar e therefor e immun e from challeng e unde r

th e antitms t

laws . Id . a

t 1350-51 . Court s hav e foun dthat

decision s b y airport s regardin g th e us e o f airpor t facilitie s b y lessee s an dothe r users ar e immun e fromantitms t liabilit y becaus e Stat e la w empower s th e airport proprietor s t o leas e land , se t term s an dcondition s for th e us e o f

th e airport

an dotherwis e exercis e th e power s o f

a n airport proprietor . E.g. , Interfac e Group , Inc . v . Massachusett s Por t Auth. , 81 6 F.2 d9 , 1 3 (1s t

Ci r 1987 ) (authority t o se t

term s an dcondition s for us e o f airport facilitie s authorize drestriction s o n whic h airline s coul dus e whic h terminals) ; Rectri x Aerodrom e Centers , Inc . V . Barnstabl e Municipa l Airpor t Com m'n , 53 4 F.Supp.2 d201 , 204- 5 (D . Mass . 2008 ) (genera l authority t o contro l us e o f airport include dauthorit y t o restric t numbe r o f entitie s sellin g aviatio n fuel) ; Susquehann aAre aReg' I Airpor t Auth. , 42 3 F . Supp . 2 d472 , 47 8 (M.D . Pa . 2006 ) (authorit y t o acquir e lan dimplie dpowe r t o limi t competitio n b y controllin g location s for competin g businesses) ; Hillma n Flyin g Serv. , Inc . v . Cit y o f Roanoke , 65 2 F . Supp . 1142 , 1145-4 6 (W.D . Va . 1987 ) (same) . Thes e case s al l recogniz e that i t i s reasonabl y foreseeabl e that th e genera l powe r

t o leas e land , regulat e th e us e o f a n airport an di n genera l operat e a

n airport wil l lea dt o decision s that may ten dt o suppres s competition . Becaus e an y suc h resul t floweddirectl y fro magran t o f stat e authority , suc h conduc t

wa s immun e fromth e antitms t laws . Here , Florid alaw expressl y authorize s th e Cit y t o ren t portion s o f

th e airport , t o regulat e th e us e o f th e airport

an dt o gran t

concession s for

th e provisio n o f

variou s aviation-relate dservice s an d products . Fla . Stat . § § 332.08(2)(a ) & 332.08(3) . It i s reasonabl y foreseeabl e that decision s o f

th e Cit y unde r

thos e grant s o f

powe r ma y suppres s competition . Moreover , t o VJC' s allegatio n that th e City favore dit s ow n hanga r operation s ove r

VJC' s propose dhangars , Florid astatute s expressl y permi t th e Cit y t o leas e al l o r

portion s o f

th e Airport

t o municipal , stat e o r

federal agencies . -28

-Clearly , it i s reasonabl y foreseeabl e that apubli c lesse e migh t

enjo y rights that

aprivat e entity doe s not . Indeed , th e FAA ha s lon g recognize dthat airport proprietor s ma y exercis e aproprietar y powe r t o provid e categorie s o f

aeronautica l service s o n an exclusiv e basis , thereb y foreclosin g competitio n b y others . Je t

1 Center , Inc . v . Naple s Airpor t Authority , FA A Docke t

No . 16-04-0 3 (Fina l Agenc y Decisio n Jul y 15 , 2005 ) a t 14-16 . Accordingly , th e Cit y i s immun e fromantitms t liability an d Coun t 1 o f VJC' s Complain t

mus t b e dismissed . c ) Eve n i f

AA S ha s Jurisdictio n Ove r VJC' s Antitms t

Claim , An dEve n If

Th e Cit y I s No t

Immun e Fro mAn y Antitms t Claim , Coun t

I Mus t Stil l B e Dismisse dBecaus e VJ C Ha s Faile dT o Properl y Plea dA Violatio n O f Th e Sherman Act . VJC/Receiver' s antitms t

clai mi s s o vagu e an dpoorl y describe dthat it mus t b e dismissed . I

t i s axiomati c that

th e fundamental purpos e o f apleadin g i s t o pu t

th e responden t

o n notic e o f

th e claim s asserte dagains t

i t s o th e responden t

ma y prepar e it s defense . Thi s i s particularl y importan t i n th e contex t

o f aPart 1 6 complain t

because , i n th e absenc e o f discover y an dpretria l proceedings , th e responden t

mus t bas e it s defens e solel y o n wha t i s se t fort h i n th e complain t

an dsupportin g documents . A vaguely state dcomplain t makes i t al l bu t impossibl e for

aresponden t

t o moun t a n appropriat e defense . First , VJC/Receiver' s antitms t clai mstate s o n tha t

th e City' s "refiisal t o gran t VJ C th e right t o constmc t

an dren t th e hangar s i s predator y conduc t an dan illega l restrain t

o f trad e i n violatio n o f 1 5 U.S.C . ^\,e t

seq. " Complain t

a t T f 75 . O n it s face , thi s clai mi s s o vagu e an dbroa da s t o preclud e th e abilit y t o respond . First , VJ C doe s no t indicat e what

antitms t law s it believe s th e City ha s violated . Th e blanke t citatio n t o "1 5 U.S.C . § 1 , etseq. " encompasse s al l federal antitms t laws , includin g combination s i n resfrain t o f trade , monopolizatio n claims , tyin g claims , predator y pricin g claims , violation s o f

th e Robinson-Patma n Ac t an dever y othe r

possibl e antitms t

theor y cognizabl e unde r federal law . Eac h o f

th e man y theorie s o f

antitms t violatio n require s certai n factual showing s an dha s it s ow n bod y o f

commo n la w that

mus t b e applie dt o eac h case . Withou t bein g informe da s -29

-t o whic h theory o r theorie s VJ C i s relyin g on , th e Cit y i s unabl e t o develo p areasone drespons e t o th e Complaint . Unles s thi s clai mi s dismissed , th e Cit y woul db e place di n th e impossibl e positio n o f havin g t o identif

y every potentiall y applicabl e antitms t theory , articulat e what

it surmise s VJC' s argumen t woul db e unde r

eac h suc h theory , an dthe n provid e alega l an dfactual respons e t o eac h suc h theory . Neithe r

Part 1 6 no r fiindamental principle s o f faimes s an ddu e proces s allo w suc h a result , whic h woul donl y encourag e future disgmntle dairport tenant s t o includ e suc h vaguely

worde dclaim s i n thei r

Part 1 6 complaints . Second , VJC/Receiver' s simpl e assertio n that th e City' s refiisal t o approv e hangar s violate s som e antitms t

law fail s t o stat e aclai munde r an y antitms t

law . Without

delvin g int o th e particular s o f every antitms t

theory , it i s clear that VJ C ha s no t

an dcanno t

mak e ke y allegation s o f

fact :

• VJC/Receive r

ha s no t alleged , o r

provide dfact s showing , that th e City i s aparty t o a combinatio n i n resfraint

o f trad e necessar y for

aclai munde r

Sectio n 1 o f

th e Sherma n Act . Se e 1 5 U.S.C . § 1 . • VJC/Receive r

ha s no t alleged , o r

provide dfact s showing , that th e City i s a monopolis t

i n th e relevan t

marke t o r that i t ha s engage di n exclusionar y conduc t a s define di n Sectio n 2 o f

th e Sherma n Ac t

a s necessar y t o sho w amonopolizatio n claim . Se e II I P . Areed a& H . Hovencamp Antitrus t La w f f 50 0 e t seq . (2002) . Indeed , VJ C assert s that

th e Cit y alread y compete s with VJ C i n th e provisio n o f hangar s fo r

smalle r aircraft , but

that VJC , throug h th e hangar project , intend s t o expan dint o ane w area , wher e th e Cit y doe s no t compet e - provisio n o f

hangar s t o mediu msize daircraft . (Complain t a t ^ 9 6 an dComplainant s Exhibi t 10) . • Althoug h VJC/Receive r use s th e wor d"predatory, " VJC/Receive r doe s no t allege , o r provid e fact s showing , tha t th e City ha s price dan y leas e o r othe r goo do r servic e belo w cos t

a s require dt o articulat e apredator y pricin g scheme . H I P . Areed a& Hovencam p Antitrus t

La w at ^ 723 . • VJC/Receive r

ha s no t alleged , o r

provide dfact s t o support a n allegatio n of

, an y antitms t injury (i.e . injur

y t o competition) . II A P . Areed a& H . Hovencamp Antitrus t La w ^ 337 . Becaus e VJC/Receiver' s allegatio n that th e Cit y ha s someho w violate dth e antitms t law s i s s o vagu e an doverbroad , an domit s ke y allegation s necessar y t o support an y antitms t

theory , Coun t

I shoul db e dismissed .

