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SPENCER FANE LLP

Andrew M. Federhar (No. 006567)

Jessica A. Gale (No. 030583)

2425 East Camelback Road, Suite 850

Phoenix, AZ 85016-4251

Telephone: (602) 333-5430

Fax: (602) 333-5431

afederhar@spencerfane.com

jgale@spencerfane.com

Attorneys for Defendant Kingman Airport 

Authority

UNITED STATES DISTRICT COURT

DISTRICT OF ARIZONA

CITY OF KINGMAN, 

Plaintiff,

v.

KINGMAN AIRPORT AUTHORITY,

Defendant.

Case No. 

(Removal from Mohave County Superior 

Court No. CV2017-00965)

NOTICE OF REMOVAL 

Pursuant to 28 U.S.C. §§ 1331, 1441(a) and 1446(b), Defendant Kingman Airport 

Authority (“KAA”) provides notice of its removal of the action entitled City of Kingman 

v. Kingman Airport Authority, Mohave County Superior Court No. cv 2017-00965 (the 

“Action”), to the United States District Court for the District of Arizona, Prescott 

Division. There is a federal action pending in this Court (Kingman Airport Authority v. 

City of Kingman, Case No. 3:17-cv-08260-JJT) and KAA is contemporaneously moving 

to consolidate this Action with the pending action. 

KAA is permitted to remove the Action. This Court has jurisdiction over Plaintiff’s 

Complaint under 28 U.S.C. § 1331 because it implicates Art. I, § 10, Cl. 1 and the Fifth 

and Fourteenth Amendments of the U.S. Constitution. The Complaint seeks to impair the 

Case 3:17-cv-08272-DLR Document 1 Filed 12/14/17 Page 1 of 8
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contract between KAA and the City of Kingman (the “City”) and deny KAA fair 

compensation. Thus, KAA’s rights under the United States Constitution are in question. 

The following facts and analysis support KAA’s Notice of Removal. Also, the City’s 

Action arises out of the transaction or occurrence that is the subject matter of the KAA’s

federal lawsuit. As such, the claim in the City’s Action is actually a compulsory 

counterclaim in the pending federal lawsuit under Rule 13(a)(1), Fed. R. Civ. P.

I. FACTUAL AND PROCEDURAL BACKGROUND

The City and KAA are parties to a lease pursuant to A.R.S. § 28-8424 (the 

“Lease”), which permits KAA to operate and manage the Kingman Airport. The City 

now seeks to terminate KAA’s leasehold interest through this Action. 

The Lease permits the City to terminate the contract if (1) KAA files for 

bankruptcy; (2) KAA makes an assignment for creditors; (3) KAA commits an act which 

deprives KAA of its ability to perform its duties; (4) KAA abandons its duties; (5) the 

failure of KAA to observe the terms of the Lease after the expiration of a 90-day notice 

and cure period, which can be extended upon the showing by KAA that it is diligently 

attempting to cure the issue. See Third Amendment and Restatement of Lease 

Agreement, attached hereto as Exhibit 1. The Lease does not provide the City with a right 

to terminate without cause and solely for its convenience. Importantly, the City has not

given notice to KAA that it has committed a breach under the Lease. Instead, the City 

passed Resolution No. 5113, which states:

A RESOLUTION BY THE MAYOR AND COMMON 

COUNCIL OF THE CITY OF KINGMAN, ARIZONA 

DECLARING THAT THE KINGMAN AIRPORT 

AUTHORITY IS FAILING TO UPHOLD THE 

EXPECTATIONS OF THE LEASE AGREEMENT.

