National Helicopter Corp. of America v. City of New York et al.
Cite as: 137 F3d 81


NATIONAL HELICOPTER CORP. OF AMERICA, Plaintiff-Appellee-Cross-Appellant,

Nos. 97-7082, 97-7142

Argued September 8, 1997
Decided February 17, 1998

Corrected Opinion


ELLEN S. RAVITCH, New York, New York (Jeffrey D. Friedlander, Acting Corporation Counsel of the City of New York, Stephen J. McGrath, Deborah Rand, New York, New York, of counsel), for Defendants-Appellants-Cross-Appellees.

DONALD W. STEVER, New York, New York (Janis M. Meyer, Clarke Bruno, Daniel Altman, Dewey Ballantine, New York, New York, of counsel), for Plaintiff-Appellee-Cross-Appellant.

Steven A. Mirmina, Washington, D.C. (Timothy M. Biddle, Lorraine B. Halloway, Crowell & Moring LLP, Washington, D.C., of counsel), filed a brief for Amicus Curiae Helicopter Association International in support of Plaintiff-Appellee-Cross-Appellant.

Before: WINTER, Chief Judge, NEWMAN, and CARDAMONE, Circuit Judges

CARDAMONE, Circuit Judge:

This case concerns Manhattan's East 34th Street Heliport (Heliport or facility). In May 1996 New York City's Economic Development Corporation (Economic Development Corporation or Corporation), the agency responsible for administering the City's heliports, issued a Request for Proposals (Request) seeking a new fixed-base operator for the Heliport. The Request imposed certain restrictions on the use of the Heliport based on City law. Plaintiff National Helicopter Corporation of America (National Helicopter or National), which had been the Heliport's fixed-base operator for the past 20 years, filed an action in the United States District Court for the Southern District of New York, challenging the validity of those restrictions on the grounds that the regulation of airports is a field preempted by federal law. On January 7, 1997 Judge Sonia Sotomayor granted in part and denied in part National Helicopter's motion seeking permanent injunctive relief. The defendant City of New York, its Council, Planning Commission, and Economic Development Corporation, appeal from that judgment. National Helicopter cross-appeals.


Developers desiring to make use of City land must comply with New York City's Zoning Resolution, which "regulat[es] and restrict[s] the location of trades and industries and the location of buildings designed for specific uses within the City of New York, and for such purposes divid[es] the City into districts." New York City Zoning Resolution 11-01. Certain uses, "whose location or control requires special consideration," are permitted only if they have been granted a special permit by the City Planning Commission (Planning Commission). Id. 74-01. The construction and operation of a heliport is one such use requiring a special permit. Id. 74-66. An applicant seeking to obtain a special permit must work through layers of agencies, departments, commissions and corporations that comprise the City bureaucracy. Such work is no sport for the short-winded.

When the City planned to develop a heliport on land it owned along the East River and adjacent to the F.D.R. Drive and 34th Street, it (through the Department of Marine and Aviation) applied for and in 1971 obtained from the Planning Commission a special permit to operate the Heliport for a term of five years. The facility, one of four public heliports in Manhattan, opened in 1972. National became its fixed-base operator in 1973 when it entered into a lease with the Department of Marine and Aviation for an initial term of 10 years. [FN1] National subsequently renewed its lease and remained the fixed-base operator until August 1997 when it was legally evicted, although it remains entitled to use the Heliport for helicopter flights.

[FN1] The lease was actually executed between the Department of Marine and Aviation and Island Helicopters, Inc., a wholly-owned subsidiary of National Helicopter. For the sake of simplicity, we refer to actions taken by both Island Helicopters and National Helicopter as having been taken by National Helicopter.

Prior Disputes Between the Parties

National's 20-plus-year relationship with the City has been far from harmonious. Each time a dispute has arisen, the parties have reached a settlement agreement committing National to perform certain obligations in exchange for continued permission to remain the Heliport's operator. Several of these settlement agreements are relevant to the issues now on appeal. The first agreement was executed in 1985, following a 1982 action brought by the City for National's failure to pay rent. The 1985 agreement required National to apply to the Planning Commission for a new special permit to allow for the continued operation of the Heliport because the City's original permit to operate the facility had expired in 1976. The City, in return, allowed National to renew its lease retroactively, enabling it to continue as the Heliport's fixed-base operator for a second period of ten years, effective October 4, 1983. In a subsequent 1989 settlement stipulation, the City agreed to extend National Helicopter's fixed-base operator lease until October 1995 and, in exchange, National Helicopter agreed to an 11 p.m. to 7 a.m. curfew of its operations.