-30 -d ) Eve n i f VJC/Receive r

Can Overcom e Al l o f

Thos e Hurdles . Coun t

I Mus t Stil l B e Dismisse dBecaus e VJC/Receive r Ha s Faile dT o Presen t

Fact s t o Support It s Vagu e Antitms t

Claim . I n additio n t o failin g t o articulat e avali dclai munde r an y antitms t

theory , VJC/Receive r present s almos t

n o fact s i n support

o f it s antitms t

claim . Th e onl y evidenc e that VJ C ha s presente d i n purporte dsupport

o f it s antitms t

claim s ar e document s quotin g individua l counci l member s regardin g th e possibility o f th e Cit y acquirin g VJC/Receiver' s leasehol dan doperatin g it s ow n hangars . Thi s evidenc e show s nothing , however . First , thos e allegations , eve n i f take n a s tme , coul dno t in themselve s support

an antitms t

violation . No t

onl y ar e the y insufficien t for th e reason s discusse dabove , bu t

i n thi s cas e th e Receive r admit s h e i s trjdn g t o sel l VJ C t o abuye r wh o wil l operat e hangar s o n th e leasehold . Thus , eve n i f th e Cit y di dinten dt o acquir e th e lease , it woul d onl y b e tryin g t o bu y th e ver y thin g VJC/Receive r i s attemptin g t o sell . Tha t canno t b e a n antitms t violation . Second , an dindependently , VJC/Receiver' s exclusiv e relianc e o n statement s o f individua l counci l member s fail s a s amatte r o f law becaus e Florid ala w i s clear that municipal bodie s suc h a s th e Cit y ac t

onl y throug h formal decision s o f th e dul y enacte dgovemin g bod y an dca n b e boun d onl y b y th e officia

l acts o f suc h bodies . Tur

k v . Richard , 4 7 So.2 d543 , 54 4 (Fl . 1950) ; Bett s v . Cit y ofEdgewater , 64 6 F . Supp . 1427 , 143 5 (M.D . Fl . 1986) . Th e FA A recognize s thi s principl e too . On e reaso n for

dismissin g th e Part

1 6 complain t

i n Boc aAirport . Inc . wa s tha t th e allegation s o f briber y relate donl y t o asingl e boardmembe r whe n "[t]h e Authorit y onl y acts a s acollectiv e body , not throug h th e statement s o r action s o f

individuals. " Boc aAirpor t Inc. , 200 4 WL 528475 1 at 14 . Here , VJC/Receive r

ha s not an dcanno t

presen t an y evidenc e tha t

th e Cit y ha s attempte dt o acquir e VJC' s leas e o r

t o establis h hangar s i n competitio n with VJC. ^ N o suc h actio n ha s bee n

* Moreover , FA A unequivocall y allow s airpor t sponsor s t o provid e an y aeronautica l service s the y desir e t o provide . Je t I Center , supra , a t

14-16 . Thus , federa l la w woul dno t preclud e th e Cit y fi"ombuildin g hangar s eve n i f the y compete d with VJC' s hangars . -31

-approve do r authorize db y th e City Council . Becaus e VJC/Receiver' s antitms t theory relie s entirel y o n statement s o f

individua l Counci l member s an dno t o n any official ac t

o f th e Counci l itself

. Coun t I i s fatall y flawedan dmus t b e rejected . (2 ) Coun t

II : Th e Cit y Ha s No t

Violate dAssuranc e 5 , Preservin g Right s an d Power s a ) Substantiv e Standar d Gran t Assuranc e 5 , Preservin g Right s an dPowers , prohibit s airport sponsor s fromtakin g actio n tha t woul ddepriv e the mo f

th e rights an dpower s necessar y t o performth e term s o f th e gran t agreements . I

t require s th e airport

sponso r no t t o sell , lease , encumber , o r otherwis e transfe r

o r dispos e o f

an y part o f it s titl e o r

othe r interest s i n it s propert y withou t th e prio r approva l o f

th e FAA . I n particular . Gran t

Assuranc e 5 prohibit s th e grantin g o f propert y interest s t o entitie s o n th e airport that coul drestric t

th e airport

sponsor' s abilit y t o preserv e it s rights an dpower s t o operat e th e airport i n complianc e with th e Federa l obligations . Complainant' s Exhibi t 2 a t 4 . I t i s fundamental tha t

aviolatio n o f

Gran t Assuranc e 5 require s tha t th e sponso r

transfe r som e righ t

o r powe r t o anothe r

party . A mer e proposal , o r issuanc e o f

reques t for bids , doe s no t transfe r rights, an ds o canno t

violat e Gran t

Assuranc e 5 : A request-for-proposal s doe s no t creat e atransfe r

o f rights o r powers . Eve n i f th e request-for-proposal s include dan optio n t o bu y airport real propert y .. . th e request-for-proposals , itself , woul dno t

transfe r rights an dpower s i n violatio n o f gran t assuranc e 5 . Thermc o Aviation , Inc. , 200 7 W L 189382 1 at *1 3 (emphasis added) . T o sho w aviolatio n o f Gran t Assuranc e 5 , acomplainan t mus t alleg e that

som e entity ha s a

n outstandin g right

o r clai mo f right that woul dinterfer e wit h th e airport sponsor' s abilit y t o fulfill it s obligation s imde r th e gran t assurances . Boc aAirport , Inc . v . Boc aRato n Airpor t Auth. , FA A Docke t

No . 16-00-10 , 200 3 W L 196385 9 at

*3 8 (Fina l Decisio n an dOrder , Mar . 20 , 2003) .

-32 -I

n Boc aAirport , th e FA A foun dn o violatio n o f Gran t Assuranc e 5 wher e complainan t faile d t o alleg e that

"an y entity ha s a

n outstandin g right

o r clai mo f right tha t woul dinterfer e wit

h th e Authority' s performance . Ther e i s nothin g t o indicat e th e Authorit y ha s take n o r permitte da

n actio n tha t woul doperat e t o depriv e i t o f an y o f th e rights an dpower s necessar y t o perfor man y o r al l o f th e terms , conditions , an dassurance s i n it s gran t agreements. " Id . b ) N o Actio n o r

Lac k o f Actio n b y th e Cit v Cite db v VJC/Receive r Ha s Diminishe dth e Citv' s Right s an dPower s Necessar y t o Ensur e it s Ability t o Compl y with it s Airport

Sponso r Gran t Assurances . Non e o f th e City' s action s that

VJC/Receive r

allege s ar e violation s o f

Assuranc e 5 woul d diminis h o r

undercu t th e Airport

Sponsor' s rights an dpower s necessar y t o carry ou t it s gran t assuranc e obligations . I

n fact , th e action s o r

failure t o ac t

asserte db y VJC/Receive r preserv e th e City' s powers , an dd o not giv e the mawa y t o an y othe r entity . Decisively , VJ C doe s no t alleg e o r provid e an y evidenc e showin g that th e City ha s transferre dan y right o r powe r t o an y party . O n it s face , therefore , VJC' s clai munde r Gran t Assuranc e 5 fail s an dshoul db e dismissed . VJC/Receive r

specificall y assert s that

th e City' s allege daction s includin g "it s attempt s t o downgrad e th e Airport

t o aB-I I classification, ^ repeatedl y denyin g VJ C th e right t o improv e it s leasehold, an dconstmin g VJ C leas e narrowl y a s no t permittin g constmctio n o f th e hangar s i s a violatio n o f

Gran t Assuranc e No . 5. " In othe r words , VJC/Receive r

argue s that

th e City , b y determinin g that

it , rathe r tha n VJC/Receiver , can establis h th e future developmen t an doperatio n o f th e Airport , ha s deprive ditsel f o f it s rights an dpowers . Eve n i f th e Cit y ha dtake n th e action s allege db y VJC/Receiver , thi s i s th e exac t opposit e o f

deprivin g th e Cit y o f

it s rights an dpower s - it i s th e exercis e o f

thos e powers .

' VJC' s allegatio n abou t

"downgrading " th e airpor t t o aB-I I classificatio n i s bot h irrelevan t an dunsubstantiated . Ther e i s n o evidenc e i n th e recor dtha t an y desir e t o "downgrade " th e Airpor t t o aB-I I classificatio n playe dan y rol e i n an y City decisio n regardin g VJC . Indeed , ther e i s n o evidenc e o f an y official Cit y actio n t o attemp t an y suc h "downgrade. " -33 -Th e fallac y i n VJC/Receiver' s argumen t ca n b e see n b y applyin g Assuranc e 5(a ) i n it s entirety . That

provisio n state s tha t

th e airport

sponso r "wil l ac t promptl y t o acquire , extinguis h o r modif y an y outstandin g right s o r claim s o f right o f other s whic h woul dinterfer e with suc h performanc e [o f

th e gran t assuranc e obligations ] b y th e sponsor. " VJC/Receive r ha s no t an dcanno t identif y an y "others " t o who mth e Cit y ha s conferre dth e power s th e Cit y supposedl y ha s give n away , an dfromwho mth e Cit y woul db e obligate dt o recaptur e suc h powers . Th e onl y entity seekin g t o tak e away power s fromth e City , a s airport proprietor , i s VJC/Receiver . Th e Cit y ha s no t allowe dVJC/Receive r

t o d o so . Ther e i s n o violatio n o f Assuranc e 5 . T o th e confrary , FA A ha s foun dthat Gran t Assuranc e 5 specificall y allow s th e airport sponso r t o requir e evidenc e tha t

apotentia l commercia l operato r ha s th e resource s t o operat e a goin g commercia l enterpris e at th e airport : Assuranc e 5 reinforce s th e [airport sponsor's ] rights an dresponsibilitie s t o pla n an dallocat e propert y accordin g t o us e that reflect s th e interes t

o f al l users . I t als o provide s for

th e airport

sponso r t o choos e it s ow n manne r t o protec t it s revenu e strea man dmaximiz e it s contro l o f airport commercia l services . Thi s mean s that th e sponso r

can requir e evidenc e tha t apotentia l commercia l operato r

ha s th e resource s t o operat e agoin g commercia l enterpris e o n th e airport . Buffal o Je t

Ctr. , Inc . v . Niagar aFrontie r Transp . Auth. , FA A Docke t No . 16-98-07 , 199 8 W L 108338 3 a

t *1 6 (Recor do f

Determination , Augus t

19 , 1998) . FA A foun dn o violatio n o f Gran t Assuranc e 5 whe n th e airport sponso r require dproo f

o f aprospectiv e commercia l operator' s ability t o obtai n financing for

constmctio n o f

ne w facility . Id . Similarl y here , ther e can b e n o violatio n o f Gran t Assuranc e 5 becaus e th e Cit y ha s insiste dthat VJ C compl y with th e City' s Minimu m Standards , includin g demonstratin g t o th e City' s satisfactio n tha t afinancially an dtechnicall y capabl e entit y with constmc t an doperat e th e hangars . That i s th e cas e here ; th e Cit y ha s no t take n o r permitte dan y actio n tha t deprive s i t

o f it s necessar y rights an dpowers . -34 -I

n contrast , th e FA A ha s foun dsponsor s i n violatio n o f Gran t Assuranc e 5 when , for example , the y hav e entere dint o lease s that limi t th e sponsor' s ability t o provid e utilit y easement s o r t o maintai n an dinstal l easement s o n leasehold s i f necessar y to serv e othe r

part s o f th e airport : A sponso r

mus t hav e contro l o f

it s lan di n orde r

t o support developmen t

an dgrowth o f

th e airport . .. . failure t o retai n th e absolut e right

o f acces s an dth e right

t o gran t utility easement s an dt o maintai n an dinstal l utilitie s [violate s Gran t Assuranc e 5] . Thes e ar e essentia l rights integra l t o th e operatio n an ddevelopmen t o f an y publi c us e airport . Bosto n Ai r