WHEREAS, The City of Kingman has conducted hearings 

and made inquiries regarding the actions of the Kingman 

Airport Authority with respect to the operations of the 

Kingman Airport and associated property subject to that 

certain lease dated January 20, 1992, between the City of 

Case 3:17-cv-08272-DLR Document 1 Filed 12/14/17 Page 2 of 8
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Kingman and the Kingman Airport Authority, a lease 

authorized by City of Kingman Resolutions No. 1601 and 

1649; and 

WHEREAS, The actions at the airport is contrary to the 

expectations of the parties to the lease. The Kingman Airport 

Authority is mismanaging the airport and committing waste 

by, inter alia, failing to maintain and improve the airport 

while it discourages development; and 

WHEREAS, The City’s assets at the airport are being 

devalued by the Kingman Airport Authority, and assets are 

being and have been diverted to improper purposes contrary 

to the public interest and necessity that attends the operation 

of the airport. 

NOW, THEREFORE, THE KINGMAN CITY COUNCIL 

DOES HEREBY RESOLVE: that the public interest and 

necessity require the acquisition of the leasehold interest, 

goodwill, furniture, fixtures, funds, and equipment of and 

concerning the lease and all rights pertinent to the lease for 

the good of the City of Kingman and its citizens so that the 

airport can be put to public use, to wit, operation of the 

airport owned by the City of Kingman. The City of Kingman 

is therefore authorized to acquire the interest in the 

aforementioned legal property including the leasehold 

interest, goodwill, furniture, fixtures, equipment, and any and 

all funds pursuant to the provisions of A.R.S. § 12-1111, et 

seq. 

In effect, Resolution No. 5113 impairs KAA’s rights under the Lease in violation 

of both the United States and Arizona Constitutions, seeks to authorize the taking of 

KAA’s interest in real and other property without just compensation, and both impairs and 

deprives KAA of its right to pursue remedies under the Lease. 

On December 5, 2017, the City filed the Action, seeking immediate possession of 

KAA’s leasehold interest in operating the airport and possession of other tangible and 

intangible assets that are not interests in real property. KAA was served with a copy of 

the Summons, Complaint, Application for Immediate Possession, and Order Setting 

Hearing on Application for Immediate Possession by personal service on December 6, 

2017. This Notice of Removal is being filed within 30 days of service. Accordingly, 

KAA seeks to remove the City’s Action to this Court pursuant to 28 U.S.C. § 1331 

Case 3:17-cv-08272-DLR Document 1 Filed 12/14/17 Page 3 of 8
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because it raises questions concerning KAA’s rights under the U.S. Constitution. 

II. LEGAL ANALYSIS

The Action is removable pursuant to 28 U.S.C. § 1441(a) because the district 

courts of the United States have original jurisdiction over the Action. Specifically, this 

Court has federal question jurisdiction pursuant to 28 U.S.C. § 1331 because this Action

arises under the U.S. Constitution. The City’s state law claim “necessarily turn[s] on the 

construction of a substantial, disputed federal question,” and is therefore removable to 

federal court. Laughton v. Tenet Healthcare Corp., No. CV-15-1310-PHX DGC, 2015 

WL 5611520, at *1 (D. Ariz. Sept. 23, 2015) (citing Rains v. Criterion Systems, Inc., 80 

F.3d 339, 343 (9th Cir. 1996)); see also Franchise Tax Bd. of State of Cal. v. Construction 

Laborers Vacation Trust for S. Cal., 463 U.S. 1, 13 (1983)). The City brings this Action 

pursuant to the authority given to it by Resolution No. 5113, which turns on two 

constitutional provisions. First, the City seeks to invoke its takings power under Arizona 

law and the Arizona Constitution which implicates KAA’s rights under the Fifth and 

Fourteenth Amendments of the U.S. Constitution because it seeks to condemn KAA’s 

leasehold interest without just compensation. See U.S. Const. amend. 5 (“. . . nor shall 

private property be taken for public use, without just compensation.”); U.S. Const. amend. 

14, § 1 (“. . . nor shall any State deprive any person of life, liberty, or property, without 

due process of law . . .”). 

Second, through Resolution No. 5113, the City seeks to impair KAA’s rights under 

the Lease by using its power of eminent domain to circumvent the terms of the Lease. 

