Concorde I recognized that the interest in a safe and efficient national air transport system reflected in the federal legislative scheme required that local airport proprietors exercise their power to control airport noise in a reasonable and nondiscriminatory fashion and in conformity with federal law, including specifically the requirement that airports be "available for public use on fair and reasonable terms and without unjust discrimination." 558 F.2d at 85. Concorde II applied this principle to enjoin an airport proprietor from further delaying access to its airport by a supersonic plane when the record established the supersonic plane satisfied the decibel-based noise standard applied by the airport proprietor to subsonic aircraft that were permitted to use the airport. The court stated the decision was based in part upon the court's obligation to enforce "the proprietor's observance of the strict statutory obligation to make his facility available for public use on fair and reasonable terms, and without unjust discrimination...." 564 F.2d at 1011.
In Concorde II, as in the present case, the action of an airport proprietor purporting to exercise delegated authority to regulate noise was held to constitute "unjust discrimination" within the meaning of the statute when the action resulted in denial of use of the airport to planes that met noise standards applied to other aircraft allowed use of the airport. Concorde II, 564 F.2d at 1012. [FN6]
San Francisco's reliance on Global Int'l Airways v. Port Auth. of New York 727 F.2d 246 (2d Cir.1984) (Global I), as support for its regulation is misplaced. Global I held airport proprietor noise regulations could be aimed at reducing cumulative noise levels rather than barring aircraft that exceeded a maximum decibel level, but also noted aircraft could only be denied use of an airport "on the basis of non- discriminatory noise criteria." Global I, 727 F.2d at 248. The court did not decide whether the noise regulation before it was unjustly discriminatory. See Global Int'l Airways v. Port Auth. of New York, 731 F.2d 127, 130 n. 1 (2d Cir.1984) (Global II).
San Francisco argues its noise regulation is valid because San Francisco had a rational basis for believing the regulation would reduce Airport noise levels by eliminating the Q707, admittedly a noisy aircraft, and encouraging a shift to quieter Stage 3 aircraft. The argument rests in part upon the contention that equal protection law provided the appropriate test for evaluating the regulation, a contention the Administrator properly rejected. See supra note 5. Moreover, it was not unreasonable for the FAA to interpret the statute as requiring more than that San Francisco's regulation reduce noise, since the statute required the Airport be available "without unjust discrimination," a requirement obviously important to an efficient national air transport system dependent upon flights by particular aircraft to various airports along a national route. Exclusion of jet-propelled or supersonic aircraft would have reduced noise, yet the discriminatory exclusion of these planes was held to be beyond the power of local airport proprietors. See Santa Monica, 659 F.2d at 105; Concorde II, 564 F.2d at 1012.
San Francisco also argues it reasonably denied the Q707 a waiver because allowing Burlington's Q707s to operate would increase the cumulative noise level at the Airport by "opening the floodgates" to operations by Q707s owned by others as well as to other Stage 1 aircraft retrofitted after the cut-off date. Again, the FAA was not required to approve a discriminatory regulatory scheme simply because it may have had the effect of reducing noise. It was only because of the 1978 Regulation that the Q707 had to apply for a waiver in the first place; that San Francisco might find non-discriminatory grounds for barring the Q707 once the waiver stage was reached does not validate the discriminatory regulatory scheme itself.
San Francisco argues its 1978 regulation is a lawful exercise in "grandfathering" under New Orleans v. Dukes, 427 U.S. 297, 96 S.Ct. 2513, 49 L.Ed.2d 511 (1976), which rejected an equal protection challenge to a local regulation that banned pushcart vendors but exempted vendors who had operated eight years or more. See also Western Air Lines v. Port Auth. of New York, 817 F.2d 222, 226 (2d Cir.1987) affirming 658 F.Supp. 952, 959-60 (S.D.N.Y.1986) (upholding an exercise of "grandfathering" in airport regulation). The FAA questioned the applicability of Dukes to this case, which does not involve an equal protection challenge and does involve an explicit statutory prohibition against unjust discrimination. In any event, San Francisco's 1978 Regulation does not grandfather planes, but types of planes. The number of takeoffs and landings by aircraft as noisy or noisier than the Q707 at San Francisco Airport could actually increase rather than decrease as a result of the regulation, refuting the contention it was simply an exercise in "grandfathering."
