UNITE D STATE S DEPARTMEN T O F TRANSPORT4W I FEDERA L AVIATIO N ADMINISTRATIO N

WASHINGTON , D.C . 

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M 201 0 AIRFORi/ENVIRONMENTA L LAiV, AGC-60 0 

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Venic e Je t

Center , LLC , Complainant , V . Cit y o f Venice , Florida , Respondent . FA A Docke t No . 16-09-0 5

72 . RESPONDEN T CIT Y O F VENICE' S MEMORANDU M O F POINT S AN D AUTHORITIE S I N SUPOR T O F IT S MOTIO N T O DISMIS S AN D OPPOSITIO N T O TRISTAT E AVIATIO N GROU P O F FLORID A LLC' S MOTIO N T O INTERVEN E AN D FO RJOINDE RA S CO-COMPLAINAN T Designatio n o f

person s t o receiv e servic e fo r th e Cit y o f

Venice , Florida : Robert C . Anderso n Cit y Attorne y Hal l & Anderson , P.A . 131 4 Eas t Venic e Avenue , Suit e E Venice , Florid a3428 5 randerson(5lhall-anderson . co m Telephone : (941 ) 480-099 9 Facsimile : (941)480-144 6 Thoma s R . Devin e W . Eri c Pils k Kapla n Kirsc h & Rockwel l LLP 100 1 Connecticu t

Av e NW , Suit e 80 0 Washington , D C 2003 6 tdevine(atkaplankirsch . co m epilsk(%kaplankirsch.co m Telephone : (202 ) 955-5600X56 8 Facsimile : (202 ) 955-561 6 Arthu r P . Ber g Kapla n Kirsc h & Rockwel l LLP 44 5 Park Ave. , 9t h Floo r Ne w York , Ne w Yor k

1002 2 aberg@kaplankirsch . co m Telephone : (212 ) 836-404 8 Facsimile : (646 ) 514-544 0TABL E O F CONTENT S

INTRODUCTIO N 1 UPDATE D STATEMEN T O F FACT S 3 ARGUMEN T 5 A . Th e Complain t

Shoul dB e Dismisse dBecaus e VJ C I s N o Longe r aTenan t o r Use r o f th e Airpor t

an dIt s Claim s Ar e Moo t 4 B . Tristat e Shoul dNo t B e Permitte dt o Interven e o r Joi n th e Complain t

Becaus e Part 1 6 Doe s No t

Permi t Interventio n o r

Joinde r an dBecaus e Ther e I s N o Actua l Controvers y Betwee n Tristat e an dth e Cit y 9 1 . Par t

1 6 Does No t

Permi t Interventio n o f

aNe w Part y Prio r

t o Issuanc e o f aDirector' s Determinatio n o r Joinde r at An y Tim e 9 2 . An y Clai mTristat e Ma y Tr y t o Asser t i s Unrip e a s Ther e I s N o Actua l Controvers y Betwee n Tristat e an dth e Cit y 1 1 a . Tristat e Has No t

Sough t Cit y Approva l o f

An y Hanga r

Project , an dth e Cit y Ha s No t

Prohibite dTristat e fromAn y Aeronautica l Activit y 1 1 b . Tristat e Has No t

Satisfie dth e Requirement s o f Part 1 6 t o Attempt Informal Resolutio n wit h th e Cit y 1 4 3 . Tristat e Canno t

Rel y o n Commo n La w Rule s Regardin g Assignmen t o f Contrac t Claim s o r

Chose s i n Actio n t o Establis h Standin g t o Assert th e Moo t Claim s o f

VJ C o r It s Ow n Prematur e Claim s 1 7 CONCLUSIO N 2 4TABL E O F AUTHORITIE S

Case s Am . Med . As s '

n v . Unite dHealthcar e Corp. , 200 7 W L 177149 8 (S.D.N.Y . Jun e 18 , 2007 ) 1 8 Arro w Airways , Inc . v . Dad e County , 74 9 F.2 d1489 , 149 1 (11t h Cir . 1985 ) 1 8 Dat aConsultants . Inc . v . Traywick , 59 3 F.Supp . 44 7 (D . Md . 1983 ) 1 8 Esposit o V

. CPMIns . Serv. , Inc. , 92 2 A.2 d34 3 (Conn . Super . Ct . 2006 ) 1 8 Ne w Englan dLega l Found , v . Mass . Por t Auth. , 88 3 F.2 d157 , 168

- 6 9 (1s t Cir . 1989 ) 1 8 Northwes t

Airlines , Inc . v . County o f Kent , 95 5 F.2 d1054 , 1058-5 9 (6th Cir . 1992) , afTdo n othe r grounds , 51 0 U.S . 355 , (1994 ) 1 8

Otlie r Authoritie s Boc aAirport , Inc . v . Boc aRato n Airpor t Authority , FA A Docke t

No . 16-04-02 , Orde r

o f Dismissa l (Marc h 21 , 2004 ) 1 4 Boc aRato n Je t

Center , Inc . v . Boc aRato n Airpor t Auth . 199 9 W L 73271 0 a t *3 , fii. 1 (FA A Docke t

No . 16-97-0 6 Aug . 20 , 1999 ) 9 Flightlin e Aviation , Inc . v . Cit y ofShreveport , 200 8 W L 595535 5 at *1 7 (FA A Docke t

No . 16-07-05 , Mar . 7 , 2008 ) 2 J & B Enters. , Inc . v . Metro . Nashvill e Airpor t Auth. , 200 9 W L 1800821 , at

*1 6 (FA A Docke t

No . 16-08-07 , Ma y 5 , 2009 ) 1 9 Je t I Center , Inc . v . Naple s Airpor t Auth. , FA A Docke t

No . 16-04-0 3 (Director' s Determination , Jan . 4 , 2005 ) 2 0 Jetawa y Aviation , LL C v . Bd . o f County Com

m'rs , 200 6 W L 4393155 , a

t *1 2 (FA A Docke t

No . 16-06-01 , Nov . 6 , 2006 ) 1 5 Northwes t

Airlines , Inc . v . Indianapoli s Airpor t Auth. , 200 8 W L 3976461 , at

*1 8 (FA A Docke t

No . 16-07-04 , Aug . 19 , 2008 ; 1 2

uPlatinu mAviatio n an dPlatinu mJe t Cente r BM I v . Bloomington

Norma l Airpor t

Authority , (FA A Docke t No . 16-06-09 , 200 7 W L 485432 1 9 , 12 , 19 , 2 0 Richar dE . Steer e v . Count y o f Sa n Diego , 200 4 W L 3198209 , a t *1 6 (FA A Docke t

No . 16-99-15 , Dec . 7 , 2004 ) 1 2 Ric k Aviatio n Inc . v . Peninsul aAirpor t Cm m'n , FA A Docke t

No . 16

- 05-1 8 2 0 Sant aMonic aAirpor t

As s ' n v . Cit

y o f Sant aMonica , 200 3 W L 1963858 , at

*1 4 (FA A Docke t

No . 16-99-21 , Februar y 4 , 2003 ) 1 5 Sant aMonic aAirpor t

As s ' n v . Cit

y o f Sant aMonica , 200 0 W L 182446 3 at

*2 1 (FA A Docke t

No . 16-99-21 , Nov . 22 , 2000 ) (Dir . Det.) , aff d2003 , W L 196385 8 (Feb . 4 , 2003 ) 2 Thermc o Aviation , Inc . v . Count y o f Lo s Angele s at

15 , 25-2 6 (FA A Docke t No . 16-06-07 , Dec . 17,2007 ) 12 , 18 , 1 9 Wilson Ai r

Center , LL C v . Memphi s an dShelb y Count y Airpor t Auth. , 200 1 W L 1085348 , at *4 , *1 5 (FA A Docke t

No . 16-99-10 , Aug . 30 , 2001 ) 1 2 Regulation s 1 4 C.F.R . § 16.10 9 4 14C.F.R . § 16.2 1 14 , 1 6 1 4 C.F.R . § 16.23(a ) 9 1 4 C.F.R . § 16.3 1 4 1 4 C.F.R . § § 16.23(b)(3) , 16.29(b)(1 ) 1 3

11 1INTRODUCTIO N

Du e t o ne w circumstance s brough t abou t b y th e Complainan t

i n thi s case , th e FA A i s face dwith asituatio n i n whic h (1 ) th e origina l Complainant , th e Receive r for th e Venic e Je t Cente r ("VJC/Receiver") , n o longe r ha s an y lega l interes t

i n th e cas e becaus e it

ha s sol dth e asset s o f VJC , specificall y al l asset s relate dt o VJC' s FB O busines s at Venic e Municipa l Airport (th e "Airport" ) t o athir dparty , Tristat e Aviatio n Grou p o f Florida , LL C ("Tristate") , an d assigne dit s Airport

leas e t o Tristat e , ; an d(2 ) th e buye r o f thos e assets , Tristate , doe s not hav e a ripe clai mt o pursu e befor e th e agency . Perhap s awar e o f

th e fac t tha t neithe r VJC/Receive r

no r Tristat e individuall y ha s standin g t o pursu e th e complain t

at thi s point , Tristat e trie s th e novel , an dunauthorized , gambit o f seekin g t o "intervene " i n th e cas e an dfor "joinde r a s aco-complainant. " Apparentl y Tristat e believe s tha t tw o entitie s that , alone , hav e n o standin g no w t o pursu e aPar t 1 6 Complain t

agains t th e City ca n someho w b e cobble dtogethe r int o on e join t

entit y tha t

meet s th e requirement s tha t th e airpor t sponso r ha s take n a

n actio n directl y an dsubstantiall y affectin g th e Complainant , th e part y pursuin g th e Complain t

ha s first attempte dt o resolv e th e disput e betwee n th e partie s informall y befor e pursuin g th e Par

t 1 6 case , an dther e i s acurren t disput e betwee n th e partie s that warrant s FA A consideration .

' Th e City' s consen t

t o th e assignmen t

o f th e leas e fromVJ C t o Tristat e wa s subjec t t o th e conditio n that

th e assignmen t

o f th e leas e b y VJC , "shal l no t releas e o r

reliev e [VJC ] froman y duty , obligatio n o r liabilit y unde r

th e term s an dcondition s o f

th e [VJC ] lease. " Tristat e Motio n t o Interven e an dFo r Joinde r A s Co-Complainan t ("Tristate" ) a t

Exhibi t B . Thi s conditio n doe s no t reserv e an y right s t o VJ C with respec t t o th e leasehold , bu t

rathe r continue s VJC' s obligation s unde r th e lease . ^ Not e tha t

Tristate' s Motio n contain s thre e lettere dexhibit s (A , B , an dC ) bu t tha t i n addition , it s Exhibi t

A ("Receiver' s Motion" ) contain s interna l exhibit s als o designate db y letter : A (th e Asse t Purchas e Agreement ) an dB ( apromissor y note) . T o minimiz e confusion , whe n th e Cit y cite s t o an y o f th e document s foimdi n Exhibi t A t o Tristate' s Motion , i t

will cit e bot h Exhibi t

A , th e nam e o f

th e documen t

referre dt o (e.g. , "Receiver' s Motion " o r "Asse t Purchas e Agreement " o r "Promissor y Note") , an dth e interna l pag e numbe r o f th e document , a s show n o n th e to p right han dcome r

o f Tristate' s exhibits . Fo r

example : Tristat e Exhibi t A (Promissor y Note ) a t

X o f XX .However , thi s attemp t b y Tristat e t o vicariousl y benefi t fromVJC' s reques t

t o th e City t o buil dhangar s o n th e VJ C site , a s wel l a s VJC' s attempt s a t informal resolution , becaus e Tristat e "agree s with " VJC' s position , mus t fail . Ther e is , i n fact , n o part y that ha s standin g t o pursu e thi s complain t

befor e th e FA A at

thi s time . VJC/Receiver' s tim e t o d o s o ra n ou t whe n i t sol d VJC' s asset s t o Tristate . Tristate' s tim e t o d o s o ha s not ye t arrived , becaus e i t

ha s no t show n ho w i t ha s bee n directl y affecte d—i t ha s not presente daproposa l t o th e Cit y t o buil dhangar s o n th e site o r give n th e Cit y an opportunit y t o evaluat e th e proposa l base do n th e fact s an d circumstance s a s the y relat e t o Tristate , for instance , whethe r

Tristat e meet s th e Airport' s minimu mstandard s t o buil dth e hangars." ' No t onl y i s Tristate' s attemp t t o injec t itsel f int o th e cas e at

thi s poin t

i n th e proceeding s wholl y unauthorize db y Par t 1 6 Rules , bu t

i t woul dwast e agenc y resource s t o analyz e th e cas e an dmak e adeterminatio n base do n briefs an devidenc e tha t relie do n th e fact s tha t

hav e bee n supersede db y fiindamental change s i n th e circumstance s surroundin g th e leasehol di n question . Moreover , i t

woul dviolat e FAA' s well-establishe dprincipl e that i t i s concerne dwit h an airpor t sponsor' s curren t

complianc e i n aPart

1 6 proceedin g i f

th e agenc y wer e t o mak e adeterminatio n basedo n fact s pleade db y apart y that n o longe r

ha s an y interes t

i n th e airport , o r

o n th e claim s o f

^ Th e fac t

tha t th e Cit y consente dt o th e assignmen t o f th e leas e fromVJ C t o Tristate , base do n th e limite dtim e availabl e t o performdu e diligenc e b y th e Cit y unde r th e Distric t

Court' s Order , doe s no t

mea n tha t

th e Cit y investigated , muc h les s determined , whethe r Tristat e me t

th e minimu mstandard s for buildin g hangar s o n th e site . Fo r instance , Tristate' s purchas e pric e t o acquir e VJ C wa s $300,00 0 cas h an dapromissor y not e fo r $250,000 , wit

h apossibl e credi t

o f u p t o $50,000 . Tristat e Exhibi t A (Receiver' s Motion ) at p . 11-1 2 o f

22 . Tristat e ha s no t provide dth e Cit y with an y evidenc e tha t i t ha s th e capacit y t o rais e th e $1. 3 millio n estimate dcos t t o buil dth e hangar s an dstil l maintai n aviabl e FBO . Especiall y i n ligh t o f th e checkere dhistor y o f

th e VJ C site , th e Cit y i s entitle dt o mak e thi s investigation , pursuan t t o it s minimu mstandards . Se e Flightlin e Aviation , Inc . v . Cit y o f Shreveport , 200 8 W L 595535 5 a t *1 7 (FA A Docke t

No . 16-07-05 , Mar . 7 , 2008 ) (Dir . Det. ) ("FA A ha s uphel dan airport sponsor' s right

t o protec t

itsel f from financial and/o r

litigatio n risk. I t

appear s tha t

Respondent' s requirement s fo r

financia l 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 Airpor t fromfinancia l risk.") (citation s omitted) . Se e als o Sant a Monic aAirpor t

As s 'n v . Cit

y o f Sant aMonica , 200 0 W L 182446 3 at *2 1 (FA A Docke t

No . 16-99-21 , Nov . 22 , 2000 ) (Dir . Det) , afd , 2003 , W L 196385 8 (Feb . 4 , 2003 ) (Fin . Dec . & Ord.) .apart y tha t ha s no t eve n provide dth e airport sponso r with an opportunit y t o evaluat e it s proposa l befor e jumpin g int o aPart 1 6 proceedin g agains t

th e sponsor . VJC/Receive r

tol dth e FA A i n it s pleading s tha t th e entit y wit h alega l interes t i n th e cas e was , an dwoul dcontinu e t o be , VJ C a s acorporat e entity , an dtha t th e Receive r

woul deithe r maintai n contro l o f

VJ C o r sel l VJC . Instead , th e Receive r sol dth e asset s o f

VJC , leavin g VJ C with n o lega l interes t

i n th e outcom e o f

th e case.' * Moreover , th e Receiver tol dth e Cour t

that i t wa s goin g t o "assign " th e right t o pursu e thi s Par t

1 6 cas e t o Tristate . Instead , VJ C ha s apparentl y attempte dt o remai n i n th e case , despit e havin g n o lega l interes t i n it s forme r

Airport asset s o r th e purporte dright

o f th e leaseholde r

t o buil dhangar s o n th e forme r VJ C leasehold, whic h i s th e cru x o f

th e case . Tristate' s xmauthorize dattemp t t o conjur e standin g basedo n som e combinatio n o f tw o entitie s tha t

eac h fai l t o mee t

th e standin g requirement s o f Par t 1 6 shoul db e rejecte db y th e FAA . Fo r

th e reasons , se t

fort h above , and , mor e fully , below , th e complain t o f VJC/Receive r shoul db e dismissed , an dth e motio n o f Tristat e t o "intervene " an dfor "joinde r a s aco complainant " shoul db e denied .



### UPDATE D STATEMEN T O F FACT S VJC/Receive r

filed aPart

1 6 Complain t

agains t th e Cit y o f

Venic e (th e "City" ) o n o r abou t Jul y 2 , 2009 . Tristat e Exhibi t A , Receiver' s Motio n for Approva l o f

th e Sal e o f

th e Asset s o f th e Venic e Je t

Cente r ("Receiver' s Motion" ) a t 6 o f 12 . FA A dockete dthi s complain t o n Jul y 10 , 2009 . In doin g so , FA A necessaril y reliedo n representation s that VJ C ha dattempte dt o informall y resolv e th e issu e wit h th e City . (Complain t at 21-22 ; FA A Docketin g Notice , Docke t

^ VJC' s otil

y remaining fmancia

l interes t tha t i s tiedt o th e cas e i s it s obligatio n t

o provide acredit

of u p t o $50,000 t o Tristat e fo r actua l cost s incurredb y Tristat

e i n seeking t

o resolv e an

y difference s wit

h th e City , including cost s incurredin pursuin g thi s Par t 1 6 case . Tristat

e Exhibit A (Receiver' s Motion) a

t p . 1 1 of 22 an d(Promissor

y Note) a t p . 2 of 10 . VJC' s obligatio n i s not dependen t on th e outcom

e o f th e case , bu t rather , on th e amoun

t Tristat e spend s i n resolvin g issue s wit h the City . Thus , if

anything , VJ C ha s afinancia l interes t in thi s cas e not

proceeding .No . 16-09-05) . I n fact , th e loca l airport s district offic e ha dreviewe dan informa l complain t filed b y VJ C and , o n Ma y 18 , 200 9 state di n a n emai l t o th e Receive r

that "w e wer e imsuccessfii l i n assistin g Venic e Je t

Cente r wit h an informa l Part

1 3 resolutio n t o thei r

complaint.... " VJ C Complain t

a t Exhibi t 21 . Base do n th e fact s an dcircumstance s presente db y th e Complain t an dth e City' s responsiv e pleadings , th e cas e ha s bee n fiilly briefe dan di s awaitin g aDirector' s Determination. ^ However , ther e hav e bee n materia l change s i n th e circumstance s surroundin g thi s cas e brough t abou t b y action s o f

th e Complainant . Specifically , (1 ) th e Complainan t entere dint o a

n Asse t Purchas e Agreemen t

with Tristat e (Tristat e Motio n at T f 3 ; Tristat e Exhibi t

A (Asse t Purchas e Agreement)) ; (2 ) th e Complainan t sough t approva l o f

th e agreemen t

b y th e federal district

court overseein g th e Receivershi p (Tristat e Motio n a t ^ 5 ; Tristat e Exhibi t

A (Receiver' s Motion)) ; (3 ) th e City approve dth e assignmen t o f th e VJ C leas e t o Tristat e (Tristat e Exhibi t B) , but filedan objectio n t o VJC' s attemp t t o assig n th e right

t o pursu e thi s Part

1 6 cas e t o Tristat e (Exhibi t I (Cit y Respons e t o Receiver' s Motion i n Distric t Court ) at 13-20 ; an d(4 ) th e Court approve dth e Asse t Purchas e Agreemen t

o n Januar y 10 , 2010 , but explicitl y state dthat

i t di dnot confe r standin g o n Tristat e t o participat e i n th e Part 1 6 proceedin g (Tristat e Motion a t f8 ; Tristat e Exhibi t c m1-3) . Th e Court

Orde r specificall y state dtha t

"a s th e Receive r

ha s acknowledge di n hi s Reply . . . th e approva l o f thi s assignmen t

o f th e VJC' s interes t

i n th e Part

1 6 proceedin g presentl y pendin g befor e th e FA A doe s not dives t th e FA A o f

th e independen t

right t o determin e

' Inexplicably , th e Receive r tol dth e Distric t

Court tha t "[a]lthoug h th e [Par t

16 ] actio n i s no w fiilly briefed , th e partie s hav e th e opportunit y t o engag e i n limite ddiscover y an dt o the n presen t thei r cas e i n a n evidentiar y hearin g befor e th e FAA. " Tristat e Exhibi t A (Receiver' s Motion ) a t 6 o f 22 . Ther e i s n o discover y o r hearin g at

thi s stag e o f th e proceeding , prio r

t o th e issuanc e o f

th e Director' s Determination . Compar e 1 4 C.F.R . § 16.3 1 with 1 4 C.F.R . § 16.109 .th e issu e o f standin g i n tha t

proceedin g no r

i s th e Court' s approva l intende dt o confer standin g o n Tristat e .. . i n tha t

proceeding. " Tristat e Exhibi t C at ^ 3 . ARGUMEN T A . Th e Complain t

Shoul dB e Dismisse dBecaus e VJ C I s N o Longe r aTenan t

o r Use r o f th e Airpor t

an dIt s Claim s Ar e Moo t Th e origina l fact s upo n whic h FA A dockete dth e complain t b y VJC/Receive r

hav e bee n overtake n b y events . VJ C ha s sol dal l o f it s asset s t o Tristat e (Tristat e Exhibi t A (Receiver' s Motion ) an dExhibi t

