Continued from Part One

II. Whether It Was Error For The Hearing Officer To Hold that ANCA Does Not Supercede 49 U.S.C. § 47107 and Grant Assurance No. 22

NAA has argued throughout these proceedings that ANCA supercedes an airport operator's written assurances made when it accepted Federal Airport Improvement grants [n.45] under 49 U.S.C. 47107(a)(1). [n.46] AAS, in contrast, has maintained that regarding stage 2 access restrictions, an airport proprietor must follow ANCA's notice, analysis, and public comment requirements and demonstrate that the restriction is not contrary to the conditions in any applicable grant assurances (including the requirement that the airport would be open for public use on reasonable conditions). The Hearing Officer held in favor of AAS on this issue, and NAA has appealed that finding. This decision denies NAA's appeal and affirms the Hearing Officer's determination on this issue.

[45] The relevant grant assurance in this decision is that the airport would be available for public use on reasonable conditions. In light of AAS' failure to appeal from the Hearing Officer's determination that NAA's Stage 2 was not discriminatory, the grant assurance prohibiting discrimination will not be discussed further.

[46] Section 47107(a)(1) provides: "The Administrator may approve a project grant application under this subchapter for an airport development project only if the Secretary receives written asurances, satisfactory to the Administrator, that (1) the airport will be available for public use on reasonable conditions and without unjust discrimination." 49 U.S.C. § 47107(a)(1).

[47] This is both a procedural and substantive requirement. As part of the notice and comment process, the airport proprietor must do a substantive cost and benefit analysis of the various alternatives and include a discussion of that analysis in the publication.

To understand the differences between Section 47524(b) and (c), it is necessary to look at 49 U.S.C. § 47525. In Section 47525, Congress directed the Administrator to conduct a study and decide on the application of section 47524(a)-(d) to airport noise and access restrictions on the operation of stage 2 aircraft with a maximum weight of not more than 75,000 pounds." 49 U.S.C. § 47525 (emphasis added). As with all enabling legislation, Congress provided the broad outline and left to the FAA the task of providing the specifics. Here, FAA, after the required study, promulgated Part 161. While Part 161 covers the range of noise and access restrictions and their requirements, the preamble to the final rule also specifically noted that ANCA does not grant airport operators any new authority and that the FAA retained, through the operation of ANCA's savings provision,its authority to challenge access restrictions that are discriminatory or unreasonable, or that impose an undue burden on interstate commerce. 56 Fed. Reg. 48661, 48662 (September 25, 1991). Thus, FAA's decision, under Section 47525, was to continue the requirement that airport operators seeking to impose Stage 2 access restrictions comply with grant assurances as well as the new regulatory requirements set forth in Part 161, Subpart C (regarding notice requirements for Stage 2 restrictions.) [n.48]

[48] In addition to the grant assurance review process that an airport operator seeking to impose a Stage 2 restriction must undergo, under 14 C.F.R. 161.205, the operator must publish an analysis of the restriction and the alternatives considered. The FAA specifically provided that "[t]he kinds of information set forth in § 161.305 are useful elements of an adequate analysis of a noise or access restriction on Stage 2 aircraft operations." 14 C.F.R. § 161.205(c) (emphasis added). Section 161.305 pertains to the required analysis and conditions for approval of proposed Stage 3 restrictions. This includes a summary of the evidence demonstrating that the proposed restriction is reasonable, nonarbitrary and nondiscriminatory. 14 C.F.R. §§ 161.305(d) and (e)(2)(i). The operator must include "[e]vidence that a current or projected noise or access problem exists, and that the proposed action(s) could relieve the problem, including [a] detailed description of the problem precipitating the proposed restriction with relevant background information on factorscontributing to the problem...." 14 C.F.R. § 161.305(e)(2)(i)(1)(i).

[T]he Act [ANCA] in no way grants airport operators any authority they did noth ave prior to the Act. Under section 9304(h), 49 U.S.C. App. 2351(h) [now 49 U.S.C. § 47533], preexisting legal limitations on airport operators' authority are not affected except as required by applying the terms of section 9304 [now 49 U.S.C. § 47524]. The courts have consistently recognized FAA's legal authority to challenge airport noise and access restrictions that are discriminatory, unreasonable, or impose an undue burden on interstate commerce. This authority is expressly preserved and recognized by the Act [ANCA].