Charte r v . Norwoo dAirpor t

Comm'«. , FAA Docke t

No . 16-07-03 , 200 8 W L 4186034 , a t '''18 , * 1 9 (Fina l Decisio n an dOrder , Augus t 14 , 2008) . Disposin g o f airport propert y withou t FAA' s permissio n i s als o violatio n o f Gran t Assuranc e 5 . M . Danie l Care y an dClif f Davenpor t

v . Afton-Lincol n Count

y Mun . Airpor t

Join t Power s Bd. . FAA Docke t No . 16-06-06 , 200 7 W L 43063 0 a t *40-4 1 (Director' s Determination , Jan . 19 , 2007) . A violatio n o f

Gran t Assuranc e 5 ma y als o b e foun dwher e th e airport sponso r give s vet o o r approva l authorit y for

airport decision s t o loca l o r

communit y groups , i f

th e sponso r

actuall y relinquishe s decision-makin g powe r t o othe r entities . Here , althoug h VJC/Receive r allege s that certai n member s o f

th e Cit y Counci l ra n o n aplatformsuggestin g slowe r growt h for

th e Airport , an dhav e sough t

t o implement

thei r platformonc e the y wer e elected , ther e ha s bee n n o allegation , an dcertainl y n o evidence , tha t the y tume dan y decision-makin g authorit y ove r t o an outside group . In contrast , th e City Counci l abolishe da n airport advisor y group , thu s makin g clear that authority ove r th e Airport

reside s with th e Cit y Counci l - th e govemin g bod y o f th e Cit y o f

Venice , th e airport sponsor . In ligh t

o f thes e circumstances , th e Directo r shoul dfollo w th e finding mad e i n Por t o f Anacortes : [T]her e i s insufficien t evidenc e i n th e administrativ e recor dt o sugges t th e Port actuall y relinquishe dan y decision-makin g power s t o th e City , loca l community , o r specia l interes t

group . Therefore , th e Directo r finds th e Responden t

i s no t i n violatio n o f

Federa l Gran t Assuranc e No . 5 , Preservin g Right s an dPowers . However , th e -35 -Directo r woul dadvis e th e Port

t o exercis e car e in placin g contingencie s fo

r Airport developmen t

o n approval fromoutsid e sources , suc h a s communit y special interes t groups . Ji mMarty n v . Por t

o f Anacortes , FA A Docke t

No . 16-02-03 , 200 3 W L 2100209 9 a t *2 6 (Director' s Determinatio n Apri l 14 , 2003) . I n additio n t o vet o o r

approva l authority , airport sponsor s may violat e Gran t Assuranc e 5 b y enterin g int o agreement s that resul t i n requirin g th e sponso r

tak e action s that

plac e i t in noncomplianc e wit

h it s Federal obligations . Pacifi c Coast Flyers , Inc. , 200 5 W L 190051 5 a t *15 . Again , ther e i s n o allegation , an dcertainl y n o proof , that thi s happene di n th e instan t case . No t issuin g apermi t

for hangar constmctio n simpl y doe s no t constitut e transfe r

o f aright o r powe r that th e Cit y i s obligate dt o retai n i n orde r t o support

an dcontro l developmen t an dgrowth o f

th e airport . c ) Leas e for Non-Airpor t

Property . In Paragrap h 5 4 o f

th e Complaint , VJC/Receive r allude s t o alette r

sen t fro mFA A t o th e Airport manage r informin g hi m"tha t

Responden t

ha dimproperl y entere dint o anon-aeronautica l leas e for Airport propert y withou t

obtainin g prio r

approva l fromth e FAA. " VJC/Receive r assert s tha t "Respondent' s executio n o f th e leas e withou t

FAA approva l was i n violatio n o f FAA law. " Complain t

a t ^ 54 . VJC/Receive r

ha s no t indicate dho w i t

ha s bee n "directl y an dadversel y affected " b y th e non-aeronautica l leas e issue . Boc aAirport , Inc . at 10 . Th e onl y "evidence " submitte db y VJC/Receive r

i s alette r fromth e AD O raisin g certai n concem s with aleas e o f airport propert y for non-aeronautica l use . Complainant' s Exhibi t 1 8 (3/3/0 9 AD O Letter) . Tha t lette r offere d comment s b y th e AD O requestin g tha t th e Cit y provid e further

informatio n regardin g th e metho dt o determin e th e leas e rate , includ e certai n "standar dclauses , designe dt o protec t airport interest s i n th e lease , an dexecut e an agreemen t wit h th e Airport

detailin g th e amoun t

o f leas e proceed s t o b e -36

-transferre dt o th e Airport Enterpris e Fund , an dstatin g what responsibility , i f

an y th e Airport

ha s t o maintai n thei r

portio n o f

th e leasehold. " Id . First , VJC/Receive r

doe s no t hav e standin g t o rais e thi s issu e - i t i s no t a n aeronautica l use r seekin g t o us e th e subjec t parce l for

aeronautica l use . Eve n i f ther e wer e a

n imprope r

conversio n o f a n aeronautica l parce l t o non-aeronautica l us e - whic h i s no t th e case , basedo n th e evidenc e i n th e recor d- it

woul donl y serv e t o artificiall y inflat e othe r aeronautica l us e parcels , suc h a s VJC/Receiver's , becaus e th e sam e leve l o f aeronautica l deman dwoul db e sprea dacros s fewe r parcel s o f land . Thus , no t

bein g abl e t o demonstrat e that i t ha s bee n harmed , VJC/Receive r doe s no t hav e standin g to rais e th e issue . VJC/Receive r

makes aweak

attemp t t o establis h standing . Althoug h ^ 8 o f th e Complain t

i s labele d"Jurisdictio n an dStanding, " th e paragraph , i n fact , doe s no t addres s standing . Late r

i n th e complaint , ^ 68-6 9 appear t o assert standin g becaus e VJ C pay s ren t t o th e airport . However , thi s establishe s standin g t o assert an allegatio n o f

revenu e diversio n - whic h i s no t a t issu e here . 1 4 C.F.R . § 16.23(a) . Althoug h ^ 6 8 include s th e term"revenu e diversion, " i t appear s t o b e cite da s on e o f th e "lega l duties " o f

th e City , and , i n an y event , th e Complain t set s fort h n o fact s o r

specifi c allegatio n o f

revenu e diversion . Secondly , th e Cit y i s workin g with th e FA A AD O t o addres s th e issue s identifie di n th e letter . "[G]ran t

assurance s ar e not

violate dwhe n th e airport sponso r takes actio n t o correc t

curren t o r potentia l violation s o f

it s federal obligation s du e t o on e o r mor e provision s o f

it s agreement s with atenant , an dtakin g suc h actio n i s th e ver y natur e o f complyin g with gran t

assuranc e 5. " Platinu m Aviation , 200 7 W L 485432 1 at *29 . Thus , eve n i f

VJC/Receive r

wer e entitle dt o brin g a

n actio n relatin g t o thi s issue , whic h i t i s not , th e fac t

that th e Airport

sponso r i s workin g with th e AD O t o resolv e th e issue s remove s i t fromth e real mo f

aPart 1 6 enforcemen t

action . Se e als o Thermc o "VJ C .. . i s directl y an dsubstantiall y affecte db y th e City' s noncomplianc e with it s lega l dutie s unde r th e AI P an d revenu e diversion. " Complain t ^ 68 . -37 -Aviation , FA A Docke t No . 16-06-0 7 a

t 2 6 (Directo r

wa s correc t

i n usin g hi s discretio n no t t o find City non-complian t

whe n correctiv e actio n u s unde r way ; citin g Par

t 1 6 decision s that

"speak to th e impor t o f curren t compliance") . d ) Th e VJ C Leas e Wa s No t Approve db y th e FAA . O n th e fac e o f

Assuranc e 5 , th e onl y potentia l violatio n committe db y th e Cit y i s th e VJ C leas e itself

, whic h th e Cit y execute dwithou t FA A approva l (arguabl y contrar y t o 5(b)) . I f VJC/Receive r

seek s a n FA A determinatio n tha t th e VJ C leas e wa s improperl y entere dint o becaus e it wa s no t approve db y FAA , th e City request s tha t FA A provid e guidanc e o n whethe r terminatio n o f th e VJ C leas e woul drender a s moo t an y suc h complianc e concems . (3 ) Coun t

III : Operatin g an dMaintainin g th e Airpor t i n Saf e Conditio n Coun t III o f th e Complain t

allege s that

Venice' s refiisa

l t o permi t

th e constmctio n o f hangar s violate s Gran t

Assuranc e 1 9 pertainin g t o Operation s an dMaintenance . Thi s argumen t i s frivolou s o n it s face , sinc e i t i s wel l establishe dtha t

Gran t Assuranc e 1 9 ha s n o applicabilit y to th e constmctio n o f

ne w facilitie s an donl y applie s t o th e operatio n an dmaintenanc e o f existin g facilities . Gran t Assuranc e 1 9 provides , in pertinen t part , that : "Th e airport

an dal l facilitie s whic h ar e necessar y t o serv e th e aeronautica l user s o f th e airport