San Francisco argues it cannot ban the noisiest types of aircraft from its Airport because five of the six models noisier than the Q707 are Boeing 747s, crucial for long-distance international travel, and it would be impractical and an undue burden on interstate commerce to ban them. Even if true, this would not justify exclusion of the Q707 on the basis of a factor -- date of type-certification as meeting Stage 2 standards -- unrelated to noise.
San Francisco asserted a defense of impossibility to the allegation it had breached its grant assurances, claiming its noise regulation was necessary to comply with California law. California requires airport proprietors to meet certain noise standards or obtain a variance to continue operating. See Cal.Pub.Util.Code ss 21661-669.6; 21 Cal.Code of Regulations ss 5000-90. See also Air Transport Ass'n of America v. Crotti, 389 F.Supp. 58, 61-62 (N.D.Cal.1975) (describing California's regulatory scheme). In 1982 San Francisco obtained a variance from the California Department of Transportation requiring that San Francisco "not knowingly permit or authorize any activity in conjunction with the Airport which results in an increase of the size of the noise impact area...." The version of the variance still in force commits San Francisco to "continue reducing the number of dwelling units located within the 65 [decibel] or greater" range of the Airport. San Francisco argues that admitting the Q707 would violate the terms of this variance.
We reject San Francisco's suggestion that a state contract defense could authorize San Francisco to adopt a noise regulation prohibited by federal law. Assuming the contrary, however, there is no merit in the defense. As the FAA pointed out, San Francisco failed to show that admitting the Q707 would violate the variance. Moreover, we note that the 1978 Regulation was not the only method San Francisco might choose to comply with the variance; the Q707 could be barred from operating at the Airport if the regulation barring it was not unreasonably discriminatory. [FN7]
In 1988, San Francisco adopted a new noise regulation requiring, effective in 1989, all carriers conduct at least 25% of their operations at the Airport with Stage 3 aircraft. Since Burlington has announced it will continue to use only Stage 2 aircraft, San Francisco argues the new regulation will prevent Burlington from operating at the Airport independently of the 1978 Regulation, and therefore, mooted any previous violation of San Francisco's assurance based on the 1978 Regulation.
Even if Burlington were to buy enough Stage 3 planes to comply with the 25% requirement, however, its remaining Q707s still would be excluded, while other operators combining "grandfathered" Stage 2 retrofits with Stage 3 aircraft would not be. Thus, San Francisco's regulatory scheme continues to discriminate against the Q707.
San Francisco argues Burlington failed to exhaust its administrative remedies by not seeking a waiver of the 1988 resolution. The FAA correctly concluded such an application would be futile: the same discrimination against the Q707 exists under the 1988 regulation as under the 1978 Regulation, for which a waiver was denied.
In 1987, Congress amended the Airport and Airway Improvement Act to impose a 180-day limit on the time the FAA may take to consider airport improvement grant applications. The amendment, codified at 49 U.S.C.App. s 2218(b)(1), provides:
(A) the Secretary provides the applicant with an opportunity for a hearing; and
(B) within 180 days after the date of such application or the date the Secretary first knows of such noncompliance, whichever is later, the Secretary makes a determination that the violation has occurred.
The statutory language is mandatory, leaving the FAA no discretion. It compels timely approval or denial of grant applications. The House bill originally set the limit at 90 days. The Senate-House conference extended the deadline to 180 days with the stated expectation that the FAA "will adopt procedural schedules which will permit cases to be completed in 180 days, without depriving parties to the cases of procedural due process." H.R.Conf.Rep. No. 484, 100th Cong., 1st Sess. 69, reprinted in 1987 U.S.Code Cong. & Admin.News 2533, 2644. The purpose of the amendment can be inferred from the deadlines placed on appropriations of entitlement funds. If such funds are not obligated to an airport by the end of the second fiscal year following the final year to which the entitlement applies, the entitlement will lapse. See 49 U.S.C.App. s 2207(a). Delay in approving the grant application, or in administrative review of a denial, would put the funds in danger of lapsing without a final judgment that could be judicially reviewed. See City and County of San Francisco v. Engen, 819 F.2d 873, 875 (9th Cir.1987). Congress apparently sought to avoid this danger by mandating a prompt decision by the FAA.