The Hearing Officer determined that ANCA did not affect the applicability of the statutory and contractual obligations under Section 47107(a)(1) and Grant Assurance No. 22 to the Stage 2 ban. He wrote:

[I]n the regulatory history of Part 161 and in the FAA's processing of this Stage 2 ban, the FAA's position consistently has been that ANCA would not preclude the agency from examining the ban under the Airport's Grant Agreement. Of course, by itself, consistency does not establish validity of a legal position, but as the agency required to implement ANCA, its interpretation and application of this statute is certainly relevant. Indeed, an agency's interpretation of a statute which it is required to implement is given deference so long as its interpretation is reasonable. Chevron U.S.A. v. Natural Resources Defense Council, 467 U.S. 837, 843 (1984); Meyer v. Holley, 537 U.S. 280 (2003); Grand Canyon Air Tour Coalition v. FAA, 154 F.3d 455, 466 (D.C. Cir. 1998). Here, the FAA has been charged with carrying out the requirements of ANCA and it consistently advised the public of its interpretation of this statute through the Part 161 rulemaking process. I do not find the FAA's interpretation to be unreasonable, and I find it to be consistent with the purposes of the Statute. Moreover, I concur that there is no clear indication that Congress intended that the "savings clause" in ANCA override the grant assurances. As the courts have noted, the grant agreement is not a simple contract between the airport proprietor and the government, but is "...part of a procedure mandated by Congress to assure federal funds are disbursed in accordance with Congress' will." City and County of San Francisco v. FAA, 942 F.2d 1391, 1396 (9th Cir. 1991.) I am not persuaded that Congress intended for ANCA to override the important obligations of an airport that accepts federal funds.

(Initial Decision at 31-32.) [n.49]

[49] NAA argues that it was error for the Hearing Officer to defer in his initial decision to the self-serving statements by AAS staff and other FAA employees and such statements do not deserve deference under Chevron. The Hearing Officer's statement above about deference to an agency's interpretation, like the Director's in his determination, was perhaps somewhat premature. Under the decisions cited by the Hearing Officer, the courts can be expected to defer to a reasonable agency interpretation. If NAA files a petition for review in a Federal court of appeals, it will be for the court to decide whether it should defer to the interpretation stated in this decision of the relationship of 49 U.S.C. §§ 47107, 47524 and 47533. It is worth mentioning, however, that hearing officers are subject to the agency regarding matters of law and policy because the agency may enforce its policy through the administrative appeals process. Ass'n of Administrative Law Judges v. Heckler, 594 F. Supp. 1132, 1141 (D.D.C. 1984).

[50] Section 47524(c) requires a showing that the proposed Stage 3 restriction is nonarbitrary, as well as reasonable and nondiscriminatory, while Grant Assurance 22 does not include language requiring a showing of nonarbitrariness. Arguably, that is a distinction without a difference. Nevertheless, to the extent that FAA may have, as a practical matter, blurred the distinctions between Stage 2 and Stage 3 restrictions in 49 U.S.C. § 47524(b) and (c), that was a decision that Congress authorized the FAA to make under 49 U.S.C. § 47525 (in which Congress directed the agency to determine how to treat restrictions of Stage 2 aircraft weighing 75,000 pounds or less.) See discussion supra pp. 26-27, regarding the direction and mandate that Congress gave the FAA in Section 47525.

Here Congress did not expressly repeal and it does not appear that it intended to repeal the statutory provisions regarding grant assurances in Section 47107(a) when it passed ANCA. Regarding ANCA's relationship with pre-existing legislation, Section 47533, entitled 'relationship to other laws,' provides:

Except as provided by section 47524 of this title, this subchapter does not affect --

(1) law in effect on November 5, 1990, on airport noise or access restrictions by local authorities.

A look at the predecessor to Section 47533, P.L. 101-508 § 9304(h), supports this interpretation of the savings provision. Congress added Section 47533(1) in 1994 when Congress passed H.R. 1758, which restated certain transportation laws, including the ANCA, and enacted them as subtitles II, III and V-X of Title 49 of the United States Code. In restating the original laws, Congress substituted simple language for awkward and obsolete terms, but did not mean to make any substantive change in the laws. House Report No. 103-180 at 1 & 3, reprinted in 1994 U.S.C.C.A.N. 818, 818 & 820.

In the original version of the savings clause set forth in Section 9304(h) of P.L. 101-508, Congress wrote as follows:

Except to the extent required by the application of the provisions of this section [the provisions regarding Stage 2 and Stage 3 restrictions were included in section 9304], nothing in this subtitle shall be deemed to eliminate, invalidate, or supersede --

(1) existing law with respect to airport noise or access restrictions.

Finally, interpreting 49 U.S.C. §§ 47107, 47524 and 47533 as NAA argues would be unreasonable in light of Congress's goal in passing ANCA of establishing a national noise policy that would stem the propagation of uncoordinated and inconsistent local restrictions that could impede the national air transportation system. 49 U.S.C. § 47521(1) & (2). Congress, as it explained in ANCA, expected that "revenues controlled by the United States Government can help resolve noise problems," while noting that these funds "carry with them a responsibility to the national airport system." 49 U.S.C. § 47521(6) (emphasis added). Under NAA's interpretation, the airport operators would be allowed to adopt restrictions -- without any FAA review for reasonableness -- that may be uncoordinated, inconsistent and contrary to the public interest.

