Both the Airport Authority and Greenwood argue that the Hearing Officer erred in failing to find that the FAA must extend full faith and credit to the Colorado Supreme Court's decision. [FN 17] They argue that collateral estoppel bars relitigation of the issues in the instant proceeding.
To accord full faith and credit to a given state-court judgment, a Federal court or administrative agency must give a prior state-court judgment "the same preclusive effect as would be given that judgment under the law of the State in which the judgment was rendered." Town of Deerfield v. FCC, 992 F.2d 420, 428 (2nd Cir. 1993), quoting Migra v. Warren City School District Board of Education, 465 U.S. 75, 81 (1984). See also American Mannex Corp. v. Rozands, 462 F.2d 688, 690 (5th Cir. 1972) (stating that "[u]nder 28 U.S.C. 1738, the Federal court follows the state rule of repose"). Thus, Colorado's rules relating to collateral estoppel bear examination.
Colorado's Estoppel Requirements Unmet
Colorado's highest court has held as follows:
In the instant case, several of the above-listed requirements under Colorado law for collateral estoppel are unmet. First, the Airport Authority and Greenwood have attempted to assert estoppel not just against Centennial Express and Thomas Kehmeier, but also against the FAA. [FN 18] The FAA, however, was not a party to, nor was it in privity with a party to, the prior proceeding. [FN 19] As a result, the FAA did not have a full and fair opportunity to litigate the issues in the prior proceeding. [FN 20]
[FN 19] Arguably, neither was Thomas Kehmeier. Kehmeier was not a party to the prior proceeding and under Colorado law, he may not have been in privity with any party, even though he was a shareholder of Centennial Express, which was a party to the prior proceeding. In Falkenberg v. Sternberg, 388 P. 2d 771 (Colo. 1964), the Colorado Supreme Court held that a corporate president who owned 98% of the corporate stock was not precluded from asserting a claim in his individual capacity against an architect even though a similar claim by the corporation had been dismissed in a prior proceeding. See also Foley Custom Homes v. Flater, 888 P.2d 383, 364 (Ct. App. 1994), citing Falkenberg v. Sternberg, 388 P. 2d 771 (Colo. 1964) and holding that Foley Custom Homes, a closely held corporation, and Daniel Foley, who owned 50% of the company's stock, were not in privity.
[FN 20] The FAA simply does not have the resources to intervene in the innumerable state court proceedings in which aviation issues arise.
In contrast, in the instant case, a Federal Article III court has never decided any of the issues.
Supremacy Clause Trumps 28 U.S.C. 1728
In any event, 28 U.S.C. s 1728, which directs that Federal courts and agencies must give state court judgments full faith and credit, is limited by the Supremacy Clause of the U.S. Constitution. Midgett, 221 Ct. Cl. at 189. Federal courts will not give effect to a judgment or decree of a state court that would restrain the exercise of sovereign power of the United States by imposing requirements that are contrary to important and established Federal policy. Id., citing Byrd v. Blue Ridge Cooperative, 356 U.S. 525 (1957); Red Fox v. Red Fox, 564 F.2d 361, 365 n.3 (9th Cir. 1977); American Mannex Co. v. Rozands, 462 F.2d 688, 690 (5th Cir.), cert. denied, 409 U.S. 1040 (1972). [FN 22]
A safe and efficient system of public use airports cannot be maintained if each Federally-funded airport is free to impose its own ban on certain types of air service without an adequate basis in fact or law. The national system would weaken and balkanize. See New England Legal Foundation v. Massachusetts Port Authority, 883 F.2d 157, 172 (1st Cir. 1989), referring to the "[b]alkanizing forces of state and local regulation," and stating that in reducing Federal economic regulation of aviation, Congress did not intend to leave a vacuum for state and local governments to fill.
According to Greenwood, the Hearing Officer erred in finding that the Airport Authority and Greenwood bore the burden of proving that a ban on scheduled passenger operations was necessary for the safe operation of the airport. Instead, Greenwood argues, the Hearing Officer should have required the FAA to show that the Director's Determination (finding unlawful the Airport Authority's ban on scheduled passenger service) would "enhance safety and security" in air commerce in the Denver region. To support its argument, Greenwood cites 49 U.S.C. 40101(d), which provides as follows:
(d) Safety Considerations in Public Interest.--In carrying out subpart III of this part [49 U.S.C. 44101 -- 45304, entitled "Safety"] and those provisions of subpart IV [49 U.S.C. 46101 - 46507, entitled "Enforcement and Penalties"] applicable in carrying out subpart III, the Administrator shall consider the following matters, among others, as being in the public interest:
(1) assigning, maintaining, and enhancing safety and security as the highest priorities in air commerce.