C (Cour t Orde r Approvin g Sal e an dTransfe r t o Tristat e ("Court

Order"))) , an dha s assigne dit s leaseholdinteres t a t th e Airport

t o Tristate . Id . Accordin g t o th e Receiver' s Motion t o th e Distric t

Court, VJ C "wil l hav e n o asset s an dn o continuin g busines s othe r tha n th e collectio n o f

th e promissor y not e tha t i s apart o f thi s sale. " Tristat e Exhibi t A (Receiver' s Motion ) a t 10of22 , n . 7 . Th e requiremen t

o f Tristat e t o mak e pajonent s t o VJ C i s no t contingen t

i n an y wa y upo n Tristat e bein g grante dth e right t o construc t

hangar s a

t th e Airport . Base do n th e term s o f th e agreemen t

filedwith , an dapprove dby , th e Court, VJ C wil l not receiv e an y additiona l fiinds fromTristat e i f

Tristat e i s allowe dt o buil dth e hangars . Tristat e Exhibi t A (Asse t Purchas e Agreement) . No r

wil l VJ C receiv e an y les s fund s fromTristat e i f Tristat e i s no t

permitte dt o buil dth e hangars. ^ In fact , pursuan t t o th e Asse t

Purchas e Agreemen t

betwee n th e Receiver

an d Tristate :

* Indeed , th e onl y financial implication s o f thi s cas e for

VJ C ar e relate dt o acredi t o f u p t o $50,00 0 tha t

VJ C i s obligate dt o provid e t o Tristat e a s reimbursemen t fo r cost s Tristat e incur s i n pursuin g thi s cas e o r othe r efiforts t o resolv e issue s with th e City . Se e not e 3 , above . Thus , i f Tristate' s motion , discusse di n Sectio n B , i s granted , VJ C ma y ultimatel y receiv e les s fund s fromTristate . VJC' s obligatio n i s no t dependen t

o n th e substantiv e outcom e o f th e case , bu t

onl y t o th e amoun t

o f mone y Tristat e spend s i n pursuin g th e case .Th e [VJC ] Asset s ar e sol d[t o Tristate ] o n an "A S IS " "WHER E IS " BASIS ,

WIT H AL L FAULT S AN D WITHOU T REPRESENTATIONS , EXPRES S O R IMPLIED , O F AN Y TYPE , KIND , CHARACTE RO RNATURE , INCLUDIN G BU T NO T LIMITE D TO , SUITABILIT Y O F TH E ASSET S FO RAN Y USE , AN D WFTHOUT WARRANTIES , EXPRES S O RIMPLIED , O F AN Y TYPE , KIND , CHARACTE RO RNATURE , INCLUDIN G BU T NO T LIMITE D TO , SUITABILIT Y O F TH E ASSET S FO RAN Y USE , AN D WITHOU T RECOURSE , EXPRES S O RIMPLIED , O F AN Y TYPE , KIND , CHARACTE R O RNATUR E EXCEP T FO RTH E EXPRES S REPRESENTATION S AN D WARRANTIE S SE T FORT H I N SECTIO N 1 0 HEREOF . Id . a t § 1 (Capitalizatio n i n original) . Se e als o id . a t §10(b)(ii ) (containin g virtuall y th e sam e language) . Thus , th e Receive r ha s mad e n o representation s t o Tristat e a s t o whethe r th e parce l i s suitabl e fo

r th e constructio n o f

th e hangar s a

t issu e i n thi s Part

1 6 proceeding . A s pointe dou t

i n th e City' s previou s pleadings , th e Receiver , wh o confrolle dVJ C prio r t o th e filing o f

th e Complaint , an dstil l control s wha t littl e remain s o f

VJC , ha s alega l obligatio n t o marsha l a s man y asset s a s possibl e for th e benefi t

o f th e defraude dinvestor s i n Nadel' s schemes . Se e City' s Memorandu mo f Point s an dAuthoritie s i n Support o f It s Answe r

an d Motio n t o Dismiss , Exh . 3 ("Receiver' s Secon dInteri mReport" ) at 4- 5 o f 41 ; Tristat e Exhibi t

A (Receiver' s Motion ) at

p . 3 o f 22 , citin g Orde r

Appointin g Receive r

at 1-2 . Th e Receiver asserte dt o th e Court

tha t th e sal e o f

asset s t o Tristat e fiilfilledthi s obligatio n with respec t t o VJC.' ' /^ . a

t 8- 9 o f 22 . Perhap s becaus e o f

this , th e Receiver

tol dth e Court

that h e wa s seekin g t o assig n VJC' s interes t t o pursu e thi s Par t

1 6 cas e t o Tristate . Id . at 7 , 10-11 , includin g n . 9 , an d2 1 o f 22. ^ A s a result , th e court

approve dth e assignmen t o f VJC' s interes t

i n thi s case , subjec t

t o FAA' s Thus , i f th e Receive r

wer e t o continu e t o pursu e thi s Par t 1 6 case , h e woul darguabl y violat e hi s obligation s t o th e Court an dt o th e victim s o f

th e Nade l fraud, a s h e woul db e expendin g Receivershi p fiinds with n o prospec t o f a benefi t t o th e Receivership . * Th e Receive r

asserte dtha t

"VJ C will als o assig n it s rights i n th e Par t 1 6 proceedin g tha t

will b e continue db y Tristate, " (Receiver' s Motio n a t p . 1 1 o f 22 , n . 9) , an dfiirther

state dtha t

"di e pursui t

o f tha t [Part 16 ] proceedin g b y th e propose dpurchase r

alleviate s th e fiiture litigatio n expense s [o f VJC/Receiver ] an dth e risk o f anegativ e outcom e i n th e litigation. " Id . at

7 o f 22 .independen t determinatio n tha t

Tristat e ha s standin g t o participate . Tristat e Exhibi t C a t p . 3 o f 4 , TI 3 ("Sai drights shal l includ e th e right o f Tristat e Aviatio n Grou p o f Florida , LLC , t o b e substitute di n th e VJC' s stea di n th e proceedin g befor e th e FAA" ) (emphasi s added) . However , th e Receive r

ha s no t don e wha t

h e tol dth e Court

h e woul dd o an dwha t

th e Court

ordered . Id . a

t Tf f 2-3 . Instead , Tristat e ha s sough t t o ad ditsel f

t o th e cas e whil e VJC/Receive r remain s i n th e case . VJC/Receiver , th e Complainant , i s n o longe r "directl y an dsubstantiall y affected " b y th e City' s refrisa

l t o approv e th e constructio n o f th e hangars , becaus e VJC , throug h th e Receiver , ha s sol dal l o f it s airport

asset s t o Tristate , i s n o longe r atenan t o r use r o f th e Airport , an d VJC/Receive r

ha s n o financial interes t

i n th e outcom e o f

thi s case. ^ Thus , an y basi s th e FAA ma y hav e ha dfor

finding tha t

VJC/Receive r

me t th e standin g requirement s o f Part 1 6 (§ § 16.23(a ) an d(b)(4 ) (complainan t mus t b e directl y an dsubstantiall y affecte db y respondent' s actions) ) ha s bee n eliminate db y th e Complainant' s ow n actions . Tristate' s Motio n t o Interven e assert s tha t VJC' s Complain t

i n thi s proceeding , a s wel l a s subsequen t

pleadings , "discusse dth e Receiver' s inten t t o sel l th e asset s o f

th e VJC. " Tristat e Motion Tf2

. Thi s assertio n i s incorrect . I n fact , th e Complainan t state dtha t

that th e Receive r

i s "intereste di n sellin g VJC " an d"intend s t o sel l th e VJ C t o awillin g an dabl e purchaser. " VJ C Complain t

^ 58 , 59 . Sellin g VJ C a s acorporat e entit y i s quit e differen t fromsellin g th e asset s o f VJC , an dth e Complainan t ha s previousl y place dagrea t dea l o f relianc e o n thi s distinction . Th e Complainant' s pleading s asserte dtha t VJ C a s a n entit y woul dremai n th e sam e regardles s o f whethe r th e Receive r

sol dVJ C o r

kep t i t i n Receivership . Whe n th e Cit y challenge dth e right o f

' A s note di n footnote s 3 an d5 , above , VJC' s onl y financial interes t i n thi s cas e i s no t

dependen t

o n th e outcome , bu t rathe r relate s t o acredi t

o f u p t o $50,00 0 tha t

VJ C i s obligate dt o appl y t o Tristate' s fiiture payment s t o VJ C base do n amount s Tristat e actuall y spend s i n tryin g t o resolv e issue s with th e City .VJC/Receive r t o brin g thi s case,' " th e Complainan t state dthat

th e applican t

for permissio n t o buil dth e hangar s wa s th e corporat e entity , VJC : It is , therefore , irrelevan t

whethe r th e part y tha t

currentl y confrol s th e VJC , th e Receiver , sell s th e VJ C for maximu mprofi t

o r keep s th e compan y i n receivershi p an dconstruct s th e hangars . Th e Complainan t i s no t th e Receiver , but

th e VJC , an entit y tha t i s separat e an dapart

fromth e Receiver

(an dtha t wa s separat e an dapart fromNadel) . VJ C Repl y at 6. " O f course , VJ C i s als o a n entit y tha t i s separat e an dapart

fromTristate . Confrar

y t o th e Receiver' s repeate dclaim s i n thi s proceedin g tha t i t intende dt o sel l VJ C a s a n entity , th e sal e t o Tristat e was onl y for

th e asset s o f

VJC ; not for th e corporat e entit y itsel f Se e Exh . A t o Tristat e Motio n (Asse t

Purchas e Agreement ) an d(Receiver' s Motio n a t 3 , 10-1 1 o f

22 , includin g n . 7 , an d2 1 o f 22) . Tristat e has , therefore , acquire dVJC' s assets , includin g th e leasehol dwith th e City , bu t not VJC' s corporat e identity . Thus , whil e th e Receive r

ha dstate dtha t

th e part y i n interes t

wa s an dwoul dremai n VJ C

- eve n thoug h th e cas e wa s brough t b y th e Receiver , an dane w entit y ma y purchas e VJ C - i n fact , Tristat e i s aseparat e entit y fromVJC , an dVJ C n o longe r ha s an interes t

i n th e asset s i t conveye dt o Tristate . VJ C i s no t atenan t nor , apparently , eve n ause r o f th e Airport . VJ C ha s n o lega l rights relatin g t o th e leasehold , th e leasehol dsite , o r an y allege drights t o mak e improvement s thereon . Accordingly , th e Part 1 6 Complainant , VJC/Receiver , lack s standin g t o continu e t o pursu e th e case . It ha s n o mor e right

t o participat e i n thi s proceedin g a t thi s poin t

' " Th e City' s prio r

challeng e o f

th e Receiver' s right

t o brin g thi s cas e o n behal f o f VJ C i n th e first

plac e woul d remai n i f th e FA A denie dth e City' s curren t Motio n t o Dismis s basedo n ne w fact s tha t hav e arise n sinc e th e briefin g wa s complete di n thi s case .

" Se e als o Complainant' s Repl y a t 5 , wher e VJC/Receive r

insiste dtha t

"[t]h e VJ C i s th e Tru e Part y at Issue " an d VJ C Repl y at

7 : "[w]hethe r

th e Receive r

sell s th e VJ C t o anothe r

part y wh o wil l buil dth e hangar s o r decide s t o kee p th e VJ C i n receivershi p for additiona l tim e an dconstruc t th e hangar s himsel f

i s completel y irrelevan t

becaus e th e VJC' s rights a s acorporat e entit y ar e no t affected ; i t

ha s th e right

t o construc t

hangar s o n it s leasehol dregardles s o f wh o control s i t

o r wh o want s t o bu y it. " (emphasi s added) .tha n doe s th e previou s leaseholder, Tripl e Diamond,' ^ fromwho mVJ C ha dpurchase dth e FB O

assets . Becaus e th e Complainan t can n o longe r

sho w tha t

ther e i s adisput e betwee n th e airpor t sponso r an dComplainan t

regardin g allege dgran t

assuranc e violation s tha t directl y an d substantiall y affec t

th e Complainant , th e Complain t shoul db e dismissed.' ^ B . Tristat e Shoul dNo t B e Permitte dt o Interven e o r Joi n th e Complain t

Becaus e Par t 1 6 Doe s No t

Permi t Interventio n o r

Joinde r an dBecaus e Ther e I s N o Actua l Controvers y Betwee n Tristat e an dth e Cit y 1 . Par t

1 6 Does No t

Permi t Interventio n o f

aNe w Part y Prio r

t o Issuanc e o f

a Director' s Determinatio n o r Joinde r a t An y Tim e Pursuan t t o Part 16 , acomplain t

i s th e mean s for

aparticular

individua l o r

entit y t o asser

t aclai mtha t

i t ha s bee n "directl y an dsubstantiall y affecte db y an y allege dnoncompliance " b y a n airport sponsor . 1 4 C.F.R . § 16.23(a) . Unde r Part 16 , FA A investigate s th e allegation s i n th e complaint , an dth e respons e o f th e sponsor , befor e issuin g it s first, an dnon-final , decisio n i n a Director' s Determination . Se e id . at §§16. 3 an d16.31 . Th e Directo r ma y dismis s acomplain t i f th e complainan t

lack s standing . Id . at

§ 16.25(c) . Reflectin g th e natur e o f

aPart 1 6 complain t

an dsubsequen t

investigation , Part

1 6 make s n o provisio n for

interventio n prio r

t o th e issuanc e o f

aDirector' s Determination . Par t 1 6 i s explici t tha t request s t o interven e wil l b e entertaine donl y afte r issuanc e o f

th e Director' s Determinatio n an dafte r

th e airport

sponso r ha s requeste dahearin g pursuan t t o Sectio n 16.201 . Id . at § 16.207 . Se e als o Boc aRato n Je t Center , Inc . v . Boc aRato n Airpor t Auth . 199 9 W L 73271 0 at *3 , fii. 1 (FA A Docke t

No . 16-97-0 6 Aug . 20 , 1999 ) (Fina l Director' s Determination )

'^ A s note di n th e City' s previou s pleadings , before sellin g it s asset s t o VJC , Tripl e Diamon dpropose dt o construc t t-hangar s o n th e sit e - adifferen t hanga r projec t than propose db y VJC . City' s Memorandu mi n Suppor t o f It s Answe r an dMotio n t o Dismis s at 5 . Th e ne w leaseholde r

o f th e sit e ma y similarl y propos e adifferen t projec t than VJ C did .

' ^ See , e.g. . Platinu mAviatio n an dPlatinu mJe t Cente r BM I v . Bloomington-Norma l Airpor t Authority , (FA A Docke t No . 16-06-09 , 200 7 W L 485432 1 a t •5 , Jun e 4 , 2007 ) (Dir . Det. ) (notin g tha t FA A doe s no t

addres s pas t complianc e issue s an ddismissin g clai mi n par t becaus e i t

ha dbecom e moot) .(denyin g motion s t o interven e b y Boc aAviatio n i n aPart 1 6 proceedin g becaus e interventio n i s not permitte dprio r

t o issuanc e o f

aDirector' s Determinatio n an dreques t for ahearing) . Similarly , ther e i s n o provisio n for th e joinde r

o f separat e claim s int o asingl e Part 1 6 proceedin g a t an y time . Applyin g th e sam e logi c t o joinde r a s th e Directo r

applie dt o interventio n i n Boc a Raton , joinde r

o f claim s i s als o no t

permitte dunde r

Part 16 . Allowin g a

n exceptio n t o th e rul e i n thi s cas e i s inappropriat e becaus e an y clai mTristat e ma y hav e wil l depen do n differen t fact s tha n thos e asserte db y VJC . I f Tristat e believe s i t

ha s a clai magains t

th e City , despit e havin g neve r requeste dCit y approva l for an y actio n o r

projec t othe r tha n consen t

t o th e leas e assignmen t

- whic h th e Cit y provide d- i t shoul dfile it s ow n complaint , demonstrat e tha t i t ha s standin g t o d o so , an dse t fort h th e mean s b y whic h i t attempte dt o resolv e th e underlyin g issu e informall y wit h th e City . Becaus e addin g Tristat e woul drequir e analysi s o f ne w fact s an dissues , addin g Tristate' s claim s t o VJC' s cas e woul d short-circui t

th e carefiilly-crafte dprocedure s o f th e Part 1 6 process , an dprejudic e th e City' s right t o defen ditself.'" * Here , Tristat e seek s t o interven e i n apreviousl y filedPart 1 6 complain t

an djoi n it s claim s wit h thos e o f

VJC , befor e aDirector' s Determinatio n ha s bee n issue d(andtherefor e befor e th e airport

sponso r ha s requeste dahearin g unde r Sectio n 16.201) . Thi s i s not , therefore , asimpl e substitutio n o f

parties , an dindee dTristat e i s carefii l no t t o phras e it s motio n a s a substitutio n o f

complainants . Rathe r

Tristat e seek s t o asser t

it s ow n clai mi n additio n t o th e clai mo f VJC . Becaus e Part

1 6 doe s not

permi t interventio n a

t thi s stag e o f

th e proces s o r joinde r at an y time , th e motio n mus t b e denied .

'• * O f course , if FA A grant s the City' s concurrently-file dMotion t o Dismiss , ther

e wouldb e no ongoing cas e i n which Tristat

e couldintervene o

r "join. " I n suc h event , FA

A shoulddismis s Tristate' s motio n a s moot . 1 02 . An y Clai mTristat e Ma y Tr y t o Asser t I s Unrip e a s Ther e I s N o Actua l Controvers y Betwee n Tristat e an dth e Cit y a . Tristat e Ha s No t Sough t Cit y Approva l o f

An y Hanga r

Project , an d th e Cit y Ha s No t

Prohibite dTristat e fro mAn y Aeronautica l Activit y Tristat e ha s no t

presente dth e Cit y wit h apla n for Tristat e t o buil dhangar s o n th e leasehol dno r

requeste dtha t

th e City approv e an y suc h plan . A s aresult , th e Cit y ha s neithe r approve dno r

denie dan y Tristat e hanga r request . Th e Cit y mus t

b e give n a n opportunit y t o evaluat e an drespon dt o an y Tristat e pla n befor e Tristat e can brin g aPart 1 6 actio n agains t

th e City . Tristate' s assertio n tha t i t "agree s an djoin s wit h VJ C i n th e allegation s an dlega l position s containe di n th e Part

1 6 Complain t

an dVJC' s subsequen t

pleadings " (Tristat e Motio n ^ 10 ) doe s not eliminat e th e nee dfo r

Tristat e t o alleg e acurren t violatio n o f

federal obligation s tha t

ha s a curren t advers e impac t

o n itsel f Fvmdamenta

l requirement s for

standin g an dripeness canno t b e satisfie dmerel y b y agreein g with a n existin g party' s allegation s an dlegal positions . Tristat e mus t demonsfrat e tha t

i t independentl y meet s thes e requirements , an di t ha s faile dt o d o so . Moreover , th e managin g directo r o f Tristat e tol dth e City , o n th e record , i n aJanuar y 5 , 201 0 meetin g o f

th e Cit y Council , tha t

Tristat e ha s n o curren t

plan s t o buil dne w hangar s o n th e site.' ' Indeed , Tristat e refraine dfrommakin g an y concret e proposa l regardin g hanga r construction . Thus , i t

i s prematur e for

th e Cit y t o rul e o n an y speculativ e assumptio n a s t o a hangar projec t tha t Tristat e ma y o r

ma y not propos e t o th e City . An di t i s certainl y prematur e fo r th e FA A t o determin e whethe r th e Cit y ha s complie dwith applicabl e gran t assurances , becaus e

" Tristate' s Managin g Director , Mart y Kretchma n (Tristat e Exhibi t A , (Receiver' s Motion ) at p . 9 o f 22 ) mad e i t clear tha t Tristat e ha dno t

eve n mad e adecisio n ye t o n whethe r

o r no t i t shoul dbuil dhangar s o n th e leasehold , bu t wante dt o kee p it s option s open . "However , w e wan t t o leav e ope n th e possibilit y o f buildin g ne w hangars , i f w e findth e deman di s there . I understan dth e deman dfo r t-hangar s i s down , bu t

w e haven' t

don e an y independen t determinatio n t o findtha t s o w e wan t

t o leav e tha t

doo r ope n unti l w e kno w it' s tim e t o clos e it . .. . jus t no t limitin g ou r potentia l retur n o n ou r

investmen t

goin g forward. " Cit y Exhibi t II ; I n ligh t

o f this , i t i s no t surprisin g tha t

h e indicate dtha t

Tristat e di dno t

hav e an y immediat e plan s t o buil dhangars . ".. . I don' t hav e an y intentio n t o brea k groun dtomorro w o n thos e hangars . On e ste p a t atime . There' s aver y linear proces s here . Th e leas e transfe r i s wha t w e nee dt o focu s o n ... " Cit y Exhibi t III . 1 1th e Cit y ha s not mad e an y decision ; i n fact , i t ha s not eve n bee n aske dt o mak e an y decisio n b y Tristate . Becaus e Tristat e ha s no t

ye t presente daproposa l t o th e City , an di t ha s state dt o th e Cit y Counci l that

i t ha s n o curren t

inten t t o buil dhangars , ther e i s n o curren t complianc e issu e for FA A t o adjudicate . Th e purpos e o f FAA' s complianc e program , includin g Part 16 , i s t o ensur e curren t airport sponso r complianc e with it s federal obligations . FA A Orde r 5190.6 B a t