NAA's interpretation would mean invalidating the grant assurances that local airport operators, like NAA, agreed to when they received grant money under the Airport Improvement Program. There is no specific language in ANCA nullifying previous grant assurances provided by airport operators when they were awarded AIP funds. Certainly, if Congress intended to nullify grant assurances previously given by recipients of AIP funds, Congress would have so stated. [n.51] Grant assurances are more than just fine print in a legal document; they are contractual obligations undertaken in exchange for receipt of federal money to improve the local airport.

[51] There is a "deeply rooted" presumption against retroactive legislation. I.N.S. v. St. Cyr,533 U.S. 289, 371 (2001) quoting Bowen v. Georgetown Univ. Hospital, 488 U.S. 204, 208(1988). As the Supreme Court has stated, "Retroactive legislation presents problems of unfairness ... because it can deprive citizens of legitimate expectations and upset settled transactions." E. Enters v. Apfel, 524 U.S. 498, 533 (1988), quoting General Motors Corp. v. Romein, 503 U.S. 181, 191 (1992). "Congressional enactments ... will not be construed to have retroactive effect unless their language requires this result." I.N.S. v. St. Cyr at 371, quoting Bowen v. Georgetown Univ. Hospital, 488 U.S. at 208.

III. Whether the Preponderance of the Evidence Supports the Hearing Officer's Decision that the Stage 2 Ban is Inconsistent with NAA's Statutory and Contractual Obligations to Make its Airport Available for Public Use on Reasonable Terms to All Types, Kinds and Classes of Aeronautical Activities.

The Hearing Officer concluded that the Stage 2 ban was inconsistent with NAA's obligations under Section 47107(a)(1) and Grant Assurance No. 22 to make its airport available for public use upon reasonable conditions to all kinds, types, and classes of aeronautical activity. The Hearing Officer concluded that "[t]he ultimate question is whether the designation of a non-compatibility threshold of DNL 60 dB in this particular situation reflects a noise compatibility problem which supports banning Stage 2 aircraft, and whether the NAA used the proper balance in deciding to implement this access restriction." [n.52] The Hearing Officer resolved this issue by finding that: 1) the selection of the DNL 60 dB contour was not justified by an existing noncompatible land use problem; and 2) NAA's failure to consider a combination of easements, land acquisition and insulation supports a finding that it did not use a balanced approach. [n.53] (Initial Decision at 48, 51.) NAA has appealed from these findings. This decision affirms the Hearing Officer's finding that the Stage 2 ban was not reasonable.

[52] The Director explained that under the FAA's interpretation of Section 47107(a)(1) "available for public use on reasonable conditions," an airport use restriction for noise reduction purposes must (1) be justified by an existing noncompatible land use problem; (2) be effective inaddressing the identified problem and (3) reflect a balanced approach to addressing the identified problem that fairly considers both local and Federal interests." (DD at 56.) He explained that this interpretation is based on ASNA, Part 150 and FAA Order No. 5190.6A.

NAA argues on appeal that the "balanced approach" aspect of the Director's "interpretation" actually constituted a new substantive rule that could only be adopted through formal notice and comment rulemaking under the Administrative Procedure Act. NAA argued that when an agency provides guidance on a broad and general term, it must use formal rulemaking. "Reasonable," NAA argues, is just such a broad and general term, so that an agency interpretation of that term requires notice and comment rulemaking. (Post-Hearing Brief of City of Naples, at 47-48.) NAA argues that it was error for the Hearing Officer to fail to decide whether the Director's Determination was invalid because it was based upon an interpretation that should have been issued as a substantive rule pursuant to Section 553 of the APA. The Hearing Officer held in his decision that the "issue presented by the NAA goes directly to the validity of the Director's Determination and is beyond the scope of the issues assigned to me to address [by the FAA Deputy Chief Counsel]." (Initial Decision at 11, n. 44.)

I agree with the Hearing Officer that the validity of the Director's Determination was not before the Hearing Officer. Moreover, at this juncture in the proceedings, I am not reviewing the Director's Determination but am considering it only as part of the voluminous record of these proceedings and as one presentation of the views of AAS in this matter. I am not obligated to defer to the views of the employees in my organization. It would be for a Federal court of appeals to decide whether any interpretation presented in my decision is an impermissible substantive rule that should have been promulgated through notice and comment rulemaking (prior to the events leading to this case), rather than through adjudication.

Finally, in light of my decision that a noncompatible land use problem did not exist, I do not have to reach the question of whether NAA took a "balanced approach" to relieve this problem. Hence, there is no reason to decide whether FAA should have issued a regulation through the notice and comment rulemaking process regarding the "balanced approach" prong of the test for reasonableness.

[53] The Hearing Officer acknowledged that in light of his finding that a noncompatible land use's problem did not exist, he did not have to determine whether the Stage 2 ban reflected a balanced's approach.