.. . shal l b e operate dat

al l time s i n asaf

e an dserviceabl e conditio n an di n accordanc e with th e minimu mstandard s a s ma y b e require do r prescribe db y applicabl e Federal , stat e an dloca l agencie s for maintenanc e an doperation. " (emphasis added. ) Complainant' s Exhibi t

2 at p . 7-8 . Th e discussio n o f

th e sponsor' s dut y t o maintai n an doperat e it s airport i n FA A Orde r 5190.6A , Airpor t

Complianc e Requirements , make s i t clear that th e dut y onl y applie s t o existin g facilities . Gran t

Assuranc e 1 9 "applie s t o al l airpor t facilitie s show n o n acurren t Airport Layou t Plan (ALP ) whic h wer e initiall y dedicate dt o aviatio n use. " Id . a t p . 14 . No t

onl y ar e th e propose d -38

-hangar s no t show n o n th e curren t

ALP , but th e AL P depict s non-compatibl e aeronautica l developmen t

o n th e propose dhangar

site . Further , "th e obligatio n t o maintai n th e airport doe s no t exten dt o majo r

rehabilitatio n o f

afacility that

ha s becom e unusabl e du e t o norma l an d unpreventabl e deterioratio n o r throug h acts o f

God. " Id . a

t p . 15 . Clearly , i f

a n airport sponso r i s no t require dt o rebuil dexistin g facilitie s pursuan t t o Gran t Assuranc e 19 , i t

i s no t require dt o approv e entirel y ne w facilitie s unde r th e assurance . I n acas e involvin g a

n allegatio n similar

t o th e clai mhere , that

th e airport

was violatin g Gran t Assuranc e 1 9 b y "no t

constmcting , developin g an doperatin g th e facilitie s deeme dnecessary b y th e Authorit y an dit s consultants...whic h indicate dthat al l remainin g aviatio n us e developmen t propert y o n th e airport

shoul db e focuse do n providin g additiona l hangar space, " th e FAA responde db y statin g th e Complainan t ha d" abasi c misunderstandin g o f th e Respondent' s Federa l obligation s establishe db y Gran t Assuranc e No . 19 . Th e purpos e o f Gran t Assuranc e No . 19(a) i s t o ensur e existin g facilitie s tha t serv e th e aeronautica l user s o f th e airport

wil l b e operated , at

al l times , in asaf e an dserviceabl e condition. " (emphasi s added. ) Boc aAirport , Inc. , 200 1 W L 43861 9 a t *2 1 -22 . Se e als o Platinu mAviation , 200 7 W L 4854321 . Anothe r proceedin g directl y o n poin t i s Adventur e Aviation , 200 3 W L 2269692 3 a t *12 . There , th e FAA hel dthat : "...th e responsibilitie s unde r Gran t Assuranc e 19 , Operatio n an d Maintenance , fo

r a n airport owne r t o preserv e an dmaintai n airport facilitie s i n asaf

e an d serviceabl e condition.. . i s acontinuin g obligatio n but i s restricte dt o onl y airpor t facilitie s show n o n acurren t Airpor t Layou t Pla n (ALP ) tha t

wer e initiall y dedicate dt o aviatio n use . " (emphasi s added) . Here , no t

onl y ar e th e hangar s whic h Complainan t desire s t o b e approve dno t o n th e curren t ALP , bu t the y conflic t

with othe r

aeronautica l use s depicte do n th e current , FAA-approve dALP . Accordingly , Coun t

3 o f th e Complain t

shoul db e dismissed .

-39

-(4 ) Coun t IV : Unjus t

Economi c Discriminatio n a ) Substantive Standar d Gran t Assuranc e No . 22 , Economi c Nondiscriminatio n implement s th e provision s o f 4 9 U.S.C . § 47107(a)(1 ) throug h (6) , an drequire s th e airport sponso r t o "mak e th e airport

availabl e for publi c us e o n reasonabl e term s an dwithou t unjus t discriminatio n t o al l types , kind s an dclasse s o f aeronautica l activities , includin g commercia l aeronautica l activitie s offerin g service s t o th e publi c a t th e airport. " In orde r t o sustai n aclai mo f

unjus t discriminatio n i n violatio n o f Gran t Assuranc e 22 , Economi c Nondiscrimination , acomplainan t "mus t provid e persuasiv e evidenc e tha t asimilarl y situate duse r

base da t th e Airport

o r on e wantin g t o provid e th e sam e servic e th e complainan t i s proposin g ha s receive dpreferentia l treatmen t vis-a-vi s th e complainant. " Platinu mAviation , 200 7 W L 4854321 , a

t *51 . Similarly , FAA' s Airport Complianc e Requirement s Orde r 5190.6 A (1989 ) ("Complianc e Handbook" ) Chapte r

4 , Sectio n 4 ("Availabilit y o n Fai r an dReasonabl e Terms") , whic h provide s guidanc e o n Gran t

Assuranc e No . 22 , state s tha t th e owne r

o f afederally-assiste dairport mus t operat e th e airport

"fo r th e us e an dbenefi t

o f th e public, " an dmak e i t

availabl e "t o al l types , kinds , an dclasse s o f

aeronautica l activit y o n fair an dreasonabl e term s an dwithou t unjus t discrimination. " Complianc e Handboo k

at Paragrap h 4-13 . A fiindamental principl e i s "th e obligatio n t o treat i n a unifor mmanne r

thos e makin g th e sam e o r simila r us e o f th e airport. " Steere , 200 4 W L 319820 9 a t *11 , citin g Complianc e Handboo k ] | 4-14(a)(2 ) an d3-1 . Complianc e Handboo k

14-1 5 cover s availabilit y an dus e o f lease dspace : Th e prim e obligatio n o f

th e owne r

o f afederally-assiste dairport i s t o operat e i t

for th e us e an dbenefi t

o f th e public . .. . Whil e th e owne r i s not require dt o constmc t

hangar s an d termina l facilities , i t

ha s th e obligatio n t o mak e availabl e suitabl e area s o r spac e o n -40 -reasonabl e term s t o thos e wh o ar e willin g an dotherwis e qualifie dt o offe r flight service s t o th e publi c .. . o r

support service s t o aircraf

t operators . Thi s mean s that unles s it undertake s t o provid e thes e service s itself , th e airport

owne r ha s aduty t o negotiat e i n goo dfait h fo r th e leas e o f suc h premises a s may b e availabl e for th e conduc t

o f aeronautica l activities . Id . ^ (emphasi s added) . Remarkably , VJC/Receive r provide s n o evidenc e t o support it s assertio n i n Paragrap h 9 3 that "Responden t

ha s permitte dothe r

tenant s t o buil dan dleas e ou t hangar s t o aircraf

t operators. " I

t ha s no t identifie dan y othe r

tenan t that ha s bee n allowe dt o buil dan dleas e out hangar s t o aircraf

t operators , muc h les s provide devidenc e t o demonstrat e that thi s i s th e case . Sinc e th e complainan t ha s a n obligatio n t o provid e persuasiv e evidenc e o f suc h discriminator y treatment , th e utte r lac k o f any evidenc e o n thi s poin t mean s that

VJC/Receiver' s clai mo f unjus t economi c discriminatio n mus t fail . b ) VJ C i s No t Willin g An dOtherwis e Qualifie dt o Buil dan dLeas e Hangar s a t th e Airport . VJC/Receive r

echoe s th e Complianc e Handboo k i n statin g that

"Responden t

ha s a n obligatio n t o mak e suitabl e area s o r spac e availabl e o n reasonabl e term s t o thos e wh o ar e willin g an dotherwis e qualifie dt o offe r th e neede dservices. " Complain t a t ^ 89 . Th e Complain t

cite s th e fact that it s leas e allow s it

t o "conduc t

an y commercia l aeronautica l activit y permitte dunde r th e Minimu mStandard s for

Commercia l Aeronautica l Activitie s at Venic e Municipa l Airport ... " Complain t

a t ^ f 13 . However , becaus e th e "minimu mstandard s document s [are ] incorporate dint o th e lease, " (Complain t

a t T ) 14 , Complainant' s Exhibi t 3 (VJ C Leas e a

t p . 8 § 14)) , al l o f

th e term s o f th e Minimu mStandard s apply .

c ) VJ C Mus t

Compl y with th e Airport' s Minimu mStandards . Which Includ e Demonsfratin g t o th e City' s Satisfaction , th e Financia l Capabilit y t o Carry Ou t th e Projec t

an dCit y Approva l o f

th e Locatio n for

Hangar Development .

