Americopters LLC v. The United States
| Decision Date | 28 October 2010 |
| Docket Number | No. 08-676,08-676 |
| Parties | AMERICOPTERS, LLC, Plaintiff, v. THE UNITED STATES, Defendant. |
| Court | U.S. Claims Court |
Fifth Amendment Taking; authorization; agency authority; internal delegation of agency authority; scope of employee's authority; ratification.
Roger J. Marzulla and Nancy G. Marzulla, Washington, D.C., for plaintiff.
Austin M. Fulk, United States Department of Justice, Civil Division, Commercial Litigation Branch, Washington, D.C., with whom were Tony West, Assistant Attorney General, Jeanne Davidson, Director, and Mark A. Melnick, Assistant Director, for defendant.
Plaintiff seeks compensation under the Fifth Amendment of the United States Constitution for the alleged taking of its business due to the actions of the Federal Aviation Administration ("FAA"). Currently before the court are defendant's motion for summary judgment and plaintiff's cross-motion for partial summary judgment on liability, both pursuant to Rule 56 of the Rules of the United States Court of Federal Claims ("RCFC"). These motions present the question of whether a Fifth Amendment taking occurs when the action allegedly causing the taking is within the agency's authority but where, as here, the individual employees performing the action were not authorizedto act. For the reasons explained below, we hold that as a matter of law, the undisputed facts do not give rise to a compensable taking. Accordingly, we grant the government's motion for summary judgment.
In the years leading up to 2002, Americopters, LLC ("Americopters") operated a helicopter tour business in Guam. Americopters' helipad was located on the roof of a restaurant. In February of 2002, Mr. Clarence Kanae, the Principal Operations Inspector for the FAA's Flight Standards District Office in Honolulu, Hawaii, conducted an inspection of Americopters' facility. During the course of his inspection, he orally identified a number of deficiencies in Americopters' operation.
Following this visit, Americopters wrote to Mr. Kanae, listing the improvements Americopters planned to make and asking him to confirm and clarify the deficiencies he had noted. After several weeks passed without any response, Americopters faxed the letter to Mr. Kanae's Honolulu office. Americopters subsequently re-faxed the letter several times, but received no response. Four months after the inspection, on July 24, 2002, Americopters received a letter from Mr. Kanae requiring Americopters to immediately cease use of its rooftop heliport:
This letter is to inform you that the use of the rooftop as a helicopter-pad, at Chuck's Steak House, is considered unsafe, and does not meet the Federal Aviation Administration Advisory Circular 150-5390-2A Heliport Design requirements. This [Advisory Circular] is Advisory in nature; however, this office feels that FAR2 91.13 will apply to this operation if the AC is not followed. Therefore, this office is requiring that yourcompany immediately cease use of the Chuck's Steak House rooftop for all flight operations.
Def.'s Mot. for Summ. J. Ex. 1. Although written by Mr. Kanae, this letter was edited and approved by his supervisor, Don Hamilton, who signed it because Mr. Kanae was out of the office. It was Mr. Hamilton, in fact, who added the final sentence requiring Americopters to cease operating. Although the FAA is statutorily authorized to promulgate and enforce air safety regulations, under the FAA's internal organization and policies, neither Mr. Kanae nor Mr. Hamilton were authorized to issue an order such as this.
Upon receipt of the letter, Americopters relocated its business to what it characterizes as a less favorable location where the volume of customers declined dramatically. As a result of the relocation, Americopters alleges that it was forced to sell one of its helicopters at a loss and ultimately to shutter its operation entirely.
In response to Mr. Kanae's letter, Americopters' counsel wrote the FAA on August 13, 2002, requesting a rescission of the "cease operations" order, confirmation that improvements it proposed would rectify the helipad's deficiencies, and 90 days to perform these improvements. In the alternative, the letter requested a hearing under 14 C.F.R. § 13.20(c). The FAA's Regional Counsel, Monroe Balton, replied on September 19, 2002, denying Americopters' request for a hearing because no legal enforcement action had been taken against Americopters. The regional office, in effect, disavowed Mr. Kanae's letter, noting that under FAA regulations only certain FAA attorneys have authority to issue "orders of compliance, cease and desist orders, orders of denials, and other orders." Def.'s Mot. for Summ. J., Ex. 4. Id. Because Mr. Kanae's letter was not "an order as that term is contemplated by the [FAR]... your requests are denied." Id.