A. The Hearing Officer's Decision

The Hearing Officer recognized that local governments may limit residential landuse within the DNL 60 dB contour. He noted, however, that the FAA nonetheless must review a proposed aircraft access restriction, based upon a local land use restriction within the DNL 60 dB contour, to see if the access restriction is compatible with the airport operator's obligations under the grant assurances including the obligation to make an airport available for public use under reasonable conditions. He noted that "the FAA has the obligation to monitor compliance with the grant assurances and to maintain the efficiency and capacity of the national air transportation system." (Initial Decision at 39.) While, as he noted, an access restriction based upon the selection of a contour below DNL 65 dB is not per se a violation, the FAA must evaluate such a restriction to see if it is consistent with the airport operator's grant assurances. (Id.)

In evaluating the reasonableness of the Stage 2 ban, the Hearing Officer's examined: 1) whether the City of Naples and Collier County's zoning ordinances prohibited residential land development within the DNL 60 dB contour; and 2) whether the City of Naples and Collier County allowed residential development in the DNL 60 dB contour. The Hearing Officer concluded that the City of Naples and Collier County did not approve any residential land development in the DNL 60 dB contour after NAA announced its Part 161 Study, but he also found that neither jurisdiction passed land use ordinances that "unequivocally prohibited such development." (Initial Decision at 43.) He considered whether NAA faced any actual or potential liability due to excessive aircraft noise in the DNL 60 dB contour and concluded that it did not. He characterized NAA's concerns about potential liability as "purely speculative." (Id. at 44.) He rejected NAA's claims that the area within the DNL 60 dB contour around the airport is "uniquely quiet or substantially different from communities in other small but growing cities in the South or elsewhere." (Id. at 45.) The Hearing Officer also found that the complaint data submitted by NAA neither constitutes reliable evidence of a non-compatible land use nor does it support the reasonableness of the Stage 2 ban. In light of these findings, the Hearing Officer held that the Stage 2 jet ban is not justified by an existing non-compatible land use problem and, as a result, implementation of a Stage 2 access restriction was not justified. (Id. at 48.)

B. NAA's Appeal

NAA argues that the Hearing Officer erred when he found that AAS met its burden of proving that the Stage 2 ban was inconsistent with NAA's statutory and contractual obligations. NAA argues that the Hearing Officer was in error because the preponderance of the evidence demonstrates that the Stage 2 ban is reasonable by any measure and, specifically, is consistent with the requirements of FAA Order No. 5190.6A. (NAA's Appeal Brief at 6, Point of Error # 4.) [n.54]

[54] NAA also argues in this regard that the Hearing Officer should have treated the Federal district court's decision in National Business Aviation Association v. NAA as reliable, probative and substantial evidence concerning the reasonableness of the Stage 2 ban. This argument is rejected. As discussed previously, the FAA is not bound by the findings of the Federal district court in that case under principles of res judicata, collateral estoppel or comity. Furthermore, the court, in determining whether the ban satisfied the reasonableness requirement of the Commerce Clause,was persuaded that the ban was reasonable in part because it concluded that NAA could consider complaints when deciding to impose the ban. National Business Aviation Association v. NAA, 162 F. Supp. 2d at 1353. In the case before me, the question is whether the ban satisfies Grant Assurance No. 22, in which NAA agreed to make its airport available on reasonable terms to all types, kinds and classes of aeronautical activities. As the Hearing Officer found in this case, complaint data is subjective and unreliable. Moreover, most of the complaints came from residents outside of the DNL 60 dB contour. (Initial Decision at 47.) Accordingly, the complaint data does not support NAA's determination that a noncompatible land use problem existed within the DNL 60 dB contour and therefore, the ban does not satisfy Grant Assurance No. 22's requirement that the airport be available on reasonable terms to all types, kinds and classes of aeronautical activities.

[55] This requirement is consistent with 14 C.F.R. §§ 150.33(a) and 150.35(b)(1).

1. Local Government Actions

NAA argues that the Hearing Officer should have found that the existence of residents exposed to noise in excess of DNL 60 dB constitutes a land use compatibility problem under Federal law. NAA argues that the Hearing Officer should have deferred to local authorities' determinations regarding land use compatibility, and that he failed to cite reliable, probative or substantial evidence to support his finding that the City and County actions did not establish the existence of a land use compatibility problem. (NAA's Appeal Brief at 6-7, Point of Error # 5.) This argument is rejected.

While the FAA determined that residential land use is normally compatible with noise levels below DNL 65 dB for the purpose of preparing noise exposure maps, the FAA recognizes that other delineations may be appropriate depending upon local circumstances and that "[t]he responsibility for determining the acceptable and permissible land uses and the relationship between specific properties and specific noise contours rests with the local authorities." (Part 150, Appendix A, Sec. A150.101(d)). The FAA noted in the preamble to Part 161 that "Part 150 permits, for reasonable circumstances, a degree of flexibility in determining a study area and the compatibility of land uses to noise." 56 Fed. Reg. 48661, 48669 (September 25, 1991) (emphasis added.)

