Notice of Investigation
FAA Docket No. 16-01-15
U.S. Department Of Transportation
Federal Aviation Administration
Office of Airport Safety and Standards
800 Independence Ave., S.W.
Washington, D.C. 20591
OCT. 31, 2001
Mr. Theodore D. Soliday
City of Naples Airport Authority
160 Aviation Drive North
Naples, EL 34104
Dear Mr. Soliday:
Enclosed please find a Notice of Investigation in the matter of compliance by the Naples Airport Authority (NAA) regarding the Naples Municipal Airport (APF)I Docket No. 1601-15. This investigation is being conducted under FAR Part 16, Rules of Practice for Federally Assisted Airport Proceedings.
In the interim, we ask that you continue to suspend enforcement of the Stage 2 ban until this matter can be resolved.
David L. Bennett
Director, Airport Safety
IN THE MATTER OF COMPLIANCE
WITH FEDERAL OBLIGATIONS BY
THE NAPLES AIRPORT
AUTHORITY, NAPLES, FLORIDA
FAA Docket No. 16-01-15
Notice is hereby given to the Naples Airport Authority (NAA), the owner and operator of the Naples Municipal Airport (APF), Naples, Florida, that the Federal Aviation Administration (FAA) is initiating an investigation into the legality of the NAA’s ban on Stage 2 aircraft. The FAA issues this Notice of Investigation in accordance with FAA Rules of Practice for Federally Assisted Airport Proceedings, 14 C.F.R. Part 16, Subpart D.
The NAA has 30 days from the date of service of this Notice to respond. The FAA strongly recommends that the NAA continue the current suspension of the enforcement of its Stage 2 ban until this matter can be resolved. The FAA notes that the NAA has deferred enforcement of the Stage 2 ban until March 1, 2002. While we also note that the NAA has followed the procedures set out in 14 C.F.R. Part 161 (Part 161), compliance with the requirements of the grant obligations is a separate matter. We have serious concerns that the ban is contrary to Federal law and related sponsor Federal grant assurance obligations.
The FAA seeks to work with the NAA to resolve the situation. However, if this matter is not resolved on or before the date the NAA’s reply is due, and the FAA’s investigation establishes violations of Federal law and related sponsor obligations, the FAA may issue a determination that the NAA is in noncompliance with its sponsor obligations in its operation of APF. As a result, if the NAA proceeds to enforce the Stage 2 ban, the NAA could be found to be ineligible to receive FAA grants and receive payments under existing grants until this matter is resolved. Further sanctions, including a judicial order of enforcement, are also possible.
I. THE AIRPORT
The Naples Municipal Airport is a public-use airport owned and operated by Naples Airport Authority, Naples, Florida.1 The facility is a commercial service airport, classified as a primary airport.2 The Airport is the base of operations for 335 aircraft and accounts for approximately 126,150 operations each year, more than 82,000 of which are itinerant.3
[FN 2] National Plan of Integrated Airport Systems (NPIAS), 1998-2002.
[FN 3] FAA Form 5010 "Airport Master Record" for APF. Date: 09/11/2001.
A. Applicable Law and Policy
The FAA Airport Compliance Program
The FAA discharges its responsibilities for ensuring airport owners’ compliance with their Federal obligations through its Airport Compliance Program. The FAA’s airport compliance efforts are based on the contractual obligations, which an airport owner accepts when receiving Federal grant funds or the transfer of Federal property for airport purposes. These obligations are incorporated in grant agreements and instruments of conveyance in order to protect the public's interest in civil aviation and to ensure compliance with Federal laws.
The FAA Airport Compliance Program is designed to ensure the availability of a national system of safe and properly maintained public-use airports operated in a manner consistent with the airport owners’ Federal obligations and the public's investment in civil aviation. The Airport Compliance Program does not control or direct the operation of airports; rather it monitors the administration of the valuable rights pledged by airport sponsors to the people of the United States in exchange for monetary grants and donations of Federal property to ensure that the public interest is being served.