Its administrative remedy thus denied, Americopters filed suit in the United States District Court for the District of Guam in February of 2003, seeking rescission of the alleged FAA orders and arguing that Mr. Kanae's purported order dated June 24, 2002, was a taking of Americopters' property. The FAA moved to dismiss the complaint, relying on 49 U.S.C. § 46110 (2006), which vests jurisdiction to hear challenges to FAA orders in the circuitcourts of appeal.3 The district court determined that Mr. Kanae's letter was an order and that § 46110 thus deprived the court of jurisdiction. The district court also dismissed Americopters' constitutional claim, holding that, although not directly preempted by § 46110, it was "inescapably intertwined" with the claims being dismissed.
Americopters appealed the dismissal to the Court of Appeals for the Ninth Circuit, which dismissed its petition for review of the order as untimely because it was not filed within the 60-day statutory period.4 The Ninth Circuit determined that Americopters' constitutional claims, however, were not so intertwined with the challenged FAA order to defeat the district court's jurisdiction. Accordingly, it reversed the dismissal of those claims and remanded them to the district court for further proceedings.
On remand to the district court, the FAA moved to dismiss or, in the alternative, to transfer the case to this court. The district court transferred the case here, and Americopters appealed the transfer to the Court of Appeals for the Federal Circuit. The Federal Circuit upheld the transfer, and on November 18, 2008, Americopters filed an amended complaint alleging that the FAA's actions had caused the loss of its business. Early in 2009, the government moved to dismiss the case, arguing that Mr. Kanae was not authorized to issue cease-and-desist orders and that an unauthorized government action cannot constitute a taking. We denied the motion and directed the parties to conduct limited discovery concerning the scope of Mr. Kanae's authority. On March 3, 2010, the government again moved for summary judgment, arguing that Mr. Kanae's shutdown order was unauthorized and thus no basis for a takings claim. Americopters cross-moved for summary judgment as to liability.
By statute, the FAA Administrator has power to promulgate regulations dealing with aviation safety, 49 U.S.C. § 106 (2006), and to conduct investigations and issue orders necessary to carry out this power, 49 U.S.C. § 40113 (2006). The administrator can delegate the authority to carry out these powers. 49 U.S.C. § 106. Pursuant to this authority, the FAA has established an organizational framework, a scheme of safety regulations, and a system for enforcing them. At the time of the events in this case, the enforcement scheme was set forth in FAA Order 2150.3A, 5 which spelled out the responsibilities of various offices and described the roles of particular types of employees.
Enforcement of safety regulations is carried out within a chain-of-command based on geographic area. FAA Order 2150.3A § 208(a). At the lowest level are field offices, such as that in which Mr. Kanae and Mr. Hamilton worked, which are responsible for investigating violations within their territory:
Field offices conduct surveillance inspections of persons, aircraft, or operations subject to the regulations to determine compliance with the regulations and any lack of qualifications, and investigate, coordinate, and report violations of all regulations which are discovered within the geographical area for which they have enforcement responsibility.
Id. § 305. These responsibilities are carried out by inspectors such as Mr. Kanae. As an Aviation Safety Inspector and Principal Operations Inspector, his role is to "gather facts, evidence, and documents, to analyze that information, and to make recommendations concerning enforcement actions." Id. § 401. His job is to investigate violations and document his findings in a report known as an Enforcement Investigation Report ("EIR"). The EIR "is the means for documenting, assembling, organizing, and presenting all evidence and other pertinent information obtained during an investigation," id. § 900(a), and includes information about the type of action recommended or taken. Id. § 903(c)(25).
In cases of relatively minor violations, inspectors are permitted to take administrative enforcement actions. Id. § 1100. Unlike legal enforcement actions, administrative actions do not charge the operator with a violation but are merely "intended to bring the incident to the attention of the person involved, document corrective action, encourage future compliance with the regulations, and provide a source of information for agency use." Id. § 1101. Inspectors are given discretion in determining when administrative action is appropriate:
Once the underlying noncompliance is corrected, responsibility for selection of the enforcement remedy that best fits the circumstances begins with FAA...
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