Part 150, however, does not require the FAA to find that an airport access's restriction is consistent with Grant Assurance No. 22 merely because the airport's proprietor tied the restriction to a local government policy that residential use is incompatible with noise levels below DNL 65 dB. Local governments and the FAA have different obligations and authority. Local governments may regulate local land use. It is the FAA's responsibility, in contrast, to protect and promote the public interest in the safety and efficiency of the national air transportation system. One way that the FAA achieves this goal is by monitoring airport operators' compliance with the assurances that they gave when they accepted AIP funds.

The Hearing Officer correctly noted that "there is a difference between local land use efforts which do not restrict aircraft, and access restrictions which do and which must be evaluated under aviation statutes and regulations and in particular, must be evaluated under the reasonableness standard set forth in Assurance 22(a)." (Initial Decision at 39.) ASNA permits airport operators to take noise mitigation steps that would not affect the accessibility of the airport by all types, kinds, and classes of aircraft. For example, under ASNA, the operator can construct noise barriers, install acoustical shielding, and acquire land, easements, air rights and development rights to mitigate the effects of noise. 49 U.S.C. § 47504(a). The FAA does not have to examine such measures to see if they run afoul of Grant Assurance No. 22 because they do not affect airport access by different types, kinds and classes of aircraft. In contrast, access restrictions must be evaluated under the grant assurances, in particular Grant Assurance No. 22. [n.56] If an airport could designate any noncompatibility threshold simply based on local government determinations without regard for Grant Assurance No. 22, it "could designate noncompatibility thresholds of 60, 55, or lower, effectively closing airports and severely crippling the nation's air transportation system." (Initial Decision at 39.)

[56] (Bennett Direct at 16.)

The Hearing Officer considered the actions taken by the local jurisdictions to see whether they justified the Stage 2 ban. He held that while neither the City of Naples nor Collier County had "unequivocally prohibited" residential development in the DNL's 60 dB contour, [n.57] the City and the County did not approve any residential land development within the DNL 60 dB contour after NAA announced its Part 161 Study. (Id.) These local ordinances and other land use actions taken by the local government bodies, however, do not establish that a land use compatibility problem exists in the DNL 60 dB contour.

[57] NAA acknowledged in its post-hearing brief that the City and County laws did not include an outright ban on residential development within the DNL 60 dB contour, claiming that flexibility was needed and that "there are sound legal reasons why land use laws are not written in such stark terms." (NAA's Post-Hearing Brief at 28.)

[58] She also stated vaguely that "through input from residents, it is clear the community is sensitive to noise greater than 60 dB DNL." (MacKenzie Direct at 7.)

[59] The FAA approved of Naples Airport's 1997 Noise Compatibility Plan update identifying the DNL 60 dB contour because FAA recognized the reasonableness of creating a buffer zone aroundthe DNL 65 dB contour through the implementation of local land use planning measures. See supra p.13. Victoria Catlett, an FAA Environmental Specialist, explained that in the 1997 update, NAA adopted the Part 150 DNL 65 dB noise contour as the threshold of incompatibility for residential uses, but recommended that for zoning and land use planning purposes, the same standards as Part 150 recommends for the DNL 65 dB noise contour should be applied in the DNL 60 dB contour. NAA had made this recommendation because it saw a need for a buffer to ensure that residential and noise sensitive uses were not developed too close to the airport. Catlett explained:

This is a preventive measure; i.e., no new noise sensitive development would be allowed in the DNL 60 dB. In fact, use of the DNL 60 dB contour to define the limits of the buffer area affirms that the significant noise threshold is DNL 65 dB; the creation of a buffer assumes that the DNL 65 dB contour may expand at some point in the future, due to increased operations, and prevents development in the expansion area in times when the contours are relatively close to the airport.

The buffer is intended only to define that area that will be protected from development, to avoid future exposure at the DNL 65 dB level. The buffer itself is not in any way intended to protect residents to noise levels below DNL 65 dB.

(Catlett Rebuttal at 1-2.) See also supra fn24 (regarding Part 150 Study for the Revised Compatibility Program for 1996.)

2. Liability from Noise-Related Litigation

NAA challenges the Hearing Officer's determination that noise-related liability is a factor in deciding whether a land use compatibility problem exists. (NAA's Appeal's Brief at 7, Point of Error # 6.) Its argument is not compelling. The Hearing Officer held that this is a "legitimate factor" to consider. He did not hold that it was imperative for an airport operator to demonstrate that it faced actual or a substantial risk of potential liability from noise-related litigation. If NAA demonstrated actual or substantial risk of potential liability, that risk might have justified the ban. Absence of such proof would not defeat the ban, if other compelling evidence of its reasonableness existed.