As a general rule, we note that the FAA Compliance Program is designed to achieve voluntary compliance with Federal obligations. In addressing allegations of non-compliance, the FAA will make a determination as to whether an airport sponsor is currently in compliance with the applicable Federal obligations. FAA has to make a judgment of whether the sponsor is reasonably meeting the Federal obligations.5 FAA can also take into consideration any action or program the sponsor has taken or implemented or proposed action or program the sponsor intends to take, which in FAA's judgment, is adequate to reasonably carry out the obligations under the grant assurances.6
[FN 6] See FAA Order 5190.6, Sec. 5-6.
The Airport Improvement Program and the Airport Sponsor Assurances
Title 49 U.S.C. § 47101, et seq. provides for Federal airport financial assistance for the development of public-use airports under the Airport Improvement Program (AIP) established by the Airport and Airway Improvement Act of 1982 as amended. Section 47107, et seq., sets forth assurances to which an airport sponsor agrees as a condition of receiving Federal financial assistance. Upon acceptance of an AlP grant, the assurances become a binding contractual obligation between the airport sponsor and the Federal government.
The FAA has a statutory mandate to ensure that airport owners comply with these sponsor assurances.7 FAA Order 5190.6A, Airport Compliance Requirements (Order), issued on October 2, 1989, provides the policies and procedures to be followed by the FAA in carrying out its legislatively mandated functions related to federally obligated airport owners’ compliance with their sponsor assurances. The Congress mandated conditions such as these on grants to local airport proprietors in part to insure the maintenance of conditions essential to an efficient national air transportation system. Grant agreements under the AAIA are not ordinary contracts, but part of a procedure mandated by Congress to assure federal funds are disbursed in accordance with Congress’ will.8 The FAA considers it inappropriate to provide Federal assistance for improvements to airports where the benefits of such improvements will not be fully realized due to inherent restrictions on aeronautical activities.
[FN 8] City and County of San Francisco v. FAA, 942 F.2d at 1396 (9th Cir. 1991).
Public Use of the Airport
Airport access restrictions are subject to other applicable Federal law in addition to the Airport Noise and Capacity Act of 1990 (ANCA) as implemented by 14 CFR Part 161. Compliance with provisions of ANCA and Part 161 does not assure an airport sponsor that a proposed restriction complies with other law, and does not supersede applicable requirements under preexisting Federal law. Compliance with the procedural requirements of ANCA does not obviate the need to comply with applicable requirements under other Federal law. See 49 U.S.C. § 47533(1).
The owner of any airport developed with Federal grant assistance is required to operate the airport for the use and benefit of the public and to make it available to all types, kinds, and classes of aeronautical activity on fair and reasonable terms, and without unjust discrimination. Assurance 22, economic nondiscrimination, of the prescribed sponsor assurances implements the provisions of 49 U.S.C. § 47107(a)(1) through (6), and requires, in pertinent part, that the sponsor of a federally obligated airport
"...may establish such fair, equal 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." Assurance 22(h)
Title 49 U.S.C. § 40103(e), provides, in relevant part, that there shall be no exclusive right for the use of any landing area or air navigation facility upon which Federal funds have been expended.” 49 U.S.C. § 47107(a)(4) similarly provides, in pertinent part, that "there will be no exclusive right for the use of the airport by any person providing or intending to provide, aeronautical services to the public."
Assurance 23, "Exclusive Rights", of the prescribed sponsor assurances requires, in pertinent part, that the sponsor of a federally obligated airport "... will permit no exclusive right for the use of the airport by any persons providing, or intending to provide aeronautical services to the public ... and that it will terminate any exclusive right to conduct an aeronautical activity now existing at such an airport before the grant of any assistance under the Airport and Airway Improvement Act of 1982."
In FAA Order 5190.1A, Exclusive Rights, the FAA published its exclusive rights policy and broadly identified aeronautical activities as subject to the statutory prohibition against exclusive tights. While public-use airports may impose qualifications and minimum standards upon those who engage in aeronautical activities, FAA has taken the position that the application of any unreasonable requirement or standard that is applied in an unjustly discriminatory manner may constitute a constructive grant of an exclusive right.
