Court Opinion

ID: 61528
Source: CourtListenerOpinion
Date Created: 2010-04-26 04:07:59+00
Date Added: 2024-06-11T08:50:40.988059
License: Public Domain

[DO NOT PUBLISH]

                   IN THE UNITED STATES COURT OF APPEALS

                             FOR THE ELEVENTH CIRCUIT           FILED
                              ________________________ U.S. COURT OF APPEALS
                                                                       ELEVENTH CIRCUIT
                                         No. 07-12058                     April 8, 2008
                                   ________________________             THOMAS K. KAHN
                                                                            CLERK
                                       FAA No. 16-05-16

BMI SALVAGE CORPORATION, a
Florida corporation and
BLUESIDE SERVICES, INC., a Florida
Corporation,

                                                                          Petitioners,

                                            versus

FEDERAL AVIATION ADMINISTRATION,
MIAMI-DADE COUNTY, FL,

                                                                          Respondents.

                                   ________________________

                                 Appeal from an Order of the
                               Federal Aviation Administration
                               _________________________

                                        (April 8, 2008)

Before BIRCH and FAY, Circuit Judges, and HINKLE,* District Judge.

________
* Honorable Robert L. Hinkle, United States Chief District Judge for the Northern District of
Florida, sitting by designation.
FAY, Circuit Judge:

      We review a final decision of the Associate Administrator for Airports (the

“Administrator”) of the Federal Aviation Administration (“FAA”) dismissing the

complaint filed by BMI Salvage Corporation (“BMI”) and Blueside Services, Inc.

(“Blueside”), alleging that Miami-Dade County, Florida has violated applicable

federal law and related FAA sponsor assurances by engaging in unjust

discrimination in its operation of the Opa-Locka Airport.

      Finding the current record lacks sufficient evidence for a meaningful

review, we remand to the Administrator in order to give the parties the opportunity

to present additional evidence. Should Miami-Dade County (the “County”) fail to

support its actions with non-discriminatory justifications, corrective steps and

relief should be ordered.

                                      I. Background

      In 1961, pursuant to the Surplus Property Act of 1944, the federal

government conveyed Opa-Locka Airport (the “Airport”), a public-use, general

aviation airport, to the County.1 As a result, the County is bound by the terms of a

      1
          See 49 U.S.C. § 47151-53.

                                            2
quitclaim deed incorporating legal duties that arise from the Surplus Property Act.2

Furthermore, as the sponsor for federal grants received by the Airport as part of

the Airport Improvement Program (the “AIP”), the County is obligated to comply

with federal law and related FAA sponsor assurances. See 49 U.S.C. § 47107.3

       In August 2005, Stephen O’Neal (“Appellant”), the owner and President of

BMI and Blueside, initiated this case by filing a formal complaint on behalf of

both companies with the FAA.4 The complaint alleged many grievances with the

County and its management of the Airport, including claims that the County

violated specific provisions of federal law and related FAA sponsor assurances

requiring it to make the Airport available to the public without unjust

discrimination.

       2
          Although the County is owner of and sponsor for federal grants received by the Airport,
the Miami-Dade Aviation Department (“MDAD”) actually operates the Airport. For simplicity,
our references to the County include MDAD.
       3
       The AIP was authorized by the Airport and Airway Improvement Act of 1982
(“AAIA”), as amended, 49 U.S.C. § 47101, et seq.
       4
           In the interest of safety, security and development of civil aeronautics, the Federal
Aviation Act of 1958, as amended, 49 U.S.C. § 40101, et seq., delegates to the FAA
Administrator significant responsibilities for the regulation of air commerce. A person directly
and substantially affected by an airport sponsor’s alleged noncompliance with its legal duties is
entitled to file a complaint with the FAA. See 14 CFR § 16.23 (West 2008) (“Part 16”). The
complaint must provide a concise but complete statement of the facts relied upon to substantiate
each allegation. The complaint must also describe how the complainant was directly and
substantially affected by the things done or omitted by the airport sponsor. See 14 CFR §
16.23(b)(3, 4) (West 2008) .

                                                3
      BMI is a small aviation business specializing in the deconstruction and

demolition of numerous categories of aircraft. In 1999, after relocating to the

Airport from nearby Miami International Airport, BMI executed a five-year lease

(the “1999 Lease”) and began operating from 2.2 acres of a large concrete ramp at

the Airport.