However, the City cannot create a law that impairs the Lease under the Contract Clause of 

the United States Constitution. U.S. Const. Art. I, § 10, Cl 1 (“No State shall enter into 

any . . . Law impairing the Obligation of Contracts . . . .”). The City’s Application for 

Immediate Possession in the Action acknowledges that its condemnation claim

unavoidably raises a federal question: whether the City is permitted to condemn property 

Case 3:17-cv-08272-DLR Document 1 Filed 12/14/17 Page 4 of 8
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despite the “Constitutional prohibition against impairment of contract.” Application at 6. 

The City and KAA disagree about the robustness of the protections of the Contract 

Clause; however, the parties appear to agree that their dispute requires the Court to decide 

if the power of eminent domain can trump the protections of the Contract Clause. The 

question as to the interplay between two portions of the U.S. Constitution is a sufficient 

ground for federal jurisdiction. See New York City Dep’t of Educ. v. S.H. ex rel. D.H., No. 

13 CIV. 3499 AJN, 2014 WL 572583, at *4 (S.D.N.Y. Jan. 22, 2014) (“Even if the City is 

wrong, the question of whether its interpretation of the [federal statute] is correct would 

be a sufficient ground for federal jurisdiction.”). 

An ordinance violates the Contract Clause if it substantially impairs a contract. S. 

Cal. Gas Co. v. City of Santa Ana, 336 F.3d 885, 889 (9th Cir. 2003). “[T]he Supreme 

Court narrowly construes the Contract Clause to ensure that local governments can 

effectively exercise their police powers. . . . However, a ‘higher level of scrutiny is 

required’ when the legislative interference involves a public rather than a private 

obligation.” Id. An impairment is substantial if it deprives a party of “an important right, 

thwarts performance of an essential term, defeats the expectations of the parties, or alters a 

financial term.” Id. at 890 (citations omitted). In addition, if a municipality enacts an 

ordinance that impairs its own contract, then it “has the burden of establishing that the . . . 

ordinance is both reasonable and necessary to an important public purpose.” Id. at 894. 

When assessing reasonableness, the Court considers “the extent of the impairment as well 

as the public purpose to be served. . . . An ‘impairment is not a reasonable one if the 

problem sought to be resolved by an impairment of the contract existed at the time the 

contractual obligation was incurred.’” Id. at 894-95 (citations omitted). An impairment is 

also not necessary if “more moderate alternatives would serve . . . [its] purposes equally 

well without impairing” the contract. Id. at 896. Finally, when a municipality seeks to 

take property without compensation, the contract is impaired. Horwitz-Matthews, Inc. v. 

Case 3:17-cv-08272-DLR Document 1 Filed 12/14/17 Page 5 of 8
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City of Chicago, 78 F.3d 1248,1251 (7th Cir. 1996) (citing Ruckelshaus v. Monsanto Co., 

467 U.S. 986, 1016 (1984)). 

The resolution passed by the City authorizing the condemnation of KAA’s 

leasehold interest seeks to deprive KAA of all of the bargained for benefits and remedies 

in the Lease. The City also denies that it owes KAA any compensation. See Notice of 

Condemnation dated November 14, 2017 at 2, referenced in Complaint ¶ 9, attached 

hereto as Exhibit 2. This is a complete impairment. And, the impairment is neither 

necessary nor reasonable because more moderate alternatives exist. 

The public purpose stated in the City’s resolution was to address KAA’s alleged 

failure to properly operate, maintain and improve the airport. This alleged problem was 

anticipated at the time the City incurred the contractual obligation: the Lease allowed the 

City to terminate KAA’s tenancy if it failed to meet its obligations to maintain the 

property after notice and a right to cure. Indeed, the City reserved the right, but not the 

obligation, to spend its own money to improve all publically-owned facilities at the 

airport. See Exhibit 1, ¶ 12(C). These contractual provisions prove that the impairment 

via ordinance is not necessary because the City can exercise its default remedy under the 

Lease as a more moderate solution, or can expend its own money to make improvements 

on public facilities. Under the Lease, a simple notice of default would require KAA to 

correct the problem within 90 days or, at least, furnish satisfactory evidence that it is 

continuously and diligently attempting to correct the problem. Resolution No. 5113 

substantially impairs KAA’s rights under the Lease because it prohibits KAA from 

pursuing its ordinary state-law remedies when the City has breached the Lease. Pure 