Courts have found the grant of an exclusive right where a significant burden has been placed on one competitor that is not placed on another. See e.g. Pompano Beach v. FAA, 774 F.2d 1529 (11th Cir, 1985). FAA Order 5190.6A provides additional guidance on the application of the statutory prohibition against exclusive rights and FAA policy regarding exclusive rights at public-use airports.9
Federal Preemption and the Proprietor Exception
Under Federal law, state and local aircraft noise restrictions are generally preempted. See City of Burbank v. Lockheed Air Terminal, 411 U.S. 624 (1973). However, a limited exception to this preemption applies to municipal airport proprietors, which are "vested only with the power to promulgate reasonable, nonarbitrary and nondiscriminatory regulations that establish acceptable noise levels for the airport and its immediate environs." British Airways Board v. Port Authority of New York and New Jersey, 558 F.2d 75, 84 (2d Cir, 1977). This "proprietor exception," codified by the Congress as part of the Airline Deregulation Act of 1978 (49 U.S.C. 41713), is based on an airport proprietor’s legitimate interest in protecting itself from liability for damages resulting from excessive noise generated by aircraft using the airport. See Griggs v. Allegheny County, 369 U.S. 84 (1962). "Since airport proprietors bear monetary liability for excessive aircraft noise under [Griggs], fairness dictates that they must also have power to insulate themselves from that liability." San Diego Unified Port Dist. v. Gianturo, 651 F.2d 1306, 1316-17 (9th Cir, 1981), cert. denied, Dept. of Transp. v. San Diego Unified Port Dist., 455 U.S. 1000 (1982), citing British Airways, 558 F.2d at 83; Lockheed Air Terminal v. City of Burbank, 457 F.2d 667, 674 n.8 (9th Cir, 1972), aff’d 411 U.S. 624 (1973); see also S. Rep. No. 1353, 90th Cong.. 2d Sess., at 6-7 (1968) ("[t]he Federal Government is in no position to require an airport to accept service by noisier aircraft, and for that purpose to obtain additional noise easements").
B. Factual Background
On June 29, 2000, the NAA released for public comment the Naples Municipal Airport Part 161 Study (the Part 161 Study). The Part 161 Study proposed a ban on all Stage 2 aircraft weighing less than 75,000 pounds, with limited exceptions. There are no Stage 2 aircraft over 75,000 pounds because Federal law required operations by all civil subsonic turbojets with a maximum weight of 75,000 pounds or more to comply with Stage 3 noise levels by December 31, 1999. In conjunction with our review of the proposed Stage 2 ban under the provisions of Part 161, the FAA reviewed the restriction for consistency with NAA’s obligations under the AIP grant assurances and other Federal law. On the basis of FAA’s review to date, it appears that the enacted restriction may be inconsistent with NAA’s obligation to provide reasonable and non-discriminatory access to the airport without granting exclusive rights.
On August 21, 2000, the FAA provided comments on the Notice of Proposed Restrictions on Stage 2 Aircraft Operations at Naples Municipal Airport and the accompanying Part 161 Study. In these comments, the FAA stated that "[i]t is not clear that the City of Naples and Collier County have in fact determined that residential use is noncompatible within the DNL 60 dB contour." The FAA also noted that the Part 161 Study "does not indicate whether any of the residential development cited as non-compatible within the DNL 60 dB contour was permitted by the City" after the FAA approved a land use measure in the 1997 revision of the NAA’s Noise Compatibility Program that would create a "buffer" within the DNL 60 dB contour to ensure that residential and noise sensitive uses are not developed too close to the Airport.10
On October 24,2000, counsel for NAA responded to both the August 21 and September 18, 2000 letters. In its September 18 letter responding to David Bennett, Director of the Office of Airport Safety and Standards. Counsel for the NAA stated that the proposed restriction would fully comply with the NAA’s obligations under Grant Assurance 22a. In the letter to Mr. Bennett, counsel for NAA included information regarding the NAA’s potential liability concerns, and stated that the City of Naples, Collier County, and the NAA "selected a reasonable threshold of land use compatibility based upon their reasonable assessment of potential liability."