      Since 1999, BMI has operated on the ramp from 13 temporary work

containers and a mobile office. Beginning in 2002, because BMI’s ramp

contained no constructed facilities, plumbing or access to utilities, BMI made

numerous formal and informal requests to the County to enter into a new lease that

would permit BMI to occupy existing or develop new constructed facilities at the

Airport. BMI alleges that the County ignored, delayed responding to or denied its

numerous requests.

      The 1999 Lease expired by its terms on December 31, 2004. Despite

negotiations for a new long-term lease that occurred from October 2004 to August

2005, BMI currently operates on a month-to-month lease by operation of law.

More than two years after the filing of the complaint, there has been no agreement

on a new long-term lease. However, there is no evidence that the Airport has

taken action to remove BMI from its premises. BMI continues to operate from a

ramp at the Airport. In fact, twice during the proceedings below, in May and

                                         4
December 2005, the County and BMI executed two Lease Modification Letters,

which enlarged the Airport ramp space available to BMI on a month-to-month

basis.

         Appellant established Blueside, a Florida corporation and proposed tenant at

the Airport, to provide fixed-base operator and aircraft repair services, as well as

to eventually absorb BMI’s demolition business.5 In October 2004, Blueside

executed a sublease agreement to develop and construct facilities at the Airport

with the Opa-Locka Community Development Corporation (“CDC”), which has a

30-year lease with the County that enables it to develop significant portions of the

Airport. Yet, Blueside currently does not operate at the Airport.

         Sublease agreements entered into by CDC require the approval of the

County. The County has not approved CDC’s sublease with Blueside. There is

some evidence in the record to the effect that the County’s failure to approve the

Blueside sublease is due, at least in part, to a default on CDC’s development lease

with the County. The decision of the Administrator and the determination of the

Director of the Office of Airport Safety and Standards (“Director”) do not probe

into the specifics of the default or the reasons for the County’s delay in approving

         5
          A fixed-base operator is a commercial entity providing aeronautical services, such as
fueling, maintenance, storage, ground and flight instruction to the public. See FAA Order
5190.6A, Airport Compliance Requirements (October 2, 1989).

                                                5
the sublease.

       Sometime shortly before Appellant filed his complaint, the County offered

Blueside a five-year lease to occupy space on a ramp at the Airport. The lease

appears similar, if not identical for all intents and purposes, to the 1999 lease.

Appellant rejected the proposed lease because he argues that the lease is

inadequate due to the five-year term and an opt-out provision that precludes him

from obtaining the requisite financing necessary to develop constructed facilities

on the ramp.

       The Director reviewed the record evidence concerning Appellant’s

allegations of unjust discrimination in the awarding of long-term development

leases and determined that the County’s treatment of BMI and Blueside did not

violate its federal obligations under 49 U.S.C. § 47107(a) and related Grant

Assurance 22 (Economic Nondiscrimination). On administrative appeal, the

Administrator affirmed the Director’s decision and dismissed the complaint.

       The issues on appeal have been distilled from the sweeping allegations in

the complaint.6 In this Court, Appellant focuses his argument on the County’s

       6
          Appellant’s complaint included claims that the County was treating BMI and Blueside
unfairly due to rule violations allegedly committed by BMI with respect to derelict aircraft and
aircraft notification procedures. We do not address these allegations because the County denies
the alleged violations had any impact on its decision whether to grant BMI and Blueside leases to
occupy or develop constructed facilities. Therefore, we refrain from addressing whether such
alleged violations, if they had been considered by the County, could be a basis for denying or

                                                6
allegedly unjust discrimination in awarding certain Airport tenants leases to

occupy or develop constructed Airport facilities, but refusing BMI and Blueside

such leases. In addition to citing evidence that the County awarded leases to

occupy or develop constructed Airport facilities to similarly-situated tenants,

Appellant points to the County’s failure to approve, or even offer a lease

comparable to, Blueside’s sublease with CDC.

       According to Appellant, the Administrator erred when he accepted the

County’s legally insufficient reasons to explain why BMI and Blueside are not

similarly-situated with tenants who received allegedly favorable leases. Further,

Appellant argues that the County’s defense that leases offered to BMI and

Blueside were comparable to leases awarded to similarly-situated tenants is

unsupported by the record.

