Enterprise Leasing Co. v. Metropolitan Airports Connission, RENT-A-CA

• Decision Date: 16 February 2001
• Docket Number: A,No. 00-2527,PLAINTIFF-APPELLEE,RENT-A-CA,DEFENDANT-APPELLANT,00-2527
• Citation: 250 F.3d 1215
• Parties: (8th Cir. 2001) ENTERPRISE LEASING COMPANY, DOING BUSINESS AS ENTERPRISEMINNESOTA CORPORATION,, v. METROPOLITAN AIRPORTS COMMISSION, A PUBLIC CORPORATION, Submitted:
• Court: U.S. Court of Appeals — Eighth Circuit

Page 1215

250 F.3d 1215 (8th Cir. 2001)

ENTERPRISE LEASING COMPANY, DOING BUSINESS AS ENTERPRISE RENT-A-CAR, A MINNESOTA CORPORATION, PLAINTIFF-APPELLEE, v. METROPOLITAN AIRPORTS COMMISSION, A PUBLIC CORPORATION, DEFENDANT-APPELLANT.

No. 00-2527

UNITED STATES COURT OF APPEALS FOR THE EIGHTH CIRCUIT

Submitted: February 16, 2001

Filed: May 30, 2001

Appeal from the United States District Court for the District of Minnesota.

Before Richard S. Arnold, Lay, and Hansen, Circuit Judges.

Lay, Circuit Judge

This case presents the question of whether Minnesota law authorized the Metropolitan Airports Commission ("MAC") to impose an 8.5 percent gross revenue fee on certain rental car companies doing business at the Minneapolis-St. Paul Metropolitan Airport ("Airport"). Upon full review, we find that the district court erred as a matter of law in holding that MAC exceeded its statutory authority by imposing the fee.

I.

Enterprise Leasing Company is a Minnesota corporation doing business as Enterprise Rent-A-Car ("Enterprise"). MAC is a public corporation chartered by the State of Minnesota to manage commercial aviation services at the Airport. Minnesota law empowers MAC to enact ordinances for the purpose of managing and operating the Airport. See Minn. Stat. Ann. 473.608, subd. 17 (2001).

In 1998, MAC enacted Ordinance 85, which is the subject of this case. The ordinance requires that all "off-Airport" ¹ rental car companies pay MAC a fee equal to 8.5 percent of their gross receipts for transactions occurring on Airport property. Enterprise is an off-Airport agency subject to the fee. Ordinance 85 is not applicable to "on-Airport" rental car companies, but those companies also pay MAC a fee equal to 8.5 percent of their gross revenues, as well as rental fees based on the amount of Airport space they occupy.

Ordinance 79 was the predecessor to Ordinance 85. That ordinance imposed an annual permit fee, plus a $1.75 per-transaction fee, on all off-Airport ground transportation vehicles using designated commercial lanes. In 1993, an exclusive roadway was opened for such vehicles to pick up and drop off passengers at the Airport. Ordinance 79 was intended to recover the actual capital and operating cost of that roadway and its related facilities. Prior to enacting Ordinance 79, MAC researched commercial vehicles' use of the Airport and calculated the fee to recover the cost of those vehicles' use of Airport resources. MAC's cost analysis included investigating the daily volume of commercial vehicles at the Airport, researching user fees at similar airports, and conducting a series of informational meetings with members of the commercial ground transportation industry.

Ordinance 79 also served as a litmus test of MAC's statutory authority to impose Airport user fees. In Hyland v. Metropolitan Airports Comm'n, 538 N.W.2d 717 (Minn. Ct. App. 1995) ("Hyland I"), the court held that statutes creating and governing MAC authorized it to charge fees to commercial vehicles picking up and dropping off passengers at the Airport.

In November 1996, growing Airport traffic and a $2 billion Airport expansion project prompted MAC to explore ways to increase Airport revenue. MAC staff proposed a new commercial vehicle ordinance as a means to that end. Believing that all rental car companies had access to the same Airport market, MAC staff recommended that off-Airport rental car companies be assessed a user fee that was (1) comparable to the fees paid by such companies at other national airports, and (2) established at a rate similar to that paid by on-Airport companies. MAC then commissioned a study that addressed four factors: (1) fees charged to rental car companies by other major airports in the nation; (2) rationales asserted by other airports to justify such fees; (3) potential increase in revenue that MAC could anticipate from a change in fee structure; and (4) recommendations for implementing a new fee structure. Ultimately, MAC proposed a new fee structure whereby off-Airport rental car companies would pay a user fee equal to 8.5 percent of their gross Airport-generated revenues. ²

Prior to its enactment, MAC held public meetings and solicited public comment concerning Ordinance 85. At a public hearing on November 13, 1997, Enterprise was among the off-Airport rental car companies voicing the opinion that although off-Airport companies should pay a "fair share," they should not pay the same fee as the on-Airport companies because off-Airport companies do not receive the same services as those whose business is conducted on Airport property. Enterprise suggested that a fee in the range of 6 to 6.5 percent was more appropriate than an 8.5 percent fee. MAC defended the 8.5 percent figure on grounds that on-Airport companies pay in excess of $1 million a year beyond the percentage of sales fees, which means that even with Ordinance 85, off-Airport companies would not pay the same overall fees as companies based on Airport property. MAC enacted Ordinance 85, effective May 1, 1998, with the 8.5 percent fee.