NAA argues that the Hearing Officer should not have substituted his judgment for that of the airport officials regarding NAA's risk of liability. (NAA's Appeal Brief at 7, Point of Error # 6.) Once the Hearing Officer decided that risk of liability was a legitimate factor to consider, however, it was logical for him and within his authority to examine the basis for any concerns that NAA had regarding its exposure to liability. [n.60]

[60] In arguing that the Hearing Officer should have deferred to the local jurisdiction's assessment of its liability, NAA relies on Santa Monica Airport Ass'n v. Santa Monica, in which the court noted that the city "should be allowed to define the threshold of its liability." Santa Monica Airport Ass'n v. Santa Monica, 659 F.2d 100, 104 n.5 (9th Cir. 1981). (NAA's Post Hearing Brief at 13.) The court, however, was not examining whether the City had complied with Grant Assurance No. 22, but was explaining that the City had to consider the many types of litigation to which it might be exposed.

NAA takes issue with the Hearing Officer's finding that it was not exposed to noise-related liability and that its concerns about liability were purely speculative. NAA argues that this finding was not supported by reliable, probative and substantial evidence. (NAA Appeal Brief at 7-8, Point of Error # 7.) The Hearing Officer's decision on this issue is affirmed because the evidence in the record is insufficient to support NAA's concerns about liability arising from noncompatible uses in the DNL 60 dB contour.

NAA acknowledged that no suits related to airport noise liability have been filed against it. (DD, Item 2, Attachment 15, at 11.) NAA wrote that "its action nevertheless was based upon identifiable and credible threats of suit that cannot be discounted, in light of settlements and judgments regarding other airports around the country." Id.

The Hearing Officer wrote that NAA Commissioner Eric West's concerns regarding liability were not persuasive and lacked specificity and corroboration. (Initial Decision at 44.) This is an apt characterization of West's vague written statement that prior to the implementation of the Stage 2 ban, his apprehensions regarding NAA's potential liability for noise damages or nuisance had increased. (West Direct at 2-3.) The only actual threat that West described came from a "residential resort complex" within the DNL 60 dB contour immediately southeast of the airport. (Id. at 3.) At the hearing, he testified that this residential resort complex was the Rock Creek Campgrounds, which is a park for recreational vehicles. (Tr. 524.)

There was insufficient evidence, however, that the Rock Creek Campground might prevail if it sued NAA for inverse condemnation. The campground, in other words, may have threatened to sue for inverse condemnation, [n.61] but that does not mean necessarily that NAA faces a credible risk of liability. In Florida, in an action for inverse condemnation, the owners of property in the vicinity of an airport must demonstrate substantial '"not just consequential'" damage that deprives them of the enjoyment and use of their properties to prove that government action has resulted in a taking. Hillsborough County Aviation Auth. v. Benitez, 200 So. 2d 194 (Fla. Dist. Ct. App.) cert. denied, 204 So. 2d 328 (Fla. 1967). To prove that the governmental body that owns a nearby airport has taken an avigational easement over a nearby property as a result of aircraft noise without compensating the property owners, the owners must demonstrate either (1) that aircraft invade the super adjacent airspace causing a direct and immediate interference with the use of their land, or (2) that the property owners have suffered a substantial ouster and deprivation of all beneficial use of their property. Fields v. Sarasota-Manatee Airport Authority, 512 So. 2d 961, 963 (Fla. Dist. App. 1987), cert.denied, 520 So. 2d 584 (Fla. 1988). Under both theories, the plaintiffs must prove a substantial adverse impact upon the market value of their land. (Id.) If the property owners can only prove that there has been a "decreased increase" in value -- the property value has increased but perhaps not as much as it would have if the airport was not located nearby -- then plaintiffs did not meet their burden of proof. (Id. at 965.)

[61] (DD, Item 2, Attachment 15 at 13.)

[62] Due to the non-restrictive measures that NAA has implemented, all but the extreme northeast corner of the campground property has been removed from the DNL 60 dB contour. (Soliday Rebuttal at 11.)

West also was concerned about liability, in part, because of the community's expressions of opposition against the existence of the airport. (West Direct at 1.) He also explained that the community's perceptions of the airport have improved dramatically in the last 5 years because of the NAA's noise abatement actions. (Tr. 530.) All of this 5-year improvement cannot be attributed to the Stage 2 ban because NAA did not begin to enforce the ban until March 2002.