-41

-I

n it s informal complaint , VJC/Nadel , quote dextensivel y fromth e Airport' s minimu m standards , bu t

no t th e provision s requirin g proo f o f financial viabilit y an dallowin g th e Cit y t o selec t th e locatio n fo

r different type s o f aeronautica l improvements . Similarly , th e Complain t selectivel y cite s t o provision s i n th e City' s Minimu mStandards . Complain t a t THI13 , 14 , an d19 . However , th e Minimu mStandard s incorporate db y referenc e int o th e lease , an dupo n whic h VJC/Nade l an dVJC/Receive r rel y for othe r purposes , clearl y stat e i n § 7 A that "N o perso n shal l us e th e airpor t o r an y portio n thereo f

o r an y o f it s improvement s o r

facilitie s for

commercial , business , o r aeronautica l activitie s withou t first complyin g with thes e Standard s an dobtainin g th e require d approval an dwritte n consen t associate dwith thos e activitie s b y enterin g int o suc h agreemen t a s may b e prescribe db y th e Cit y o f Venice. " Complainant' s Exhibi t 4 a t p . 6 o f 17 . VJC/Nade l too k

th e positio n i n it s informal complain t that us e o f term"Cit y o f

Venice " i n § 5 o f th e Minimu mStandards , relatin g t o arequiremen t that "[a]n y propose dconstmctio n o r facilitie s develope db y th e Operator wil l b e approve db y th e Venic e Municipa l Airport an dth e City o f Venice, " "clearl y .. . i s astandar d"boilerplat e provisio n that pertain s t o th e City' s variou s department s havin g jurisdictio n ove r constmction, " an dnot

t o th e City Counci l (Complainant' s Exhibi t 1 1 at p . 2) . However , i t

i s no t atenant' s prerogativ e t o determin e what it s landlord , th e airpor t proprietor , mean t

b y referenc e t o itsel f

i n it s minimu mstandards . VJC' s contentio n that th e City , b y referencin g itsel f b y th e genera l term"th e Cit y o f Venice " i n it s Minimu mStandard s had someho w strippe dAuthorit y fromth e Cit y Counci l i n favo r o f individual , unspecifie dCit y Department s i s absur do n it s face . Moreover , th e us e o f th e ter m"Cit y o f

Venic e elsewher e i n th e Minimu mStandard s clearl y include s th e Cit y Council . Fo r instance , th e requiremen t i n Sectio n 7 A that a n operato r

ente r int o suc h agreemen t

"a s ma y b e prescribe db y th e Cit y o f Venice " clearl y indicate s tha t

th e policymakin g armo f th e City , i.e. , th e Cit y Council , i s t o b e involved . Thi s i s consisten t wit h th e us e o f

th e ter m"Cit y o f

Venice " elsewher e i n th e Minimu mStandards , a s i n th e -42 -passag e quote db y VJC/Receive r "I t i s th e inten t

o f th e Cit y o f

Venic e ... " an d"Th e Cit y o f Venic e wil l provid e afai

r an dreasonabl e opportunit y withou t unjus t discriminatio n ... " Complainant' s Exhibi t 4 a t § 3(A ) an d(B) , reference di n Complain t t [14]. ^ Finally , neithe r

VJC/Nade l no r

VJC/Receive r

acknowledge d§ 8(A ) o f th e Minimu m Standards , whic h provide s that "Propose do r

existin g Operators , ma y b e require dt o provid e evidenc e o f

pas t experience , financial capability an dtechnica l abilit y t o perfor mth e propose d services. " Id . a

t p . 6 o f 17 . Th e paragrap h that

follow s provide s that : Regardin g evidenc e o f

financial capabilit y t o performan dprovid e th e services , th e Cit y o f Venic e shal l b e th e sol e judg e o f what constitute s adequat e finance s an dth e procedur e t o bas e financial information . I f th e Operato r

o r propose dOperato r

doe s not , i n th e opinio n o f

th e City o f

Venice , exhibit

adequat e financial responsibilit y t o undertak e th e propose dservices , th e Cit y o f Venic e ma y den y an y requeste dactivity . Id. , § 8(B ) a

t p . 7 o f 17 . Eve n i f

arequiremen t

o f reasonablenes s i s rea dint o thi s provision , ther e can b e n o doub t

tha t neithe r VJC/Nade l no r

VJC/Receive r

ha s provide dsufficien t

evidenc e o f financial capabilit y t o buil dan doperat e th e hangars . A s discusse dmor e fully below , VJC/Nade l coul dno t an ddi dnot

provid e evidenc e o f

legitimat e financial resources . VJC/Receiver , after disavowin g an y inten t

t o buil dth e hangars , simpl y mad e a n unsupporte dassertio n that h e ha d resource s available . Complain t a t ^ 59-60 . Moreover , i n th e Minimu mStandard s provide : "Th e Cit y o f Venic e further

reserve s th e right t o designat e fromtime-to-tim e th e specifi c area s wher e a n individua l aeronautica l servic e o r a combinatio n o f

aeronautica l service s ma y b e conducte dan ddetermin e whethe r o r no t ther e i s sufficient appropriat e o r

adequat e spac e a

t th e propose dsit e t o mee t th e minimu mrequirement s No t surprisingly , i

n ligh t o f hi s ow n action s tha

t Mr . Nadel wa s well awar

e a t the time , bu

t other s wer

e not , th e informa

l complain t signe dby Mr . Nade

l neglectedt

o mentio n tha

t th e Minimu

mStandard s als o requir

e tha t the "Operator

shall adher

e to th e highes t

ethica l an daviatio n servic e communit y standard s in th e conduc

t o f it s activities. " Id . a

t Sectio n 6 G , p . 4 of

17 . Usin g stolen fiinds fo

r th e purchas e o f

a n FB O an d subsequen t diversio n o f

stolen fiinds int

o th e busines s (Cit

y Exhibit 2 a t THJ15-23) , doe s no

t qualif y a s adherenc e to th e "highes t

ethica l standards. " -43 -established . Suc h determinatio n shal l conside r th e natur e an dexten t

o f th e propose doperatio n an d th e sit e availabl e for

suc h apurpos e that

can b e performe dorderly , safely , consistently , an db e a n efficient operatio n for

th e airport. " Th e Minimu mStandard s fo r FBO' s provid e fiirther: "N o constmctio n o f an y kin dshal l b e don e a t th e Venic e Airport

withou t th e prio r approva l o f

th e Cit y and , i f

necessar y i n th e opinio n o f th e City , th e Federa l Aviatio n Administration , o r it s successo r

governmenta l agency , an dn o suc h approval shal l b e grante dunles s suc h constmctio n an ddesig n i s consisten t with th e architectur e an d th e maste r

pla n Sectio n 7-l b for

th e developmen t

o f th e Venic e Airport. " Minimu mStandard s for Venic e Municipal Airpor t Venice , Florida , § 3(c) , pg . 2- 3 o f 17 . " A fixedbas e operato r in an y category may , i f

sufficien t lan dan dare ai s lease dfromth e City , constmc t suc h ahangar

o r hangar s i n alocatio n satisfactor y t o th e Cit y an dengag e i n th e busines s o f renta l o f spac e for aircraf t storage. " Id . A t

§ 10 , p . 2 a

t 7 . Thus , unde r

th e Minimu mStandard s for FBOs , th e right

o f an FB O t o buil dan dren t ou t hangar s i s no t

absolut e - i t

ma y onl y b e don e i n an are aacceptabl e t o th e City . A s demonstrate db y th e current , FAA-approve dALP , th e are adesignatedb y th e Cit y for curren t an dpropose dfiiture hangar s t o b e rente dou t

t o th e publi c for

aircraf t storag e i s no t

alon g th e borde r

o f th e airport

wher e th e VJ C site i s located , bu t acros s ataxiway , awa y fromth e Airport boundary . City Exhibi t

1 3 (ALP) . A s reflecte di n Cit y Counci l discussions , thi s i s stil l th e preferre dare afor suc h activities . A n airport

nee dnot develo p it s facilitie s i n accordanc e with th e wishe s o f an y individua l use r

o r tenant . Rather , th e airport i s entitle dt o exercis e it s proprietar y power s t o provid e for th e orderl y developmen t

o f th e airport : A s th e FA A hel di n Sant aMonic aAirpor t Associatio n v . Cit y o f

Sant aMonica , FA A Docke t 16-99-2 1 Final Decisio n an dOrde r (Feb . 4 , 2003) , " asponso r i s no t require dt o develo p an y an dal l parcel s o f lan di n amanne r

consisten t

with th e wishe s o f

an y on e party , but rathe r ma y exercis e [its ] proprietar y rights an dpower s t o develo p an dadministe r th e Airport' s lan di n amanne r consisten t

wit h th e public' s interes t an dtha t "i s exactl y what

th e Count y i s doin g a

t CR Q consisten t

with it s FAA-approve dAirport layou t Plan. " -44 -Pacifi c Coas t Flyers , 200 5 W L 190051 5 a t *29 . d ) Requirin g Assuranc e o f Financia l Capabilit y i s aLegitimat e Exercis e o f Proprietar y Power s an dDoe s No t Violat e th e Prohibitio n Agains t Unjus t Economi c Discrimination . I t i s legitimat e t o assur e tha t propose dbuilder/operato r o f hangar s ha s th e financial resource s an dothe r capabilitie s necessar y t o carr y ou t th e project . FA A ha s recognize dthat includin g assuranc e o f

"financial capability " i s a n appropriat e aspec t

o f a n airport' s minimu mstandards . Flightlin e Aviation , Inc . v . Cit y o f Shreveport , Docke t

No . 16-07-05 , 200 8 WL 595535 5 a t *1 7 (Director' s Determinatio n Mar . 7 , 2008 ) ("FA A ha s uphel dan airport sponsor s right

t o protec t

itsel f fromfinancial and/o r

litigatio n risk...It

appear s that

Respondent' s requirement s for financial informatio n i n th e Amende dMinimu mStandard s ar e simpl y awa y o f protectin g itsel f

an dth e aeronautica l communit y operatin g o n th e Airport from financial risk."). I n ligh t o f th e circumstance s i n thi s cas e - th e massiv e fraudperpetrate db y Mr . Nadel , an d th e Receiver' s subsequen t effort s t o ge t

a s muc h mone y a s possibl e from abuye r o f VJC , the n tak e that mone y off-airport—FAA shoul dno t mak e a n exceptio n t o it s polic y o f allowin g th e airport sponso r t o mak e afinancial inquir y t o protec t itsel f fromfinancial risk. Simpl y put , th e Receiver' s interest s ar e no t

aligne dwith eithe r

th e City' s o r

FAA's . Onc e th e Receive r ha s extracte dal l it

can fromth e buyer , th e Receive r wil l b e indifferen t

a s t o whethe r

th e buye r

ha s an y resource s lef

t t o develo p an doperat e th e VJ C site . I n th e contex t

o f selectin g lessee s fo

r aeronautica l land , FA A ha s foun dn o violatio n o f th e prohibitio n agains t

unjus t discriminatio n wher e th e airport sponso r t o required , an dmad e decision s base don , informatio n demonstratin g tha t aprospectiv e tenan t

ha dth e financial capabilit y t o carr y ou t aeronautica l development :