Enterprise brought suit in the United States District Court for the District of Minnesota, alleging that the fee imposed under Ordinance 85 violated the Minnesota and United States Constitutions and exceeded MAC's authority under state law. Specifically, Enterprise claimed that the fee constituted an impermissible tax, and in the alternative, it violated Minnesota Statute section 473.651.

MAC moved for summary judgment on all of Enterprise's claims and Enterprise cross-moved for partial summary judgment on its statutory claim. The district court granted MAC's motion as to all of Enterprise's constitutional claims. However, the court granted Enterprise's motion on its claim under section 473.651. ³ See Enterprise Leasing Co. v. Metropolitan Airports Comm'n, 92 F. Supp. 2d 936 (D. Minn. 2000).

II.

We review de novo questions of state law decided by the district court. See John T. v. Marion Indep. Sch. Dist., 173 F.3d 684, 687 (8th Cir. 1999). The Minnesota courts have not interpreted section 473.651 as it relates to the issue in this case. Where the meaning of a state agency's authorizing legislation is not explicit, the court gives deference to the agency's interpretation. See Minn. Stat. 645.16(8) (1947); McAfee v. Department of Revenue, 514 N.W.2d 301, 304 (Minn. Ct. App. 1994) (finding that an agency's interpretation of a statute is entitled to consideration and that such consideration increases when the agency is construing a statute it administers and its construction is longstanding). However, an agency's interpretation "does not preclude a different construction by the courts." See Gust v. Minnesota Dept. of Natural Res., 486 N.W.2d 7, 9 (Minn. Ct. App. 1992).

III.

The issue before us is whether the district court erred in finding that MAC violated Minnesota Statute section 473.651 when it levied a fee equal to 8.5 percent of off-Airport rental car companies' gross revenues.

MAC has broad statutory authority and discretion to manage the Airport in the public's best interest. See Minn. Stat. Ann. 473.608 (enumerating powers and conferring upon MAC "all the powers as a body corporate necessary and convenient to accomplish the objects and perform the duties prescribed" by statute); Hyland v Metropolitan Airport Comm'n, 884 F. Supp. 334, 336 (D. Minn. 1995) ("Hyland II") ("The Minnesota legislature has delegated to MAC broad statutory authority to improve, maintain, operate, and manage airports in a manner which will, in MAC's opinion, further the interest of aeronautics in the state of Minnesota."). Minnesota law specifically grants MAC the authority to assess fees on Airport users, providing that:

[MAC] shall have the authority to determine the charges for the use of any of the property under its management and control, and the terms and conditions under which such property may be used. Where there is reasonable basis for classification of users as to any use, [MAC] may classify users, but charges as to each class shall be reasonable and uniform for such use, and established with due regard to the value of the property and improvements used and the expense of operation to [MAC].

Minn. Stat. Ann. 473.651 (2001) (emphasis added).

The district court found that MAC failed to give due regard to the value of the property and improvements used by off-Airport rental car companies and the expense of operation to MAC. According to the district court, section 473.651 required MAC to consider the specific Airport resources off-Airport companies actually use. Because MAC considered the value of customer market generated by the entire Airport when it created the new fee structure, the district court concluded that MAC exceeded its statutory authority and granted summary judgment in favor of Enterprise.

Two primary factors framed the district court's analysis. First, the court opined that Hyland strictly construed section 473.651, such that MAC may only impose on off-Airport rental car companies user fees that reflect a direct link to the cost of the specific roadways and facilities those companies actually use to service their customers. Second, the court was unpersuaded by case law that embraces the notion that rental car companies benefit from, and therefore "use," the market created by an entire airport facility.

We find the district court's analysis to be overly narrow and its statutory interpretation legal error. Our analysis leads to the conclusion that MAC was within its broad discretionary authority under section 473.651 when it considered the entire Airport facility in developing Ordinance 85. Accordingly, we reverse the district court's grant of summary judgment.

A.

One of our basic concerns is the district court's understanding that the statutory interpretation of section 473.651 is controlled by Hyland I. The district court determined that "[i]n Hyland [I], the court appeared to adopt a more narrow...