                                    II. Standard of Review

       We must apply the standard of review articulated in the Federal Aviation

Act, 49 U.S.C. § 46110(c) (West 2008), and by default, the Administrative

Procedure Act, 5 U.S.C. § 706 (West 2008), when reviewing a final decision of the

Federal Aviation Administration dismissing a complaint filed under Part 16.

       Under the Federal Aviation Act, the Administration's findings of fact are

delaying the approval of the desired leases.

                                               7
conclusive if supported by substantial evidence. See 49 U.S.C. § 46110(c) (West

2008) (“Findings of fact by the . . . Administrator, if supported by substantial

evidence, are conclusive.”). We consider the record in its entirety “including the

body of evidence opposed to the [FAA’s] view,” when reviewing the record for

substantial evidence. NLRB v. S. Fla. Hotel & Motel Ass’n, 751 F.2d 1571, 1579

(11th Cir. 1985) (quoting Universal Camera v. NLRB, 340 U.S. 474, 488, 71 S.Ct.

456, 465, 95 L.Ed. 456 (1951)). “Substantial evidence is such relevant evidence

as a reasonable mind might accept as adequate to support a conclusion.” Singer v.

Garvey, 208 F.3d 555, 558 (6th Cir. 2000).

      Even if two different conclusions can be drawn from the evidence, we may

still find that the agency’s factual findings are supported by substantial evidence.

See S. Fla. Hotel & Motel Ass’n, 751 F.2d at 1579. Substantial evidence review

“gives the agency the benefit of the doubt, since it requires not the degree of

evidence which satisfies the court that the requisite fact exists, but merely the

degree which could satisfy a reasonable factfinder.” Allentown Mack Sales &

Serv., Inc. v. NLRB, 522 U.S. 359, 377, 118 S.Ct. 818, 139 L.Ed.2d 797 (1998)

(italics omitted).

      In addition, we must ascertain whether there is a rational connection

between the facts found and the decision made by the agency. See Bowman

                                          8
Transp., Inc. v. Arkansas-Best Freight Sys., Inc., 419 U.S. 281, 285, 95 S.Ct. 438,

442, 42 L.Ed.2d 447 (1974); Nat’l Wildlife Fed’n v. Marsh, 721 F.2d 767, 780

(11th Cir. 1983). Thus, not only must the agency’s factual findings be supported

by substantial evidence, but the agency’s nonfactual analysis, including its

interpretation of the governing statute, application of that statute to the facts, and

conclusion must also be reasonable and not arbitrary and capricious. See South

Dakota v. Civil Aeronautics Bd., 740 F.2d 619, 621 (8th Cir.1984); Starr v. FAA,

589 F.2d 307, 310 (7th Cir. 1978).

                                    III. Discussion

      The federal government plays an important role in developing civil aviation

through various legislative acts designed to develop airport facilities. Under

programs that provide funds and surplus federal property to local communities, an

airport’s sponsor or owner is bound by certain obligations, either through contract

or a restrictive covenant in the property deed or conveyance instrument, to

maintain and operate the airport facilities safely, efficiently, and in accordance

with specified conditions.

      The Airport receives federal funds under such a program: the AIP. This

program provides financial assistance to airport sponsors in exchange for binding

                                           9
commitments designed to ensure that the public interest is served.7 These

commitments were detailed in the County’s applications for federal assistance and

in the grant agreement, which includes a list of sponsor assurances incorporating

applicable federal laws, regulations, executive orders, statute-based assurances,

and other requirements binding on the County. After acceptance of an AIP grant,

the assurances become a binding obligation between the airport sponsor and the

federal government, and the FAA has a statutory obligation to ensure that airport

sponsors comply with their sponsor assurances. See 49 U.S.C. § 47122 (West

2008).