2-1 ; Thermc o Aviation , Inc . v . Count y o f Lo s Angele s at

15 , 25-2 6 (FA A Docke t

No . 16-06-07 , Dec . 17 , 2007 ) (Fina l Agenc y Decision) . I n evaluatin g aPart 1 6 complaint , FA A i s concerne donl y with asponsor' s curren t

complianc e wit h it s federal obligations , no t allege dpas t

noncompliance . Platinu mAviation , FA A Docke t No . 16-06-09 , Director' s Determinatio n a t 46 , n . 255 . Failur e t o demonstrat e curren t

noncomplianc e i s ground s for dismissa l o f

aPart 1 6 Complaint . Richar dE . Steer e v . Count

y o f San Diego , 200 4 W L 3198209 , at *1 6 (FA A Docke t

No . 16-99-15 , Dec . 7 , 2004 ) (Fina l Dec . & Ord.) ; Wilson Ai r Center , LL C v . Memphi s an dShelb y Count y Airpor t Auth. , 200 1 W L 1085348, at *4 , *1 5 (FA A Docke t

No . 16-99-10 , Aug . 30 , 2001 ) (Fina l Dec . & Ord.) . Unti l Tristat e demonsfrate s tha t i t ha s sough t

t o buil dhangar s an dbee n prevente dfrom doin g so , an y clai mb y Tristat e relatin g t o hanga r constructio n i s unripe . Se e Northwes t Airlines , Inc . V . Indianapoli s Airpor t

Auth. , 200 8 W L 3976461 , at 1 8 (FA A Docke t

No . 16-07-04 , Aug . 19 , 2008 ; (Dir . Det. ) affd . Fina l Agenc y Decisio n an dOrder , Oct . 27 , 200 9 ("Th e Directo r agree s wit h th e Authorit y tha t Amendmen t

No . 3 ha s ye t

t o adversel y affec t

th e Complainant s .. . [T]h e issu e i s no t ye t ripe for revie w sinc e th e ren t

Credi t ha s not bee n applie d an dth e Complainant s hav e no t bee n harmed." ) Similarl y here , Tristat e ha s no t demonsfrate d that i t ha s bee n harme da t

thi s point ; i t

ha s not alleged , mus t

les s demonstrated , tha t

i t ha s an y

1 2curren t

plan s t o develo p hangar s o n th e site , propose dsuc h developmen t t o th e City , an dbee n prevente dfromimplementin g it s plans . FA A shoul dden y Tristate' s motio n o n thi s basis . I n Indianapolis , th e FA A fiirther stated , "th e Directo r

wil l no t speculat e regardin g th e fiiture rat e makin g methodolog y that th e Complainant s an dth e Authorit y ma y negotiat e for th e replacemen t

o f th e Leas e Agreement. " Id . Similarly , th e FA A shoul dno t speculat e her e a s t o whethe r th e Cit y an dTristat e coul dwor k ou t amutuall y agreeabl e solutio n i f Tristat e wer e t o mak e a n actua l proposa l t o th e City . Thi s i s aprimar y reaso n tha t FA A require s complainant s t o attemp t informa l resolutio n befor e the y ma y file acomplaint , an dTristate' s failur e t o d o s o not onl y fail s t o satisf

y § 16.21 , bu t

i t als o demonsfrate s tha t

an y clai mTristat e assert s a t thi s poin t

i s unripe . I n Indianapolis , th e Directo r foun dthat , a s th e cost s for th e dispute drenta l credi t "wil l no t b e imposed , i f

at all , unti l a

t leas t th e expiratio n o f

th e Leas e Agreemen t

i n Decembe r 201 0 .. . ther e i s n o controvers y ripe for revie w fo r

FAA. " Id . a

t 29 . Accordingly , th e complain t wa s dismissed . Fo r

th e sam e reasons , FA A shoul drejec t Tristate' s motion . Tristat e attempt s t o solv e it s inheren t lac k o f standin g b y allegin g tha t i t ha s bee n "directl y an dsubstantiall y affecte db y th e City' s non-complianc e becaus e i t purchase dth e VJC' s asset s an dinterest , includin g th e right t o develo p th e propert y an dth e City' s effort s t o restric t developmen t

o n th e leasehol dar e i n violatio n o f thes e rights." Tristat e Motio n 1 [ 10 . However , Tristat e ha s no t

pleaded , muc h les s demonsfrated , tha t i t ha s attempte dt o buil dth e hangar s o r ha s an y plan s t o d o s o i n th e nea r future . Merel y sayin g i t ha s bee n harme di s no t

sufficien t t o demonsfrat e that

apropose dcomplainan t

has , i n fact , bee n harmed . Se e 1 4 C.F.R . § § 16.23(b)(3) , 16.29(b)(1 ) (complainant s mus t "[p]rovid e aconcis e bu t complet e statemen t

o f th e fact s relie dupo n t o substantiat e eac h allegation " an dmus t als o "fil e document s .. . sufficien t t o

1 3presen t

al l relevan t

fact s an dargumen t

necessar y for

th e FA A t o determin e whethe r th e sponso r i s i n compliance.") Indeed , th e term s o f

th e Asse t Purchas e Agreemen t

undercu t Tristate' s claim . Tristat e purchase dVJC' s asset s an dinterest s "'A S IS ' 'WHER E IS' " wit h n o representation s a s t o th e suitabilit y o f

th e leaseholdfor

an y particula r

use . Tristat e Exhibi t

A (Asse t Purchas e Agreement ) at

§§1 , 10 . Tristate' s assertio n that i t ha s bee n harme db y arestrictio n o n it s us e simpl y a s aresul t

o f havin g purchase dVJC' s assets , is , thus , implausibl e o n it s face . Moreover , th e City' s reason s for turnin g dow n VJC' s reques t t o buil dth e hangar s wer e relate dt o th e specifi c circumstance s relatin g t o VJC , a s se t fort h i n th e City' s pleading s i n thi s proceeding , alon g wit h th e City' s plan s for developmen t

o f th e airpor t

pursuan t t o th e AL P agree dupo n b y th e FA A an dth e City . Neithe r Tristat e no r

th e FA A ar e entitle dt o assum e tha t th e Cit y woul dmak e th e sam e decisio n wer e Tristat e t o submi t aproposa l t o buil dhangar s consisten t wit h th e ALP , i f

Tristat e wer e t o mee t

th e Airport' s Minimu mStandard s fo r th e project . Se e Indianapoli s a t 18 . b . Tristat e Ha s No t Satisfie dth e Requirement s o f Par t 1 6 t o Attemp t Informa l Resolutio n wit h th e Cit y Whil e VJ C engage di n informa l attempt s t o resolv e it s disput e wit h th e City , thu s meetin g th e requiremen t

o f 1 4 C.F.R . §16.21 , Tristat e canno t piggybac k

o n VJC' s actions . I

n ligh t o f th e circumstance s relatin g t o Tristate , whic h ar e differen t fromth e circumstance s surroundin g th e VJC/Receive r Complain t

filedwit h th e FAA , Tristat e ha s obviousl y not attempte dinforma l resolutio n o f adisput e that

ha s no t ye t arisen . A s such , i t

fail s t o mee t

a fundamental requiremen t for initiatin g aPart

1 6 complaint . Se e §16.21 . Se e als o Boc aAirport , Inc . V . Boc aRato n Airpor t

Authority , FA A Docke t

No . 16-04-02 , Orde r

o f Dismissa l (Marc h 21 , 2004) . 1 4In acas e wher e th e Directo r foun dthat

complainant s ha dnot

engage di n attempt s a

t informa l resolutio n befor e filing acomplaint , bu t th e Directo r

nonetheles s mad e adeterminatio n t o dismis s th e Complain t

o n th e merits , th e Fina l Agenc y Decisio n criticize dth e Directo r for not dismissin g th e cas e fo r

failur e t o engag e i n informa l resolution . In th e decision , FAA explaine d th e reason s for

§ 16.2 1 an dwh y complaint s shoul db e dismisse di f informa l resolutio n ha s not bee n attempte db y th e complainant : I f th e Directo r

believe dtha t

th e Complainant' s [sic ] ha dno t engage di n goo dfait

h effort s t o informall y resolv e thi s Complaint , amor e appropriat e actio n woul d hav e bee n t o dismis s th e Complaint , withou t prejudice , t o allo w th e opportunit y for th e Complainants ' [sic ] t o correc t thi s procedura l deficiency . Nothin g i n 1 4 CF R§ 1 6 prevent s th e Director' s [sic ] frommakin g afindin g regardin g th e procedura l requirement s o f th e rul e i n hi s Director' s Determinations . Rather , i t i s m y opinio n tha t

th e Director' s decisio n t o addres s th e merit s o f

thi s cas e afte r

affirmin g abasi s for

aprocedura l dismissa l undermine s th e expres s intent o f th e Part 1 6 rul e a s a n expedite dprocedure . Th e inten t

o f Part 1 6 i s t o expedit e substantiall y th e handlin g an ddispositio n o f airport-relate dcomplaints . 1 4 CFR§ 16.21(a ) i s designe dt o ensur e tha t th e FA A doe s no t expen dit s limite dresource s considerin g complaint s that ar e late r withdraw n becaus e th e partie s resolv e th e issue s o n thei r own . Full y considerin g th e merit s o f

th e allegation s withou t

ensurin g tha t

th e requirement s o f

1 4 CF R§ 16.21(a ) hav e bee n me t

coul dresul t

i n th e inefficien t

us e o f limite dFA A resources... . Sant aMonic aAirpor t

As s 'n v . Cit

y o f Sant aMonica , 200 3 W L 1963858 , at *1 4 (FA A Docke t No . 16-99-21 , Februar y 4 , 2003 ) (Fina l Dec . & Ord. ) (footnot e omitted) . Fo r th e reason s expresse di n Sant aMonica , th e FA A shoul drejec t Tristate' s motio n t o b e adde d a s aCo-Complainant , becaus e i t ha s faile dt o engag e i n attempt s t o resolv e informall y it s purporte ddisput e wit h th e City . I n anothe r

case , FA A foun dtha t

acomplainant' s effort s t o engag e i n goo dfait h pre complain t resolutio n ma y hav e bee n inadequat e becaus e th e complainan t gav e th e airport sponso r inadequat e tim e t o respon dt o it s proposal . Jetawa y Aviation , LL C v . Bd . o f Count y Com m'rs , 200 6 W L 4393155 , at *1 2 (FA A Docke t

No . 16-06-01 , Nov . 6 , 2006 ) (Dir . Det.) . 1 5However , FA A proceede dt o decid e th e cas e o n th e merit s becaus e th e responden t sough t a decisio n o n th e merits , an dthus , chos e not t o file amotio n t o dismis s base do n complainant' s failur e t o attemp t

informa l resolution.' ^ I n thi s case , Tristat e ha s mad e n o attemp t a t informal resolutio n prio r t o seekin g t o joi n i n th e cas e a s a"co-complainant. " Unlik e th e complainan t i n Jetaway , Tristat e ha s no t demande da Cit y respons e t o it s proposa l withi n an unreasonabl e timefram e {i dat *12) ; rather , Tristat e ha s no t eve n mad e aspecifi c proposa l t o th e Cit y t o buil dhangars , includin g suc h fiandamental informatio n a s scope , timing , an dfiinding o f th e project . Thus , Tristate' s pre-complain t actio n (o r inaction ) i s eve n mor e unreasonabl e tha n th e pre-complain t action s o f

Jetaway , an dth e FA A shoul dden y Tristate' s motio n o n thi s basis . B y objectin g t o Tristate' s motio n for joinde r a s aco-complainant , th e City , unlik e th e airport sponso r i n Jetaway , ha s mad e i t

clear tha t th e Cit y believe s tha t

Tristate' s motio n shoul d b e denie dan dTristat e shoul dnot b e allowe dt o participat e i n th e instan t case . Again , unlik e th e airpor t sponso r i n Jetaway , th e Cit y doe s no t believ e i t i s bes t t o addres s th e issue s i n thi s cas e now , o n th e merits . Amon g th e reason s ar e that VJ C ha s n o curren t

interes t i n th e leasehold , Tristat e ha s not

mad e aproposa l t o th e City , thu s givin g th e Cit y n o opportunit y t o revie w an d respon dt o an y suc h proposal , an dth e circumstance s upo n whic h th e partie s basedthei r pleading s i n thi s cas e hav e materiall y changed .

' * "Whil e the Count

y contend s tha

t the Par t 1 6 filing was premature , i

t electe dnot

t o file aMotion t

o Dismiss , an

d believe s tha

t i t i s bes t to addres s th e matter s now ando n th e merits . Therefore , although Complainan t ma y have faile dt o conduct adequat e pre-complain

t resolutio n fo

r meeting the requirement s of 1 4 C.F.R . § 16.21 , th

e Directo r will proceedwit

h decidin g th e matte

r now o n the merit s a s submittedby the partie s i n thi s proceeding. " Id .

1 63 . Tristat e Canno t Rel y o n Commo n La w Rule s Regardin g Assignmen t o f Contrac t Claim s o r

Chose s i n Actio n t o Establis h Standin g t o Asser t th e Moo t Claim s o f

VJ C o r It s Ow n Prematur e Claim s Tristat e attempt s t o glos s ove r th e uniqu e factua l an dlega l base s tha t distinguis h it s potentia l fiiture claim s fromVJC' s pas t claims , a s detaile dabove , a s wel l a s Part 16' s proscriptio n agains t

interventio n at

thi s stag e o f

th e proceedin g an dth e unavailabilit y o f joinder , b y invokin g th e commo n la w confractual doctrin e o f assignmen t

o f achos e i n action . Se e Tristat e Motio n fT

f 4 & 9 . Tristat e argue s tha t becaus e VJ C assigne dit s leas e wit h th e Cit y t o Tristate , "Tristat e i s entitle dt o al l rights an dinterest s arisin g from[that Lease] , includin g it s right t o maintai n thi s action. " Id . \9 . Thi s argumen t i s unavailing , however , eve n unde r th e authorit y cite db y Tristate . First , th e Leas e itsel f

i s silen t regardin g this , o r

any . Part 1 6 proceeding , s o th e mer e assignmen t

o f th e Leas e doe s not

automaticall y confe r

an y "rights " o n Tristat e wit h regar dt o this , o r any . Part 1 6 proceeding . I n approvin g th e Asse t Purchas e Agreement , th e Distric t Court was carefii l not

t o intrud e o n FAA' s prerogativ e a s th e agenc y adjudicatin g th e Part 1 6 case . Thus , i t i s clear tha t neithe r th e VJ C leas e assigne dfromth e Receiver t o Tristat e no r

th e Court' s approva l o f

th e Asse t Purchas e Agreemen t

confer s an automati c right t o fransfer

o r assig n th e pursui t o f th e Part 1 6 complain t

t o whic h th e FA A mus t

defer . Accordingly , ther e i s n o contractua l basi s for

an y claime dassignment . A s note dabove , althoug h Tristat e chos e no t t o mentio n it , th e Distric t

Court , i n approvin g th e sal e o f VJC' s asset s t o Tristate , specificall y hel d tha t it s approva l di dno t

confe r standin g o n Tristat e t o pursu e thi s Par t 1 6 action , becaus e Tristate' s standin g was aquestio n reserve dt o th e FAA . Tristat e Exhibi t C (Cour t Order ) ^ 3 . Second , an dmor e fiindamentally , th e concep t o f a n assignmen t

doe s no t appl y t o a reques t for adminisfrativ e investigatio n an denforcemen t action ; th e principl e i s generall y limite d t o claim s relatin g t o injurie s t o property , includin g contrac t an dtor t claims . 6 A C.J.S . 1 7Assignment s § 4 3 (2009) . Th e case s cite db y Tristat e al l involve dassignment s o f confractual o r tort rights t o recove r

mone y o r

property . Esposit o v . CPMIns . Serv. , Inc. , 92 2 A.2 d34 3 (Conn . Super . Ct . 2006 ) (assignee s o f acciden t victim s sough t

tort damage s i n connectio n with ca r accident) ; Am . Med . As s ' n v . Unite dHealthcar e Corp. , 200 7 W L 177149 8 (S.D.N.Y . Jun e 18 , 2007 ) (assignmen t

o f claim s t o recove r

medica l benefit s unde r

insuranc e o r

benefi t plans) ; Dat a Consultants , Inc . v . Traywick , 59 3 F.Supp . 44 7 (D . Md . 1983 ) (assignmen t o f stoc k purchas e agreement) . In eac h o f

thos e cases , th e assignee s sough t t o enforc e th e confractua l o r tort rights tha t wer e assigne dt o them ; non e involve dan attemp t t o invok e th e power s o f

aregulator y agenc y t o tak e enforcemen t action . Here , i n contrast , Tristat e doe s no t see k t o enforc e th e Lease , whic h wa s th e onl y confrac t assigne dt o it , bu t

rather , seek s FA A enforcemen t o f certai n federal obligation s tha t onl y th e FA A ca n enforce . Becaus e ther e i s n o privat e right o f actio n t o enforc e federa l airport gran t obligations,' ^ ther e i s n o privat e claim , o r chos e i n action , tha t

coul dhav e bee n assigne dt o Tristate . Th e inapplicabilit y o f

commo n la w assignmen t case s i s see n fiirther

i n th e fimdamental differenc e betwee n aPart 1 6 clai man da n assignabl e chos e i n actio n o r right t o enforc e a contrac t o r tor t claim . Th e purpos e o f

FAA' s complianc e program , includin g Par t 16 , i s t o ensur e airpor t

sponso r complianc e wit h it s federal obligations , no t t o provid e relie f

t o th e complainant . Thermc o Aviation , Inc . v . Count y o f Lo s Angeles , FA A Docke t No . 16-06-07 , (Dec . 17 , 2007 ) (Fina l Agenc y Decision) , pps . 15 , 25-26 . A Part 1 6 clai mis , i n essence , a

' ^ Arro w Airways , Inc . v . Dad e County , 74 9 F.2 d1489,149 1 (11t h Cir. 1985) ; Northwes t

Airlines , Inc . v . Count

y o f Kent , 95 5 F.2 d1054 , 1058-5 9 (6th Cir. 1992) , affdo n othe r grounds , 51 0 U.S . 355 , (1994) ; Ne w Englan dLega l Foun dV . Mass . Por t

Auth. , 88 3 F.2 d157 , 168-6 9 (1s t Cir. 1989) . 1 8reques t

tha t th e FA A exercis e it s enforcemen t powers , no t

apetitio n t o confe r

specifi c propert y rights o n th e complainant : Th e FA A Complianc e progra mi s designe dt o achiev e voluntar y complianc e wit h federa l obligation s accepte db y owner s and/o r operator s o f

public-us e airport s develope dwit

h FAA-administere dassistance . Therefore , i n addressin g allegation s o f

noncompliance , th e FA

A wil l mak e adeterminatio n a s t o whethe r a n airpor t

sponso r i s currentl y i n complianc e wit h th e applicabl e federa l obligations . Consequently , th e FA A wil l conside r

th e successfu l actio n by th e airpor t t o cur e an y allege do r potentia l pas t

violatio n o f

applicabl e federa l obligatio n t o b e ground s fo r dismissa l o f

suc h allegations . . . . A s i t is , Thermc o woul dnot b e du e an y preferentia l treatmen t ove r an y othe r aeronautica l use r

for th e leas e o f

Airpor t property . Id . a

t 25-2 6 (emphasi s i n original. ) Se e als o id . at

15 . No r i s aPart 1 6 complain t

apetitio n t o confe r

damage s o n th e complainant . FA A ha s n o authorit y t o awar dmone y damage s i n aPart 1 6 case . J& B Enters. , Inc . v . Metro . Nashvill e Airpor t Auth. , 200 9 W L 1800821 , a t *1 6 (FA A Docke t

No . 16-08-07 , Ma y 5 , 2009 ) (Dir . Det.) . A s such , "prosecution " o f aPart 1 6 case , unlik e acas e for mone y damage s o r

chose s i n action , i s no t

apropert y right

that i s transferrabl e a s an "asset. " Althoug h Tristat e an d VJC/Receive r

have , a t variou s times , referre dt o VJ C havin g propert y rights t o buil dhangar s o n th e sit e (e.g. , Tristat e Motio n at 3) , i n fact , VJC/Receive r di dnot file a n actio n t o enforc e it s suppose drights unde r

th e Lease . Indeed , Part

1 6 i s not th e appropriat e foru mfor adjudicatin g leas e o r contrac t rights. Se e Northwes t