In a letter dated January 30, 2001, following a meeting between NAA and FAA on January 4 and attendance by FAA representatives at a meeting of the NAA Board on January 18, the FAA notified the NAA that the FAA would perform a substantive review of any analysis provided by the NAA, including information provided in connection with the Part 161 process, to determine whether or not the proposed restriction is consistent with the applicable grant assurances. In the letter, the FAA stated that this review would include "a determination whether or not the NAA has reasonably demonstrated a legitimate interest in avoiding liability for excessive noise generated by the airport." The FAA also stated that it was inclined to find unreasonable a total ban on Stage 2 aircraft operations "to address the particular circumstances at Naples between the DNL 60 and 65 dB noise contours."
On February 7, 2001, the NAA passed resolution 2000-8, implementing the rule banning operations by Stage 2 aircraft.12
In a letter dated March 19, 2001 the NAA notified the FAA that it had decided to proceed with a Supplemental Analysis to the Part 161 Study intended to address unresolved Part 161 issues raised by the FAA. Furthermore, the NAA expressed an interest in giving grant compliance the level of attention and resolution that it gave the Part 161 process. This letter also stated that the NAA board "unanimously expressed an interest in working with the FAA to negotiate a resolution to the grant compliance issues and adopted a motion directing the staff to work and meet informally with the appropriate FAA officials to focus on grant compliance issues and to report back to the Board on those efforts.
On June 23, 2001, the NAA submitted to the FAA a draft of the Supplemental Analysis. In a letter dated July 27, 2001, Chairman Eric West conveyed to FAA the NAA Commissioners’ decision to complete the process under Part 161 and to defer other issues. The letter clearly indicates the NAA’s understanding that the Part 161 Study and the Supplemental Analysis do not resolve the grant assurance compliance issues.
On August 16, 2001, NAA approved starting a new 46-day comment period and 180-day notification period regarding the Part 161 study, including the Supplemental Analysis, and deferred enforcement of the Stage 2 ban until March 1, 2002. The FAA provided comments on the Supplemental Analysis in correspondence dated October 31, 2001. As stated in that correspondence, the Supplemental Analysis does not resolve the FAA’s concerns regarding compliance with other Federal law, including sponsor assurances in the NAA’s Federal grant agreements. The NAA has not demonstrated in the Supplemental Analysis that it has a proprietary interest that would invoke the "proprietor exception" to Federal preemption of state and local aircraft noise restrictions. Nor does the Supplemental Analysis demonstrate that the Stage 2 ban is otherwise reasonable.
After reviewing all the information provided by the NAA in support of the Stage 2 ban, including materials generated for the Part 161 process, the FAA continues to have concerns that the NAA’s Stage 2 ban is inconsistent with the NAA’s grant agreement obligation to make the airport available for public use on reasonable terms and without unjust discrimination to all types, kinds, and classes of aeronautical activities. Therefore, the FAA finds sufficient cause to initiate a formal investigation in this matter.
The issues involved in this investigation include the NAA’s authority to impose the Stage 2 ban and the NAA’s use of the DNL 60 dB contour to justify the ban. With respect to the NAA’s authority to impose the ban, the information provided by the NAA to date does not demonstrate that the NAA has a proprietary interest that would bring the Stage 2 ban within the scope of the "proprietor exception" to Federal preemption of state and local aircraft noise restrictions. The information does not show that the NAA has potential liability exposure for existing levels of noise generated by aircraft using the airport. While a great deal of information has been provided, it is not clear there is another proprietary interest that would bring the Stage 2 ban within the scope of the "proprietor exception." Regarding the NAA's use of the DNL 60 dB contour, the FAA’s concerns include the following: (1) the local land use ordinances on which the NAA relies to select the DNL 60 dB contour does not appear to provide a reasonable basis for a restriction on aircraft operations; and (2) residential development has been, and continues to be, allowed by the City and the County within the DNL 60 dB contour.