Pursuant to the 1985 settlement agreement and as part of the special permit application process, National was required to prepare an Environmental Impact Statement (EIS) to assess the Heliport's effect on its surrounding environment. National hired Young Environmental Services to do this work, but Young had failed to complete the project by 1993. Following another rent dispute, the Economic Development Corporation (successor to the Department of Marine and Aviation and its successor, the Department of Ports and Trade), as the current agency in charge of administering the City-owned heliports, assumed responsibility for completing the EIS. National agreed to reimburse the City for its costs.

Another rent dispute developed in 1993, causing the City to serve a notice of termination of National's fixed-base operator lease because National had not made the agreed-upon rental payments spelled out in a prior settlement. In response, National filed an action against the City in New York State Supreme Court seeking a stay of eviction. The parties resolved this dispute in a series of settlements commencing on January 10, 1994. The final such settlement, entered on February 13, 1996, provided that the City would allow National to continue its occupancy of the Heliport on a month-to-month basis until July 31, 1996 at which time the City could eject National pursuant to an executed Order of Ejectment. National Helicopter further agreed to waive any claims that were or could have been raised in its state court action against the City.

The Special Permit Application

Meanwhile, on June 29, 1995 the Economic Development Corporation and the Department of Business Services, as co-applicants, filed with the Planning Commission an application for a special permit to allow for the continued operation of the Heliport. The agencies' application discussed their proposal to attain the City's goals of redistributing sightseeing flights away from the Heliport to other City heliports by restricting tourist operations to Saturday and Sunday flights only and limiting the number of flights to a maximum of four per hour during a 12-hour operating day. The agencies hoped that these restrictions would reduce total operations at the Heliport by 47 percent.

Under New York City law, before the Planning Commission may award a special permit, the affected community boards, the borough president, the New York City Council, and the public must review the significant land use decision. See New York City Charter 197-c. Pursuant to this review procedure, the Planning Commission certified the agencies' application, including a draft EIS, as complete on August 7, 1995. The Planning Commission referred the application to Manhattan Community Board 6 and the Manhattan borough president for consideration. Both opposed the application unless various conditions - including a curfew and the prohibition of weekend sightseeing operations - were met. On November 29, 1995 the City Planning Commission conducted a public hearing to consider comments from the affected community board, representatives of New York University's medical facilities located near the Heliport, and other community members.

The final EIS, issued on December 27, 1995, evaluated noise data measured at seven receptor sites surrounding the Heliport. It considered the impact of a 47 percent reduction in operations, as discussed in the application for the special permit, and concluded that the proposed reduction would decrease noise levels, both in magnitude and significant impact.

On January 9, 1996 the City Planning Commission recommended awarding the special permit to the Economic Development Corporation and the Department of Business Services for a period of ten years and subject to a variety of restrictions. On March 6, 1996 following a public hearing addressing the City Planning Commission's recommendations, the City Council enacted Resolution 1558, approving the issuance of the special permit, subject to the following conditions: (1) the restriction of weekday operations to between 8 a.m. and 8 p.m.; (2) the restriction of weekend operations to between 10 a.m. and 6 p.m.; (3) the phasing out of weekend operations entirely; (4) the reduction of operations by a minimum of 47 percent overall; (5) the barring of Sikorsky S-58Ts, or helicopters of a similar size, from use of the Heliport for sightseeing operations; (6) the prohibition of sightseeing flights over Second Avenue and the requirement that such flights heading north and south fly only over the East and Hudson Rivers; and (7) the requirement that helicopters using the Heliport be marked for identification from the ground. The Economic Development Corporation incorporated these conditions into its May 6, 1996 Request seeking a new fixed-base operator for the facility.

On May 15, 1996 National filed its first amended complaint in the district court seeking to enjoin the conditions imposed by the City Council's Resolution 1558. Although National originally moved for a preliminary injunction, the parties consented to stay the enforcement of Resolution 1558 and suspend the Request until the court rendered a final judgment on the merits.