Section 40101 of Title 49 does not apply. First, it does not deal with the issue of the proper allocation of the burden of proof. Second, it expressly applies only to subpart III (49 U.S.C. 44101- 45304) and subpart IV (49 U.S.C. 46101 -- 46507). whereas the authority for the instant proceeding (the statute under which the Director's Determination withheld approval of new grants) is 49 U.S.C. 47106(d). The Airport Authority allegedly violated 49 U.S.C. 47107(a)(1) regarding economic discrimination; 49 U.S.C. 47107(a)(4) and 40103(e), regarding exclusive rights; and 49 U.S.C. 41713(b)(1), regarding Federal preemption of state regulation of air carrier prices, routes, and services. None of these provisions are found in subparts III and IV.
The allocation of the burden of proof in these proceedings is set by 14 C.F.R. 16.229. Under Section 16.229, the agency has the burden of proving noncompliance with Federal law and the grant assurances, but a party who asserts an affirmative defense has the burden of proving the affirmative defense. 14 C.F.R. 16.229(a) & (b).
The following facts are undisputed:
In determining what constitutes an affirmative defense, fairness and convenience are relevant considerations. WRIGHT & MILLER, FEDERAL PRACTICE & PROCEDURE: CIVIL 2D § 1271. Thus, if all or most of the relevant information is within the control of the defending party, then fairness and convenience suggest that the matter should be considered an affirmative defense. Id. In the instant case, the Airport Authority determined that safety and the civil aviation needs of the public required its ban on scheduled passenger service. The Airport Authority is in the best position to provide the evidence on which it based its safety and public needs determination.
Another relevant consideration in determining whether a matter constitutes an affirmative defense is whether the party bringing the action will be taken by surprise by the assertion of the defense at the trial or hearing if the defense is not pleaded affirmatively. Id. This consideration also supports the Hearing Officer's determination that safety constituted an affirmative defense. In the instant case, the agency and complainants would have been taken by surprise if the Airport Authority had not affirmatively pleaded the "safe operation and public civil aviation needs" defense in its answer.
For these reasons, the Hearing Officer did not err in ruling that the Airport Authority's justifications for discrimination constitute affirmative defenses which the Airport Authority had the burden of proving.
A. Safe Operation of the Airport
The Airport Authority and Greenwood claim that the ban on scheduled passenger service is necessary for the safe operation of the aircraft. To support their claim, they argue as follows:
[FN 24] 14 C.F.R. Part 139 contains the rules governing the certification and operation of land airports that serve any scheduled or unscheduled passenger operations of air carriers that are conducted with aircraft having a seating capacity of more than 30 passengers. 14 C.F.R. 139.1.
[FN 26] Tr. 105-07. The FAA's expert in aviation security testified that the size of the aircraft determines whether FAA regulations require screening. Tr. 426. Even when screening is required, the air carrier rather than the airport operator ordinarily provides for it. Tr. 430.
[FN 28] The fire station is located about a mile and a half from the airport runways. Tr. 493.
[FN 29] At the hearing, the Mayor of Greenwood was asked the following question: "There is nothing inherently more unsafe about the fact that a Beechcraft King Air is flying over your homes and schools on a scheduled basis as opposed to an unscheduled basis, is there?" His reply was no. Tr. 232. See also Tr. 417 (another witness to the same effect).
As for the NTSB recommendation, the Airport Authority's claim that the NTSB recommendation formed the basis for the ban lacks credibility, given that the NTSB issued its recommendation after the Airport Authority banned scheduled operations. Thus, the Airport Authority's claim bears all the hallmarks of a post hoc rationalization. [FN 31] Moreover, the NTSB recommendation was only a recommendation. The FAA's statutory duty is to decide if the recommendation should be implemented, either in its original or in a modified form. The FAA is not required to follow NTSB recommendations. [FN 32]
[FN 32] Tr. 599.
B. Civil Aviation Needs of the Public
The Airport Authority and Greenwood claim that the ban on scheduled passenger service is necessary to serve the civil aviation needs of the public. They argue that permitting scheduled passenger service would conflict with Centennial Airport's designation as a general aviation reliever airport, and that the FAA should defer to regional and local planning.