       In this case, Appellant alleges that the County has violated Federal Grant

Assurance 22 (Economic Nondiscrimination), which provides that the County

must make the Airport available “for public use on reasonable terms, and without

unjust discrimination, to all types, kinds, and classes of aeronautical activities,

including commercial aeronautical activities offering services to the public at the

airport.”8 Grant Assurance 22(a) (implementing 49 U.S.C. § 47107(a)(1)).9

       7
        The Secretary of Transportation is authorized to prescribe project sponsorship
requirements to ensure compliance with the AAIA. See 49 U.S.C. § 47107(g)(1) (West 2008).
       8
         As noted, the County’s operation of the Airport is also bound by the terms of a
quitclaim deed issued under the Surplus Property Act. Property deeds issued under that Act
provide in relevant part that “the property transferred hereby . . . shall be used for public airport
purposes, and only for such purposes, on reasonable terms and without unjust discrimination.”
This deed covenant mirrors Grant Assurance 22 thus, we do not address whether the County’s

                                                  10
Specifically, BMI and Blueside claim the County violated Grant Assurance 22

when it awarded certain tenants, but not others, leases to occupy or develop

constructed Airport facilities.10

       BMI and Blueside claim in general that they are similarly situated with the

Airport tenants who received favorable leases from the County. The

Administrator and Director both acknowledged, however, that facts supporting

these claims had not been clearly, concisely, or completely described as required

by Part 16. Further complicating the effort to determine whether the tenants are

similarly situated, the record includes what could be considered conflicting

statements from BMI and Blueside.

       For example, as noted by the Administrator, when describing how the

County allegedly favored fixed-base operator Miami Executive Aviation,

Appellant compares the County’s treatment of Blueside, but then suddenly

obligations arise from the deed or contractual sponsor assurances because the analysis would be
identical for purposes of our review.
       9
          The obligation to make the Airport available to the public without unjust discrimination
is necessarily balanced by provisions permitting the County “to establish such reasonable, and
not unjustly discriminatory, conditions to be met by all users of the airport as may be necessary
for the safe and efficient operation of the airport.” Grant Assurance 22(h). Moreover, under
Grant Assurance 22(i), the County may “prohibit or limit any given type, kind or class of
aeronautical use of the airport if such action is necessary for the safe operation of the airport or
necessary to serve the civil aviation needs of the public.”
       10
         By failing to raise a violation of Grant Assurance 23 (Exclusive Rights) in his
complaint, Appellant has waived his right to argue such a violation in this Court.

                                                11
switches to statements regarding BMI, only then to jump back to statements

regarding Blueside. The Administrator used this inconsistency to suggest that the

record is not clear regarding which corporate entity wishes to establish a new

aircraft repair station.

        We must agree that while arguing their case below BMI and Blueside did

themselves a disservice by muddying the record with the revolving use of

corporate names and presenting indistinct business plans. However, certain record

evidence deemed inconsistent by the Administrator is not, in our view, contrary to

Appellant’s express plans to eventually merge BMI and Blueside. We are able to

reconcile many of these seeming inconsistencies by recognizing that these

statements reflect both failed past efforts to expand BMI and present efforts to

offer additional services through Blueside, which plans to possibly absorb BMI in

the future.11

        Our reading of the record clearly shows that BMI is an established aircraft

demolition business that made numerous requests to obtain a more permanent

leasing arrangement at the Airport. The record also clearly shows that Blueside is

        11
             For example, the statement: “BMI Salvage Corporation made repeated requests to
lease . . . in an effort to open a new aircraft repair station business” is not necessarily inconsistent
with “Blueside is proposing to offer [fixed-base operator] services, which includes the creation of
a . . . repair station which are totally different services from BMI, which [presently] offers aircraft
teardown services.”

                                                  12
a separate entity established by Appellant for the primary purpose of entering into

a long-term lease to operate a fixed-base operator business. Further, we read the

record as clearly demonstrating that Appellant attempted numerous times in vain

to obtain permission to occupy or develop constructed facilities at the Airport for

the purpose of opening an aircraft repair business.

      There is potential confusion regarding the corporate name under which that

aircraft repair business was to operate. However, there can be no mistake that

Appellant made several requests, first through BMI then through Blueside, for a

lease to occupy or develop constructed facilities at the Airport in order to open an

aircraft repair business. The record may be lacking in certain specific details,

some of which the County or third parties are likely in a better position to provide

than BMI or Blueside. Nevertheless, we believe Appellant has stated with

sufficient particularity his allegations that the County unjustly discriminated

against BMI and Blueside by refusing to grant either company a lease to occupy or

develop constructed facilities at the Airport.