The District Court's Decision

In an opinion entered January 7, 1997 Judge Sotomayor permanently enjoined the City from enforcing all but two of Resolution 1558's provisions. National Helicopter Corp. v. City of New York, 952 F. Supp. 1011 (S.D.N.Y. 1997). She first determined that National had not waived its right to challenge conditions adopted in connection with the Council's special permit when it signed the February 1996 stipulation. Id. at 1021-22. Next, the district court, although generally recognizing federal preemption over the regulation of aircraft and airspace, observed that municipalities that are proprietors of local airports - like the City with respect to this Heliport - may regulate an airport's noise levels in a "reasonable, nonarbitrary and non-discriminatory" manner. Id. at 1026 (quoting British Airways Bd. v. Port Auth. of N.Y. and N.J., 558 F.2d 75, 84 (2d Cir. 1977) (Concorde I)). With that standard in mind, the district judge upheld the weekday and weekend curfews (conditions #1 and #2) as reasonable regulations of noise at the Heliport. Conversely, she determined that the other conditions exceeded the scope of the City's authority pursuant to the proprietor exception, and permanently enjoined their enforcement. Id. at 1026-32.


I Threshold Matters

A. Standing

Before turning to the merits, we must first dispose of two threshold matters: standing and waiver. The City maintains that National does not have standing to challenge the conditions imposed in Resolution 1558 and the Request. It also maintains that even if appellant has standing to challenge the Resolution's conditions, it has waived its rights to challenge them.

We address the standing issue first. The basis for the City's standing argument is that because National does not have a valid expectation of becoming the Heliport's next fixed-base operator, it lacks sufficient interest in the controversy regarding the City regulation to challenge it. See Sierra Club v. Morton, 405 U.S. 727, 731 (1972) (explaining that standing addresses the question "[w]hether a party has a sufficient stake in an otherwise justiciable controversy to obtain judicial resolution of that controversy"). National's interest, as the district court recognized, extends beyond its status as a fixed-base provider; it may operate as a user of the Heliport in the future. 952 F. Supp. at 1019-20. The conditions of the City's Resolution, if enforced, would seriously impact National's business, both as an operator and as a user.

We are unable to agree with the City's view of the Request to the extent it asserts that certain conditions, i.e., the ban on the Sikorsky S-58T helicopter, the sightseeing route restriction, and the markings requirement, only apply to a fixed-base operator. The Request states that those conditions apply to "all sightseeing helicopter service providers based at the [Heliport]" and defines such providers as companies that have subcontracted with the fixed-base operator to base their operations at the Heliport. National Helicopter, even if it was not granted fixed-base operator status, could subcontract with the fixed-base operator to base its operations at the facility. Thus, National has a sufficient stake in the resolution of this controversy to give it standing.

B. Waiver

Turning to the alleged waiver, the City asserts that National is precluded from challenging Resolution 1558's conditions because it bargained away that right when it executed the February 13, 1996 stipulation. The stipulation contained a clause in which National waived any and all claims with respect to the Economic Development Corporation's "acts or omissions regarding the EIS . . ., the [land use review] application, or any conditions relating to the special permit required under the City's Zoning Resolution."

A release freely entered into that clearly waives a right to pursue a cause of action is binding. See National Union Fire Ins. Co. v. Woodhead, 917 F.2d 752, 757 (2d Cir. 1990); Bank of America Nat'l Trust & Sav. Assoc. v. Gillaizeau, 766 F.2d 709, 713 (2d Cir. 1985). But a release should not be read to include matters of which the parties had no intention to dispose. Lefrak SBN Assocs. v. Kennedy Galleries, Inc., 203 AD2d 256, 257 (2d Dep't 1994); see also Gettner v. Getty Oil Co., 226 AD2d 502, 503 (2d Dep't 1996) (stating that the "meaning and coverage of a release depends on the controversy being settled"); East 56th Plaza, Inc. v. Abrams, 91 AD2d 1129, 1130 (3d Dep't 1983) ("This intent must be clearly established and cannot be inferred from doubtful or equivocal ... language, and the burden of proof is on the person claiming the waiver of the right.").

Reading the waiver language in its entirety, and considering the controversy being settled, it is far from evident that National intended to release the City for claims regarding conditions that may have been imposed upon the special permit the City Council had not yet granted. The waiver that plaintiff signed concerned only claims regarding the requirement of a special permit and the manner in which the Economic Development Corporation pursued it. National therefore could not challenge the application process undertaken by the Economic Development Corporation as improper under City law, i.e., the Zoning Resolution and the City Charter, but it could pursue a substantive claim that the conditions ultimately imposed by the City Council violate federal law. Cf. Summit School v. Neugent, 82 AD2d 463, 468 (2d Dep't 1981) (requiring the narrow interpretation of waivers where matters of public policy are concerned).