Airline s v . Indianapoli s Airpor t Authority , Director' s Determinatio n a

t p . 2 9 ("[T]h e Directo r

conclude s tha t

th e clai mregardin g advers e impac t involve s aconfrac t

disput e betwee n th e Authorit y an dth e Complainant s an dtha t Part 1 6 i s no t th e prope r

venu e t o adjudicat e contrac t dispute s whe n n o actio n ha s ye t t o b e take n t o implemen t

th e confrac t

term s tha t

ar e i n amaime r

confrar y t o th e gran t

assurances." ) Se e als o id . at 4 4 ("I f th e partie s hav e adisput e regardin g thei r signator y Leas e Agreement , Part 1 6 i s no t th e prope r venu e for

resolvin g thes e type s o f

confrac t disputes...." ) Platinu mAviation , 200 7 WL

1 94854321 , a t *1 8 (Fina l Dec . 8

c Ord. ) (citin g Je ? /

Center , Inc . v . Naple s Airpor t Auth. , FA A Docke t No . 16-04-0 3 (Director' s Determination , Jan . 4 , 2005)) . Th e onl y agreement s enforce di n aPar t 1 6 proceedin g ar e agreement s betwee n th e federal governmen t

an dth e airport

sponsor , suc h a s AI P gran t agreement s an dSurplu s Property Ac t instrument s o f

fransfer, no t

agreement s betwee n airport s an dthei r tenants . Thus , Tristate' s argumen t that i t ha s alega l right

t o enforc e an agreemen t

t o whic h VJ C (an dno w Tristate ) i s a party , i n thi s Part

1 6 proceeding , i s misplaced , becaus e Part 1 6 proceeding s ar e not

th e prope r foru mfor enforcin g suc h agreement s i n an y event , regardles s o f whethe r o r no t ther e i s a limitatio n o f

assignabilit y i n th e agreement : Th e FA A neithe r

approve s no r

monitor s term s o f

agreement s betwee n airpor t sponsor s an dairport

tenants . Th e FA A doe s not arbitrat e dispute s throug h th e Part 1 6 complain t

process . No r

doe s th e FA A enforc e confrac t term s betwee n partie s t o a n agreemen t

whe n th e FA A i s not

apart y t o that

agreement . Rather , th e FA A enforce s th e gran t

agreement s i t

enter s int o wit h airport

sponsors . Platinu mAviation , 200 7 W L 4854321 , at *1 8 (Fina l Dec . & Ord) . Ha dth e Receiver

filedan actio n t o asser t

VJC' s suppose dleasehol drights, i.e. , an actio n t o enforc e th e Lease , Tristate' s argumen t an dth e case s i t

cite s migh t

b e relevant . However , suc h acas e woul dhav e t o b e file di n stat e court , not befor e th e FAA . See , e.g. . Northwes t Airlines , FA A Docke t

No . 16-07-04 , Director' s Determinatio n at 2 9 (contrac t

dispute s betwee n airport sponso r an dtenan t

ar e matter s "t o b e resolve di n stat e court " (citin g Ric k Aviatio n Inc . v . Peninsul aAirpor t

Cm m'n , FA A Docke t

No . 16-05-1 8 (Fina l Decisio n an dOrder , Nov . 6 , 2007))) . Th e Receive r

di dnot file astat e court

actio n t o enforc e VJC' s lease . Instead , h e filed a muc h differen t

typ e o f action' ^ - seekin g an FA A determinatio n o f aviolatio n b y th e Cit y o f it s

" I n seeking t

o initiat e the Par t 1 6 action , th

e Receive r acknowledgedtha

t i t wa s differen

t fi-omth e typ e of

action typically undertaken , or

authorized , b y areceive

r pursuan t to the Court' s orde

r o n extending the receivership : 2 0federal gran t assuranc e commitments.' ^ Tristate' s argument s an dcite dcase s ar e completel y of f th e mar k i n thi s Part

1 6 proceeding . Tristat e cite s n o authorit y t o support th e propositio n i t

i s reall y seekin g t o advance , tha t on e can assig n th e right

t o pursu e an adminisfrativ e proceedin g tha t seek s agenc y enforcemen t actio n agains t

athir dpart y i n th e sam e manne r tha t on e ca n assig n acontractua l o r tort propert y right. Indeed , t o allo w suc h a n assignmen t

woul db e confrar

y t o publi c polic y i n thi s cas e becaus e i t woul dessentiall y allo w Tristat e t o pursu e VJC' s moo t clai mwithou t

havin g t o presen t fact s o f it s ow n that

demonstrat e acurren t

violatio n o f

th e City' s federal obligations . Tristate' s attemp t t o adjudicat e wha t

i s a t bes t (assumin g tha t

VJC' s allegation s showe daviolation , whic h the y di dnot ) apas t

bu t no w moo t

violation , i s contrar y t o purpos e o f Part 16 , whic h focuse s o n curren t violations . Accordingly , th e doctrin e o f assignmen t

doe s not apply , b y it s ow n terms , t o Tristate' s attemp t

t o adop t VJC' s allegation s tha t

th e Cit y violate dit s federal obligations .

Pursuan t t o th e Orde r

Appointin g Receive r

(Dkt . 8) , th e Receive r

ha s th e dut y an dauthorit y to : "[i]nstitut e suc h action s an dlega l proceedings , for th e benefi t

an do n behal f

o f th e Defendants an d Relie f Defendants an dthei r

investor s an dothe r

creditor s a s th e Receive r deem s necessary . . . . " Dkt . 8 a t T l 2 . Th e discretio n provide dt o th e Receive r t o initiat e action s pursuan t t o th e Orde r Appointin g Receive r

doe s no t clearl y encompas s th e institutio n o f aPar t 1 6 Complaint . Therefore , th e Receive r

bring s thi s matte r

t o th e Court' s attentio n fo r approva l prio r

t o proceeding . Cit y Exhibi t

I V (Receiver' s Unoppose dReques t fo r Leav e t o Fil e Complain t Pursuan t t o Titl e 1 4 C.F.R . Par t 16) , a t pp s 2-3 , n . 2 . Whil e i t wa s reasonabl e fo

r th e Receive r

t o see k leav e o f th e Cour t

prio r t o filing th e Par t

1 6 complaint , onc e th e actio n wa s filed, procedura l determination s relatin g t o tha t actio n ar e withi n th e jurisdictio n o f th e FAA , no t

th e Court . Th e Distric t

Cour t tacitl y acknowledge dthi s b y specificall y providin g tha t it s orde r approvin g th e sal e o f VJC' s asset s di dno t

dives t th e FA A o f

th e independen t

right t o determin e th e issu e o f standin g no r

wa s i t intende d t o confe r standin g o n Tristat e i n thi s Par t 1 6 proceeding . Tristat e Exhibi t C ^ 3 .

" A s fiirther

evidenc e o f

th e fac t tha t aPar t 1 6 proceedin g i s concerne dwith determinin g complianc e with a n airport sponsor' s federa l obligations , rathe r tha n th e provisio n o f

relie f t o an y individua l complainant , i f th e initia l decisio n i n th e Par t

1 6 process , th e Director' s Determination , i s advers e t o th e respondent , an dth e responden t exercise s it s right

t o ahearing , th e part y assertin g agran t assuranc e violatio n b y th e responden t a t th e hearin g stag e o f th e proceedin g woul dno t b e th e complainant , bu t

rathe r th e FAA , an dan FA A attorne y woul dserv e a s th e "prosecutor " fo r

th e agency . 1 4 C.F.R . 16.203(b) . 2 1Moreover , if , a s Tristat e seem s t o argu e i n Paragrap h 9 , Tristat e rest s it s clai mo f assignmen t

o n th e Lease , it s argumen t fail s for th e additiona l reaso n that th e Leas e require s Cit y approva l o f

an y assignment , an dth e City specificall y withhel dit s consen t t o an y purporte d assignmen t

o f th e Par t 1 6 complaint . Exh . I (City' s Respons e t o th e Receiver' s Motio n t o Sel l VJ C Assets ) at

13-20 . Accordingly , Tristat e i s barre db y th e term s o f th e Leas e upo n whic h i t purport s t o rel y fromclaimin g an assignmen t o f th e Par t 1 6 complain t

unde r th e Lease . A s th e case s cite db y Tristat e mak e clear , a n assignmen t involve s on e part y transferrin g it s right t o recove r

o n aspecifie dcontrac t

o r tort clai mt o anothe r

party . Tristat e Motio n ^ 2 . Tha t i s no t wha t Tristat e seek s here , a s evidence db y th e fac t tha t VJ C intend s t o remai n i n thi s cas e a s apart y an dTristat e seek s t o interven e an djoi n wit h VJC . Indeed , Tristat e ha s style dit s motio n a s on e t o interven e an djoin , rathe r tha n substitut e o r

assume . Thus , Tristat e i s no t attemptin g t o enforc e VJC' s clai ma s an assignee , an dth e assignmen t case s Tristat e cite s ar e simpl y inapposite . Tristat e attempt s t o explai n awa y thi s proble mb y claimin g that , becaus e th e validit y o f th e assignmen t

o f th e Par t 1 6 complain t

i s i n dispute , i t

i s appropriat e t o hav e bot h VJ C an d Tristat e a s complainants . Id . ^ 9 , citin g Dat aConsultants , 59 3 F.Supp . a t 458 . A s explaine d above , however , aPart

1 6 complain t

canno t b e assigne dbecaus e eac h complainan t mus t establis h it s ow n standin g t o pursu e aclaim . Moreover , i n Dat aConsultants , ther e wa s n o disput e tha t

ther e wa s avali dstoc k

purchas e agreement ; rather , th e disput e was whic h o f th e tw o

'" ' Tristat e recognize s thi s fac t i n footnot e on e o f

it s motion , an dmake s th e alternativ e argumen t tha t th e Lease' s anti-assignmen t

claus e doe s no t

ba r VJC' s assignmen t

o f "VJC' s right

t o assig n it s interes t

an dclai mi n thi s proceedin g t o athird-party. " Tristat e Motio n a t 2 , Fn . 1 . A s detaile dabove , however , ther e i s n o "right " t o assig n a Par t 1 6 complain t

becaus e i s no t

aprivat e propert y right

an dther e i s n o persona l remedy ; i t i s reques t

fo r enforcemen t

actio n b y aregulator y agency . I n an y event , Tristat e canno t hav e i t bot h ways . Eithe r

(1 ) Tristate' s assignmen t

clai mbase do n th e Leas e fail s becaus e th e Leas e doe s no t mak e suc h a n assignmen t o r th e Cit y withhel d it s consent , o r

(2 ) it s non-contractua l assignmen t clai mfail s becaus e request s fo r regulator y enforcemen t

actio n ar e no t assignable . 2 2plaintiff

s coul denforc e it . Othe r tha n th e questio n o f

wh o woul denforc e th e agreement , however , th e fact s an dlega l base s for enforcin g th e agreemen t wer e identical . Here , however , ther e ar e tw o separat e set s o f factua l an dlega l assertions : (1 ) th e no w moo t assertion s relatin g t o th e City' s pas t action s wit h respec t

t o VJ C an d(2 ) th e prospectiv e an d speculativ e assertion s relatin g t o th e City' s potentia l fiiture action s wit h respec t t o apossibl e proposa l b y Tristate . Eve n i f i t wer e relevan t

for Tristat e t o rel y i n par t

o n th e City' s pas t

action s regardin g VJC , th e FAA' s final decisio n woul dnecessaril y tur n o n th e additiona l (prospectiv e an dspeculative ) circumstance s regardin g afiiture Tristat e proposal . A s discusse dabove , becaus e approva l o f

an y developmen t

o n th e Airpor t

unde r th e Minimu mStandard s an d applicabl e Cit y procedure s depend s o n th e specific s o f bot h th e propose dprojec t an dth e entit y proposin g th e project , th e Cit y mus t conside r an y proposa l for

hangar s o r

othe r facilitie s Tristat e ma y mak e base do n th e particular s o f tha t proposa l an dTristate' s capabilitie s an dqualifications . Thos e fact s woul dfor

mth e basi s o f

an y complain t

b y Tristat e tha t

FA A coul dentertain , if

, i n fact , th e Cit y turne ddow n aproposa l b y Tristat e an dTristat e attempte dt o resolv e th e issu e informally . Absen t

suc h circumstances , i t

i s prematur e for

FA A t o entertai n acomplain t b y Tristate .

23CONCLUSIO N

Fo r th e reason s se t

fort h abov e an di n th e City' s concurrentl y filed Motion t o Dismis s an d Oppositio n t o Tristate' s Motion , th e FA A shoul ddismis s th e Complain t filedb y VJC/Receive r an dden y Tristate' s motion .

t h Respectfiill y submitte dthi s 1 8 da y o f February , 201 0

Robert C . Anderson , Esq . Cit y Attorne y Hal l & Anderson , P.A . 131 4 Eas t Venic e Avenue , Suit e E Venice , Florid a3428 5 randerson(a),hall-anderson.co m Telephone : (941 ) 480-099 9 Facsimile : (941)480-144 6 Thoma s R . Devin e W . Eri c Pils k Kapla n Kirsc h & Rockwel l LL P 100 1 Connecticu t

Avenue , NW , Suit e 80 0 Washington , D C 2003 6 epilsk(a),kaplankirsch . co m tdevine(2).kaplankirskch . co m Telephone : (202 ) 955-560 0 X56 8 Facsimile : (202)955-561 6 Arthu r P . Berg , Esq . Kapla n Kirsc h & Rockwel l LL P 44 5 Par k Ave. , 9t h Floo r New York , Ne w York

1002 2 abe r g(g),kaplankirsch . co m Telephone : (212 ) 836-404 8 Facsimile : (646)514-544 0

2 4CERTIFICAT E O F SERVIC E

I hereb y certif

y tha t I hav e serve dth e foregoin g RESPONDEN T CITY O F VENICE' S MEMORANDU M O F POINT S AN D AUTHORITIE S I N SUPOR T O F IT S MOTIO N T O DISMIS S AN D OPPOSITIO N T O TRISTAT E AVIATIO N GROU P O F FLORID A LLC' S MOTIO N T O INTERVEN E AN D FO RJOINDE RA S CO-COMPLAINAN T o n th e followin g part y a t th e followin g addres s b y overnigh t deliver y o n Februar y 18 , 2010 : Offic e o f th e Chie f Counse l Attii : FAA Part

1 6 Airpor t

Proceeding s Docket , AGC-61 0 Roo m92 5 Federa l Aviatio n Administratio n 80 0 Independenc e Avenue , S.W . Washington , D C 2059 1 Origina l an d3 copie s b y overnigh t deliver y I als o hereb y certif

y tha t I hav e serve dth e foregoin g RESPONDEN T CITY O F VENICE' S MEMORANDU M O F POINT S AN D AUTHORITIE S IN SUPOR T O F IT S MOTIO N T O DISMIS S AN D OPPOSITIO N T O TRISTAT E AVIATIO N GROU P O F FLORID A LLC' S MOTIO N T O INTERVEN E AN D FO RJOINDE RA S CO-COMPLAINAN T o n th e followin g person s a t th e followin g addresse s b y overnigh t deliver y an delecfroni c mai l o n Februar y 18 , 2010 : Gianluc aMorello , Esq . Dominiqu e Pearlman , Esq . WIAN D GUERR A KIN G P.L . 300 0 Bayport

Drive , Suit e 60 0 Tampa , FL 3360 7 Fa x No . (813)347-519 9 1 cop y Richar dL . Richards , Esq . RICHARD S & ASSOCIATE S 23 2 Andalusi aAvenue , Suit e 20 2 Cora l Gables , F L 3313 4 Fax No . (305 ) 448-222 9 1 cop y

25I als o hereb y certif y tha t I hav e serve dth e foregoin g RESPONDEN T CITY O F VENICE' S MEMORANDU M O F POINT S AN D AUTHORITIE S I N SUPOR T O F IT S MOTIO N T O DISMIS S AN D OPPOSITIO N T O TRISTAT E AVIATIO N GROU P O F FLORID A LLC' S MOTIO N T O INTERVEN E AN D FO RJOINDE RA S CO-COMPLAINAN T o n th e followin g person s vi aelecfroni c mai l at th e followin g addresse s o n Februar y 18 , 2010 : Jonatha n Cros s Manager Airport s Law Branch , AGC-61 0 Offic e o f th e Chie f Counse l Federa l Aviatio n Adminisfratio n 80 0 Independenc e Avenue , S.W . RM900 E Washington , D C 2059 1 Fa x No . (202 ) 267-576 9 jonathan.cross@faa.go v ICop y Raymon dVeatc h Senio r Attorne y Airport s Law Branch , AGC-61 0 Offic e o f th e Chie f Counse l Federa l Aviatio n Administratio n 80 0 Independenc e Avenue , S.W . R M 900 E Washington , D C 2059 1 Fa x No . (202 ) 267-576 9 raymond.veatch@faa.go v ICop y

>t

h Date dthi s 18" * da y o f

February , 2010 :

2 6

# Exhibi t IC00038-1359S 1 

### UNITE D STATE S DISTRIC T COUR T MIDDL E DISTRIC T O F FLORID A TAMP A DIVISIO N SECURITIE S AN

D EXCHANG

E COMMISSION , Plaintiff , ARTHU RNADEL , SCOO P CAPITAL , LLC , SCOO P MANAGEMENT , INC. ,

Defendants . SCOOP REA

L ESTATE , L.P. , VALHALL

A INVESTMEN

T PARTNERS , L.P. , VALHALL

A MANAGEMENT , INC. , VICTOR Y FUND , LTD. , VIKING IR

A FUND , LLC , VIKING FUND , LLC , an d VIKING MANAGEMENT , LL C

Relie f Defendants . Cas e No. : 8:09-cv-0087-T-26TB M

/ 

### TH E CIT Y O F VENICE' S RESPONS E T O RECEIVER' S MOTIO N FO RAPPROVA L

O F SAL E O F TH E ASSET S O F TH E VENIC E JE T CENTE R AN D AGREEMEN T WIT H NORTHER N TRUST . N.A . (Do c No . 254 ) TH E CITY OF VENIC E ("City") , pursuant t o thi s Court' s orde

r entere do n Decembe

r 22 , 200 9 (Doc . No . 274) , files thi s respons e to th e Receiver' s Motio n fo r Approva l o f Sale of Th e Asset s o f

th e Venic e Je t

Cente r andAgreemen

t wit h Norther n Trust , N.A . (Doc . No . 254 ) (the "Sal e Motion" ) andstate s a s follows : I . BACKGROUN D 1 . Pursuant

to aleas e agreemen

t date dMa

y 23 , 200 6 ("Lease") , th e Cit y leased certain real propert

y a t th e Venic e Municipa

l Airpor t ("Airport" ) t o Venic e Je t Center , LL

C ("VJC") . Pursuant

t o th e Lease , VJ C assume dpossessio n o f rea l propert y formerl y lease dto

21397. 1C00038-13595 1



### Tripl e Diamond , aseparate fixed-base doperator ("FBO" ) a

t th e Airport . During it s tenancy . Tripl e Diamondintende dt o buil dso-calle d"t-hangars " o n th e site . 2 . Accordin g t o th e Receiver , VJC , throug h Mr . Nadel , establishe dVJ C fo r th e purpos e o f

ownin g th e Tripl e Diamondassets , entere dinto a n agreement

t o purchas e Tripl e Diamond , andthe n consummate dadea l in May , 200 6 t o buy thos e asset s usin g funds derive d fromhi s fraudulent

endeavors . Tw o year s later , VJ C sough t t o buil d"bo x hangars " o n th e site . 3 . The Venic e Cit

y Council , i n evaluatin g th e VJ C hanga r proposals , face

dhighly unusua l circumstance s tha

t change dsignificantly ove

r time , raisin g fundamenta

l question s abou

t th e City' s rights an dresponsibilitie s regardin g th e propose ddevelopment . 4 . When Mr . Nade l indicate dtha t VJ C mtende dt o buil dbo x hangars , which ar e differen t fromt-hangars , o n th e site , th e Cit y Manage r explicitl y informedVJC i n Jun e 2008 , tha t th e propose dhanga

r projec t woul drequir

e approva l b y th e Mayor

andCit y Counci l an

d directe dVJ C t o submi t

a"concep t

plan " to Cit

y staf f wit h sufficien

t technica l detai l t o allo w Cit y staf f t o determin e i f

there wer

e an y "fata l technica l flaws" wit

h th e plan prio r

t o Cit y Counci l consideration . 5 . Between Jun e 200 8 an dAugus t 2008 , i n aserie s o f

letter s fromVJ C andit s attorneys , th e VJ C hanga

r reques t evolve dfromone , to two , the n fou r hangars . Through th e requiremen

t tha t VJ C submi t

aconceptua

l pla n fo r th e entire parcel , th e City' s Fir e Marsha l wa s abl e to stud

y th e pla n anddetermin e tha

t th e VJC' s pla

n ultimatel y to buil dfive hangar s wa s no t viabl e o n tha

t site . Therefore , VJ C propose dt o buil dfou r hangar s rather

than five. O n Augus t 18,2008 , VJ C sent

aletter t o th e Cit y indicatin g tha

t th e proposa

l wa s fo r 4 hangars . 6 . Th e Cit

y schedule da

n informationa

l presentatio n b y VJ C o n it s hanga r proposa l fo r th e Augus t

26,200 8 meetin g o f

the Cit y Council . Whil e VJC' s attorney s argue dtha t th e Cit y

SL K SAR : «1397v 4C00038-13S95 1



### shoul dapprov e th e VJ C hanga r proposa l a t tha t time , th e Cit

y di dno t d o so , a s i t

ha dschedule d th e presentatio n a s a

n infomiatio n itemonly , no t an actio n item . 7 . Rather

tha n pursuin g an actio n ite mfo r th e next Cit y Counci l meeting , VJ C submitteda

n informa l complain

t to th e Federa

l Aviatio n Adminisfration' s (FAA's ) loca l Airport s Disfrict

Offic e (ADO ) o n Septembe r 2 , 2008 . O n Septembe

r 3 , th e AD O advise dth e Cit y tha t VJ C hadfile dth e informa l complaint . Th e Cit

y filed arespons e o n Septembe r 15 , 2008 . 8 . I

n November , 2008 , VJC submitte dpropose dplan s to construc t hangar s t o the City' s Buildin g andEngineerin g Departments . 9 . On Decembe

r 29 , 2008 , th e officia

l a t th e AD O handlin g th e informa l complain

t determine dtha

t informa l resolutio n wa s no t

possible , andadvise dVJ C tha t i t wa s free t o file a forma l Par t 1 6 complaint , i f

i t chose . I n th e meantime , th e Cit

y obtaine dalega

l memorandu

m fromKapla

n Kfrsc h & Rockwell LLP , concernin g it s obligation s unde r th e federa

l Airpor t Improvemen

t Progra m("AIP" ) gran

t assurance s wit

h respec t t o th e hanga

r proposal , base do n certai n assume dfacts . Th e factua l premis e upo n whic h th e memorandumwa s base dlater prove d to b e incorrec t

i n severa l materia l aspects . 10 . In January , 200 9 th e fimdamental natur e o f th e project , andindee dof VJ C itself