3. Uniquely Quiet

The Hearing Officer held that the area within the DNL 60 dB contour is not unusually peaceful and tranquil, and as a result, the local ambience does not justify the Stage 2 ban. He wrote that "the evidence does not support the position that the portions of the City of Naples or Collier County within the DNL 60 dB contour around APF [Naples Airport] are uniquely quiet or substantially different from communities in other small but growing cities in the South or elsewhere." (Initial Decision at 45.) NAA argues on appeal that the Hearing Officer's conclusions on this issue were in error and not supported by the preponderance of the reliable, probative and substantial evidence.

Preliminarily, NAA appears to argue that the Hearing Officer should not have considered this issue. NAA argues that the Hearing Officer did not cite any authority for the proposition that NAA was required to establish that the area in the contour was "uniquely quiet," or at least, that it would be uniquely quiet without airport-related noise.(NAA's Appeal Brief at 8, Point of Error # 8.) NAA, however, mischaracterizes the Hearing Officer's decision. The Hearing Officer did not hold that NAA had to demonstrate that the area within the DNL 60 dB contour was unusually quiet. On the contrary, he held that this factor is relevant to the inquiry regarding the reasonableness of the locally-defined standard of noncompatibility. (Initial Decision at 45.)

The Hearing Officer concluded that the evidence did not support a finding that the areas around the airport are uniquely quiet or substantially different from communities in other small but growing cities in the South or elsewhere. There was ample evidence to support his description of this area as a suburban environment and that the area southwest of the airport has a fair degree of congestion. For example, regarding the pre-Stage 2 ban DNL 60 dB contour, NAA Executive Director Soliday testified that the Beau Mer's apartments are located at the fairly busy intersection of State Highways 41 and 45.'s (Tr. 393.) Mariner's Cove Condos are located off of Goodlette-Frank Road, a six-lane road with a "fair amount of highway traffic." (Tr. 393-394.) The Naples Bay community is just south of Highway 41, where "highway traffic can be counted on." (Tr. 395.) Soliday testified that there are restaurants, stores, and tourist attractions in this area and slightly further southwest. (Tr. 396.)

NAA argues that "the Hearing Officer's conclusions regarding the level of community noise and the nature of the environment in the vicinity of the Airport was notbased on any reliable, probative and substantial evidence but rather the mere inference apparently drawn from the fact that some residents live in multi-family dwellings and near multi-lane roads." (NAA Appeal Brief at 8.) The Hearing Officer's inference, however, that the local environment was not uniquely quiet was quite reasonable given the evidence of multiple unit housing, multi-lane roads, traffic, tourism and commerce.

4. Conclusion

In light of the above, the preponderance of the evidence supports the Hearing Officer's determination that NAA's decision to base the Stage 2 ban on a DNL 60 dB threshold was not reasonable. The evidence does not show that there was a noncompatible land use problem in the DNL 60 dB contour that would justify a Stage 2 ban based on that threshold. As a result, the Hearing Officer's determination that the Stage 2 ban was contrary to Section 47107(a)(1) and Grant Assurance No. 22 is affirmed.

In light of this conclusion, there is no need to review the Hearing Officer's decision that the Stage 2 ban did not represent a balanced approach to mitigating an existing noncompatibility problem.

IV. Whether the Hearing Officer Applied the Burden of Proof to the Correct Party

The basic burden of proof in this proceeding was on the agency. 14 C.F.R. § 16.229(a). There are only two exceptions to the general rule that the agency bears the burden of proof. The first is for the proponent of a motion, request, or order. 14 C.F.R. § 16.229(b). The second is for a party asserting an affirmative defense. 14 C.F.R. § 16.229(c).

In the initial decision, the Hearing Officer correctly stated the general rule that the burden of proof was on the agency. (Initial Decision at 11.) Nevertheless, NAA argues without any explanation on page 9 of its Appeal Brief that the Hearing Officer reversed the burden of proof concerning the following three findings:

Finding 1 -- That the Federal district court decision did not bind the FAA;

Finding 3 -- That the Stage 2 ban was inconsistent with NAA's obligation to make its airport available for public use on reasonable terms; and

Finding 4 -- That ANCA does not affect the applicability of the grant assurances.

In contrast, Finding 3 -- that the Stage 2 ban was inconsistent with NAA's obligation to make its airport available for public use on reasonable terms to all types, kinds, and classes of aeronautical activities -- did require the resolution of questions of fact. The Hearing Officer, however, indicated several times that he was placing the burden of proof firmly on the agency.

He stated that "deference [to an agency's interpretation of a statute that it has authority to implement] . . . does not relieve an agency from the burden of establishing that . . . its application to a particular set of facts is correct." (Initial Decision at 37; emphasis added). He further stated that "there is nothing in the pertinent regulations or statutes which confers the FAA with the authority to reject an access restriction unless it can demonstrate that it violates the contractual obligation that the airport has pursuant to 49 U.S.C. § 47107." (Id. at 39; emphasis added).

NAA argues on page 5 of its post-hearing brief (which NAA incorporated by reference into NAA's appeal brief), that AAS structured its case as if NAA had the burden of proof. The issue, however, is whether the Hearing Officer applied the burden of proof to the correct party.