II The Proprietor Exception

We now address the merits of the controversy. National contends that the conditions imposed under Resolution 1558 and the Request are defective because they are preempted by federal law. The City, on the other hand, avers that it carefully assessed and imposed all the conditions pursuant to its power as the proprietor of the Heliport.

The Supremacy Clause of the United States Constitution invalidates state and local laws that "interfere with or are contrary to, the laws of congress." Chicago & N.W. Transp. Co. v. Kalo Brick & Tile Co., 450 U.S. 311, 317 (1981) (quoting Gibbons v. Ogden, 9 Wheat. 1, 211 (1824)). Congress preempted state and local regulations "related to a price, route or service of an air carrier" when it passed 1305(a) of the Airline Deregulation Act, now recodified at 49 U.S.C. 41713(b)(1) (1994). Cf. id. 40101, et seq. (1994) (Federal Aviation Act); id. 44715 (1994) (Noise Control Act); id. 47521, et seq. (1994) (Airport Noise and Capacity Act) (acts implying preemption of noise regulation at airports).

In enacting the aviation legislation, Congress stated that the preemptive effect of 1305(a) did not extend to acts passed by state and local agencies in the course of "carrying out [their] proprietary powers and rights." Id. 41713(b)(3). Under this "cooperative scheme," Congress has consciously delegated to state and municipal proprietors the authority to adopt rational regulations with respect to the permissible level of noise created by aircraft using their airports in order to protect the local population. See Concorde I, 558 F.2d at 83-84 (discussing the 1968 amendment to Federal Aviation Act and Noise Control Act legislative history in which Congress specifically reserved the rights of proprietors to establish regulations limiting the permissible level of noise at their airports); S. Rep. No. 96-52, at 13 (1980), reprinted in 1980 U.S.C.C.A.N. 89, 101 (proclaiming that the Aviation Safety and Noise Abatement Act was not "intended to alter the respective legal responsibilities of the Federal Government and local airport proprietors for the control of aviation noise"); cf. City of Burbank v. Lockheed Air Terminal, Inc., 411 U.S. 624, 633, 635-36 n.14 (1973) (acknowledging that while the federal government has "full control over aircraft noise, pre-empting state and local control" under their police power, the "authority that a municipality may have as a landlord is not necessarily congruent with its police power").

Hence, federal courts have recognized federal preemption over the regulation of aircraft and airspace, subject to a complementary though more "limited role for local airport proprietors in regulating noise levels at their airports." City and County of San Francisco v. F.A.A., 942 F.2d 1391, 1394 (9th Cir. 1991). Under this plan of divided authority, we have held that the proprietor exception allows municipalities to promulgate "reasonable, nonarbitrary and non-discriminatory" regulations of noise and other environmental concerns at the local level. Concorde I, 558 F.2d at 84 (regulations of noise levels); see also Western Air Lines, Inc. v. Port Auth. of N.Y. and N.J., 658 F. Supp. 952, 957 (S.D.N.Y. 1986) (permissible regulations of noise and other environmental concerns), aff'd, 817 F.2d 222 (2d Cir. 1987).

National does not dispute the viability of the proprietor exception. It maintains instead that the City, in enacting Resolution 1558, did not act in its proprietary capacity, but rather under its police power, and therefore is not entitled to rely on the proprietor exception. As a result, the conditions the resolution imposed, it continues, are presumptively invalid. See City of Burbank, 411 U.S. at 633, 635-36 n.14 (invalidating curfew on airport operations imposed pursuant to city's police power); San Diego Unified Port Dist. v. Gianturco, 651 F.2d 1306, 1315 n.22 (9th Cir. 1981) (listing cases invalidating curfews imposed pursuant to municipalities' police power).