, changeddramaticall y when Mr . Nadel wa s arreste dandindicte do n severa l charges . Man

y of Mr . Nadel' s assets , includin g VJC , wer e seize db y th e Receiver . 11 . The appointment

o f th e Receive

r fo r VJ C wa s a

n unprecedente deven

t fo r th e City , andth e Cit

y Counci l appropriately wante dt o mak e sur e i t understoo dth e consequence s o f tha t action . The Cit

y Counci l discusse din ameasure danddeliberativ e wa y variou s issue s

SL K SAR : #21397v 4C00038-13595 1



### relatin g to VJ C a s th e unusua l event s surroundin g it s ownership unfolded . The Council als o sough t additiona l informatio n andguidanc e i n dealin g wit h th e situation . 12 . I n January , 2009 , th e Cit y Counci l reviewe danddiscusse dth e hanga r project and specifically sough

t additiona l inpu t fromth e AD O concernin g Venic e Je t Center' s reques t

to construc t additiona l hanga r spac e o n it s leasehol dan dth e potential consframts o f th e Airpor

t Layout Plan . The Cit

y Attorney aske dth e AD O o n Februar y 4 , 2009 , specificall

y whethe r constructio n of

th e hangar s woul dviolate gran t Assuranc e 29 , Complianc e wit h Airpor t Layou t Plan , sinc e th e hanga

r developmen

t appeare dto b e inconsistent wit h th e ALP , an

dthe Cit y i s oblige dt o comply wit

h Assuranc e 2 9 alon g v^dt

h othe r Assurances . 13 . Ove

r th e cours e o f

th e nex t severa l months , th e Cit

y Counci l dealt

wit h variou s aspect s o f th e VJ C situatio n includin g th e Cit y Attorney' s Februar

y 4 , 200 9 letter

to th e FAA , negotiatin g wit

h th e Receiver , seekin g t

o determin e whethe

r th e Cit y i s acredito r

o f VJC , ho w to preserv e th e rights o f

th e City , contactin g th e FA A regardin g other

designate dhanga

r locations , whethe r th e Cit y ha s th e right

to den y th e VJ C reques t

fo r mor e hangars , ne w circumstance s becaus e o f

th e receivership , additiona l hangar s triggerin g ne w leas e negotiations , potentia l relocatio n o f

th e VJC , funding to mov e existin g facilities , developmen t o f a n emergency pla

n i f VJ C cease doperation , workin g wit h th e VJ C receiver , th e Cit y possibl y operatin g the VJC , issue s regardin g aviatio n fue l sales , airpor

t lease s an

dvertica l improvement

andaddressin g adherenc e to th e ALP . 14 . At it s Marc h 10 , 200 9 meeting , th e Cit y Counci l discusse dconcern s tha t th e hangar s wer

e propose dfo

r alocatio n identifie dfo

r othe r purposes , seekin g confirmation tha t VJ C ha dfinancial resource s t o buil dth e hangars , andwhethe r VJ C hadavali dLeas e wit h th e City , The Receive

r als o spok

e befor e th e Coimcil andquestione dwhether afinancia l viabilit y

SL K SAR : #2l397v 4C00038-13595 1



### claus e wa s include di n th e buildin g codes . H e als o sai dtha t it wa s unlikely h e woul

dus e investo r funds t o construc t

hangars , andpointe dou t

tha t financin g ma

y b e forthcoming from a potentia l ne w user . A motio n t o ^prov e th e VJ C propose dhangar s wa s defeated , 15 , Th e Coimcil the n discusse dth e validit y of th e existin g VJ C Lease , if th e Leas e allowe dhanga

r construction , whethe

r o r no t th e lesse e defaulte do n th e Lease , andpossibl e fraud durin g procuremen

t o f VJC , andfinancia

l viabilit y o f aVJ C purchaser . Ther

e wa s consensu s to direc t th e Cit y Attorney t o see

k a n opinio n fromloca

l outsid e counsel exper

t in commercia

l lease s o n whethe

r th e VJ C Leas e i s vali dandentitle dVJ C to construc t hangars . A

t thi s meeting , th e Cit y Counci l vote dno t

to approv e th e VJ C reques t to buil d4 bo x hangar s o n it s leas e site . 16 , At subsequent

meetings , th e Counci l discusse dpotentiall y funding th e purchas e o f VJC , andreceivin g aVJ C marketin g packe t fromth e Receiver ; issue s relatin g t o apossibl e appraisa l o f th e leasehold ; obtainin g th e outsid e loca l counse l opinio n o n th e VJ C Lease ; a possibl e right

o f first refusa l i n th e purchas e o f

VJC ; th e confidentialit

y agreemen

t sough t by th e Receiver ; th e possibl e conflic t between Florida' s sunshin e law s andth e confidentialit y agreement ; protectin g th e City' s interest s andavoidin g potential lawsuits ; th e result s o f outside loca l counsel' s opinion ; Sectio n 4 5 o f th e VJ C Leas e concernin g demolitio n andconstructio n of improvements ; additiona

l fact s tha

t hadbeen discovere dsubsequent to th e ADO' s letter ; requirement s fo

r submittin g specification s prior to hanga r construction ; submitta

l of concept plans ; th e nee dfo

r demonsfratin g financial viability ; potentiall y approvin g hangar s subject t o subsequen t verificatio n o f

financial viability ; goo dfait h obligations ; claim s tha

t th e Cit y was intentionall y lowerin g th e valu e o f th e VJC ; whethe

r anee dfo

r additiona

l hangar s was demonsfrated ; hanga

r utilizatio n issues ; th e Leas e no t bein g clea

r in definin g obligation s of parties ; andth e Receiver

havin g no t

responde dto th e City' s reques t fo r financial data .

SL K SAR : #21397v 4C00038-13595 1



### 17 , The Counci l als o discusse dPar t 1 6 andPar

t 1 3 procedure s befor

e the FAA ; informa l communication s wit

h aVJ C officia

l o n propose dhanga

r locations , wit

h n o definitiv e response ; astaf

f technica l revie w o f

conceptua

l plan s (althoug h final drawing s wouldb e requeste dandsubmitte dto Counci l fo r approval) ; submittin g ahanga r concep t t o FA A including informatio n o n wh

y th e Cit y di dno t favo r approval ; dealin g wit

h th e actua

l purchase r versu s conditiona l approva l fo r propose dconstructio n t o enhanc e propert y value ; Mr , Wiand' s lac

k o f communicatio n wit

h th e City ; andFA

A dfrective s regardin g hanga r approval . 18 , A t th e Jun e 9 , 200 9 Cit

y Council meeting , amotio n t o rescin dth e Coimci l actio n o f March 10 , 200 9 denyin g hanga r constructio n failed . Cit

y Counci l the n dfrecte

dth e Cit y Manage r andth e Cit

y Attorne y t o engag e i n goo dfait h negotiation s wit

h th e Receive

r i n a n attemp t to resolv e conflict s andreac h amutually beneficia l outcome . Cit

y official s met

wit h th e Receive r o n Jun e 19,200 9 to discus s potentia l amicabl e resolutio n o f

th e dispute , 19 , The Counci l subsequently discusse dth e meetin g betwee n th e Receive r an dthe Cit y Manage r andCit y Attorney , wit

h arepor t b y th e Cit

y Manager

tha t Mr . Wian

dma y possibl y sho w interes t

in settlement

term s tha t include : 1 ) th e cit

y approvin g constructio n o f the fou r hangar s andrelate dconstructio n a s submitte do n th e sit e plan ; 2 ) th e VJ C demonsfratin g financial capabilit

y prio r to th e issuin g o f

buildin g permits ; 3 ) consideratio n o f aspecific lan

d swa p proposa l to construc t

hangar s o n th e opposit

e side o f th e taxiway ; an d4 ) consideratio n of givin g th e Cit

y th e right o f first refiisa l regardin g sal e o f

th e VJC . Th e Cit

y Manage r state dtha t th e Receive

r advise dthat

h e wa s goin g t o file aPar

t 1 6 admmisfrativ e complaint befor e th e FA A (th e "Par t 1 6 Action ) an dwoul dlitigate fo r damage s du e to hanga

r constructio n no t

being approved . Th e Cit

y Manager

requeste dspecifi c directio n fromth e Cit y Counci l regardin g th e propose dsettlement

terms .

SL K SAR : #2I397v 4C00038-13595 1



### 20 . The Cit

y hadfurthe

r discussion s relatin g to th e Receiver' s statemen t tha t he ha s n o intentio n o f

actuall y buildin g hangars ; financial documentatio n no t bein g provide db y th e Receiver ; problem s wit

h th e Lease ; th e eventua

l owne r o f th e VJ C constructin g th e hangars ; acquirin g additiona

l option s fromMr . Wiand ; consideratio n of aspecifi c lan dswa

p proposa l t o construc t hangar s o n th e opposite sid e o f th e taxiway ; an

dconsideratio n o f

obtainin g arigh

t o f firs t refusa l regardin g sal e o f

th e VJC . 21 . The Counci l vote dto engag e outside counsel to assis t i n defendin g the Par

t 1 6 Action , I n light o f th e Receiver' s anticipate dfiling o f aPar t 1 6 Action , th e Counci l declinedt o authoriz e th e Cit

y Manage r andCit y Attorney to discus s wit h th e Receiver

th e settlemen

t proposa l describe di n Paragrap h 19 , above . The Counci l approve damotio n t o discus s litigatio n strateg y andsettlement

a t aprivate Attorney-Clien t

sessio n i f th e Par t 1 6 Complain

t wa s filed, 22 . The Par

t 1 6 Complain

t wa s filedbefor

e th e FA A b y tiie Receiver

July 7 , 2009 . Th e Cit y filedit s Answer , Motio n to Dismis s an dMemorandumi n Suppor t Thereo f on Septembe r 2 , 2009 , The Receive

r filedaReply on Septembe r 30 , 2009 , andth e Cit

y filedit s Rebutta l on Octobe

r 28 , 2009 . Cit

y Official s als o met

wit h Mr . Wiando n Augus t

10 , 200 9 an

d made aspecifi c proposa

l t o resolv e th e issue . n . TH E SAL E MOTIO N AN D TH E CITY' S CONSEN T T O ASSIGNMEN T OF TH E LEAS E AN

D SUBLEASE S 23 . In th e Sal e Motion , th e Receive r characterize s th e City' s effort s i n seeking to determin e andprotec t

it s lega l interest s a s describe dabov e a s constitutin g "overtly obstructionist " conduc t

andtha t suc h action s constitute d"interferenc e wit h [VJC's ] propert

y rights, " all v^dt

h a n apparent

vie w toward s tryin g to convinc e thi s Cour t tha t th e Cit y would unreasonably refus e it s consent to th e propose dleas e assignmen t t o Tristate , The Receive r allege s variou s purporte dimprope r action s b y th e Cit

y (Sal e Motio n a

t p , 12-14 ) andassert s tha

t

SL K SAR : #21397v 4C00038-13595 1



### thes e provide abasi s fo

r concludin g tha

t th e Cit y ma y unreasonably withhol dconsen t fromth e propose dleas e assignment . Id . a t p . 20-21 . 24 , Afte

r thi s Cour t entere dit s orde

r givin g th e Cit

y additional time withi n whic h t o undertak e appropriat

e du e diligenc e an

dotherwis e comply wit

h th e notic e requirement s applicabl e t o municipalitie s under Florid alaw . Cit

y staf f andth e attorney s fo

r th e Cit y conducted a n intervie w wit

h on e o f th e principal s fo

r Tristate , reviewe dcertai n confidentia l financial information , andchecke dbusines s references . The Cit y Counci l the n met

o n Januar y 5 , 201 0 andhear dpresentation s fromCit

y staf f andth e attorney s fo

r th e Cit y a s wel l a s fromTristat

e an d th e publi c a

t large . Thereafter , th e Cit

y Counci l voted , 5 t

o 2 , to approv e VJC' s reques t t o assign th e leas e agreemen

t t o Tristate , provide dtha

t Tristate shoul db e deeme dt o b e responsibl e t o faithfull y perfor mall o f VJC' s obligation s unde

r th e Leas e and , fiirther , tha t VJC wa s no

t relieve dof

an y duty , liabilit

y or obligatio n unde

r th e Lease . A tru e andcorrec t cop y o f th e City' s consent

i s attache dhereto a s Exhibi t A andha s bee

n provide dt o th e Receiver . 25 , Unde

r Florid alaw , alessee' s assignmen t o f aleas e t o athirdpart

y doe s no t reliev e th e lesse e fromit s financia l o r othe r obligation s to th e lessor , Kornblu mv. Henr

y E . Mangel s Co. , 16

7 So.2 d1 6 (Fla.3 dDCA 1964) . A s such , VJ C shoul dremai n liabl e fo r it s obligation s unde

r th e Lease , notwithstandin g th e assignmen t t o Tristate . 26 . I n additio n t o approvin g th e assignmen t of th e VJ C Lease , th e Cit

y Counci l als o vote dt o approv e th e assignment t o Tristate of

th e sub-leas e agreement s betwee n VJC an dHertz , andVJ C andCockpit

Cafe , LLC (th e "Subleases") . See Exhibit s B andC 27 . The fac

t tha t th e Cit y ha s consente dto th e Leas e demonsfrate s tha t th e Receiver' s assertion s wit

h respec t to potential actio n o r

inactio n by the Cit

y concernin g th e approva

l of th e leas e assignmen

t are inappropriate andmisguided . However , becaus e th e Receive r ha s mad e

SL K SAR : #21397v 4C00038-13595 1

thes e allegation s o n th e recor di n thi s proceeding , th e Cit y i s compelle dt o respon do n th e record , briefly , a s t o th e substanc e o f th e allegations , 28 . Th e Receive r

assert s tha t

th e Cit y denie d"VJC' s reques t t o construc t

4 bo x hangar s i n Jul y 2008 , eve n thoug h th e propose dconstructio n complie dwit h all applicabl e plannin g an dbuildin g cod e provision s an dme t al l Minimu mStandard s fo r th e Venic e Municipa l Airpor t an dFixe dBase dOperation s (th e 'mmimu mstandards'), " Sal e Motio n a t 12-13 . Th e Cit y Counci l schedule da n informationa l meetin g t o hea r apresentatio n fromMr . Nade l o n th e proposal , bu t

di dno t vot e eithe r

wa y o n th e proposal . Moreover , th e projec t di dno t mee t all minimu mstandards , a s ther e wa s n o demonsfratio n o f financia l viabilit y o r

complianc e with othe r minimu mstandard s fo r

th e Airpor t

whic h ar e apar t

o f th e Lease' , 29 . Receive r

assert s tha t

th e Cit y denie dth e reques t t o buil dhangar s i n Augus t 200 8 an drequire dVJ C t o submi t aconcep t

pla n "eve n thoug h th e VJ C ha dno t previousl y bee n require dt o produc e aconcep t pla n whe n i t

buil t it s firs t hangar s o n th e leasehold. " Sal e Motio n a t 13 . I n fact , th e Cit y di dno t tur n dow n th e projec t

unti l Marc h 2009 . Moreover , th e hangar s tha t VJ C first

buil t o n it s leasehol dfulfille darequiremen t i n th e Leas e impose db y th e City that VJ C tea r dow n an dreconstiiic t

existin g hangars . Sal e Motio n Exhibi t 3A- B (VJC' s Lease) . Ther e woul db e n o reaso n fo r th e Cit y t o approv e aconcep t pla n o f aprojec t tha t i t require dVJ C t o undertak e t o replac e dilapidate dhangar s o n th e site . 30 . Confrar y t o Receiver' s assertio n (Sal e Motio n a t 13) , th e Cit y di dno t misrepresen t

t o th e FA A i n Septembe r 200 8 tha t

VJC' s reques t

wa s denie dbecaus e i t mad e n o

' A s th e Receive

r i s aware , th e City' s positio n on thes e point s i s discusse dextensively in it s rebutta l to Venic e Je

t Cente r Reply ; Venic

e Je t Center v . Cit y o f Venice . Fl , FA

A Docke t No . 16-09-05 , a

t Sectio n V , pp . 28-4 6 an

da t page s 41-4 5 o f

th e City' s Memorandu

mo f Point s an dAuflioritie s i

n Suppor t o f it s Answe r an dit s Motion to Dismis s th e Receiver' s Par

t 1 6 Complaint . In th e interes t o f brevity , th e Cit

y i s no t appendin g it s filings i

n the Par t 1 6 Action to thi s Respons e but wil l mak e thos e paper s availabl e i f

requested . SL K SAR : #21397v 4C00038-13595 1



### forma l reques t to buil dth e hangars . Evidenc e supplie db y th e Cit y i n th e Par

t 1 6 Actio n indicate s tha

t VJ C applie dfo

r buildin g permit s i n November , 2008 , 31 , * The Receive

r seem s to imply tha

t ther e i s somethin g wron g wit h th e Cit y "seekin g lega

l advic e a s t o whethe

r th e Cit y coul dterminat

e th e VJC' s Lease" , It

wa s reasonabl e andprudent

fo r th e Cit y t o investigate whethe

r VJC' s bein g forcedinto receivershi p wa s a n even t o f defaul t under th e Lease . 32 , The Receive

r criticize s th e Cit

y fo r "ignorin g thre e separate letter s fromth e FA A encouragin g approva

l o f th e VJC' s hangar s projec t andwarnin g tha

t denyin g th e reques t

would b e confrar y t o federa

l grant assurances, " Sal e Motio n a t 13 . The reference dletter s constitut e informa l guidanc e fromth e loca

l FA A Airport s Disfrict

Office , no t

a n officia l determinatio n b

y FAA , Although a

n officia l a t th e FA A AD O di dencourag e approva l o f th e hanga r project , thi s wa s don e i n ignoranc e o f

th e fact s relate dto VJC' s receip t o f stole n fund s andit s inabilit y to demonsfrat

e tha t i t coul dfun

dth e projec t

without relyin g o n stole n funds , either dfrecti y o r indfrectly . Moreover , on e o f th e AD O letter s reference di n th e Sal e Motio n relatin g to th e Airpor t Layout Pla n (ALP) issue , discusse dbelow , als o appeare dto b e confrar y t o FAA' s official , publishe dguidanc e tha t airport s no t

allo w developmen

t inconsistent

wit h a n approved ALP . 33 , The Receive r als o complain s tha

t th e Cit y ignore dadvic e fromcounsel tha t "warne dth e Cit

y woul dlikely b e expose dt o liabilit y i f it continue dt o den

y th e VJC' s reques t

t o buil dth e hangars, " Sal e Motio n a t 13 , A s discusse dextensively i n it s Par t 1 6 filings, the reference dguidanc e b y outsid e counsel wa s base do n severa l critical erroneou s factua l assumptions , A furthe

r assessment

o f th e actua l fact s surroundin g th e VJ C andit s operatio n an d fundin g b y th e infusion o f

illegal fund s b y Mr , Nade l result s in adifferen t analysis . Moreover ,

SL K SAR : #21397v 4 

### 1 0C00038-13595 1



### th e Cit y Counci l di dfollo w th e memorandum' s advic e tha t i f th e approve dAL

P depicte dfutur

e developmen

t o n th e site incompatibl e wit h th e propose dhangars , th e Cit y woul dhav e abasi s fo

r denying approva

l fo r th e hangars . However , th e Receive r als o object s t o th e City' s positio n o n th e AL P issue , thu s simultaneously criticizin g th e Cit y fo r "ignoring " advic e fromoutside counsel andfo

r followin g tha

t advic e wit

h respec t to th e AL P issue . Sal e Motio n a

t 13 . I n an y event , aclient

is , o f course , unde

r n o obligatio n to follo w counsel' s advic e andmay , instead , asser t it s positio n i n th e appropriat e adjudicator

y forum , such a s aPar

t 1 6 proceeding . 34 . A s fo

r th e Cit y "ignorin g th e FAA' s communicatio n indicatin g tha t th e AL P presente dn o suc h barrier

t o th e projec t

andagai n encouragin g th e Cit y to approv e construction, " {id . a t 13-14) , thi s wa s on e o f

th e thre e FA

A AD O letter s th e Receiver alread y referenced , an

d th e ADO' s opinio n appear s to confradict publishe dFA

A guidance . The AL

P issu e i s th e subject of th e pendin g Par

t 1 6 Action , which wil l provid e a n officia l FA A determinatio n o n th e matter . 35 . Th e Receive

r include s thre e separate assertion s tha t appea r t o relate t o th e sam

e actio n take n b y th e Cit

y Counci l o n March 10 , 2009 : "denyin g VJC' s writte n reques t dated Februar y 200 9 t o buil dth e hangars, " (Sal e Motio n a t 13) , "denyin g VJC' s writte n reques t dated Februar y 25 , 200 9 t o buil dth e hangars, " (Sal e Motio n a t 14) and"formally denyin g th e VJC' s reques t o n Marc h 10 , 200 9 a

t aCit y Counci l meetmg andcontendin g th e VJC' s Leas e wa s voi d becaus e th e compan

y i s i n receivership " {id.) . Peculiarly , afte r assertin g tha

t th e Cit y Council contende dth e Leas e wa s void , th e Receive r assert s tha

t th e Cit y sough t "ye t anothe r lega l opinio n t o determin e whethe r th e Cit y coul dterminate th e VJC' s Leas e becaus e th e compan y i s i n receivership. " Id . Thus , i t i s clea r tha t th e Cit y Counci l ha

dnot , in fact , made adeterminatio n on thi s issue , bu t

rather sough t to investigat

e th e issu e furthe

r given th e unusua

l circumstance s surroundin g VJ C andth e adven t o f th e receivership .

