Pueblo Aircraft Serv. v. City of Pueblo, Colo.

• Decision Date: 26 September 1980
• Docket Number: Civ. A. No. 77-HC-1049.
• Citation: 498 F. Supp. 1205
• Parties: PUEBLO AIRCRAFT SERVICE, INC., a Colorado Corporation, Plaintiff, v. The CITY OF PUEBLO, COLORADO, a Municipal corporation, Thomas Lopez, Individually and as Director of Aviation for the City of Pueblo, Pan-Ark Aviation, Inc., a Colorado Corporation, George Rabatin, Jr., Defendants.
• Court: U.S. District Court — District of Colorado

498 F. Supp. 1205

PUEBLO AIRCRAFT SERVICE, INC., a Colorado Corporation, Plaintiff, v. The CITY OF PUEBLO, COLORADO, a Municipal corporation, Thomas Lopez, Individually and as Director of Aviation for the City of Pueblo, Pan-Ark Aviation, Inc., a Colorado Corporation, George Rabatin, Jr., Defendants.

Civ. A. No. 77-HC-1049.

United States District Court, D. Colorado.

September 26, 1980.

Alan J. Sulzenfuss, Salida, Colo., and Maurice R. Franks, Pueblo, Colo., for plaintiffs.

David A. Cole, Asst. City Atty., and Thomas E. Jagger, Pueblo, Colo., for defendants, City of Pueblo and Thomas Lopez.

Kettelkamp & Vento, Pueblo, Colo., for defendants, Pan Ark Aviation, Inc., and George Rabatin, Jr.

OPINION AND ORDER

CHILSON, District Judge.

Preliminary Statement

This action arises out of the operation of a municipal airport by the City of Pueblo.

Since prior to the year 1970, various services, such as the refueling of aircraft, repair of aircraft, etc., were performed at the airport by three "fixed base operators" operating under leases from the City.

The three fixed base operators were the defendants, Pan Ark, Flower Aviation, and the plaintiff, Pueblo Aircraft Service, Inc.

In 1970, Willard J. Teel and Betty I. Teel acquired all of the stock of the plaintiff and thereafter managed and operated the business carried on under the lease to the plaintiff.

Plaintiff's lease expired by its terms on March 31, 1977, and was extended to June 31, 1977.

Several months prior to the expiration of plaintiff's lease, the City determined to require public bidding for a lease of the premises then leased to plaintiff. Plaintiff and Pan Ark were the only bidders. Pan Ark was declared to be the successful bidder and the City Council authorized the lease of said premises to Pan Ark on June 21, 1977, to commence on July 1, 1977.

Thereupon, plaintiff commenced this action seeking to recover damages based on certain claims under state law and other claims based on alleged violations of the Federal Antitrust laws.

The state claims were dismissed by the Court leaving for determination only the antitrust claims of the plaintiff and the defendants' claim that the City is immune from the Federal Antitrust laws.

Plaintiff's claims are designated in the pre-trial order as the plaintiff's First, Second, Fourth Claim (A), Fourth Claim (B), and Fifth Claim.

After the pre-trial order was entered, the claims against Flower Aviation were dismissed upon joint motion of Flower Aviation and the plaintiff.

Thereafter, the remaining defendants, City of Pueblo, Lopez, Pan Ark, and George Rabatin, Jr., filed motions for summary judgment of dismissal of the claims against them which motions are now before the Court for determination.

Briefs in support of and in opposition to the motions were filed supported by various affidavits, documents, and voluminous depositions. A hearing on the motions was had in open court on September 9, 1980.

The Court has read and considered the motions and the documentary evidence filed in support of and in opposition to the motions and has considered the oral argument of counsel.

By the pleadings and the summary judgment motions, defendants contend the City of Pueblo is immune from the Federal Antitrust laws. We address this question first.

IMMUNITY

The pertinent uncontroverted facts are that the City in 1948 acquired from the Federal Government a tract of land which the Government had used as a military airfield during World War II. The City acquired the property for the specific purpose of establishing a municipal airport.

At the time of its acquisition, certain facilities for airport operations existed on the premises, including, among other things, hangars and a storage facility to store aviation fuel.

