City of Santa Monica v. Fed. Aviation Admin.

Decision Date21 January 2011
Docket NumberNo. 09–1233.,09–1233.
Citation631 F.3d 550
PartiesCITY OF SANTA MONICA, Petitionerv.FEDERAL AVIATION ADMINISTRATION, Respondent.
CourtU.S. Court of Appeals — District of Columbia Circuit

OPINION TEXT STARTS HERE

On Petition for Review of an Order of the Federal Aviation Administration.W. Eric Pilsk argued the cause for petitioner. With him on the briefs were Thomas R. Devine and Ivan O. Campbell.Dana Kaersvang, Attorney, U.S. Department of Justice, argued the cause for respondent. With her on the brief were Mark B. Stern and Alisa B. Klein, Attorneys, Paul M. Geier, Assistant General Counsel for Litigation, U.S. Department of Transportation, and Paul Samuel Smith, Senior Trial Attorney.Kathleen A. Yodice, Frank J. Costello, and Jol A. Silversmith were on the brief for amici curiae Aircraft Owners and Pilots Association, et al., in support of respondent.Before: SENTELLE, Chief Judge, HENDERSON and ROGERS, Circuit Judges.Opinion for the Court filed by Chief Judge SENTELLE.SENTELLE, Chief Judge:

The City of Santa Monica (Petitioner) petitions this court for review of the Federal Aviation Administration's (FAA's) final agency decision and order concluding that Petitioner's ordinance banning certain categories of aircraft from operating at the Santa Monica Municipal Airport (“SMO”) violates Petitioner's contractual obligations to the federal government. Petitioner claims that it was arbitrary and capricious for the FAA to conclude that Petitioner was failing to make SMO available for use on “fair and reasonable terms and without unjust discrimination, to all types, kinds, and classes of aeronautical use.” For the reasons set forth below, we reject Petitioner's contentions and deny the petition for review.

I.

SMO is a single-runway, regional public air port located in, owned, and operated by Petitioner. SMO has no scheduled passenger service, but serves general aviation aircraft and functions as a reliever airport for the Los Angeles International Airport. SMO serves four categories of general aviation aircraft: Category A and B aircraft (those with approach speeds of less than 121 knots at maximum landing weight) and Category C and D aircraft (those with approach speeds of 121 knots or greater at maximum landing weight). Category C and D aircraft, which make up approximately seven percent of all operations at SMO, are almost exclusively business and executive jets.

In 1981, the Santa Monica City Council enacted a resolution to close SMO, triggering a flurry of litigation between Petitioner, the FAA, and several private parties. In 1984, Petitioner and the FAA resolved their dispute by entering into a contract (the 1984 Agreement”), in which they agreed to the following principles:

(i) The Airport is to be open and available to and for public use as an airport on fair and reasonable terms, without unjust discrimination, and without granting any exclusive rights prohibited by law.

(ii) Pursuant to the Federal Aviation Act of 1958, as amended, exclusive authority is vested in the FAA for the regulation of all aspects of air safety, the management and control of the safe and efficient use of the navigable airspace, and movement of aircraft through that airspace.

Santa Monica Airport Agreement at 2–3 (Jan. 31, 1984) (hereinafter 1984 Agreement). The parties also agreed that:

(i) The Airport serves an important role in the regional and national system of air transportation and air commerce. It has a vital and critical role in its function as a general aviation reliever for the primary airports in the area. As a reliever facility the Airport attracts and provides services to general aviation thereby diverting aircraft away from the air carrier airports and other heavily used airports in the Greater Los Angeles Area. Study and analysis have confirmed this congestion and that other similar general aviation reliever airports in the area are already heavily used and do not have the ability to accept or absorb the service provided by Santa Monica Airport.

Id. at 3–4. The 1984 Agreement specified that it would remain effective until July 1, 2015, and that Petitioner would operate and maintain SMO “as a viable functioning facility without any derogation of its role as a general aviation reliever” until that date. Id. at 9.

Between 1985 and 2003, Petitioner applied for and received $10.2 million in federal funds through grant agreements between Petitioner and the FAA under the FAA's Airport Improvement Program. The 1984 Agreement was incorporated into those grant agreements, which further bound Petitioner to certain grant assurances. Of particular relevance to this case is grant assurance 22, which included the following two restrictions:

(a) [The airport sponsor] will make its airport available as an airport for public use on fair and reasonable terms and without unjust discrimination, to all types, kinds, and classes of aeronautical uses.

* * *

(i) The sponsor may prohibit or limit any given type, kind, or class of aeronautical use of the airport if such action is necessary for the safe operation of the airport or necessary to serve the civil aviation needs of the public.