      Extracting from the record that BMI and Blueside wish to occupy or

develop constructed facilities at the Airport for the purpose of operating

aeronautical businesses, we must address Appellant’s allegations that the County

repeatedly delayed or denied BMI and Blueside leases to occupy or develop

                                          13
constructed facilities while granting such leases to similarly situated tenants. The

two specific tenants alleged to have received favorable treatment are Clero

Aviation and Miami Executive Aviation. We begin with Clero Aviation.

      In 2002, on at least two occasions, Appellant expressed to the County an

interest in entering into a long-term lease that would enable BMI to expand and

offer aircraft repair services. In February 2002, Appellant notified the County that

he wanted to develop property at the Airport in a letter complaining that his phone

calls to County-approved developers authorized to provide a long-term lease went

unreturned for several years. In March 2002, Appellant sent a facsimile to a

County official requesting permission to lease Building 407 at the Airport , a

condemned building BMI offered to renovate at its own cost provided the County

would partially offset such costs with lease credits. That request was not granted

and the record provides no reason.

      In contrast, the record shows that the County provided Clero Aviation a

five-year lease to occupy a condemned building (Building 66). When that

building failed inspection, the County and Clero Aviation promptly entered into a

new three-year lease for a separate condemned building (Building 137). The

recitals to the three-year lease state that Clero Aviation intended to occupy

Building 137 while negotiations were simultaneously underway with the County

                                         14
for Clero Aviation to construct a new facility on Airport property. The record also

appears to demonstrate that the County agreed to finance, at least in part, the

refurbishment and re-certification of those condemned buildings.

      In the face of what could be reasonably interpreted as discriminatory

treatment, the Administrator concluded that BMI and Clero Aviation were not

similarly situated tenants and, in any event, the BMI and Clero Aviation leases

were in fact comparable. The Administrator reasoned that Clero Aviation was not

similarly situated because it entered into a lease to operate its existing repair

station business, whereas the purpose of BMI’s request was to open a new aircraft

repair business and possibly continue its existing demolition business.

      Yet, we find no evidence in the record regarding the relevance of this

distinction to the County’s decision whether to award an existing tenant access to

a condemned building. Further, as we discuss below with respect to Miami

Executive Aviation, a policy that awards leases merely based on whether a lessee

operates an existing business or a new business likely violates the County’s duty

to refrain from granting exclusive rights to certain tenants.

      In addition to Clero Aviation’s operation of an existing repair station, the

decision below noted there existed a non-aeronautical element to BMI’s aircraft

demolition business that gave the County a sufficient basis to discriminate in favor

                                           15
of Clero Aviation, which does not have a non-aeronautical element to its business.

The decision below clarified that BMI obtains aircraft and dismantles them,

resulting in the aircraft never flying again, while Clero Aviation repairs

non-flyable aircraft, permitting the aircraft to fly again. If we understand this

distinction correctly, a demolition business is not similarly-situated with an

aircraft repair business for purposes of awarding a lease to occupy a condemned

building because the former has a non-aeronautical element.

      The FAA concedes that “the receipt of aircraft onto the leasehold for

demolition, along with a reasonable time period after the aircraft is last parked

under its own power, is an aeronautical activity.” BMI Salvage Corp. & Blueside

Services, Inc. v. Miami-Dade County, Florida, FAA Docket No. 16-05-16, 2006

WL 2512974, at *10 (Dep’t Transp. July 25, 2006) (Director’s Determination).

The implication, however, is that at some point in the demolition process BMI is

no longer engaged in a completely aeronautical activity. The arguably hybrid

nature of any aircraft salvage or demolition operation understandably presents

challenges for the management of the Airport. We must consider these challenges

in the context of reviewing a complaint alleging a violation of an airport sponsor’s

                                          16
federal obligations.12

       We do not refute the obvious fact that the two businesses are engaged in

different activities at the Airport. BMI is in the aircraft demolition business, while

Clero Aviation is in the aircraft repair business. Thus, leases between these parties

and the County would apply to businesses with different purposes. However, it is

unstated in the record what relevance the different business purposes have to the

decision whether to grant these particular existing tenants the right to refurbish

and occupy condemned buildings. If, as the County argues and the record

supports, BMI made proposals to expand its operation and add an aircraft repair

business, the record is silent on what effect the proposed expansion has on

whether BMI and Clero Aviation are similarly situated for purposes of leasing and

refurbishing a condemned building. If BMI proposed to offer aircraft repair

services, the parties’ business purposes are less distinct.