The deed from the Government to the City contained a provision that no exclusive right for the use of the airport shall be vested in any person to the exclusion of others in the same class including:

"Any exclusive right to engage in the sale or supplying of aircraft, aircraft accessories, equipment, or supplies (excluding the sale of gasoline and oil), or aircraft services necessary for the operation of aircraft (including the maintenance and repair of aircraft, aircraft engines, propellers, and appliances.)" (Affidavit of Fred E. Weisbrod, Exhibit No. 1)

In 1945, the State Legislature enacted a statute providing in pertinent part:

"Section 1. The acquisition of any lands for the purpose of establishing airports or other air navigation facilities; the acquisition of airport protection privileges; the acquisition, establishment, construction, enlargement, improvement, maintenance, equipment and operation of airports and other air navigation facilities, and the exercise of any other powers herein granted to any county, city and county, city or town, are hereby declared to be public, governmental functions, exercised for a public purpose, and matters of public necessity; and such lands and other property, easements and privileges acquired and used in the manner and for the purposes enumerated in this act shall and are hereby declared to be acquired and used for public purposes and as a matter of public necessity." (1945 Session Laws, P. 38.)

Prior to, and at all times since the acquisition of the airport, the City of Pueblo was a "Home Rule" City, chartered pursuant to Article XX, Section 6 of the Colorado Constitution, which provides in pertinent parts:

"Section 6. Home rule for cities and towns. The people of each city or town of this state, having a population of two thousand inhabitants as determined by the last preceding census taken under the authority of the United States, the state of Colorado or said city or town are hereby vested with and they shall always have power to make, amend, add to or replace the charter of said city or town, which shall be its organic law and extend to all its local and municipal matters. "Such charter and the ordinances made pursuant thereto in such matters shall supersede within the territorial limits and other jurisdiction of said city or town any law of the state in conflict therewith.

. . . . .

"It is the intention of this article to grant and confirm to the people of all municipalities coming within its provisions the full right of self-government in both local and municipal matters and the enumeration herein of certain powers shall not be construed to deny such cities and towns, and to the people thereof, any right or power essential or proper to the full exercise of such right.

"The statutes of the state of Colorado, so far as applicable, shall continue to apply to such cities and towns, except insofar as superseded by the charters of such cities and towns or by ordinance passed pursuant to such charters."

After acquisition of the airport, the City elected to provide certain necessary and essential services and supplies by leasing portions of the airport and the hangars and other improvements located thereon to fixed base operators who would provide those supplies and services to those using the airport. Specifically the leases provided:

"D. The City hereby grants unto the Lessee the following rights and privileges subject to the Rules and Regulations governing the Pueblo Memorial Airport set forth by the City, the State of Colorado, or the Federal Aviation Agency:

1. To sell new and used aircraft.

2. To conduct a school for the purpose of teaching others to fly.

3. To rent aircraft to others.

4. To charter aircraft.

5. To rent automobiles belonging to responsible automobile renting companies; i. e., Hertz, Avis, National.

6. To sell in the demised premises, soft drinks, candy and tobacco from coin operated vending machines but not food or food products.

7. To dispense aviation and automobile gasoline and lubricants or propellants in accordance to (sic) the rules and regulations of the City, and the Federal Aviation Agency, except that Lessee may not operate a public automotive service station nor dispense automobile gasoline, lubricants or propellants to the public. Said automotive operation is restricted to the Lessee's equipment and the servicing of rental autos.

8. To use, in common with others authorized to do so, common areas of the Airport, including runways, taxi-ways, aprons, and other conveniences provided for public use for the take-off, flying, and landing of aircraft.

9. In or upon said demised premises, to locate, maintain and operate shops for limited or full repair, maintenance and/or overhaul of aircraft, or aircraft components including the storage and sale of aircraft parts, accessories and airmen's supplies, materials and equipment.

10. To store aircraft for others, either in a main hangar, tee hangars or tie down area.

11. To manufacture aircraft or allied parts and components."

Leases were issued to three fixed base operators, namely the plaintiff, Pan Ark Aviation, and Flower Aviation. All three leases authorized the lessees to engage in all of the activities set forth above.

Since there was only one fuel storage facility to store fuel on the airport to supply the customers of the fixed base operators, each lease contained the following provision:

"The lessee agrees to purchase from the City all aviation gasoline or propellants dispensed through lessee's operation at the City's cost plus five cents per gallon."

This was modified in 1974 to increase the charge from five cents to five and one-half cents per gallon.

The City assumed the responsibility for providing and maintaining the storage facility, monitoring the quality of fuel, providing fire protection and delivering to and maintaining in the storage facility the fuel supplies to serve the needs of the fixed base operators and certain other aircraft using the airport who were not supplied by the fixed base operators.

Assuming but not deciding that the City's dealings with the fixed base operators violated the Federal Antitrust laws in one or more ways alleged in the complaint, ...