Wafer Inc. v. City of Prescott, 845 F.3d 943, 952 (9th Cir. 2017); Horwitz-Matthews, Inc., 

78 F.3d at 1250 (“Unless the form affects the promisee’s remedy--unless the city council 

has been delegated authority by the state to modify the law of contracts, which is state 

rather than municipal law--there is no impairment of the obligation of the city’s 

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contracts.”). This is an impairment of contract and a violation of the Contracts Clause of 

the U.S. Constitution. 

The issue of whether the condemnation is constitutional is an essential element of 

the City’s claim. Even though the City did not plead compliance with the federal 

constitution, it is still an element of the City’s claim. See, e.g., Nat'l Compressed Steel 

Corp. v. Unified Gov't of Wyandotte Cnty./Kan. City, 38 P.3d 723, 733 (Kan. 2002) (“The 

power of eminent domain must be exercised in strict accordance with its essential 

elements in order to protect the constitutional right of the citizen to own and possess 

property against an unlawful perversion of such right.”). The Court must resolve whether 

Resolution No. 5113 unconstitutionally impairs the Lease before it can consider whether 

the City is otherwise entitled to condemn the leasehold interest under the laws of eminent 

domain and pay no just compensation. Therefore, a substantial, disputed federal question 

exists between the parties, which confers jurisdiction on this Court and allows this Action 

to be removed. 

A. The requirements of 28 U.S.C. §§ 1446(b)(1) and (b)(2) are met. 

In accordance with 28 U.S.C. § 1446(b), KAA’s Notice of Removal is timely filed. 

KAA was served with a copy of the Complaint, Application for Immediate Possession,

Summons, and Order Setting Hearing on Application for Immediate Possession by 

personal service on December 6, 2017. See Exhibit 3. Pursuant to 28 U.S.C. § 1446(a), a 

notice of removal must be filed within thirty (30) days after the defendant’s receipt of “a 

copy of the initial pleading setting forth the claim for relief upon which such action or 

proceeding is based.” Accordingly, KAA’s Notice of Removal dated December 14, 2017, 

is timely. 

III. LIST OF ATTACHED PROCESS, PLEADINGS AND ORDERS

Pursuant to 28 U.S.C. § 1446(a) and L.R. Civ 3.6, KAA attaches to this notice true 

and complete copies of all pleadings and other documents filed in the state court

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proceeding and served upon it in the Action. See Exhibit 3. KAA also attaches to this 

notice a true and complete copy of its Opposition to Motion for Immediate Possession and 

Motion to Dismiss filed on December 14, 2017. See Exhibit 4.

IV. SERVICE OF NOTICE OF REMOVAL

Pursuant to 28 U.S.C. § 1446(d), and contemporaneous with the filing of the 

instant Notice of Removal, KAA is filing a Notice of Removal to Federal Court with the 

Mohave County Superior Court regarding the filing of this Notice of Removal, which 

satisfies the requirements of 28 U.S.C. § 1446(d).

DATED this 14th day of December, 2017.

SPENCER FANE LLP

By s/ Andrew M. Federhar 

Andrew M. Federhar

Jessica A. Gale

Attorneys for Defendant Kingman 

Airport Authority

CERTIFICATE OF SERVICE

I hereby certify that on this 14th day of December, 2017, I electronically 

transmitted the attached document to the Clerk’s office using the CM/ECF System for 

filing and transmittal of a Notice of Electronic Filing to the following CM/ECF 

registrants:

Daryl Williams 

BAIRD WILLIAMS & GREER

6225 N. 24th St., Suite 125 

Phoenix, AZ 85016

Attorney for Plaintiff

DarylWilliams@bwglaw.net 

s/ Katrina Thomas 

Case 3:17-cv-08272-DLR Document 1 Filed 12/14/17 Page 8 of 8