SL K SAR : #21397v 4 

### 1 1000038-13595 1



### 36 . Given th e allegation s of Mr . Nadel' s fraud, hi s funding o f VJC wit h th e proceed s o f tha t fraud(a s allege dby th e Receive r i n hi s motion s an dfilings befor e thi s Court) , Mr . Nadel' s subsequent

arrest , th e initiatio n o f

thi s proceedin g b y th e SEC , an dth e extensio n o f

th e Receivership to includ e VJC , i t wa s reasonabl e fo

r th e Cit y to investigat

e whethe r th e involuntar y receivership wa s a

n event o f defaul t unde r th e Lease , a s th e Cit

y explaine din th e Par t 1 6 Action . 37 . Confrar

y t o th e Receiver' s assertion , th e Cit y di dno t ignor e outside counsel' s opinio n tha

t th e Leas e remain s valid ; in fact , th e Cit y ha s take n n o actio n t o voi dth e Lease . The City' s actio n i n approvin g th e assignmen t of th e Leas e a s note dbelo w no w render s thi s assertio n moot . Moreover , th e outsid e counsel opinio n als o indicate dtha t th e Cit y ha dareasonabl e argumen t tha t th e Leas e di dno t

permi t additiona l hangars . 38 . Finally , th e Receive r complain s tha

t th e Cit y denie d"VJC' s reques t

to buil d hangar s o n th e basi s tha

t th e Receive

r di dno t demonsfrat

e financia l capabilit y despit e th e fac t that : (1 ) VJC hadno t

previousl y been require dt o demonstrate financia l capabilit y to buil d hangars ; (2 ) n o other

Airpor t tenant s wh

o hav e buil t

hangar s hav e been requure dto sho w financial capability ; and(3 ) th e VJ C ha s satisfiedth e financial capabilit y reqmrement. " Id . 39 . Wit

h respec t t o item(1) , VJC' s Lease , a t Sectio n 45 , specifically requfre dVJC t o demolis h existin g dilapidate dhangar s o n th e leasehol dandbuil da10,000 squar e foo t hanga r o n th e site withi n five (5 ) year s of executin g th e Lease . Failure t o d o s o woul dconstitut e adefaul t unde r th e Leas e andth e Cit

y coul dterminat

e th e Lease , amon g other

remedies . Thus , th e Cit

y wa s protecte di n cas e VJ C di dno t full y carr y out ih & prescribe dhanga

r projec t becaus e it ha dth e optio n o f terminatin g th e Lease . The Cit y di dno t nee dth e additiona

l protectio n o f

verifying th e financia l wherewitha

l o f VJ C t o comply wit

h Sectio n 4 5 o f

th e Lease . Moreover , th e Receiver' s

SL K SAR : #21397v

4 

### 1 2C00038-13S95 1



### swor n statemen

t t o th e Cour

t tha t VJC' s purchas e o f

th e asset s o f

Tripl e Diamondwa s funde d completely wit

h stole n fund s andtha

t VJC ha daccepte da

t leas t $325,00 0 i n additiona

l stolen fund s - an dlikely more , whic h ha

dno t been fracked dow n b y th e Receive r a s of th e dat e of th e filing - raise dlegitimate question s a s t o th e financial resource s availabl e t o VJ C to buil dth e hangars . Thus , i t

wa s eminently reasonabl e fo r th e Cit y to inquir

e a s t o VJC' s financial resource s unde

r th e Receivership t o complet e th e project . 40 . Wit

h respec t to Ite m(2) , th e Receive

r ha s provide dn o evidenc e tha t an y othe r tenant ha dbeen force dinto receivership (or wa s capitalize dwit

h stole n funds) . Thi s justifie s freating th e Receive

r differently fromothe

r tenant s seekin g approva

l t o fun dprojects . 41 . A s fo

r Item(3) , Receive

r clearly hadno t

satisfie dth e financial capabilit y requiremen

t unde r an y reasonabl e standard . The Receiver simply made flat

assertion s a s t

o th e total cash or

cas h equivalent s on handin th e entire Receivership , whic h assertion s wer e unsupporte db y th e Receiver' s Report s to th e Cour t an ddi dno t

indicat e tha t th e Receive

r ha d applie dfo r o r receive dpermissio n fromth e Cour t t o expendReceivership fund s to buil dsuch hangars . It

woul dhav e bee n irresponsibl e fo r th e Cit y t o rel y o n th e bal dassertion s mad e b y th e Receive r unde r thes e cfrcumstances , andsuch unsupporte dassertion s do no t satisf y th e financial viabilit y requfremen

t containe di n th e applicabl e minimu mstandards , III . TH E ASSIGNMEN T O F TH E PAR T 1 6 CLAIM S A . Determination s o

f Wh o i s aPrope r

Part y i n aPar t

1 6 Proceedin g Ar e Withi n th e Purvie w o f th e FAA , No t

th e Cour t 42 . I t woul db e iriappropriat

e fo r thi s Cour

t to grant th e Receiver' s reques t

fo r a n orde r conferring o n Tristat e "th e right to b e substitute din th e VJC' s stea di n th e proceedin g befor e th e FA A (FA A Docke t No , 16-09-05) " (Sal e Motio n a t p , 21) , becaus e determination s of whethe r a n entit y i s entitle dt o brin g aPar

t 1 6 Complain

t or tak e ove r aPar t 1 6 Complain

t befor e

SLK_SAR : #21397v

4 1 3C00038-13595 1



### th e FA A i s amatte

r fo r th e agenc y t

o determine , pursuan

t to Rule s o f

Practic e i t

ha s issue d governin g such proceedings , subjec t to revie w i n th e U.S , Court s o f Appeals , 43 . In th e Sal e Motion , th e Receive r state s that : (1 ) "Th e VJ C wil l als o assig n it s right s i n th e Par t 1 6 proceedin g tha

t wil l be continue db y Tristate " (Sal e Motio n a t p , 11 , n , 9)" ; and (2 ) "Tristate agree s t o , . , assum e prosecutio n o f

th e par t 1 6 Complain

t subject to a n offse t o f th e net obligation s to th e Receive r u p t o $50,00 0 fo

r expense s an

d cost s actuall y incurre di n coimectio n wit h efforts t o resolv e al l dispute s wit h the City , includin g th e Par

t 1 6 Complaint" , (Sal e Motio n a t p , 10-11) , Unde r the Rule s o f

Practic e fo

r Federally-Assiste dAirpor t Enforcemen

t Proceedings , 1 4 C.F.R , Par t 16 , under whic h th e reference dPar

t 1 6 cas e wa s filedb y th e Receiver , onl y the FA A ma y determine whethe

r aperso n seekin g t o undertak e aPar t 1 6 proceedin g i s "directly an d substantially affectedb y an y allege dnoncomplianc e b y a n airpor t sponsor " andha s "engage di n goo dfait h efforts t o attemp t

t o resolv e th e dispute dmatte r informally " wit

h th e airpor

t sponsor , an dotherwis e complie s wit h requirement s t o confe

r standing . Se e 1 4 CF.R . § 16.25 , citin g § § 16.2 3 and16.3 . Se

e als o 1 4 C.F.R . § 16.21 . 44 . Fina

l FAA determination s i n Par t 1 6 case s are reviewabl e exclusively i n th e U.S . Court s o f Appeals , no t

i n U.S . Distiic t

Courts . 4 9 U.S. C § 46110 ; 1 4 CF,R , § 16,247 , Anothe r Federa l Distric t Cour t ha s acknowledge dthi s point : Fairvie w essentiall y seek s judicial revie w o f th e FAA' s decisio n in th e Par t 1 6 proceeding . The partie s agree , however , tha t such arevie w i s veste dexclusively in th e court s o f

appeals . See 1 4 CF.R . § 16.247 ( aperso n ma y see k judicial review i n th e court s o f

appeal s pursuant

to 4 9 U.S,C , § 46110) ; Tow n o f Fairvie w [v . Cit

y o f McKinney , FA

A Docket No . 16-99-04] , 200 1 W L 8807 2 a

t *[22 ] [(Fina

l Decisio n andOrder , Jan . 23 , 2001)] , (directin g Fairvie w t o file any appea l i n the court s o f appeals) ; 4 9 U.S.C . § 46110(c ) (th e court s o f appeal s hav e "exclusiv e jurisdiction " ove

r a n appea l froma n orde r unde r thi s part) . Tow n o f Fairvie w v . Dep' t

ofTransp. , 20 1 F . Supp . 2 d64,7 0 (D,D,C , 2002) ,

SLK_SAR : #21397v

4 1 4C00038-13595 1

45 . Becaus e Congres s ha s veste d i n th e Secretar y o f Transportatio n (wh o ha s delegate d t o th e FAA ) th e authorit y t o adjudicat e allegation s o f violation s o f

federal airport improvemen t

progra m("AIP" ) gran t assurances ^ mandate d b y di e Airpor t an d Airwa y Improvemen t

Ac t o f 1982 , a s amended , 4 9 U,S,C , § 4710 1 e t seq. , tiiere i s n o privat e right o f actio n for

apart y seekin g enforcemen t actio n agains t

a n aupor t

sponso r

fo r suc h allege d violations . Arro w Airways . Inc . v . Dad e County , 74 9 F.2 d 1489 , 149 1 (11t h Cir , 1985) ; Northwes t

Airlines , Inc . v . Count y o f Kent , 95 5 F.2 d 1054 , 105 8 (6t h Cfr , 1992 ) affdo n othe r grounds , 51 0 U.S . 355 , 11 4 S . Ct . 855 , 12 7 L.Ed,2 d 18 3 (1994) ; Ne w Englan d Lega l Foun d v . Massachusett s Por t

Auth , 88 3 F.2 d 157,168-6 9 (1s t Cir . 1989) . 46 . Thus , apart y mus t tur n t o th e FAA , rathe r tha n aU,S , Distric t

Court , fo r

relie f A s such , i t

i s th e FAA , no t

adisfric t

court , tha t

determine s whethe r

apurporte dpart y meet s th e standard s fo r

pursuin g acas e agains t a n airpor t

sponso r

fo r allege dviolatio n o f

th e gran t assurances . Indeed , th e FA A i s give n exfremel y wid e latitude , eve n b y th e reviewin g cour t (i.e. , th e Cour t

o f Appeals , no t

th e Disfric t

Court ) i n determinin g ho w t o adjudicat e suc h cases .

^ The VJ C Par t 1 6 Complain

t allege s violation s of

five gran t assurance s by th e Cit

y o f Venice . ' The exten

t o f th e DOT/FA

A contro l ove

r th e administrativ e adjudication o f complaint s o f

violation s o f

gran t assurance s wa s well-expresse di n adecisio n of

th e 1s t Circuit i n acas e i n which DO T exercise dit s discretio n to hea r th e cas e rathe

r tha n FAA : Thi s Congressiona

l anointmen

t o f th e powe r "t o insur e complianc e [wit

h th e gran t assurances] " upo n th e Secretary , i

n our view , doe s mor

e tha n merel y exclud e privat e partie s fi-omth e righ

t t o file a n actio n i n court . I n term s o f th e issu e befor

e u s i t ha s th e mor

e significan

t effec t of indicating the standar db y which w e shoul dreview th e Secretary' s enforcemen t actions . Firs t o f all , ther e shoul db e littl e doub t

tha t Congres s ha s entruste dth e administratio n o f § 51 1 [th e predecessor

to 4 9 U.S.C . 47107 ] t o th e Secretary . I f thi s b e th e case , a s i t

is , even withou

t mor e we ar e requiredby Chevro n t o giv e "considerabl e weight " to th e Secretary' s constructio n o f § 511 , an dto th e action s take n by hi

m"t o insur

e compliance " therewit

h Ther e i s more , however . Th e specifi c languag e o f § 511(b ) no t

onl y establishe s tha

t i t i s th e Secretar y tha t prescribe s th e requirement s o f sponsorship , but

als o tha t th e requirement s ar

e thos e "a s th e Secretar

y consider s necessar

y " (emphasi s supplied) . Additionally , th e introductor y paragraph t o § 511(a) establishe s tha t assurance s shal l b e submitte dwhich ar e "satisfactor

y t o th e Secretar y " (emphasi s supplied) . I

n othe r words , i n insuring complianc e wit

h § 511 , i t

i s u p t o th e SLK_SAR : #21397v

4 1 5C00038-13595 1 B . Th e Cour t

i s No t Boun dt o Implemen t

th e Receiver' s Request , Whic h i s Base do n Fundamenta l Misunderstanding s o f th e Purpos e an dProcedure s o f Par t 1 6 Cases . 47 . Th e Receive r

ha s mischaracterize dth e statu s o f th e Par t 1 6 cas e i n hi s motio n t o th e Court . Th e Receive r assert s tha t

"Althoug h th e actio n i s no w fiilly briefed , th e partie s hav e th e opportunit y t o engag e i n limite ddiscover y an dt o the n presen t thef r cas e i n an evidentiary hearin g befor e th e FAA, " Sal e Motio n a t p , 6 . Thi s assertio n i s incorrect . Ther e i s n o discovery o r hearin g provide dprio r

t o th e issuanc e o f

th e FAA' s initia l decision , 48 , A s provide di n 1 4 CF,R . § 16,31 , "Afte r consideratio n o f

th e pleading s an dothe r informatio n obtaine db y th e FA A afte r investigation , th e Dfrecto r wil l rende r

an initia l decisio n an dprovid e i t

t o eac h part y b y certifie dmai l withi n 12 0 day s o f th e dat e th e las t

pleadin g specifie di n §16,2 3 wa s due, " Th e las t pleadin g specifie db y § 16,2 3 wa s th e City' s Rebuttal , du e an dfiledb y th e Cit y o n Octobe r 28 , 2009 , Sal e Motio n a t 6 , "I n renderin g it s initia l determination , th e FA A ma y rel y entfrel y o n th e complain t an dth e responsiv e pleading s provide dunde r

thi s subpart . Eac h part y shal l file document s tha t i t consider s sufficien t

t o presen t al l relevan t

fact s an dargumen t

necessar y fo r

th e FA A t o determin e whethe r th e sponso r i s i n compliance."' * Secretar y t o decid e wha t i s necessar

y an dsatisfactory . This languag e establishe s abus

e o f discretio n review , th

e mos t deferentia l standar do f revie w availabl e fo r administrativ

e appeals , wit h th e exceptio n o f thos e rar e instance s i

n whic h ther e i s o f n o judicia l revie w a t all . Davis , A Basi c Guid e t o Standard s o f Judicia l Review , 3 3 S.D.L.Rev . 469,48 0 (1988) . Ne w Englan dLega l Foun dv . Mass . Por t Auth. , 883 F.2

d157 , 16 9 (1s t Cir . 1989) . Se

e 4969.5.47107 . * Federa l aviatio n regulations provid

e that : [FAA's ] investigatio

n ma y includ e on e o r mor e o f th e following , a

t th e sole discretio

n o f th e FAA : (1 ) A revie w o f th e writte n submissions o

r pleading s o

f th e parties , as supplemente

db y an y informa l investigatio

n th e FA A consider s necessar y an db y additiona l informatio n fluiiishe db y th e partie s a t FA A reques t I n renderin g its initia l determination, th

e FA A m(Q > rel y entirel y o n th e complain t andth e responsiv

e pleading s provide

dunde r thi s subpart . Eac

h part y shall file document s tha t i t consider s sufficien t t o presen t al l relevan t fact s andargumen

t necessar y for th e FA A t o determin e whethe r th e sponso r i s i n compliance . (2) Obtainin

g ora l an ddocumentar

y

SL K SAR : #21397v 4 1 6C00038-13595 1



### 49 . T o th e City' s knowledge , th e FA A ha s no t

exercise dit s discretio n to obtain fiirther informatio n beyon dtha

t provide db y th e partie s in their pleading s an dexhibit s attached thereto . Thus , th e statu s o f th e cas e i s tha

t al l pleading s ar

e complete , andth e partie s ar e awaitin g issuanc e o f

th e initia l determinatio n b y th e Director . 50 . Moreover , contrar

y to th e implicatio n o f

th e Receiver' s representation s to th e Cour t (Sal e Motio n a

t 6) , th e Complainant

i n aPar t 1 6 hearin g i s no t

entitle dt o ahearing . 1 4 C,F.R . § 16,33 , See als o 1 Andrew Lange . Inc . v . FAA, 20 8 F.3 d389 , 391-9 2 (2 dCir . 2000) ; Penobsco t Air Servs. , Ltd . v . FAA, 16

4 F.3 d713 , 72 0 (1s t

Cir . 1999) , Instead , ahearing i s provide donly i n th e instanc e wher e th e initial determinatio n i s advers e t o th e airpor t sponsor , it i s provide dth e opportunit

y fo r ahearing , andi t

doe s no t waiv e th e right

t o ahearing . Se

e 1 4 C,F.R . §§16,31,16,3 3 an d1 4 C,F,R , § 16,201 , 51 . Finally , th e administratio n o f aPar t 1 6 proceedin g i s fimdamentally differen t fi-om adjudicatio n o f

adispute between private parties . The purpos e o f FAA' s complianc e program , o f whic h th e Par

t 1 6 proces s i s apart , i s to ensur e airpor t sponsor complianc e wit

h it s federa

l obligations , no t

t o provid e relie f

t o any specifi c complainant . Thermc o Aviation , Inc . v . Count y o f Lo s Angeles . FA

A Docket No . 16-06-07 , (Dec , 17 , 2007 ) (Fina l Agenc y Decision) , pps , 15 , 25-26 , Th e FA A Complianc e progra mi s designe dto achiev e voluntar y complianc e wit

h federa l obligation s accepte db y owner s and/o r

operator s o f

public-us e airport s develope dwit

h FAA-administere dassistance . Therefore , in addressin g allegation s o f

noncompliance , the FA

A wil l mak

e adeterminatio n a s to whethe r a n airpor t

sponso r i s currentl y i

n complianc e wit

h the applicabl e federa l obligations . Consequently , th e FA A wil l conside

r the successfu l actio n b

y the

evidenc e b

y us e o f th e agency' s authorit

y to compe

l productio n o f

suc h evidenc e .. . (3 ) Conducting o r

requirin g tha

t th e sponsor

conduct a n audi t o f airpor t financial records an

d transactions.. . 1 4 C.F.R . § 16.29 (Emphasi s added) . SLK_SAR:#21397v

4 l yC00038-13595 1

airpor t t o cur e an y allege do r potentia l pas t

violatio n o f

applicabl e federa l obligatio n t o b e ground s fo r dismissa l o f

suc h allegations... . No t onl y doe s th e FA A polic y stan dfor 'curren t compliance, ' bu t

i t als o stand s for th e concep t

o f voluntar y compliance . Th e voluntar y action s take n b y th e Cit y i n correctiv e actio n ar e appropriat e an d th e Directo r

wa s correc t

i n usin g hi s discretio n declinin g t o findth e Cit y non complian t whe n correctiv e actio n i s unde r wa y or , perhaps , completed . A s i t is , Thermc o woul dno t

b e du e an y preferentia l treatmen t ove r an y othe r

aeronautica l use r for th e leas e o f

Airpor t property . Id . a t 25-2 6 (emphasi s i n original. ) Se e als o id . a t 15 . 52 , A s such , "prosecution " o f aPar t 1 6 case , unlik e acas e fo r mone y damage s o r chose s i n action , i s no t

apropert y right

tha t i s transferrabl e a s a n "asset, " Th e FA A ha s n o authorit y t o awar dmone y damage s i n aPar t 1 6 case , J& B Enters. , Inc . v . Metro . Nashvill e Airpor t Auth. , FA A Docke t

No , 16-08-07 , 200 9 W L 180082 1 a t "^1 6 (Director' s Determination , Ma y 5 , 2009) , Ha dth e receive r fileda n actio n fo r

mone y damage s o r

achos e i n actio n i n astat e o r federal civi l court , h e migh t b e abl e t o mak e acas e fo r seekin g t o transfe r

th e right t o continu e th e actio n t o Tristate , However , th e Receive r di dno t d o so . Instead , h e filed amuc h differen t typ e o f action ^ - seekin g a n FA A determinatio n o f aviolatio n b y th e Cit y o f it s federa l gran t

I n seekin g t o initiat e th e Par t 1 6 action , th

e Receive r acknowledge

ddia t i t wa s differen t fi-omth e typ e o f actio n typicall y undertaken, o

r authorized, b

y areceive r pursuan t t o th e Court' s orde

r o n extendin g th e receivership : Pursuan t t o th e Orde r Appointin g Receive r (Dkt. 8) , th

e Receive r ha s th e dut y an dauthorit y to : '[ijnstitut e suc h actions an

dlega l proceedings , fo

r th e benefi t an do n behal f o f th e Defendant

s an d Relie f Defendant s an dthei r investor s an dothe r creditor s a s th e Receive r deem s necessar y . . . . ' Dkt . 8 a t ^ 2 . Th e discretio n provide dt o th e Receive r t o initiat e actions pursuan

t t o th e Orde r Appointin g Receive r does no t clearl y encompas s th

e institutio n o f aPar t 1 6 Complaint. Therefore, th e Receive r bring s thi s matte

r t o th e Court' s attentio

n fo r t^prova l prio r t o proceeding . Receiver' s Unoppose

dReques t fo r Leav e t o Fil e Complain t Pursuan t t o Titl e 14 C.F.R. Par

t 16 , a t pp s 2-3 , n . 2 . Whil e i t wa s reasonabl e fo r th e Receive r t o see k leav e o f th e Cour t t o file th e Par t 1 6 complaint