The Economic Development Corporation, acting in a proprietary capacity, was extensively involved in the permit application process and issued the Request. It proposed to change operations at the Heliport by reducing operations by 47 percent and imposing a curfew. Since there was participation by a number of different City agencies in the permit process, some acting as owner, e.g., the Economic Development Corporation, some as protectors of the public, e.g., the City Planning Commission, we think the City acted in both a proprietary and a police capacity when it imposed the conditions upon the special permit. The proprietor exception is accordingly applicable to our evaluation of Resolution 1558 and the Request. See United States v. State of New York, 552 F. Supp. 255, 264 (N.D.N.Y. 1982) (reasoning that a curfew imposed by the State of New York pursuant to its police and proprietary powers was entitled to analysis under the proprietor exception), aff'd per curiam on other grounds, 708 F.2d 92 (2d Cir. 1983).

III The Reasonableness of the Restrictions

As a proprietor, the City, as noted, has the power to promulgate reasonable, nonarbitrary and non-discriminatory regulations. Those regulations must avoid even the appearance of irrational or arbitrary action. See British Airways Bd. v. Port Auth. of N.Y. and N.J., 564 F.2d 1002, 1005 (2d Cir. 1977) (Concorde II). Further, the City may regulate only a narrowly defined subject matter -- aircraft noise and other environmental concerns at the local level. See Western Air Lines, 658 F. Supp. at 957.

The City asserts that all seven of the conditions imposed upon the special permit fall within its power under the proprietor exception. It contends the district court erred when it permanently enjoined five of those conditions (conditions #37). National counters that it was error not to strike all seven conditions. We review orders granting or denying injunctive relief for an abuse of discretion. See Nikon Inc. v. Ikon Corp., 987 F.2d 91, 94 (2d Cir. 1993) ("Abuse of discretion can be found if the district court relied upon a clearly erroneous finding of fact or incorrectly applied the law."). With this in mind, we analyze in order the conditions imposed.

Weekday and Weekend Curfews (Conditions #1 and #2)

We agree with the district court that the weekday and weekend curfews imposed should be upheld. The protection of the local residential community from undesirable heliport noise during sleeping hours is primarily a matter of local concern and for that reason falls within the proprietor exception. See Santa Monica Airport Ass'n v. City of Santa Monica, 481 F. Supp. 927, 938-39 (C.D. Cal. 1979), aff'd, 659 F.2d 100 (9th Cir. 1981); see also Concorde I, 558 F.2d at 83 ("It is perhaps more important ... that the inherently local aspect of noise control can be most effectively left to the operator, as the unitary local authority who controls airport access.").

We note that at least two district court decisions in this Circuit have enjoined curfews. See United States v. County of Westchester, 571 F. Supp. 786, 797 (S.D.N.Y. 1983) (enjoining curfew on all night flight operations at airport imposed regardless of accompanying emitted noise as unreasonable, arbitrary, discriminatory and overbroad); State of New York, 552 F. Supp. at 265 (enjoining night-time curfew on all aircraft, regardless of decibel level emitted by individual aircraft, as "overbroad and constitutionally impermissible in view of federal pre-emption of regulations concerning noise and planes in flight"). To the extent that these decisions have stricken curfews for their failure to target the noisiest aircraft or the noisiest times of operation, they have since been overturned by our opinion in Global Int'l Airways Corp. v. Port Auth. of N.Y. & N.J., 727 F.2d 246, 251 (2d Cir. 1984), which permits proprietors to reduce cumulative noise levels, as opposed to only targeting peak noise levels or the noise level produced by an individual aircraft.

Elimination of Weekend Operations (Condition #3)

We are unable to sustain the district court's enjoining of condition #3, which eliminated weekend operations at the Heliport, for reasons similar to those just stated with respect to conditions #1 and #2. The regulation requiring the facility's operator to phase out operations on Saturdays and Sundays is based on the City's desire to protect area residents from significant noise intrusion during the weekend when most people are trying to rest and relax at home. We agree with those courts that have held such reasoning as ample justification for the application of the proprietor exception. See Santa Monica Airport Ass'n, 481 F. Supp. at 939 (recognizing that "the interest being protected, the minimization of noise during the weekend hours when the need for leisure and rest in the residential community is the highest, is a matter of peculiar local concern" and upholding a weekend ban on touch-and-go, stop-and-go and low approach operations).

We find such a restriction to be reasonable and not arbitrary. See Concorde I, 558 F.2d at 84. The fact that the Economic Development Corporation's proposal, on which the EIS is based, contemplated shifting sightseeing operations from weekdays to the weekend does not alter this conclusion. The Corporation determined, and the EIS confirmed, that the Heliport was a source of excessive noise. That is a sufficient basis on which a proprietor may impose a weekend curfew.

Continued in Part Two