It i s withi n an airport

proprietor' s discretio n t o selec t financially secur e tenants , especiall y for

ne w developmen t

i n an are ao f

th e Airport

wher e ther e wer e n o existin g genera l aviatio n services . Th e fac t tha t th e Cit y selecte dtenant s wh o wer e -45 -abl e t o financ e th e developmen t o f thei r FB O businesse s i s no t

unreasonabl e an d doe s no t constitut e unjus t

discrimination . I f

anything , it

show s that

th e City wa s actin g i n apmden t

manner . Sant aMonic aAirpor t

Ass' n v . Cit

y o f Sant aMonica , Cai , FAA Docke t No . 16-99-21 , 200 0 WL 182446 3 a t *2 1 (Director' s Determinatio n Nov . 22 , 2000) , aff'd , 200 3 W L 196385 8 (Final Decisio n an dOrde r Feb . 4 , 2003).' ° A s note dabove , regardin g th e VJ C hangar proposa l a

t th e Airport , th e Actin g Associat e Administrato r

fo r Airport s acknowledge dthat i t i s legitimat e for

th e Cit y t o verif

y th e financial capabilitie s o f

th e entity seekin g t o buil dheingars . City Exhibi t 4 . Ther e i s n o evidenc e i n th e recor dthat

VJC/Nade l eve r

provide dth e necessar y financial informatio n t o th e City , an di t i s clear , a s describe dabove , tha t

i t coul dnot

demonstrat e that

i t ha dlegitimat e resource s (tha t is , fund s tha t wer e no t stole n o r supporte db y stole n funds ) t o buil dth e hangars . A s for VJC/Receiver , aflat

statemen t

that "th e receivershi p ha s th e financial ability t o constmc t th e four hangars " couple dwith an assertio n tha t "th e receivershi p fiindcontain s ove r $ 1 0 millio n i n asset s an dapproximatel y $ 4 millio n i n cas e i n ban k accounts " (Complain t

a t T f 60 ) doe s not suffic e t o demonstrat e sufficien t financial resource s availabl e t o appl y t o th e project . First , th e Receiver' s assertio n o f

tota l receivershi p asset s (that is , no t jus t thos e asset s attributabl e t o VJC ) i s

' " Se e als o Lytto

n v . Sherida

n Count y Bd . Of Count y Com m'rs , Docke

t No . 16-01-16 , 2002 W

L 3200247 1 a

t *1 1 (Director' s Determination Dec . 20 , 2002 ) (Airpor t didno t unjustl y discriminat

e agains t Complainan

t whe n i t reflisedaleas e wher

e Complainan

t faile dt o suppl y adequat e information , includin g documentatio n mean t t o assur e financial capability . "I

t i s reasonable fo

r the sponso r t o verif y th e financia

l capabilit y of aprospectiv e tenan

t t o mee t th e fe e an drenta l structur e established.") . NDC . Inc . V

. Cit y o f Beverly , Mass. , FA

A Docke t No . 13-93-0

4 (Recor do f Decision Jan . 12 , 2001 ) (Airpor t di dno t unjustl y discriminat

e agains t Complainan

t by denying it s proposa

l basedo n afailur e t o submi t financia l data) . Hous e V . Kingma n Airpor t Auth. , FA A Docke t No . 13-94-1 0 (Recor

dof Decision Apr . 3 , 1997) . (Airpor t actedreasonably an

dtherefor e didnot violat e Gran t Assuranc e 22 b y denying Complainant' s applicatio n to purchas e propert y a t th e Airport , wher

e Complainan

t faile dto submi t financia l dataa s require db

y Airpor t policy) . -46

-no t

hom e ou t

b y th e report

h e enclose dwith hi s Jun e 25 , 200 9 lette r t o Cit y Attome y Robert Anderson . City Exhibi t

3 . Indeed , that

attachment . Th e Receiver' s Secon dInteri mReport , filed Jun e 9 , 200 9 indicate dthat for th e reportin g perio dendin g 4/30/09 , th e receivershi p hadTotal Ne t Asset s o f $1,557,431.1 6 (with anotatio n "Doesn' t includ e $ 1.5 mScoo p Capita l CD/wil l b e payin g $1.5 mloan) . Id . a

t Documen t

141- 2 (Standardize dFun dAccountin g Report for Consolidate d Nade l Entitie s - Cas h Basis , Reportin g Perio d03/01/0 9 t o 4/30/09 , Attachmen t t o Receive r

Report) . Th e Receiver' s Thir dInteri mReport , filedo n Augus t 17 , 2008 , liste dTota l Ne t Asset s o f $2,151,211.3 5 a s o f

6/30/09 , with th e sam e notatio n concemin g th e Scoo p Capita l CD/loan . City Exhibi t 1 6 a t Documen t

176- 2 (Standardize dFun dAccountin g Report fo r Consolidate dNade l Entitie s - Cas h Basis , Reportin g Perio d05/01/0 9 t o 6/30/09 , Attachmen t t o Receive r

Report) . Moreover , th e mer e fac t

tha t th e Receivershi p ha s som e asset s doe s no t mea n that

the y ar e availabl e t o fun

dth e developmen t

o f th e propose dhangar s a

t Venic e Airport . A s noted , thes e ar e tota l asset s o f

th e receivership , no t

jus t thos e relate dt o VJC . Th e Receiver i s t o "administe r

suc h asset s a s i s require di n orde r t o compl y with th e direction s containe di n thi s Orde r [Reappointin g Receiver ] an dt o hol dal l othe r asset s pendin g fiirther

orde r o f thi s Court . Id . a

t p . 3 o f 8 . Th e Receiver' s missio n i s t o marsha l th e asset s derive dfromMr . Nadel' s illega l scheme s an dpu t the m i n afiindfor

th e benefi t

o f th e victim s o f

Mr . Nadel' s fraud. Complainant' s Exhibi t 1 (Orde r Reappointin g Receiver ) at ^ 1 , 7 , 17 , 23 . Cit y Exhibi t 3 at 7 . In ligh t

o f thes e circumstances , th e Receiver' s assertion s that VJC/Receive r

ha s sufficien t

fund s availabl e t o carr y ou t th e propose d hanga r projec t d o no t satisf y th e requiremen t

o f Minimu mStandard s § 8(B ) that th e City o f

Venic e b e convince dtha t

VJC/Receive r

demonstrate s tha t

i t ha s sufficient

financial resource s t o undertak e th e propose dconstmctio n an dleasin g out o f th e hangzirs . I n addition , th e Receiver

assert s that

VJC/Receive r

doe s no t inten dt o constmc t

o r operat e th e hangars . Complain t

at ^ 59 , Exhibi t

3 (Receive r

lette r t o R . Anderson) . T o date , th e receive r -47 -ha s no t

identifie dth e entity t o who mh e intend s t o sel l VJC . A s aresult , th e financial resource s o f th e ultimat e buye r

o f VJ C hav e no t

bee n presente dt o th e City , an dth e City ha s not , an dcannot , evaluat e thos e financial resources . Thus , th e City ha s no t discriminate dunjustl y agains t an y VJC/Nadel , VJC/Receive r o r VJC/Unname dBuyer . Rather , non e o f thes e entitie s hav e demonstrate dt o th e City' s satisfactio n that i t satisfie s th e City' s legitimat e minimu mstandard s concemin g financial resource s necessar y t o carr y ou t th e propose dproject . e ) Ther e i s N o Curren t Proposa l t o th e Cit v b y an Entit y That Wil l Buil dan d Operat e th e Hangars . Becaus e FAA i s conceme dwith a n airport sponsor' s curren t

complianc e with it s gran t assuranc e obligations , i t

i s importan t

t o kee p i n min dthat

ther e i s n o proposa l currentl y befor e th e Airport b y a n entity that

say s i t wil l buil dan doperat e th e hangars . VJC/Receive r explicitl y state s that i t wil l no t buil dth e hangars . Complain t a t ] | 59 . VJC/Receive r

doe s not revea l wh o th e rea l part y i n interes t

is , an dassert s tha t

thi s ha s no t

ye t bee n determined . Th e Cit y i s entitle dt o kno w wh o wil l carry ou t

th e projec t

befor e bein g aske dt o approv e th e project . Onl y the n can th e City assur e itsel f

o f th e FBO' s financial fitness an dabilit y t o carr y ou t th e project . A s note dabove , th e requeste dCit y approva l ha s evolve dt o dat e from 1 t o 2 , an dthe n t o 4 bo x hangars . Th e prio r

leaseholde r

intende dt o buil dt-hangars , an entirel y different for mo f development . At

thi s point , ther e i s obviousl y n o way o f knowin g whethe r

o r ho w th e ultimat e owne r o f VJ C wil l see k

t o develo p th e VJ C leasehold—i f i t wil l wan t

t o develo p th e hangar s a s VJ C Nade l proposed , o r

i f i t ma y see k

t o chang e o r

modif y th e project . Th e Airport i s entitle dt o se e th e actua l projec t

b y th e actua l entit y that

seek s t o buil di t

befor e grantin g an y approvals , rathe r than bein g force dt o giv e ablin dapproval . Ther e i s simpl y n o federa l aviatio n interes t i n forcin g th e Cit y t o giv e ablin dapprova l t o an unknow n entit y t o buil dhangars , simpl y s o that th e Receiver

can realiz e an incrementall y greate r amoun t o f mone y fromth e buye r

o f VJ C an dtak e thos e fund s of f airport . Simpl y put , th e -48 -Receiver' s interest s an dth e federal aviatio n interest s ar e no t aligned , an dther e i s n o reaso n t o deviat e fromth e proces s that FA A ha s allowe di n othe r case s - wher e th e airport sponso r deal s directl y with th e entity that seek s t o develo p aeronautica l facilities , an dth e airport sponso r ensure s that th e propose ddevelope r