       Absent further explanation, we find the alleged non-aeronautical aspects of

       12
           According to the Director, the challenges for a sponsor include the requirement to
reserve aeronautical facilities for aeronautical activities; the requirement to charge fair-market
value for the use of airport facilities for non-aeronautical purposes; the requirement to operate
and maintain the airport in a safe and serviceable condition; and retaining the ability to develop
aeronautical areas of the airport for purely aeronautical activities. Grant Assurance 24 includes
the requirement to charge non-aeronautical, fair-market value rates for non-aeronautical activities
at the airport. Further, the County’s property deed and its Airport Layout Plan (ALP) designate
aeronautical areas of the airport that must be used for aeronautical purposes, unless specifically
authorized by FAA pursuant to a possible ALP change and notice to the public of the change
from aeronautical to non-aeronautical use.

                                                17
BMI’s business to be an unpersuasive basis on which to conclude that the parties

are not similarly situated.13 The record provides no reason why the non-

aeronautical element, if there is one, is a reasonable justification to distinguish

between BMI and Clero Aviation. It is our understanding that presence at the

airport is a prerequisite for BMI’s demolition business. Aircraft must be flown to

the site of BMI’s business for demolition to begin. Therefore, the natural, perhaps

only logistically feasible, place for such a business to operate is within the

designated aeronautical area of the Airport.

       The non-aeronautical element of BMI’s business is at most de minimis in

light of the need to locate an aircraft demolition business in proximity to

aeronautical areas in the Airport. Until the County can explain how the hybrid

nature of BMI’s business is crucial to its decision whether to award a lease to

occupy a condemned building, we find the current explanation for the apparently

disparate treatment in this case to be deficient.14

       13
           The FAA’s definition of aeronautical activities does not explicitly rule out the
possibility that a business such as BMI’s is a completely aeronautical activity. A demolition
business is not specifically included on the list of aeronautical activities; however, the list is by
its terms not exhaustive. See Appendix 5 of FAA Order 5190.6A, Airport Compliance
Requirements.
       14
           The Director suggested the County could simultaneously accommodate BMI’s
demolition business and assure compliance with its federal grant assurances by providing a time
limit to remove non-aeronautical parts from designated aeronautical areas. See BMI Salvage
Corp. & Blueside Services, Inc., FAA Docket No. 16-05-16, 2006 WL 2512974, at *14 (Dep’t
Transp. July 25, 2006) (Director’s Determination).

                                                  18
      Importantly, the decision below also concluded that the leases under which

BMI and Clero Aviation operate are in fact comparable. BMI operated on a ramp

at the Airport pursuant to a standard five-year lease with a 30-day relocate or

vacate clause. Clero Aviation initially operated in Building 66 pursuant to a

standard five-year lease with a 30-day relocate or vacate clause. Clero Aviation

currently has a three-year lease for a separate building (Building 137) including an

option for an extension and a 30-day relocate or vacate clause.

      During oral argument, Appellant emphasized the crippling nature of the

30-day relocate or vacate clause, which he argued prevents BMI from obtaining

financing to refurbish or construct facilities at the Airport. While we are

unpersuaded by the County’s claims that the 30-day clause was included merely

for BMI’s benefit (in which case the clause could be drafted to grant BMI a

unilateral right), it appears from the record that the 30-day relocate or vacate

clause is a standard provision in Airport leases. Even so, notwithstanding the

presence of a 30-day relocate or vacate clause in both leases, the leases are

glaringly different in a fundamental way: Clero is granted access to a building and

BMI is denied access to a building. Further, a 30-day relocate or vacate clause is

less damaging to a lessee where the lessor agrees to assume certain costs

associated with re-certifying and refurbishing the condemned building, as the

                                          19
County agreed to do in the case of Clero Aviation.

      We find the current record lacks sufficient legal and factual justification to

support the conclusion that BMI and Clero Aviation are not similarly situated for

purposes of leasing a condemned building. Substantial evidence in the record also

indicates that BMI and Clero Aviation’s leases are not comparable.