, onc e th e actio n i s filed, procedura

l determinations relatin

g t o tha t actio n ar e withi n th e jurisdictio

n o f th e FAA , no t th e Court. SLK_SAR : #21397v

4 I gC00038-13595 1

assuranc e commitments. ^ Th e Receive r i s no t entitle dt o transfe r

th e right t o pursu e suc h acas e withou t leav e o f th e agenc y tha t

i s adjudicatin g th e matte r pursuan t t o it s congressiona l mandate . 53 , Moreover , th e Receive r ha s no t provide dan y reason , lega l o r otherwise , i n suppor t o f hi s motio n t o transfe r

th e Par t 1 6 actio n fi:omVJ C t o Tristat e an doffer s n o authorit y fo r th e propositio n tha t

thi s Cour t

ca n entertai n issue s whic h ar e withi n th e exclusiv e jurisdictio n o f th e FA A an dth e Cour t

o f Appeals . Instead , h e simpl y assert s tha t th e Cour t

shoul dissu e a n orde r becaus e tiie Receive r

an dTristat e hav e agree dt o th e transfer . O f course , thi s leave s tw o importan t partie s ou t

o f th e equatio n - th e FA A an dth e City . Th e desire s o f th e Receive r

an d th e prospectiv e buye r

o f VJC' s asset s ar e insufficien t t o warran t

th e Court' s intrudin g o n th e prerogative s o f

th e agenc y charge db y Congres s wit h adjudicatin g allege dviolation s o f th e gran t assurances . Thus , th e Cour t shoul dno t

gran t th e Receiver' s motio n a s t o th e transfe r o f th e authorit y t o pursu e th e Par t 1 6 case , 54 . Althoug h th e Cit y believe s tha t i t i s not appropriat e t o orde r

tha t th e right

t o pursu e di e Part

1 6 cas e b e transferre dt o Tristate , th e Cit y ha s n o objectio n t o th e Receive r providin g acredi t

o f u p t o $50,00 0 t o Tristat e fo r actua l cost s i t

incur s t o resolv e al l dispute s wit h th e City . Thi s ca n b e accomplishe db y deletin g th e referenc e t o th e Par t 1 6 cas e i n th e Receiver' s propose dorder . No r woul dth e Cit y objec t

t o th e Cour t

makin g clea r

i n it s orde r

tha t th e Cour t ha s n o objectio n t o th e transfer , i f th e Receive r

an dTristat e ar e abl e t o obtai n FA A permissio n t o d o so . O f course , th e City , a s th e Responden t t o tha t action , woul db e give n a n opportunit y b y th e FA A t o respon dt o an y suc h propose dtransfer . A s furthe r evidenc e o f th e fac t tha t aPar t 1 6 proceedin

g i s concerne

dwit h determinin

g complianc

e wit h a n airpor t sponsor' s federa

l obligations , rathe

r tha n th e provisio n o f relie f t o an y mdividua l complainant

, i f th e initia l decisio n i n th e Par t 1 6 process , th

e Director' s Determination, wer e advers e t o di e City , an dth e Cit y exercise dit s right t o a hearing , th e part y assertin g agran t assuranc e violatio n b y th e Cit y a t th e hearin g stag e o f th e proceedin g woul dno t b e th e Complainant

, bu t rathe r di e FAA , an da n FA A attorne y serves a s th e "prosecutor " fo

r th e agency . 14 C.F.R

. § 16.203(b) . SL K SAR : #21397v 4 1 9C00038-13595 1



### 55 . In conclusion , th e Cit y submit s tha

t thi s Cour t nee dno t andcanno t

adjudicat e an y o f th e procedura

l or substantiv e aspect s o f

th e Par t 1 6 Actio n includin g th e entr y o f a n orde r whic h substitute s Tristate fo r VJ C i n that

action . Rather , thi s Cour

t shoul dfindan

dorde r that i t i s no t rulin g o n an

y issue s wit

h respec t to th e abilit

y of Tristate t o b e substitute din th e stea do f VJ C in th e Par

t 1 6 Actio n a s th e resul t

o f an y approva l o f th e sal e Motion , Such afinding would b e consistent

wit h th e term s o f

th e Asset Purchas e Agreemen

t whereb y Tristate i s agreeing t o purchas e VJC' s rights, titl e andinteres t i n th e Par t 1 6 Actio n an dth e othe

r VJ C asset s o n a

n "a s is" , "wher e is " basi s "wit

h al l fault s andvwthou

t representation s o f

an y type , kind , characte

r o r nature.,. " (Se e Exhibi t

A to Sal e Motio n a

t 1fl,(a ) and(b ) and^1 1 ,(g) . Includin g thi s provisio n woul duphol dth e bargain s reache dbetwee n th e Receive r andTristate andpreserv e the rights o f th e Cit y i n th e Par

t 1 6 Actio n a s wel l a s recogni2dn g th e appropriate jurisdictio n of th e FA A ove r such aproceeding . WHEREFORE , th e Cit

y respectfiilly request s thi s Cour t t o enter it s orde r (1 ) approving th e transfe r o f th e Leas e andSublease s t o Tristate i n accordanc e wit h th e consent s approvedb y th e Cit y Counci l i n th e form s attache dhereto a s Exhibit s A , B , an dC , and(2 ) findan dorde r tha t th e Cour t i s no t ndin g o n an

y procedura

l or substantiv e aspect s o f

th e Par t 1 6 Actio n including an y claimtha

t Tristate i s authorize dt o b e substitute dfo r VJ C i n th e Par

t 1 6 Action . Respectfiilly submitted . SHUMAKER , LOO P & KENDRICK , LL P 24 0 Souti i Pineappl e Av , P.O . Box 4994 8 Sarasota , F

L 34230-694 8 (941 ) 366-666p/ m11366-399 9 Facsimil e Attopmy s fojl^GttV^l^y'enice Mar k D . Hildreth , Esquire Florid aBa r No . 45489 3

SLK_SAR : #21397v

4 2 0C00038-13595 1 

### -and

Thoma s R . Devine , Esquire KAPLA N KIRSC H & ROCKWELL , LL P 100 1 Connecticut

Av e NW , Ste , 90 5 Washington , D C 2003 6 (202 ) 955-5600/(202)955-561 6 Facsimil e Attorney s fo r

Cit y o f Venic e CERTIFICAT E O F SERVIC E I HEREB Y CERTIFY tha

t o n thi s y

_da

y o f January , 2010 , atiiie cop y o f th e foregoing Cit y o f Venice' s Respons e to Receiver' s Motion fo r Approval o f

Sal e o f th e Asset s o f

th e Venic e Je t Cente r an dAgreemen

t wit h Norther n Trust , N.A . (Do c No . 254 ) ha s bee n fiimishedb y electronically filing th e foregoin g wit h th e Cler k of th e Cour t usin g th e CM/ECF system , I fiirther certif y tha t atru e an dcorrec t

cop y ha s bee n fiimished vi aFirs t Clas s Unite dState s Mail , postag e pre-paid , t o th e followin g non-CM/EC F participant : Arthur G , Nadel Registe r No . 50690-01 8 MC C Ne w Yor

k Metropolita

n Correctiona

l Center 15 0 Par k Ro w Ne w York , N

Y 1000 7

SLK_SAR : #21397v

4 2 1

### CONSENT T O ASSIGNMENT AN D ASSUMPTIO N O F LEAS E Th e CIT Y O F VENICE , a s lessor

unde r th e Ma y 23 , 200 6 Lease , hereby consents t o th e assignmen t an dassumption of

the leas e to an

db y TRISTAT

E AVIATIO

N GROU P O FFLORID A LL C upo n th e followin

g term s an dconditions : 1 , TRISTAT

E AVIATIO

N GROU P OF FLORID

A LL C shal l utiliz e th e lease

dpremise s onl y fo r th e use s authorizedb

y th e Ma y 23,200 6 Leas e an

dshal l faithfiill y perfor mall o f th e lessee' s dutie s an dobligation s unde

r sai dlease . 2 . A s betwee

n the CIT Y O F VENIC E an dVENIC E JE T CENTER, LLC , the assignmen t an dassumption o f

th e leas e t o an db y TRISTAT

E AVIATIO

N GROU P O F FLORID A LL C shal l not releas e or reliev e VENIC

E JE T CENTER , LL

C fro man y duty , obligatio n or

liabilit y unde r the term s an dcondition s o f

th e Ma y 23,200 6 Lease . Date dthi s & ^ da

y of <TAAJ/j/i/Si , 2010 .

CIT Y O FVENIC E

E dMartin , Mayo

r .AFTEST :

or i Stelzer , Cit

y ©fer k 

## Approve dB y City Counci l Date : ZT^JU/.J^A-^ . ^.-^DI OCONSEN T T O ASSIGNMEN T AN D ASSUMPTIO N O F SUBLEAS E AGREEMEN T TTi e CIT Y O F VENICE , a s lesso r unde r th e Ma y 23 , 200 6 Lease , hereb y consent s t o th e assignmen t

an dassumptio n o f

th e HERT Z CORPORATIO N subleas e date dOctobe r 22,200 9 t o an

d b y TRISTAT E AVL\TIO N GROU P O F FLORID A LL C upo n th e followin g term s an dconditions : 1 . HERT Z CORPORATION , a s subleasee , shal l abid e b y all o f th e term s an dcondition s containe dwithi n th e Ma

y 23 , 200 6 Leas e an dshal l no t acquir e an y greate r

right s i n th e us e and enjoyment o f th e lease dpremise s tha n thos e possesse db y th e origina l lessee . 2 . TRISTAT E AVIATIO N GROU P O F FLORID A LL C shal l remai n liabl e fo r th e performanc e o f

al l o f th e lessee' s dutie s an dobligation s containe dwithi n th e May 23,200 6 Lease , Date dthi s if- % day o f JAJJU/^/ S 

# f - _,2010 , CITYOFVEN I By : lartin . Mayo r ATTEST : By: . ri Stelzer , City Cler k 

## Approve dB y City Counci l

Date : '^/Jonfu^ ^ '^ot' o

### CONSEN T T O ASSIGNMEN T AN

D ASSUMPTIO N OF SUBLEAS E AGREEMENT Th e CIT Y O F VENICE , a s lesso

r unde r the Ma y 23 , 200 6 Lease , hereby consents t o th e assignmen t andassumptio n o f

th e COCKPI

T CAFt , LL

C subleas e datedFebruar

y 26,200 8 t

o an d b y TRISTAT

E AVIATION GROU

P O FFLORID A LL C upon the following term s an dconditions : 1 . COCKPI

T CAF6 , 

### LLC , a s subleasee , shall abide by all o f th e term s an

dcondition s containe dwithi n th e Ma

y 23 , 200 6 Leas e an

dshal l not acquir e an y greate r right s i n th e us e an d enjoymen t of th e lease dpremise s tha

n thos e possessedb

y the origina

l lessee . 2 . TRISTAT

E AVIATIO

N GROU P O F FLORID

A LL C shall remain liable fo

r th e performance o f

al l o f th e lessee' s dutie s an

dobligation s containedwithi n di e Ma y 23,200 6 Lease . Date dthi s ^-f/ i da y o f VmV/?/2 ^ 2010 .

CIT Y O F VENIC E

[Martin , Mayo

r ATTEST : 5r i Stelzer , Cit

y 

## Approve dB y Cit y Counci l Date : \J^j^u^*^C

f s , 3o/ o

# Exhibi t I I

### VENICE CIT Y COUNCI

L MEETING - JANUAR

Y 5,201 0 VERBATI M PORTION S 3:28:4 2 Counci l membe

r Su e Lang : Yo

u state dthat , yo

u know , it' s no t

you r intentio n t o com

e her e an dgro w th e airpor

t or increas e traffic comin g i

n her e jus t to buy fue

l etc . tha t you'r e basically buildin g abusines s on , yo u know , wha

t wouldb e th e norma

l traffic coming int

o thi s destination , but

then on th e othe

r hand , you'r e talkin g about buildin g hangars . Yo

u know , ou

r experienc e i s th e waitin g lis t her e fo r t-hangar s i s wa

y down , there' s othe

r large r hangar s fo

r sale , s o I' mtryin g to reconcil e you r tw o statement s that , yo u know , s o wha

t exactly i s you

r pla n here fo r th e business , other

tha n jus t t o pic k u p wha t th e Jet Cente r ha db^ n doing . Mart y Kretchman : Our , ther

e are essentially tw o separat e issue s an

dI'l l explai n 'e mfo

r you . Th e projection s wer e mad e ver y conservatively base do

n traffi c patterns . We'v e bee n i n thi s busines s long enough . W e don' t d o pi e i n th e sk y numbers , especiall y whe

n w e personally hav e ski

n i n th e game . So , w e came up wit h projection s sayin g here' s the current traffic levels , wha

t ca n w e d o to increase , uplif t an dmaximiz e profitability , increas e operationa

l efficiencie s andthing s lik e that . An

dthen th e projections , the proform aestimates , wha

t w e gav e Mr . Snyde

r wa s basedo

n those . However , w e wan t t o leav e ope n th e possibilit

y of buildin g ne

w hangars , i

f w e fin dth e demandi s there . 1 understan dth e demandfo r t-hangar s i s down , bu t

w e haven' t

don e an y independen

t determinatio n t

o findtha t s o w e wan

t to leav e tha

t door ope n unti l w e kno w it' s time t o clos e it . So , there' s essentially tw o differen t concepts , one i s base do n historica

l dat a tryin g to mak

e th e projectio n whethe

r or no t w e shoul dmak

e th e purchas e andthen the other i s jus t not limitin g ou

r potentia l retur n o n our investmen

t goin g forward .

## CIT Y O F VENIC E 40 1 W . Venic e Avenu e Venice , FL 3428 5 (941 ) 486-262 6 Fa

x (941 ) 480-303 1 Suncom : 516-438 2 "Cit y o n th e Gulf "



### CERTIFICATIO N

I , Lor i Stelzer , MMC , Cit

y Cler k o f th e Cit y o f Venice , Florida , amunicipa l corporatio n in SarasotaCoun^ , Florida , d o hereby certif y a n excerp t o f averbatimtranscrip t

o f th e Venic e Cit

y Council Meetin g heldo n Januar y 5 , 2010 , consistin g o f

on e page , attache dhereto i s atru e and conec t copy , an dwhic h origina

l i s o n file i

n th e offic e o f

th e Cit y Clerk' s Offic e o f

th e Cit y of Venice . WITNES S m

y handan dth e officia

l sea l o f sai dCit y thi s 17t h da y o f February , 2010 .

Lor i Slfelzer , MMC , Ci (SEAL )

# Exhibi t II I

### VENICE CITY COUNCI L MEETIN G - JANUAR

Y 5 , 201 0 VERBATI M PORTION 3:11:4 1 Mayo r Martin : Let

m e ask you acoupl e o f

th e question s tha

t I'v e mentione dbefore . I think , let' s star

t wit h th e questio n o f

th e locatio n of

th e hangar s - what' s you

r thinkin g about that ? Mart y Kretchman : Followin g Mr . McKeon' s trai n o f thought , I don' t

wan t t o get to o dee p into thos e issues . But

I di dtel l Mr . Turne

r h e aske dtha

t question , matter

o f fact , on e o f hi s first question s i

n ou r initia l meetin g las t

week , ho w d o I fee

l about th e hangars ? It's , it's , a s amatte r o f fact , no t opinion , th e hangar s d o not holdth e sam

e intrinsi c valu e i f

they are move

dt o a n interio r portio n o f

th e airpor t vs . wher e they hav e bee n permitte dan

dplanne dcurrently . So , a s th e busines s owner , m y feeling wouldb e they holdmor

e valu e i n their

current locatio n wher

e they hav e bee n permitte dan d planned . That' s wher

e I wouldintendt o buil dthem , bu t I don' t hav e any intentio n t o brea k groun dtomorro w o n thos e hangars . On e ste p a t atime. There' s aver

y linea r proces s here . The leas e transfe r i s wha t w e nee dt o focu s o n an

dI spok e wit h yo u briefl y followin g acounci l meeting , you aske dth e same question , an dI thin k thi s i s prett

y muc h th e sam e response . It' s th e sam

e thin g I tol dMr . Turner .

## CIT Y O F VENIC E 40 1 W . Venic e Avenu e Venice , F L 3428 5 (941 ) 486-262 6 Fa

x (941 ) 480-303 1 Suncom : 516-438 2 Cit y o n th e Gulf "



### CERTIFICATIO N

I , Lor i Stelzer , MMC , Cit

y Cler k o f th e Cit y o f Venice , Florida , amunicipa l corporatio n i

n SarasotaCounty , Florida , do hereby certif y a n excerp t o f averbatimtranscrip t

o f th e Venic e Cit

y Council Meetin g hel do n Januar y 5 , 2010 , consistin g o f

on e page , attache dhereto i s atru e an d correc t copy , andwhic h origina

l i s o n file in th e offic e o f

th e Cit y Clerk' s Offic e o f

th e Cit y o f Venice . WITNES S m

y handan dth e officia

l sea l o f sai dCit y thi s 17t h da y of February , 2010 .

Lori/Stelzer , MMC , €ft

y Cler k (SEAL )

# Exhibi t I VUNITE D STATE S DISTRIC T COUR T MIDDL E DISTRIC T O F FLORID A TAMP A DIVISIO N SECURITIE S AND EXCHANGE COMMISSION ,

Plaintiff , v . ARTHU RNADEL , SCOO P CAPITAL , LLC , SCOO P MANAGEMENT , INC .

Defendants , SCOO P REA L ESTATE , L.P . VALHALLA INVESTMEN T PARTNERS , L.P. , VALHALL A MANAGEMENT , INC . VICTOR Y IR

A FUND , LTD , VICTOR Y FUND , LTD , VIKIN G IR

A FUND , LLC , VIKIN G FUND , LLC , AND VIKIN G MANAGEMENT ,

Relie f Defendants . Cas e No . 8:09-cv-87-T-26TB M

/ RECEIVER' S UNOPPOSE D REQUES T FO RLEAV E T O FIL E COMPLAIN T

PURSUAN T T O TITL E 1 4 CF RPAR T 1 6 Burto n W . Wiand , a s Receiver , seek s leav e t o file aPar t 1 6 Complain t

before th e Federal Aviatio n Administratio n ("FAA" ) pursuan t t o Titl e 14 , Cod e o f

Federal Regulations , Par t 1 6 (Rule s o f

Practic e fo

r Federall y Assiste dAirport Enforcemen t

Proceedings ) agains t th e Cit y o f Venic e ("th e City") . Th e purpos e o f thi s propose dactio n i s t o protec t and preserv e th e right s an dvalu e o f th e Venic e Je t

Center , LL C ("VJC") , a n asse t o f th e Receivership .INTRODUCTIO N Th e SE C institute dthi s actio n t o "hal t [an ] ongoin g fraud , maintai n th e statu s quo , an dpreserv e investo r

assets.... " (Dkt . 1 , Compl. , ^ 7. ) Burto n W . Wiandwa s appointe dby thi s Cour t a s th e Receive r

fo r Defendant s Scoo p Capital , LL C an dScoo p Management , Inc . an dal l Relie f

Defendant s b

y Order Appointiri g Receive r

(Dkt . 8 ) entere dJanuar

y 21 , 2009 . Th e Receivershi p wa s expande dt o includ e VJ C b y orde r entere dJanuar

y 27 , 200 9 (Dkt . 17). ' VJ C ha s applie dfo

r an dbee n denie dpermit s by th e Cit y t o buil daircraf

t hangars . Th e Receive r believe s th e denial , i

n violatio n o f

federa l law , ha s diminishe dVJC' s valu e and seek s t o pursu e th e appropriat e administrativ e remedy t o obtai n relie f Th e Receive r

i s currentl y solicitin g offer s fo r th e sal e o f

VJ C an dhope s to recove r asignificant

su mo f mone y throug h th e transaction . Th e Cit y i s activel y attemptin g t o frustrat e th e Receiver' s effort s t o maximiz e th e proceed s o f asal e o f th e VJC . A s detaile dbelow , th e City' s action s to imped e th e sal e appea

r t o b e part

o f th e City' s attempt s t o acquir e VJ C itsel f an dterminat e VJC' s lease . VJC' s right s t o develo p it s busines s i s guarantee dby it s leas e agreemen t an d federa l regulations . I

t i s th e Receiver' s vie w tha t th e institutio n o f

aproceedin g wit

h th e FA A wil l b e a

n efficient

an deconomica l mean s o f enforcin g VJC' s right s an dthi s proceedin g wil l inure to th e benefi t o f th e defraude dinvestors .