complie s wit

h al l airport

minimu mstandards , includin g financial responsibility . A s fo r th e previou s statement s b y th e local AD O officia l that th e Cit y shoul dapprov e th e hangars , tha

t determinatio n was mad e base dpartl y o n factua l assumption s that

th e AD O coul dno t reasonabl y hav e know n t o b e fals e (i.e. , th e assumptio n that VJC/Nade l ha dlegitimat e resource s availabl e t o buil dth e hangars ) an dpartl y o n amisinterpretatio n o f FAA' s AL P guidance . I n an y event , thi s woul dno t

b e th e first

tim e an AD O ha s give n advic e that was no t sustaine di n aforma

l Part 1 6 proceeding . Se e Pacifi c Coas t Flyer s a t * 2 8 an d* 42 . I n fact , eve n whe n FA A headquarter s official s giv e informal guidanc e t o airport sponsor s an daeronautica l users , the y typicall y includ e caveat s t o th e effec t that suc h advic e doe s no t necessaril y indicat e ho w th e FA A woul dml e i f th e issu e cam e befor e it

i n aformal Par

t 1 6 complaint , wit

h aful l developmen t

o f th e fact s an dargumen t

b y th e intereste dparties . Thus , FAA i s free t o reac h aconclusion , basedo n th e unusua l fact s o f thi s case , tha t

i s different

fromth e informa l determinatio n mad e b y an official a t th e loca l ADO . Th e fact s a s the y hav e develope ddemonsfrat e tha t ther e i s not , an dha s no t

been , an y violatio n o f

Gran t Assuranc e 22 , an dthi s coun t o f th e Complain t

shoul db e dismissed . (5 ) Coun t

V : Exclusiv e Right s a ) Standar d Th e exclusiv e rights doctrin e i s articulate ddifferentl y i n differen t source s bu t

generall y refer s t o th e sam e proscribe dconduct . Th e relevan t part o f 4 9 U.S.C . § 40103(e ) provides , " A perso n doe s no t

hav e a n exclusiv e right

t o us e a n ai r navigatio n facility o n whic h Govemmen t -49

-mone y ha s bee n expended. " Sectio n 47107(a)(4 ) provide s in relevan t part , " A perso n providing , o r intendin g t o provide , aeronautica l service s t o th e publi c wil l no t b e give n an exclusiv e right t o us e th e airpor t ... " Gran t Assuranc e No . 23 , '"Exclusiv e Rights , " implement s th e provision s o f 47107(a)(4) . It

require s that

a n airport "permi t n o exclusiv e right

for th e us e o f

th e airpor

t b y an y person s providing , o r intendin g t o provide , aeronautica l service s t o th e public, " an d that th e airpor

t "wil l not , eithe r

directl y o r

indirectly , gran t

o r permi t an y person , firm, o r corporation , th e exclusiv e right a t th e airport

t o conduc t

an y aeronautica l activities. " I t als o provide s that

"i t wil l terminat e an y exclusiv e right t o conduc t

a n aeronautica l activit y no w existin g a t suc h a n airport befor e th e gran t

o f an y assistanc e unde r

Titl e 49 , Unite dState s Code. " "A n exclusiv e rights violatio n occur s whe n th e airport sponso r exclude s others , eithe r intentionall y o r

unintentionally , fromparticipatin g i n a n on-airport

aeronautica l activity. " Advisory Circular 150/5190-6 , Exclusiv e Right s A t Federally-Obligate dAirports , date dJanuar y 4 , 2007 . I n addition , FA A ha s take n th e positio n tha t th e applicatio n o f

"an y unreasonabl e requiremen t o r an y standar dthat

i s applie di n an unjustl y discriminator y manne r ma y constitut e th e constmctiv e gran t o f a n exclusiv e right." 4 1 North 7 3 Wes t Inc . v . Westcheste r

County , Ne w York, FAA Docke t No . 16-07-1 3 a

t *1 8 (Jun e 12 , 2008) . A complainan t

seekin g t o establis h aviolatio n o f Gran t Assuranc e 2 3 mus t

demonstrat e that th e airport

sponso r grante dspecia l rights o r privilege s t o other s makin g th e sam e o r similar us e o f th e airport

whil e denyin g th e sam e t o th e complainant . Ji mMarty n v . Por t o f Anacortes , Washington , 200 3 W L 2100209 9 a t *24 . Th e FA A recognize s severa l exception s to , an dlimitation s on , th e prohibitio n o n exclusiv e rights. Se e generall y FA A Advisor y Circula r 150/5190- 6 § 1.3(b) ; FA A Orde r 5190.6 A § 3-9 . -50 -Mos t

relevan t t o th e Complaint , th e FA A ha s advised , "Wha t i s a n exclusiv e rights violatio n i s th e denia l b y th e airport

sponso r t o affor dothe r qualifie dpartie s a

n opportunit y t o b e a

n on-airport aeronautica l service s provider. " FA A Advisor y Circular 150/5190- 6 § 1.3(b)(2) . b ) Gran t

Assuranc e 2 3 Doe s No t

Preven t th e City Fro mExercisin g a n Exclusiv e Right t o Provid e Aeronautica l Servic e Th e Complain t

make s assertion s abou t

apotentia l airport

rol e i n buildin g o r

operatin g hangars , bu t

provide s n o evidence , excep t for newspape r

clipping s o f

quote s from afew individua l Counci l members . Thi s i s no t evidenc e o f

th e grantin g o f

a n exclusiv e right. I

t i s jus t talk . Ther e i s n o evidenc e that

th e City ha s acte dt o d o so . Moreover , eve n i f th e Cit y wer e t o buil do r operat e hangars , that

woul dno t

constitut e a

n exclusiv e rights violation ; a n airport sponso r i s no t prohibite d fromexercising , wit

h it s ow n facilitie s an dpersonnel , a n exclusiv e right

t o provid e a

n aeronautica l service . I t i s simpl y prohibite dfromgrantin g suc h a n exclusiv e right

t o athir dparty . Id . a

t § 1.3(b)(1) ; se e als o discussio n i n Je t I Center . Inc . v . Naple s Airpor t Authority , FA A Docke t

No . 16

- 04-0 3 (Fina l Agenc y Decisio n Jul y 15 , 2005 ) a t 16-18 . c ) Complainan t

Has Provide dN o Evidenc e Tha t Othe r Tenant s Hav e Bee n Give n Exclusiv e Right s T o Buil dan dLeas e Hangar s Th e Complain t

makes vagu e assertion s (paragraph s 34 , 10 1 an d103 ) abou t othe r tenant s bein g give n rights t o buil dhangar s an dleas e the mou t t o th e publi c i n competitio n with VJC/Receiver , bu t

i t provide s n o evidenc e t o support thi s assertion , an ddoe s no t eve n identif

y wh o thos e othe r

tenant s are . Fundamenta l t o provin g a n exclusiv e rights clai mi s th e identificatio n o f th e othe r entit y t o who mth e exclusiv e right ha s bee n granted . Moreover , th e fac t that VJC/Receive r state s tha t thes e unname dothe r

tenant s ar e i n competitio n with VJ C indicate s that VJ C ha s not

bee n denie dth e right

t o buil dhangar s an dleas e the mou t t o th e public . I n fact , b y th e explici t term s i f it s lease , i t ha s bee n allowe dt o buil dan dleas e out hangar spac e at th e airport . Thus , i t

ha s not bee n exclude dfromprovidin g hangar renta l servic e at

th e airport . -51

-Becaus e o f th e tota l lac k

o f evidenc e that

th e airport

ha s grante da

n exclusiv e right

t o an y othe r entity t o buil dhangar s that ha s bee n denie dt o VJC/Receiver , thi s coun t o f th e Complain t shoul db e dismissed . D . AFFIRMATIV E DEFENSE S (1 ) Firs t

Affirmativ e Defense : Th e Complain t Fail s T o Stat e A Rip e Clai mFo r Relie f Par t 1 6 authorize s th e Directo r t o dismis s acomplain t

i f i t fail s t o stat e clai mthat

warrant s an dinvestigatio n o r

fiirther actio n b y th e Director . 1 4 C.F.R . § 16.2 5 (b) . A s discusse dabove , th e focu s o f th e Par t 1 6 proces s i s o n th e airport sponsor' s curren t

complianc e o r

lac k thereo f Steere , 200 4 W L 319820 9 a

t =^9 , *16 , *21 , *22 . Wilson Ai r Center , 200 1 W L 108534 8 a t *4 ; purporte d pas t violation s an dpotentia l future violation s ar e not prope r matter s for

aPart 1 6 proceeding . Accordingly , th e Directo r ha s foun dPar

t 1 6 complaint s no t

ripe for adjudicatio n whe n th e clai m depend s o n th e uncertai n fliture action s o f th e partie s basedo n uncertai n fiiture facts . Northwes t Airlines , Inc . e t

al . v . Indianapoli s Airpor t Auth. , e t al , FAA Docke t

16-07-0 4 200 8 W L 397646 1 a t *2 3 (FAA ) (Aug . 19 , 2008 ) (dismissin g complain t a s unrip e whe n leas e amendmen t ha dno t ye t bee n applie dan dit

wa s uncertai n ho w applicatio n o f leas e amendmen t

woul daffec t

complainants) . I t i s clear that VJ C ha s faile dt o allege daripe se t o f fact s upo n whic h th e Directo r coul d issu e adecision . A s detaile dabove , VJC/Receive r seek s adeclaratio n tha t

th e Cit y mus t

approv e th e developmen t

o f certai n hangar s o n it s leasehold , eve n thoug h VJC/Receive r admit s that

i t wil l no t buil dthos e hangar s an dtha t i t doe s no t kno w wh o wil l buil dthos e hangars . Complain t a t ^ 58