      We turn next to Appellant’s allegations that the County has unjustly

discriminated against BMI and Blueside in favor of Miami Executive Aviation

(“MEA”). According to Appellant, the County granted a 35-year development

lease to MEA, which is a similarly situated aeronautical service provider that was

not required to use an approved developer. However, as with Clero Aviation, the

Administrator concluded that MEA is not similarly situated with BMI and

Blueside.

      By April 2005, the County was in the process of awarding a 35-year

development lease to MEA, which is a fixed-base operator. We understand that

when aeronautical tenants propose the same or similar use of the airport, if the

level of investment and business aspects are dissimilar, the FAA may find the

aeronautical users are not similarly situated. See Skydance Helicopters, Inc. d/b/a

Skydance Operations, Inc. v. Sedona Oak-Creek Airport Auth. and Yavapai

County, Ariz., FAA Docket No. 16-02-02, 2003 WL 1524500, at *27-28 (March

                                         20
7, 2003) (Director's Determination). In this case, however, we do not believe the

record sufficiently demonstrates that BMI and Blueside are comparing themselves

to an entity with dissimilar business aspects or levels of investment.

      From the record we are able to discern that, prior to receiving a long-term

35-year lease, MEA conducted business through a standard five-year lease with a

30-day relocate or vacate clause. However, once the five-year lease expired, the

County provided MEA an opportunity to avoid the potential risk of developing on

a short-term lease by entering into a long-term lease. In contrast, since BMI’s

five-year lease expired, the County has not offered BMI a similar long-term lease

and BMI operates from a ramp on a month-to-month basis.

      The record sheds no light on why BMI’s demolition business is sufficiently

distinct from MEA’s fixed-base operator business to justify differential treatment

with respect to a long-term lease. There may be numerous factors that could serve

as the basis for legitimate distinctions, but we fail to see them in the record.

Merely stating that one business is an existing tenant while another is a proposed

tenant, or that one business is a fixed-base operator while another is a demolition

business, is alone insufficient to justify differential treatment.

      Even assuming arguendo that BMI’s demolition business is sufficiently

distinct from MEA’s to justify differential treatment regarding the right to receive

                                           21
a long-term lease to develop constructed facilities, Blueside and MEA have

exactly the same business purpose. Aside from any confusion regarding the entity

proposing to offer aircraft repair services, the record clearly shows that Blueside

proposed to offer fixed-base operator services under a long-term sublease with

CDC. Thus, there is scant evidence to conclude that the County’s reliance on

different business purposes was a legitimate justification to refuse to approve

Blueside’s long-term development sublease.

       We note that Blueside finally secured a long-term development by entering

into a sublease with an approved developer. However, more than three years later,

the County has not ratified that sublease thereby preventing Blueside from

developing at the Airport.15 There is testimony in the record stating that the

County has not approved the sublease because CDC is currently in default on its

lease with the County. Nevertheless, the record shows only superficial efforts by

the County to accommodate Blueside’s plans to develop, which according to the

County have been thwarted due to CDC’s actions and not by any fault of Blueside.

       The decision below gives dramatic consideration to the fact that MEA is a

current tenant operating an established fixed-base operator business. Blueside, in

       15
          Ratification by the County is required even though CDC is an approved developer at
the Airport.

                                              22
contrast, has never had a lease with the Airport and was proposing to introduce a

new fixed-base operator business. The decisions below relied on this distinction

to conclude that Blueside is not similarly situated with MEA. We find this

distinction troubling. Permitting the County to award favorable leases to parties

merely because they are established businesses would erect a potentially

unsurmountable barrier to entry for new operators.

       If the County were permitted to rely on this proffered reason alone, it would

have a chilling effect on new businesses and operators seeking to establish

themselves at the Airport.16 There is no record evidence to explain why this

particular new fixed-base operator should not be treated the same way as this

particular established fixed-base operator. Because a lease for constructed

facilities is essential to establish a fixed-base operation, the record should include

details about MEA and Blueside that can serve as legitimate justifications for

discriminating in favor of the established business over the new business.