Grant Agreement, Santa Monica Airport at pt. V, pp. 7–8 (June 27, 1994) (hereinafter “Grant Agreement”). Under the terms of the Airport Improvement Program grants, the agreements between Petitioner and the FAA remain in effect throughout the useful life of the facilities developed or equipment purchased with the grant funds, but not to exceed twenty years from the date of the acceptance of the funds. Id. at pt. V, p. 1. Although the parties dispute whether the grant assurances expire in 2015 or 2023, the parties agree that they currently remain in effect.

In July 2002, the Santa Monica Airport Commission voted to recommend to Petitioner a revised Aircraft Conformance Program that would reserve SMO for the exclusive use of Category A and B aircraft. This action provoked a long series of meetings, discussions and negotiations between Petitioner and the FAA that continued until 2008. On March 25, 2008, Petitioner adopted an ordinance adding section 10.04.06.220 to the City of Santa Monica Municipal Code (“Ordinance”), which prohibits any person from operating a Category C or D aircraft from landing or departing SMO except in emergencies. See Santa Monica, Cal., Municipal Code § 10.04.06.220 (2008).

Believing that the Ordinance violated Petitioner's obligations under the grant agreements to make SMO available “for public use on fair and reasonable terms and without unjust discrimination, to all types, kinds, and classes of aeronautical use,” Grant Agreement at pt. V, p. 7, the FAA took action to prevent its enforcement. On April 23, 2008, the FAA issued a cease and desist order requiring Petitioner to suspend enforcement of the Ordinance until the FAA issued a final agency decision regarding the Ordinance's legality. The FAA also filed motions with the U.S. District Court for the Central District of California requesting a temporary restraining order and a preliminary injunction to prevent Petitioner from enforcing the Ordinance. The district court granted both motions.

After the district court issued the preliminary injunction, Petitioner and the FAA proceeded through the agency's administrative review process. On May 27, 2008, the FAA issued a director's determination in which it concluded, inter alia, that the Ordinance was inconsistent with Petitioner's contractual obligations under the grant agreements. In the Matter of Compliance with Federal Obligations by the City of Santa Monica, California, Director's Determination at 66, FAA Docket No. 16–02–08, 2008 WL 6895776 (May 27, 2008). After the FAA issued the director's determination, Petitioner requested a hearing, which was held before an FAA Hearing Officer in March of 2009. On May 14, 2009, the Hearing Officer issued an initial decision in which he also concluded that that the Ordinance violated grant assurance 22. In the Matter of Compliance with Federal Obligations by the City of Santa Monica, California, Initial Decision of the Hearing Officer at 113, FAA Docket No. 16–02–08, 2009 WL 3176872 (May 14, 2009). After both parties appealed portions of the Hearing Officer's initial decision, the FAA issued a final agency decision and order on July 8, 2009, which concluded that federal law preempts the Ordinance and that the Ordinance violates grant assurance 22. In the Matter of the City of Santa Monica, Final Agency Decision and Order at 56, FAA Order No. 2009–1, 2009 WL 3176873 (July 8, 2009), modified by Order Granting Motion for Clarification of Final Agency Decision, FAA Order No. 2009–2, 2009 WL 3176871 (Sept. 3, 2009) (hereinafter Final Agency Decision). Pursuant to 49 U.S.C. § 46110(a), Petitioner seeks review of the FAA's final decision and order.

II.

In its final agency decision, the FAA concluded that Petitioner's Ordinance was invalid for two reasons: because Congress's grant of exclusive authority to the FAA to regulate aviation safety preempts the Ordinance and because the Ordinance violates Petitioner's contractual obligations under grant assurance 22. Final Agency Decision at 3–4. Preemption—the basis for the FAA's first conclusion—is a constitutional doctrine, derived from the supremacy clause in Article VI of the Constitution. Gade v. Nat'l Solid Wastes Mgmt. Ass'n, 505 U.S. 88, 108, 112 S.Ct. 2374, 120 L.Ed.2d 73 (1992). “Before reaching a constitutional question, a federal court should ... consider whether there is a nonconstitutional ground for deciding the case, and if there is, dispose of the case on that ground.” Kalka v. Hawk, 215 F.3d 90, 97 (D.C.Cir.2000). For this reason, judicial restraint requires us to begin our analysis by examining the FAA's second conclusion regarding Petitioner's contractual obligations.

A.

Petitioner argues that the FAA acted arbitrarily and capriciously when it concluded that the Ordinance violates grant...

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