- 59 , Cit y Exhibi t

3 (6/25/0 9 Lette r

fromReceive r

t o R . Anderson) . VJC/Receive r canno t kno w i f th e ultimat e builde r

wil l i n fac t

wan t t o buil dan y hangars , muc h les s (1 ) th e sam e numbe r o f hangar s VJ C ha s proposed , (2 ) i n th e sam e location s a s VJ C ha s proposed , (3 ) i n th e sam e tim e frame VJ C ha s proposed , o r

(4 ) i n th e sam e siz e an dconfiguratio n a s VJ C ha s proposed . No r can VJC/Receive r

kno w i f th e ultimat e buildin g wil l hav e th e financial capabilit y t o buil dan doperat e -52 -th e hangar s o r b e capabl e o f

otherwis e complyin g with th e City' s Minimu mStandards . I t i s entirel y possibl e that

eve n i f th e City approve dth e pla n a s propose db y VJC , it woul dultimatel y den y th e projec t becaus e th e ultimat e develope r coul dno t

mee t th e City' s Minimu mStandards . Moreover , it i s possibl e that

th e ultimat e develope r

wil l as k th e City t o approv e adifferen t projec t tha n VJ C proposes . Two point s ar e clear , therefore . First , th e absenc e o f th e actual builde r

means that

ther e ar e insufficien t

fact s o n whic h th e FA A coul deve r determin e that

th e Cit y ha s acte di n amanne r inconsisten t

with th e City' s Minimu mStandard s regarding , inte r alia , th e financial capabilit y o f airport users . I t therefor e canno t

possibl y determin e that

th e Cit y ha s violate dit s gran t obligation s o n th e curren t

record . Indeed , eve n i f

th e FA A wer e t o agre e generall y tha t th e Cit y shoul dapprov e ahangar project , that

woul dno t

mean tha t

aspecifi c develope r

coul dno t

b e tume ddow n b y th e City i f i t faile dt o mee t

th e City' s Minimu mStandard s an dth e Cit y woul dproperl y den y an y reques t t o buil dthem . Second , th e absenc e o f

th e actua l develope r

raise s suc h fundamental doubt s regardin g th e natur e an dexten t

o f th e hangar

projec t tha t i t i s simpl y impossibl e t o findan y impropriet y o f th e City' s actions . I

n short , i t i s impossibl e t o determin e no w what wil l actuall y b e propose dfor constmctio n b y whom . Give n th e fundamenta l absenc e o f aconcret e projec t

tha t an identifiabl e entity actuall y intend s t o build , i t i s simpl y impossibl e t o kno w (1 ) whethe r th e Cit y woul do r

woul d no t approv e an actua l project , (2 ) th e ground s for suc h future Cit y action , an d(3 ) whethe r that future Cit y actio n woul do r woul dno t

compl y with th e City' s federal obligations . In short , i n th e absenc e o f

thos e fundamental facts , th e FA A canno t findth e Cit y i n violatio n o f it s federal obligations .

-53 -(2 ) Secon dAffirmativ e Defense : VJ C Lack s Standin g T o Pursu e Thi s Cas e

Par t 1 6 require s tha

t aComplainan t

sho w that

it wa s "directl y an dsubstantiall y affected " b y an y noncomplianc e with FAA requirements . 4 9 CF R16.23(a) , (b)(4) . I t als o require s th e Directo r t o dismis s acomplain t

i f th e complainan t

lacks standin g t o file acomplain t unde r 16.23 . Id . a

t 16.25(c) . Th e FAA ha s mad e clear that thi s standin g requiremen t mandate s adirec t

link betwee n th e allege dviolatio n an dadenia l o f aeronautica l access . Thermc o Aviatio n Inc. , 200 7 W L 1893821 . I

n Thermco , th e Associat e Administrato r agree dwith th e Director' s finding that th e Complainan t

lacke dstandin g t o challeng e a n airport sponsor' s us e o f

lan dfor non-aeronautical purpose s because : th e recor ddoe s no t

support tha t th e Cit y was o r

i s require dt o provid e Thermc o with along-termleas e specificall y for Hangar # 3 i n orde r

t o ensur e reasonabl e aeronautica l access . Th e recor dshow s an dThermc o admit s that i t ha s ha dashort

termleas e t o Hangar

#3 . Thermc o ha s faile dt o sho w that i t doe s no t enjo y along

ter mhangar

leas e a t th e Airport

becaus e o f

th e City' s pas t

land-us e practices . I

n fact , Thermc o fail s t o sho w that i t ha s propose daspecifi c long-termleas e o f an y Airport propert y othe r

tha n Hangar

#3 . Finally , Thermc o fail s t o sho w i t wa s denie d aleas e i n favo r

o f anon-aeronautica l use . I da t *25 . Th e situatio n i s analogous here . VJC/Receive r ha s admitte dthat

i t doe s no t inten dt o buil d th e hangar s an dtha t

i t doe s no t kno w wh o wil l buil dth e hangars . I t certainl y ha s no t

reveale dth e identit y o f

th e ultimat e develope r

t o th e City . Cit y approva l o f

th e propose dhangar s i s not necessar y t o ensur e VJ C an y aeronautica l access . VJ C continue s t o enjo y it s leasehol dan dha s no t bee n deprive do f

an y abilit y t o conduc t an y aeronautica l activity . I t i s obvious , therefore , that VJ C i s no t

directl y an dsubstantiall y affecte d b y th e City' s inabilit y t o approv e an y hangar s a t thi s time . Simpl y stated , th e hanga r projec t i s no t VJC/Receiver' s project , an dVJ C lacks standin g t o complai n o n behal f o f an unknow n future owne r wh o ma y o r

ma y not wan t t o buil dth e sam e (o r

any ) hangar

project .

-54 -Th e Receiver' s onl y clai mo f injur y i s that i t ma y no t receiv e a s muc h mone y for th e sal e o f VJ C i f th e hanga

r projec t i s no t approved . Bu t

VJC/Receive r

doe s no t offe r ashre do f

proo f that th e valu e o f

it s asset s woul db e greate r o r that abuye r woul dpa y mor e fo

r th e propert y i f

th e hangar s wer e approved . Eve n unde r th e term s o f

it s ow n Complaint , VJC/Receive r ha s faile dto sho w that i t i s directl y an dsubstantiall y affecte db y th e City' s allege dnon-compliance. " Mor e fundamentally , th e FAA' s complianc e progra mi n general , an dth e Part 1 6 proces s i n particular , i s designe dt o protec t th e aviatio n syste man dth e rights o f aeronautica l user s t o conduc t aeronautica l activitie s o n airports . VJ C admittedl y doe s no t see k t o conduc t

an y aeronautica l activity ; it

seek s onl y t o sel l aleasehol do n a n airport for a s muc h mone y a s possibl e i n orde r t o tak e that mone y of

f th e airport

an drefun dth e victim s o f Mr . Nadal' s fraud. Par

t 1 6 i s simpl y no t intende dt o protec t

th e non-aeronautica l financial interest s o f entitie s that

happe n t o leas e lan do n a n airport . Becaus e th e purel y financial non-aeronautica l interest s VJ C seek s t o pursu e i n thi s matte r ar e no t th e kin do f

interest s Par

t 1 6 i s intende dt o protect , VJ C i s no t directl y an dsubstantiall y affecte db y an y allege dnon-complianc e b y th e City , an dth e Complain t shoul db e dismissed .

" Th e fac t

tha t VJ C i s alesse e payin g ren t t o th e Cit y doe s no t

itsel f confe r an y standing . 1 4 C.F.R . § 16.23(a ) make s clear tha t payin g ren t

t o an airpor t

onl y confer s standin g with respec t t o revenu e diversio n claims . Sinc e VJ C doe s no t alleg e revenu e diversio n i n it s Complaint , th e fac t tha t i t pay s ren t t o th e Cit y doe s no t

itsel f confe r standin g t o pursu e thes e claims . -55 -IV . CONCLUSIO N

Fo r th e reason s se t

fort h above , th e City' s Motion t o Dismis s shoul db e granted .

nd Respectfull y submitte dthi s 2 day o f September , 200 9



### y Rober t Anderson , Esq . City Attome y Hal l & Anderson , P.A . 131 4 Eas t Venic e Ave. , Suit e E Venice , F L 3428 5 Telephone : (941 ) 480-099 9 Facsimile : (941)480-144 6 Thoma s Devin e W . Eri c Pils k KAPLA N KIRSC H & ROCKWEL L LLP 100 1 Connecticu t

Av e NW , Suit e 90 5 Washington , D C 2003 6 Telephone : (202 ) 955-5600X56 8 Facsimile : (202 ) 955-561 6

Arthu r P . Ber g KAPLA N KIRSC H & ROCKWEL L LLP 64 1 Lexingto n Ave . Suit e 140 9 Ne w York , N Y 1002 2 Telephone : (212 ) 328-951 5 Facsimile : (646)514-544 0 Counse l fo r Responden t

Cit y o f Venice , F L

-56

-CERTIFICAT E O FSERVIC E

I hereb y certif

y that I hav e thi s day serve dth e foregoin g Responden t Cit y o f Venice , Florida' s Memorandu mo f Point s an dAuthoritie s i n Suppor t o f it s Answe r

an dit s Motio n t o Dismiss , o n th e followin g person s a t th e followin g addresse s b y overnigh t Federal Express : Offic e o f th e Chie f Counse l Attn : FA A Part

1 6 Airport

Proceeding s Docket , AGC-61 0 Roo m92 5 Federal Aviatio n Administratio n 80 0 Independenc e Avenue , S.W . Washington , D C 2059 1 Origina l an d3 copie s VI A Federa l Expres s No . Gianluc aMorello , Esq . Dominiqu e Pearlman , Esq . Fowle r Whit e Boggs , P.A . 50 1 E . Kenned y Blvd. , Suit e 170 0 Tampa , FL 3360 2 Fa x No . (813)229-831 3 On e Cop y VI A Federa l Expres s No .

,n d Date dthi s 2" " da y o f

September , 2009 : Thoma s R . Devin e

-57 -