There is no question that the FAA hearing officer's factual findings are supported by substantial evidence in the record of this case. The hearing officer, in his findings, listed ten differences between the lease the City offered Brettman and the leases it gave the Beckers. The leases and evidence detailing the differences therein were before the hearing officer in the form of testimony and exhibits. The City was on notice prior to the hearing that the leases would be scrutinized and was afforded ample opportunity to cross-examine and challenge any evidence pertaining to the leases.
The City argues that the different provisions in the proposed Brettman lease are not unjustly discriminatory per se. This is true. But, based upon the evidence in the record, the hearing officer was entitled to find that they were unjustly discriminatory. First, the cited provisions in the lease offered to Brettman are, on their face, disadvantageous to Brettman. [FN 14] Second, Brettman testified about the prejudicial effect of each of the provisions. The hearing officer heard testimony that Brettman is an experienced aviator and businessman, engaged in the business of developing aircraft hangar facilities at airports; at the time of the hearing, Brettman had constructed hangars at airports in Venice, Daytona Beach, Orlando, and Merritt Island, Florida and was soon to commence such an operation in Jacksonville. The hearing officer, as fact finder, was charged with weighing the evidence and making credibility determinations. It was reasonable for the hearing officer to accept Brettman's testimony that the cited lease provisions would impose an undue hardship upon his proposed business operation at Pompano Beach Air Park, rendering it noncompetitive with the existing fixed base operators. Applying the substantial evidence test, we will not disturb the credibility choices the fact finder has made or reevaluate the weight of the evidence.
A number of the discriminatory provisions listed by the hearing officer would limit Brettman's control over his business and impede his ability to plan for the future, to secure financing, and to operate on a competitive basis with the Beckers. The City proposed that in order for Brettman to transfer control of more than fifteen percent of the business, he must obtain prior City approval. In contrast, the Beckers' leases permit the Beckers to transfer control of or hypothecate for financing purposes up to fifty percent of their assets without prior City approval. According to the lease the City proposed to Brettman, Brettman would have to comply with the City's current and future minimum standards for fixed base operators; the Beckers' leases lock their operations to the City's 1967 minimum standards. The proposed Brettman lease contemplates more extensive prior City approval before any construction could commence than is required of the Beckers, who may commence construction within thirty days absent the City's objection. Bankruptcy and lien provisions in the proposed Brettman lease are also clearly disadvantageous. The City, according to its proposed lease, could terminate the Brettman lease within thirty days of voluntary or involuntary bankruptcy. Additionally, should Brettman be in breach of any of the provisions of his lease, the City could place a lien upon all revenues earned from the leased premises to ensure Brettman's compliance with his lease. This provision is not present in the Beckers' leases. Finally, Brettman would be subject to an escalatory gasoline tax provision not contained in the Beckers' leases that would permit the City, in agreement with any one of the Air Park's fixed base operators, to increase its tax of two cents per gallon. Pompano Air Center's lease locks in its gasoline tax at two cents per gallon, while Bec-Air's lease provides that the two cents per gallon tax may be increased only by agreement between the City and all of the fixed base operators at the Air Park.
The proposed Brettman lease would impose upon Brettman an onerous requirement to disclose extensive confidential business information, including his projected gross revenues and operating costs for each year of the thirty-year lease term. The Beckers' leases contain no such requirement, and the City has never demanded such information from them.
According to the testimony, the Beckers' two businesses at the Air Park were, in essence, one business enterprise. While Pompano Air Center is a fully developed fixed base operator servicing airplanes, Bec-Air, located next door, is little more than a corporate shell. It supplies no service other than gasoline and refers all maintenance work to Pompano Air Center. The two corporations have interlocking officers, with the father and son basically trading positions in the corporate structure of each operation. The senior Becker purchased Executive Aviation in 1981 and created Bec-Air for tax purposes rather than having his existing company absorb the operation. Then he installed his son as the senior officer of Bec-Air, creating the guise of a separate business. Neither Bec-Air nor Pompano Air Center has fully developed all of the land leased from the City; extensive vacant areas remain on their leaseholds. It was reasonable for the hearing officer to conclude that the Beckers' businesses, in combination with each other, comprised the type of unacceptable monopoly Congress intended to prohibit when it enacted section 1349(a).
True, there was no evidence that the City by express agreement gave the Beckers an exclusive right to provide services to fixed-wing aircraft at the Air Park; witnesses questioned whether such an agreement existed flatly denied the proposition. But an exclusive right may also be created by imposing on outsiders unreasonable standards or requirements. The lease the City offered Brettman, when compared to the leases it has given the Beckers, made it virtually impossible for Brettman or any applicant for that matter to start a similar business at the Air Park and to compete with the Beckers. This is not a case where the existence of only one enterprise conducting a particular aeronautical activity at an airport is acceptable because the market potential is insufficient to attract competitors, see supra note 13; the City had an entrepreneur actively seeking to do business at the airport and representing that he had investors willing to utilize his proposed facilities. At least in Brettman's mind a potential market existed to sustain a competing fixed-wing aircraft service center. The potential competitive effect of Brettman's operation upon the Beckers' business was an insufficient reason to deny access to Brettman. See City of Dallas, 371 F.Supp. at 1030. Instead of making its public airport available to the benefits of competitive enterprise, the City foreclosed, by imposing unreasonable standards and requirements, the opportunity for others to enjoy the rights and privileges held by the Beckers.
The City attempted to justify each of the discriminatory provisions in the proposed Brettman lease, arguing that they were incorporated to protect the City's and thus the public's interest. These justifications, which might have provided an adequate reason for the City's modification of its standard fixed base operator lease over time, were insufficient here, in light of the City's conduct vis-a-vis Brettman. Key to our affirmance of the hearing officer's findings and order is the fact that the City's contemporaneous treatment of the Beckers and Brettman differed so markedly. The City last amended its lease with John Becker and Pompano Air Center in November 1978; Brettman applied for a lease May 30, 1979; the City granted Executive Aviation a lease in July 1979; and the City then granted Brian Becker a lease in November 1981. The differences in these leases have already been noted; we find no reasonable explanation or justification in the record as to why they exist. Contrary to the City's foreboding warning and admonition, our affirmance of the hearing officer's findings and order is not a signal to cities and potential lessees of municipal property that all municipal leases must be identical. We applaud a city's desire to learn from experience and to be ever watchful for improvements in the way it does business in order to protect the public's interest; modifications in standard contracts and leases is one way to accomplish this worthy goal. But in this instance the clock stopped for the City of Pompano Beach on May 30, 1979, the date of Brettman's initial request. Any modifications in the lease the City extends to Brettman must be reasonable when compared to similar leases offered by the City to others at that time or subsequent thereto. The FAA has construed the statute prohibiting the grant of an exclusive right at a federally subsidized airport and has acted here in accordance with the proper interpretation of the law. We find no indication that the FAA's application of the law was incorrect.
For the foregoing reasons, the FAA's order, requiring the City to offer Brettman a lease with "terms, conditions, and requirements substantially identical" to those in the leases held by the Beckers, is
AFFIRMED.
JOHN R. BROWN, Circuit Judge, dissenting:
Despite the majority's insistence that we do not trench upon a municipality's right to determine -- in the light of time and changed economics and municipal policies -- changes in controlling policies, that is the effect of this decision. What happened years ago; how someone was treated years ago; what factors were thought significantly relevant years ago cannot be the measure against which to determine today's decision. To hold otherwise is to deny life in which for children, for adults, for government, for society we learn from the past and, learning, adapt the lessons of the past to the future. I therefore respectfully dissent.