       The record indeed indicates that the County has offered Blueside a direct

five-year lease. However, the proposed lease does not grant Blueside access to an

existing building. Further, the lease is drafted for a term of five years, working

       16
         Further, such a policy could be implemented in a way that would violate Federal Grant
Assurance 23 (Exclusive Rights) by granting exclusive rights to existing businesses.

                                              23
against Appellant’s plans to develop at the Airport over the long-term.

Negotiations for this lease appear to have stalled. There is some indication that

Blueside may be rejecting the lease solely due to the five-year term and the 30-day

relocate clause.

      If the County can provide further evidence that the 30-day clause is standard

in all Airport leases and that similarly situated tenants have used five-year leases

with 30-day relocate clauses to successfully develop Airport property, Blueside

will have less footing from which to argue that the proposed lease is

discriminatory.17 And, if the County’s claim is genuine that the 30-day clause

exists merely for the benefit of the lessee, the County should be willing at

Blueside’s request to revise the proposed lease to make the clause unilateral.

      We do not suggest that the County has avoided negotiating in good faith

with BMI and Blueside. The decisions below noted that the County had offered to

work through various issues and even had expanded the amount of ramp space

available to BMI under its month-to-month lease. Nevertheless, the record

evidence paints a picture that over numerous years BMI and Blueside have been

continuously denied without legitimate justification the right to occupy or develop

constructed facilities at the Airport.

      17
           The record is devoid of any such evidence.

                                               24
      The proponent of a motion, request, or order has the burden of proof.

Likewise, a party who has asserted an affirmative defense has the burden of

proving the affirmative defense. This standard burden of proof is consistent with

federal case law and the Administrative Procedure Act provision stating, “[e]xcept

as otherwise provided by statute, the proponent of a rule or order has the burden of

proof.” 5 U.S.C. § 556(d) (West 2008). Therefore, we believe the County should

have the opportunity to supplement the record, if it can, with legitimate

explanations for its differential treatment of BMI and Blueside as compared to

MEA and Clero Aviation.

      We are not in a position to speculate concerning unarticulated motives the

County may have had in denying BMI and Blueside the right to occupy or develop

constructed facilities at the Airport. The record provides abundant instances of

personal friction between Appellant and various County employees. Yet, having

disclaimed any unarticulated motives and relying only on those discussed above,

the County has not proffered valid, particularized reasons for denying BMI and

Blueside the right to occupy or develop constructed facilities at the Airport.

       Operating the airport for aeronautical use is a sponsor’s primary obligation.

Part of this primary obligation is the opportunity for leaseholders to develop

airport property for aeronautical use. See United States Constr. Corp. v. City of

                                         25
Pompano Beach, Fl., FAA Docket No. 16-00-14, 2002 WL 1821882 (July 10,

2002) (Final Agency Decision). Federal assistance is not available for

improvements to airports where the benefits of such improvements will not be

fully realized due to inherent restrictions on aeronautical activities.

                                   IV. Conclusion

      It would seem rather basic that the County would require all applicants who

desired to do business at the Airport to provide evidence of financial stability,

competence in the specific area of activity, the ability to comply with the laws and

regulations governing such activity and similar fundamentals. However, this

record reflects nothing of the sort. What we are holding is that it is not adequate

under the law to deny an applicant the opportunity to operate at the Airport simply

because there is an existing operator present. There may be some maximum

number of fixed-base operations that the activity at the Airport would support, but

this record contains no such evidence. It may be that some existing buildings are

simply beyond refurbishing. But this record is silent in that regard. Negotiations

can go on for extended periods. However, when they go on for years, that fact

alone raises serious questions about the lack of “good faith.” This record is simply

inadequate for us to make a meaningful review.

      Accordingly, we REMAND this case to the Administrator in order that he

                                          26
may give the County the opportunity to present legally and factually sufficient

justifications for its refusal or delay in awarding BMI and Blueside the

opportunity to occupy or develop constructed facilities at the Airport.18 In the

absence of such, corrective steps should be ordered.

       REVERSED and REMANDED with instructions.

       18
          We note that the County stated that it was “ready, willing and available” to work
towards executing a lease that will accommodate Appellant’s business needs. We are
encouraged by this statement and, given that several years have passed since this statement was
made, this case could become moot if the parties were to set aside their past disagreements and
agree on a lease that will enable Appellant to occupy or develop constructed facilities at the
Airport.

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