' VJ C i s aFlorid alimite dliability company , organize do n Apri l 18 , 2006 , o f whic h Arthu r Nade l wa s previousl y amanagin g member . ^ Pursuan t

t o th e Order

Appointin g Receive r

(Dkt . 8) , th e Receive r

ha s th e dut

y an dauthority to : "[i]nstitut e suc h action s an dlega l proceedings , fo

r th e benefi t

an do n behal f

o f th e Defendant s an dRelie f

Defendant s an dthei r

investor s an dothe r

creditor s a s th e Receive r deem s necessary . . . . " Dkt . 8 a t ^ 2 . Th e discretio n provide dt o th e Receive r t o initiat e action s pursuan t

t o th e Orde r

Appointin g Receive r

doe s no t clearl y encompas s th e institutio n

(footnot e cont'd )

### BACKGROUN D 1 . In Jun e o f

1947 an dpursuan t

t o th e Surplu s Property Ac t o f 1944 , th e federa

l governmen t

conveye dVenic e Municipal Airport ("th e Airport") , ageneral aviatio n facility , to th e Cit y o f Venice , Florida . A s aresult , th e Cit y i s boun dby th e term s o f aquitclai mdee d incorporatin g lega

l dutie s tha

t aris e fro mth e Surplu s Propert

y Act . Se e 4 9 U.S.C . § 47151 , e t seq . 2 . A s th e sponso r fo r federa l grant s receive db y th e Airport a s par t o f th e Airport Improvemen t

Program("AIP") ^ th e Cit y i s obligate dt o compl y wit h federa l la w an drelate d FA A sponso r

assurances . Se e 4 9 U.S.C . § 4710 7 (2009) . In connectio n wit h aeronautica l operations , airpor

t sponsor s regularl y leas e spac e t o Fixe dBas e Operator s (FBOs ) that i n turn offe r arang e o f

service s t o th e aviatio n community , includin g bu t no t limite dto : aircraf

t maintenance , fuelin g an dlin e service , flight instruction , an dhanga

r space . VJ C i s on e suc h FB O that entere dint o a25-yea

r lease , containin g a5 yea r renewal option , wit

h th e Cit y on Ma y 23 , 2006 . Pursuan t

t o th e lease , VJ C wa s obligate dt o pa y th e Cit y approximatel y $9,50 0 pe r

month , i n additio n t o al l taxe s an dassessment s a s the y becam e due , i n retur n for th e righ t t o "[c]onduc t

any commercial aeronautica l activity permitte dunde r th e Minimu m

o f aPar t 1 6 Complaint . Therefore , th e Receive r bring s thi s matte r

t o th e Court' s attentio n fo r approval prio r

t o proceeding . ^ Th e AI P wa s authorize dby th e Airport an dAirway Improvemen t Ac t o f 198 2 ("AIAA") , a s amended , 4 9 U.S.C . § 47101 , e t seq . Th e sourc e o f

AI P fund s i s th e Aviatio n Trus t Fun d ("ATF") , whic h was establishe db y Congres s in 197 0 t o provid e fundin g fo r aviatio n capita l investmen t

programs . AI P fund s are discretionary an ddistribute dannuall y b y th e FAA .Standard s fo r Commercial Aeronautical Activitie s a t Venic e Municipal Airpor t . . . . " ("Minimu mStandard s Document")'' . 3 . Th e leas e cover s thre e separat e parcel s o f landtotallin g approximatel y 9. 7 acres . On e parce l i s entirel y vacant . A buildin g an dhanger s were locate do n section s o f th e other tw o parcels . Pursuan t

t o obligation s under

th e lease , VJ C wa s require dt o demolis h an d rebuil dth e ol dhanger s an drefurbis h th e existin g building , whic h it did . Th e rebuil t

hanger s wer e filledupo n completio n i n approximatel y th e Fal l o f 2007 . 4 . Subsequen t

to th e construction , th e nee dfo r ne w aircraf

t storag e spac e gre w to th e exten t

that certai n aircraf

t were store di

n area s no t

designe do r

suitabl e fo

r indoo r storage . I

n Ma y 2008 , VJ C applie dt o th e Cit y fo r approval t o construc t

fou r ne w hangar s o n approximatel y 2. 5 acre s o f vacan t land . VJ C sough t

t o buil dfou

r "bo x hangars, " designe d

* Thi s documen t

i s incorporate dinto th e leas e an ddiscusse s th e general operationa l requirement s fo

r FBO s an dth e City' s purporte dgoal s andphilosoph y concernin g Airpor t operations : [T]h e Cit y o f Venice' s goa

l in adoptin g thes e standard s it t o encourag e developmen t

o f qualit y aeronautica l service s an dt o make th e airport availabl e for commercia l aeronautical activitie s o n afai r an dreasonabl e ter

mwithou t unjus t discriminatio n ... . I

t i s th e inten t

o f th e Cit y o f Venic e t o offe

r th e maximu mvariety o f

aviatio n relate dservice s i n orde r to maximiz e th e choic e o f servic e provider s to th e publi c usin g th e airport . Despit e th e abov e communicate dgoal s an dinten t o f th e City , Venic e ha s ove r th e pas t yea r andahal f

discriminate dagains t

VJ C an dtake n activ e measure s t o limi t aviatio n relate d service s t o th e public . ^ Th e Minimu mStandard s Document specifie s th e FB O i s responsibl e fo r supplyin g "storag e an dparkin g an dare afo

r utilit y an dsuppor

t facilitie s . . . . " I

t was , therefore , i

n par t VJC' s responsibility t o ensur e that sufficient storag e an dsupport

facilitie s existe dfo

r it s operations .t o servic e medium-size daircrafts , includin g smalle r jet s an dturboprops . Th e site pla n was reviewe dby th e Cit

y departments , an dn o flaws hav e bee n reported . B y Jun e 2008 , VJ C was ready t o procee dt o th e final buildin g stage . Th e Cit y Counci l refuse dt o perm h th e construction . 5 . I n aletter date dDecembe r

4 , 2008 , directe dt o th e Interi mManager o f th e Cit y o f Venice , th e FAA unequivocall y communicate dthat 'ftjh e FAA agree s tha t

th e Cit y o f Venic e appear s t o b e unnecessaril y delayin g th e expansio n o f th e Venic e Je t

Center . Th e FA A believe s th e airport

sponsor' s primar

y concern i

n th e developmen t

o f airpor t propertie s shoul db e meetin g aeronautica l deman d... . Thes e delay s create db y th e city appea r t o b e restrictin g aeronautica l acces s t o th e Airport , whic h i s inconsisten t wit h federa l gran t assurance s an dth e Surplu s Propert y Dee drestrictions. " (emphasi s added) . Th e FA A ha s no t waivere dfromit s positio n that th e action s o f

th e Cit y were an dcontinu e t o b e inconsisten t

wit h it s federa

l obligations . 6 . Th e Cit

y als o sough t

alega l opinio n a s t o whethe r

i t ha dauthority t o den y VJC' s reques t

t o construc t

hangars . Cit

y Attorney , Mr . Robert

C . Anderson , i

n conjunctio n wit h outsid e counsel , Kaplan Kirsc h & Rockwell , provide dth e Cit y wit h acomprehensiv e legal opinion . Thi s opinio n i s consisten t wit h th e positio n o f

th e FA A an dadvise dtha t

"[t]h e Cit y o f Venic e woul dru n asignifican t ris k o f bein g foundi

n violatio n o f

it s grant assurance s i f it denie dth e Je t

Center' s reques t

t o construc t

additiona l hanga

r spac e on it s leasehold." ^

^ Th e 13-page dlega

l memorandu mexplaine dthat "[a] n airport

sponsor' s prim e obligatio n i s t o operat e th e airport

fo r aeronautica l use , includin g th e opportunity fo r leaseholder s t o develo p airport

propert y fo

r aeronautical use " an dprovide dexample s o f supportin g cas e law . (footnote cont'd )7 . Yet , th e Cit y continue dt o preven t

constructio n o f

th e hangars . On Februar y 19 , 2009 , th e FA

A wrot e t o th e Cit

y onc e agai n an dstate d"I n sum , th e Cit y o f Venic e ma

y an dshoul dapprov e th e constructio n o f hanger s i

n th e are ayo u mention . Th e landi s designate dfo

r aeronautica l use , an dth e FA A ha s eve n processe da'pe n an dink ' chang e t o th e 200 0 ALP incorporatin g hanger s in thi s vicinity . . . . I n accordanc e wit h m y previou s advic e concernin g airpor t complianc e matters , thi s proposa l shoul db e forwarde dt o thi s offic e withou t

furthe r delay. " (emphasi s added) . N o actio n wa s take n on behal f o f th e Cit y t o confor mt o th e FAA' s request . 8 . City official s hav e more recentl y expresse dth e vie w that th e establishmen t

o f th e Receivershi p wil l allo w th e City a n advantag e i n it s ques t

t o acquir e VJC . O n Marc h 10 , 2009 , th e Receive r

me t wit h th e Cit y Counci l an dagai n requeste dapproval t o buil dth e hangar s o n behal f

o f VJC ' Th e Cit

y formall y denie dth e Receiver' s reques t an dintimate d tha t VJC' s leas e wa s voi dno w tha t th e compan y i s i

n receivership . Further , th e Cit y ha s Th e lega l opinio n furthe

r state dthat

"[t]h e fact

that th e Cit y ha s allowe dother

tenant s t o buil dan dleas e ou t

hangar s woul dmake th e Cit y vulnerabl e t o charge s o f unjus t discriminatio n i f

it denie dJe t

Cente r th e righ t

t o buil dhangars. " Th e Cit y incurre d approximatel y $20,00 0 o f tax payers ' monie s i

n legal fee s t o obtai n th e lega l memorandum , whic h merel y reinforce daconclusio n alread y communicate db y th e FAA . ^ Th e Receive r

previousl y submitte dasimila r writte n reques t

t o Cit y Mayo r E dMarti n o n Februar y 2 , 2009 . Th e correspondenc e discusse dtha t "i t i s essentia l an dimperativ e an d[th e Receiver's ] dut

y t o d o everythin g in [his ] powe r t o hav e th e Venic e Je t

Cente r continu e t o operat e s o that

th e asset s o f

th e entit y are preserve dfo

r futur e Orde r o f th e Court . [Th e Receiver ] i s further

charge dt o operat e th e Venic e Je t Cente r t o mov e it

forwar ds o it increase s in valu e o r

at leas t doe s no t los e value. " Anothe r

lette r t o th e Mayo r

an dCounci l Member s followe do n Februar y 25 , 2009 , o n behal f

o f th e Receiver . Th e letter

aske dthat

th e Cit y releas e it s hol do n th e hangar s constructio n an dcite dt o correspondenc e fro mth e FA A that demonstrate dan y further delay wa s unreasonable .recentl y publicall y expresse dit s inten t t o bu y VJ C fo

r anomina l amount , whic h woul d negativel y effect

th e Receivershi p estate . 9 . A s discusse dbelow , th e la w concernin g th e filing o f aPar t 1 6 Complain t substantiate s tha

t suc h aproceedin g agains t th e Cit y i s well-founded . Th e Receiver ha s considere dth e potentia l expens e o f suc h a n enforcement

actio n an dha s determine dthat , i n light o f th e benefi t

that woul dinure t o th e receivership , it i s in th e bes t

interest s o f

th e receivershi p t o institut e aPar t 1 6 Complain t

t o th e FAA . Th e purpos e o f thi s proceedin g woul db e t o assur e VJC' s righ t t o develo p thi s property , maximizin g it s value . LEGA L BASI S FO RINSTITUTIN G A PAR T 1 6 PROCEEDIN G A . VJ C I s Entitle dT o Brin g A Par t 1 6 Complain t

Agains t Th e Cit y O f Venic e Th e federa

l governmen t

assist s th e developmen t o f civi l aviatio n throug h variou s legislativ e act s that

are designe dt o develo p airpor t facilities . Se e BMI Salvag e Corp . v . Federal Aviatio n Aviatio n Administration . 27 2 Fed . Appx . 842 , 84 6 (11t h Cir . 2008) . Th e AI P permit s th e governmen t t o allocat e federa

l fund s t o airports , contingen t o n certai n assurance s mad e b y th e airport "sponsors " wh o receiv e th e federal funds . Id. ; 4 9 U.S.C . § 47101 , e t seq . Afte

r acceptin g a

n AI P grant , th e sponsor' s assurance s becom e abindin g obligatio n betwee n th e airport sponso r andth e federa

l government . BM I Salvag e Corp. . 27 2 Fed . Appx . a

t 846 . Th e FA

A assign s broa dresponsibilitie s t o th e FAA Administrato r t o regulat e ai r

commerc e in th e interes t o f safety , security , an ddevelopmen t o f civi l aeronautics . Se e 4 9 U.S.C . § 40101 , e t seq . I t i s th e responsibility o f

th e FAA Administrato rto ensure airpor t sponsor s compl y wit

h th e assurance s mad e whe n receivin g federa l funds . BM I Salvag e Corp. . 27 2 Fed . Appx . a t 846 . Th e FA A promulgate daset

o f regulation s that

appl y t o "[a]l l proceeding s involvin g Federally-assiste dairports " includin g proceeding s tha t concern faile dfedera

l obligation s o

n behal f o f a n airpor t sponsor . 1 4 C.F.R . § 16.1(a) (Rule s o f Practice) . A perso n "directl y an d substantiall y affected " b y a n airpor t sponsor' s noncomplianc e wit h it s lega l dutie s under

th e AIP i s entitle dt o file acomplain t wit h th e FAA ("Part

1 6 Complaint" ) an dinitiat e a n administrativ e enforcemen t action . Se e 1 4 C.F.R . § 16.23(a) ; se e e.g. . Gravso n v . DeKalb County . GA. . FAA Docke t No . 16-05-1 3 (Februar

y 1 , 2006 ) (Final Agenc y Decision)) ; Airborn e Tactical Advantag e Co. . LL C v . Peninsul aAirport Commission . 200 6 W

L 753016 , * 1 (E.D . Vir . 2006 ) (discussin g ther e i s n o privat e caus e o f actio n fo r aviolatio n o f

4 9 U.S.C . § 4710 7 but

arigh t t o initiat e a

n administrativ e enforcemen t actio n wit

h th e FAA) . Any perso n "[d]oin g busines s wit h a n airpor t an dpayin g fee s o r

rental s t o th e airpor

t shal l b e considere ddirectl y an dsubstantiall y affecte d. . . " by an y allege dviolatio n o f assurance s mad e and/o r

obligation s assume db y a n airpor t sponso r unde r th e AIP . Se e 1 4 C.F.R . § 16.23(a) ; 4 9 U.S.C . § 47107 . Whe n filing aPar

t 1 6 Complaint , th e complainan t mus t demonstrat e i

t mad e "goo dfait

h effort s t o resolv e th e dispute dmatte r informall y prio r

to th e filing" an dthat

ther e i s "[n] o reasonabl e prospec t fo r timel y resolutio n o f

th e dispute. " Se e 1 4 C.F.R . § 16.21(b) . VJ C ha s pai dapproximatel y $228,00 0 i n ren t t o th e City , plu s expende d$100,00 0 i n developmen t

costs , an dha s bee n denie dth e ability t o develo p it s leasehol ddu e t o dela y tactic s take n b y th e Cit

y an dit s Counci l i

n direc t contraventio n o f

assurance s mad e underfedera l law . VJC , therefore , ha s standin g to file aPar t 1 6 Complain t

wit h th e FA A and institutin g aproceedin g ma y assis t th e potentia l sal e o f

VJC. ^ B . Th e Receive r

Ha s A Goo dBasi s T o Submi t A Par t 1 6 Complain t Th e Cit y i s obligate da s asponso r receivin g AI P fundin g t o mak e th e Airpor

t 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. " Se e Fed . Aviatio n Admin. , Assurances , Airpor t Sponsors , Par

t C : Sponso r

Certification , t

22(a) ' (emphasi s added) ; 4 9 U.S.C . § 47107(a)(1 ) (permittin g approval o f

agran t applicatio n onl y if

writte n assuranc e i s provide dtha t "th e airpor t wil l b e availabl e fo

r publi c us e o n reasonabl e condition s an dwithou t unjus t discrimination") . Indeed , "[o]peratin g th e airpor t fo r aeronautica l us e i s asponsor' s primar y obligation . Par

t o f thi s primary obligatio n i s th e opportunity for leaseholder s t o develo p airpor t property fo

r aeronautica l use. " BM I Salvag e Corp. . 27 2 Fed . Appx . a t 85 2 (citin g Unite dState s Constr . Corp . v . Cit y o f Pompan o Beach . Fl. . FA A Docke t No . 16-00-14 , 200 2 W L 182188 2 (Jul y 10 , 2002 ) (Final Agenc y Decision)) .

Th e Receive r

submit s thi s reques t

fo r leav e t o file aPar

t 1 6 Complain t

withou t waivin g an

y right to see k equitabl e assistanc e fro

mthi s Cour

t i n th e futur

e in bringin g potential action s agains t th e City and/o r

individual Counci l Members . Th e Receive r i s als o no t

waivin g th e righ t t o seek potentia l damage s fo

r breac h o f

th e leas e or

under anti-trus t law s fo r th e City' s apparen t predatory conduct . ' Th e assurance s give n b y airport sponsor s whe n receivin g federa l fundin g are availabl e at : http://www.faa.gov/airports_airtraffic/airports/aip/grant_assurances/media/airport_sponsor_ a ssurances.pd fTh e Cit y als o mad e assurance s i

t woul d"[pjermi t

n o exclusiv e right

fo r th e us e o f

th e airpor t by an y perso n providing , o r

intendin g t o provide , aeronautica l service s t o th e public. " Se e Fed . Aviatio n Admin. , Assurances , Airpor t Sponsors , Par

t C : Sponso r

Certification , T

[ 23 . I n fact , th e Cit

y ma y no t prohibi t o r limi t akin do r

clas s o f aeronautica l us e o f

th e airpor

t unles s such actio n "[i] s necessar y fo r th e saf e operatio n o f

th e airpor t

o r necessar y t o serv e th e civi l aviatio n need s o f th e public. " Se e Fed . Aviatio n Admin. , Assurances , Airpor t Sponsors , Par

t C : Sponso r

Certification , ]

f 22(i ) (emphasi s added) . Moreover , VJC' s leas e andincorporate ddocument s therei n explicitl y stat e "[l] t i s th e intentio n o f

th e Cit y o f Venic e t o offe r th e maximu mvariety o f aviatio n relate dservice s i n orde r t o maximiz e th e choic e o f servic e provider s t o th e publi c usin g th e airport. " Despite th e clea

r languag e i

n th e leas e andth e sponsor' s federa l assurances , th e Cit

y an dit s Council , hav e refuse dt o permi t hanga r constructio n that

woul dprovid e utilizatio n o f medium-size daircraf

t an daviatio n service s t o th e public . Th e City' s refusa l i s a n unreasonabl e denial o f

acces s t o aeronautica l developmen t an daviolatio n o f

grant assuranc e 2 2 (Economi c Nondiscrimination) . Th e Cit y ha s purposefull y refuse dt o allo w th e constructio n o f

hangar s o n usabl e lan dwithi n th e boarder s o f th e Airport

i n contraventio n o f th e requirement s o f

th e FAA an dth e assurance s i t mad e unde r

th e AIP . In doin g so , th e Cit y ha s undermine dth e Receiver' s ability t o effectivel y marke t VJ C an dreceiv e areasonabl e marke t valu e fo r thi s asse t o f th e Receivership . CONCLUSIO N Pursuan t t o th e Orde r

Appointin g Receiver , th e Receive r i s authorize dto initiate action s andproceeding s for th e benefi t

o f th e Defendants , Relie f

Defendants , an dthei r

1 0investor s an dcreditors . Se e Orde r Appointin g Receive r

(Dkt . 8 a t ^ 2) . Whil e thi s paragrap h give s th e Receive r

discretio n t o institute action s on behal f o f th e Receivership , becaus e aPar t 1 6 proceedin g differ s fromaction s generall y initiate db y a n equity receiver , th e Receiver desire s t o brin g thi s matte r t o th e Court' s attentio n fo r approval prio r

t o proceeding . Th e Receiver believe s institutio n o f

aPar t 1 6 Complain t

wil l enhanc e th e viability o f asal e o f VJ C an dth e expens e incurre di n institutin g th e proceedin g if necessary wil l b e reasonabl e i n light o f th e potential benefit . WHEREFORE , th e Receive r respectfull y request s thi s Cour t gran t leav e t o institute a Par t 1 6 Complain t

wit h th e Federal Aviatio n Administratio n agains t th e Cit y of Venice , Florida . LOCA L RUL E 3.01(g ) CERTIFICATIO N O F COUNSE L Th e undersigne dcounse l for th e Receive r

i s authorize dt o represen t t o th e Cour

t tha t th e SEC ha s n o objectio n t o th e Court' s grantin g thi s motion . Th e undersigne dcounse l i s unabl e to contac t

Arthu r Nadel , wh o i s incarcerate di n Ne w Yor

k an di s no t

represente dby counse l i n thi s action . VERIFICATIO N The factua

l allegation s state di

n thi s Reques t

are tru e an dcorrec t

t o th e bes t

o f m y knowledge , information , an dbelief . s/

Burto n W . Wiand . Receive r

1 1CERTIFICAT E O F SERVIC E 1 hereb y certif

y that o n thi s 14 * da

y o f May , 2009, 1 electronicall y filedth e foregoin g wit h th e Cler k o f th e Cour t b y usin g th e CM/EC F system . 1 furthe r certif y that 1 maile dth e foregoin g documen t

an dth e notic e o f

electroni c filin g b y first-class mai l t o th e followin g non-CM/EC F participants : Arthu r G . Nade l Registe r No . 50690-01 8 MC C Ne w Yor

k Metropolitan Correctiona l Cente r 15 0 Par k Ro w Ne w York , N Y 10007 s/Car l R . Nelso n Car i R . Nelson , FB N 028018 6 cnelson(^fowlerwhite.co m Gianluc aMorello , FB N 03499 7 Gianluca.morello(^fowlerwhite.co m Ashle y B . Trehan , FB N 004341 1 Ashley.trehan@fowlerwhite.co m May aM . Lockwood , FB N 017548 1 mlockwood@fowlerwhite.co m FOWLERWHITE BOGGS , P.A . 50 1 E . Kenned y Blvd. , Suit e 170 0 Tampa , F L 3360 2 Phon e (813 ) 228-7411 , Fa x (813 ) 229-831 3 Attorney s for

th e Receiver , Burto n W . Wiand

1 2