Although Centennial Airport's primary function may be to serve general aviation, it does not logically follow that any level of scheduled Part 135 service is inconsistent with that primary function. The initiation of scheduled passenger service at Centennial Airport is unlikely to change the predominately general aviation role of the airport. [FN 33] The claim that permitting both scheduled and unscheduled passenger operations would alter the character of the airport is speculative. [FN 34] There have been no studies suggesting that scheduled passenger service would reduce general aviation use of the airport. [FN 35] In the unlikely event that scheduled passenger service ever undermined the airport's reliever role, there were reasonable and nondiscriminatory restrictions short of a total ban which could have been attempted first. The Airport Authority admitted in its answers to interrogatories that it did not consider any of these alternatives to meet the civil aviation needs of the public before imposing the ban. [FN 36] In fact, the Denver Regional Aviation System Plan itself recognizes that an airport may be required by its grant obligations to accept service that is inconsistent with its primary purpose. The Airport Authority and Greenwood do not dispute the Hearing Officer's factual finding that prior to 1993, the Airport Authority's policies permitted scheduled passengers service at Centennial Airport, notwithstanding its general aviation designation in regional planning documents.
[FN 34] Note that there was testimony at the hearing that Centennial Express's proposed operations would have had an "insignificant" impact on the operations at Centennial Airport. See, e.g., Tr. 496.
[FN 35] Tr. 251.
[FN 36] See also Tr. 118-19.
Multi-Airport Proprietor Rule
Congress made the receipt of Federal funds contingent upon an airport owner's agreement to make the airport available for public use and without unjust discrimination. As a result, a Federally-funded airport may not ordinarily ban a whole class of service. In light of case law, however, the FAA has carved out the following exception to the general rule. This exception is referred to as the multi-airport proprietor rule. It provides as follows:
The Airport Authority and Greenwood take issue with the FAA's multi-airport proprietor rule. They argue that there is no valid distinction between multiple airports controlled by the same owner, and multiple airports acting under a plan devised by a regional planning organization. However, the Airport Authority has failed to show that air traffic at Centennial Airport is approaching or exceeding the maximum practical capacity. For example, in its answers to interrogatories, the Airport Authority conceded that capacity was not a basis for the ban on scheduled passenger service. [FN 37] Thus, it is unnecessary to reach the issue of whether the Airport Authority has met the other requirements of the multi-airport proprietor rule.
The Hearing Officer determined that the Airport Authority's ban on scheduled passenger service violated the Federal statute that preempts state and local regulation of air carrier prices, routes, and service. [FN 38] He rejected the Airport Authority's claim that the ban falls within the "proprietary powers" exception to the statute. [FN 39] The Airport Authority and Greenwood argue on appeal that he erred in so doing.
[FN 39] 49 U.S.C. 41713(b)(3) provides, in relevant part, as follows: "This subsection does not limit a State [or] political subdivision of a State ... that owns or operates an airport ... from carrying out its proprietary powers and rights."
[FN 41] See supra p. 24.
[FN 42] The Airport Authority and Greenwood also argue that even if the Airport Authority's total ban on scheduled operations was unlawful, operations at Centennial Airport would still be limited to nine-passenger aircraft, because a Federal statute went into effect in 1996 requiring airports to have a Part 139 certificate for scheduled operations involving aircraft of more than nine- passenger seats (49 U.S.C. 44706), Centennial Airport does not have such a certificate, and the statute provides (in 49 U.S.C. 44706(f)) that airport sponsors may not be forced to obtain a certificate.
While the Airport Authority and Greenwood argue that the statute is self- executing, the agency's position is that under 49 U.S.C. 44706(e), the statute does not apply until 120 days after the agency sends implementing regulations and an economic impact report to Congress, and until that occurs, 30-passenger aircraft may operate at Centennial Airport. This issue will not be decided because it is not presented by the facts of this case. It is undisputed that the Airport Authority's ban on scheduled passenger service is total. The Airport Authority sought and obtained an injunction against Centennial Express's six-passenger aircraft.
The Hearing Officer correctly affirmed the Director's determinations that the Airport Authority violated the following:
ACCORDINGLY, it is ordered that:
1. Arapahoe County Public Airport Authority (the Airport Authority) present a plan to the Airports Division, Northwest Mountain Region of the FAA within 60 days from the date of this final agency decision on how it intends to address the FAA's concerns by eliminating the violations outlined above;
2. Pending FAA approval of the corrective action plan specified in Ordering Paragraph 1, or until further notice, the Airport Authority is ineligible to apply for new FAA grants under 49 U.S.C. 47106(d). [FN 43]
If the Airport Authority does not submit a corrective action plan in accordance with Ordering Paragraph 1 above, or petition for judicial review of this decision as set forth below, the FAA proposes to issue an order under 49 U.S.C. s 47122 directing the Airport Authority to eliminate the violations outlined above. The failure to comply with that order would result in termination of the Airport Authority's eligibility for new FAA grants. [FN 44]
SUSAN L. KURLAND
Associate Administrator for Airports
Issued on this 18th day of February, 1999.