In addition, the FAA has concerns regarding the reasonableness of the Stage 2 ban based on the NAA’s discussion and analysis of benefits and cost in the Part 161 study. These concerns include: (1) whether the NAA’s conclusion that the ban has considerably less cost and substantially greater reduction in impacted population, is reasonable, in light of the cost benefit analysis provided and (2) whether the NAA unreasonably eliminated sound insulation as a viable alternative given the Collier County ordinance allowing construction of sound-insulated residential property within the DNL 60 dB contour.
The FAA also has concerns regarding the complaint data the NAA is using to support the Stage 2 ban and concerns that the NAA failed to take into account, as an element justifying the restriction for the purpose of compliance with the grant assurances, the effects of restricting non-jet Stage 2 and aircraft that are not certificated as Stage 2 or 3 under 14 CFR Part 36 (hereinafter "non-Stage designated aircraft").
With regard to discrimination, it appears that the restriction would allow noisier non-Stage designated aircraft to operate from APF while restricting some less noisy Stage 2 aircraft For example. The Stage 2 ban would permit a DC-3 aircraft with a noise level at take-off of 85 dBA to utilize the airport yet restrict a Sabreliner 75A with a noise level at take-off of 77.7 dBA. Use of noise control regulations by airport proprietors to bar aircraft on a basis other than noise, or without a factual basis, has been found to be inconsistent with a fair and efficient national air transport system and unlawful. City of San Francisco v. FAA, 942 F.2d 1391 (9th Cir, 1991) (holding that airport proprietor’s regulation banning a retrofitted Q707 aircraft from operating at the airport while permitting noisier aircraft to operate was unjust discrimination under the grant assurances). In addition, "[a]lthough the proprietor exception allows reasonable regulations to protect against excessive noise, that power may not be used to discriminate ... A regulation purporting to reduce noise cannot bar an aircraft on any other basis." National Helicopter Corp. of America v. City of New York, 137 F.3d 81, 91 (2d. Cir. 1998) (City’s restrictions on the Sikorsky S-58T and other large helicopters because of their size -- not the noise they made -- held to be "unreasonable discrimination.").
The FAA is aware of the decision issued by the U.S. District Court for the Middle District of Florida in National Business Aviation Association Inc. v. City of Naples Airport Authority, No. 2:00-cv-572-FTM-29DNF (filed August 8, 2001). However, the FAA is not bound by this decision because it was not a party to the litigation. Federated Department Stores, Inc. v. Moitie, 452 U.S. 394, 398 (1981); Siegel V. Lepore, 234 F.3d 1163, 1172 (11th Cir. 2000). reh’g denied, 234 F. 3d 1218 (11th Cir. 2000).13 In addition, the court’s decision did not address the issues the FAA is investigating, including: (1) whether the Stage 2 ban violates the sponsor assurances in the NAA’s Federal grant agreements; (2) whether there is a sufficient factual justification for the NAA to base the Stage 2 ban on noise levels below DNL 65 dB or (3) whether there are other grounds for finding that the Stage 2 ban is preempted by Federal law.
III. ISSUES UNDER INVESTIGATION
The issues under investigation include, but are not limited to, the following:
IV. OPPORTUNITY TO RESPOND
Pursuant to 14 C.F.R. §16.103 and 16.17, NAA may reply to this Notice no later than 30 days from the date of this Notice. In accordance with 14 C.F.R. §16.103 and 16.105, during that timeframe, the FAA invites good faith efforts by NAA to resolve informally the matters that are addressed in the Notice. Information provided by NAA after that date may not be considered by the FAA. Possible noncompliance with Federal requirements is a serious matter. If the issues addressed in this Notice are not resolved by the above date, and the FAA's investigation establishes violations at Federal law and related sponsor obligations, the FAA may issue a Director’s determination in accordance with 14 C.F.R. §16.31 on the above-identified issues.
David L. Bennett
Director, Office of Airport Safety
OCT 31, 2001