The FAA argues the statute does not apply retroactively and so does not compel approval of grants for the years 1986 and 1987. San Francisco agrees, but notes it refiled the grant applications for these years after the statute was amended. The FAA points to no bar to refiling applications for previous years. We hold the refiled applications are subject to the 180-day limitation period in the same way as newly filed ones.
The FAA argues grant approval would be meaningless. Section 2218(b) allows the Administrator to continue to withhold already-obligated payments for another 180 days without a hearing or decision. The FAA argues it had a total of 360 days to decide whether or not to withhold payment, and met that deadline. It would be a "useless gesture," the FAA concludes, to order grant approval when the Administrator may refuse to pay.
We disagree with the FAA's reading of the statute. If Congress had wanted to establish a single 360-day period for grant approval and fund disbursement, it could easily have said so. This case does not require us to decide whether the FAA may decline to disburse the funds generated by the current grant applications, and we leave that question to another day.
Finally, the FAA argues San Francisco should be estopped from invoking the 180-day time limit because San Francisco's own refusal to abide by a tighter discovery schedule caused the delay. San Francisco presented evidence it proposed the discovery schedule in reliance on the FAA's representation the proceeding was not the required statutory "hearing" under section 2218(b). The FAA does not suggest the discovery proposal was improperly motivated. In any case, even under the FAA's proposed schedule, completion of the hearing and administrative appeal process within the required period would have been difficult if not impossible.
Although the FAA admits it failed to approve or deny San Francisco's fiscal year 1986 and 1987 applications within the statutory period, it argues its December 12, 1988 decision finding San Francisco in violation of grant assurances for the 1986 and 1987 fiscal years, and rejecting San Francisco's applications for these years and while the discriminatory regulation remained effective, disposed of the need to consider future grant applications until San Francisco cured the default. We agree. It would be a useless paper-shuffling for the FAA to respond each year to a grant request premised on identical circumstances as the grant request rejected the previous year. San Francisco was entitled to have its applications approved under the statute only for the 1986 and 1987 fiscal years.
The County of San Mateo (San Mateo) appeals the ALJ's decision to deny it full intervenor status. San Mateo was not allowed to offer testimony, file motions, or participate in arguments and settlement negotiations, although it did file briefs and observe the proceedings. Intervention in FAA proceedings is permissive under FAA regulations if the intervenor "has a property or financial interest that may not be adequately represented" and "intervention will not unduly broaden the issues or delay the proceedings." 14 C.F.R. s 13.51 (1991). San Mateo's interest in this case stems from San Francisco International Airport's location in San Mateo County, and the effects of Airport noise on at least 20,000 County residents. The ALJ concluded San Francisco could adequately represent San Mateo's interest in enforcing the regulation.
San Mateo argues San Francisco could not adequately represent its interests because San Mateo and San Francisco Airport had been adversaries in previous state noise variance permit proceedings. However, the relevant consideration is whether the interests of the parties diverged in this proceeding, not in any other. See United States v. American Telephone and Telegraph Co., 642 F.2d 1285, 1293 (D.C.Cir.1980) (adequacy of representation must be assessed in relation to the specific purpose of intervention). San Francisco had the same incentive as San Mateo to support the 1978 noise regulation. It was not an abuse of discretion to deny San Mateo County more than limited intervention.
We affirm the FAA's determination that the 1978 Regulation violated San Francisco's grant assurance. We also affirm the FAA's decision that California was not a necessary party to the administrative proceeding, and the FAA's decision to deny San Mateo County full intervenor status. However, we direct the FAA to approve San Francisco's applications for fiscal years 1986 and 1987 because the FAA failed to comply with 49 U.S.C.App. s 2218(b).
AFFIRMED in part, REVERSED in part. Each party to bear its own costs on appeal.