NAA argues that on the issue of liability, the Hearing Officer effectively imposed the burden of proof on it, contrary to 14 C.F.R. § 16.229, by finding that the evidence presented by the Airport Authority was unpersuasive but not requiring AAS to introduce any contradictory evidence. (NAA's Appeal Brief at 7, Point of Error # 7). Under Part 150, all land uses, including residential land use, are compatible with noise levels at DNL 65 dB or less. In this case, NAA argues, it is justified in implementing a ban on all Stage 2 aircraft because of locally based determinations that residential land use is incompatible with noise levels within the DNL 60 dB contour. The burden of proving that residential land use is incompatible with noise levels starting at the DNL 60 dB threshold is on NAA because that is, in essence, an affirmative defense. Under 14 C.F.R. § 16.229(c), "a party who has asserted an affirmative defense has the burden of proving the affirmative defense." If NAA could show that it faces a substantial risk of liability arising from within the DNL 60 dB contour, that would tend to show that the Stage 2 ban was reasonable under Section 47107(a)(1) and Grant Assurance No. 22.

V. Whether the Director Issued His Determination Late

NAA argues that the Director issued his determination 11 months late. According to NAA, under 14 C.F.R. § 16.31, the Director should have issued his determination within 120 days. (NAA's Appeal Brief at 9, Point of Error #11.) NAA's argument must be rejected because Section 16.31's 120-day requirement does not apply to cases like this one that arise from an agency action initiated by the FAA under Section 16.101. Moreover, even if the 120-day requirement did apply, the Rules of Practice do not specify a consequence for a late-issued determination by the Director. As a result, even if the Director issued his determination late, that fact alone would not invalidate the determination.

Section 16.31, entitled "Director's determinations after investigations," appears in 14 C.F.R. Part 16, Subpart C. Subpart C provides special rules applicable to actions in which a person directly and substantially affected by an alleged noncompliance files a complaint. 14 C.F.R. § 16.23(a). The FAA will launch an investigation if, upon review of the pleadings filed under Section 16.23, the FAA determines that there are reasons for further investigation. 14 C.F.R. § 16.29(a). Under Section 16.31(a), the Director will render an initial determination after consideration of the pleadings and other information within 120 days of the date of the last pleading specified in Section 16.23.

This case did not arise from a complaint as described in Section 16.23. Instead, the FAA initiated this case under Part 16, Subpart D. In such proceedings, initiated by the FAA, "[i]f the matters addressed in the FAA notices are not resolved informally, the FAA may issue a Director's determination under § 16.31." 14 C.F.R. § 16.105. However, Section 16.31's requirement that the Director issue a determination within 120 days of the date on which the last pleading was due cannot apply when the Director issues a determination in a case initiated through agency action because in such a case, there is no complaint, answer or other pleading.

Moreover, assuming arguendo that Section 16.31's 120-day time frame applied in this case, Section 16.31 does not specify any consequence if the Director fails to meet the deadline for issuing his determination. An official who fails to comply with a statutory time limit does not lose jurisdiction unless the statute expressly states loss of jurisdiction as a consequence for failing to comply. McCarthney v. Busey, 954 F.2d 1147, 1152(6th Cir. 1992). While the instant case involves a regulatory, rather than a statutory, time limit, it is reasonable to apply the same rule. Assuming arguendo that the 120-day time frame applied in this case, the Director would not have lost jurisdiction because Section 16.31 does not provide any such consequence if the determination is late. Consequently, it is not necessary to decide whether the Director's Determination, if it was indeed late, would render the initial decision invalid or warrant its reversal.

VI. NAA's Other Arguments

All arguments not specifically addressed in this decision have been considered and are rejected. [n.63]

[63] NAA's appeal brief includes vague arguments that are not supported by record citations.

In light of the foregoing, NAA's appeal is denied, and the Hearing Officer's initial decision is affirmed.

________________________________
WOODIE WOODWARD
Associate Administrator for Airports

It is ordered, pursuant to the authority set forth in 49 U.S.C. § 47106(d), that until Naples Airport Authority (NAA) rescinds or takes formal action discontinuing the enforcement of the ban on Stage 2 aircraft operations at Naples Municipal Airport, the Federal Aviation Administration (FAA) shall withhold approval of:

• any application submitted by NAA for amounts apportioned under 49 U.S.C. § 47114(c) and (e); and
• any application submitted by NAA for discretionary grants authorized under 49 U.S.C. § 47115. [n.64]

[64] A person may seek judicial review in a United States Court of Appeals from a final agency decision and order of the Associate Administrator. See 14 C.F.R. 16.247 for information regarding appeal rights.

________________________________
WOODIE WOODWARD
Associate Administrator for Airports
Issued this 25th day of August, 2003.