Piedmont Aviation, Inc. v. Raleigh-Durham Airport Authority, RALEIGH-DURHAM

• Decision Date: 26 June 1975
• Docket Number: No. 21,RALEIGH-DURHAM,21
• Citation: 215 S.E.2d 552,288 N.C. 98
• Court: North Carolina Supreme Court
• Parties: PIEDMONT AVIATION, INC., et al. v.AIRPORT AUTHORITY, Respondent.

Page 552

215 S.E.2d 552

288 N.C. 98

PIEDMONT AVIATION, INC., et al. v. RALEIGH-DURHAM AIRPORT AUTHORITY, Respondent.

No. 21.

Supreme Court of North Carolina.

June 26, 1975.

Purrington, Hatch & Purrington by A. L. Purrington, Jr., and Edwin B. Hatch, Raleigh, for respondent-appellant.

Womble, Carlyle, Sandridge & Rice by E. Lawrence Davis and Jimmy H. Barnhill, Winston-Salem, Poyner, Geraghty, Hartsfield & Townsend by John J. Geraghty, Raleigh, for petitioners-appellees.

LAKE, Justice.

The Authority was created by Chapter 168 of the Public-Local Laws of 1939. By that Act, as amended by Ch. 755 of the Session Laws of 1959, the Authority is authorized to own and operate the Raleigh-Durham Airport, to contract for the operation of 'airline scheduled' flights, nonscheduled flights and other airplane activities and to charge and collect 'reasonable and adequate' fees and rents for the use of its property and for services rendered in the operation thereof,

G.S. § 63--1(a)(14) provides that such an authority is a 'municipality' within the meaning of Ch. 63 of the General Statutes. G.S. § 63--53(5) authorizes a 'municipality' to 'determine the charges or rental for the use of any property (of the Authority) * * * and the charges for any services or accommodations (supplied by it).' G.S. § 63--53(5) further provides that such charges 'shall be reasonable and uniform for the same class of service and established with due regard to the property and improvements used and the expense of operation to the municipality.'

A municipality operating an airport acts in a proprietary capacity. Airport Authority v. Stewart, 278 N.C. 227, 179 S.E.2d 424; Rhodes v. Asheville, 230 N.C. 134, 52 S.E.2d 371, rehear. den., 230 N.C. 759, 53 S.E.2d 313. Upon the rehearing of Rhodes v. Asheville, supra, this Court said that the legislative declaration that such operation should be deemed a 'governmental function (see G.S. 63--50) did not make it so, for that is a judicial and not a legislative question.'

Thus, in determining the fee it will charge for the privilege of landing an aircraft upon its runway and the rent it will charge for the use of its properties, the authority is acting as the proprietor of the property, not as a regulatory agency. The Statement in Candler v. Asheville, 247 N.C. 398, 101 S.E.2d 470, to the effect that a municipality in establishing rates it will charge for water is exercising a governmental function was not necessary to the decision in that case, is not supported by the authorities cited therefor and may no longer be deemed authoritative. That statement overlooks the distinction to be drawn between municipal action fixing rates to be charged by a public utility to its customers and municipal action fixing rates which the municipality, itself, will charge for its service. The former function is a governmental function. See: Shirk v. City of Lancaster, 313 Pa. 158, 169 A. 557, 90 A.L.R. 688; City of Seymour v. Texas Electric Service Co., 5 Cir., 66 F.2d 814, cert. den., 290 U.S. 685, 54 S.Ct. 121, 78 L.Ed. 590. The latter is a proprietary function.

Thus, the managing board of the authority, in determining landing fees and rentals which it will charge the users of its facilities, acts as does the board of directors of a private corporation owning and operating a like facility, subject only to limitations imposed upon it by statute or by contractual obligations assumed by it. Our attention has been directed to no statutory limitation imposed upon the Authority in the matter of fixing landing fees and rentals except the provision in Ch. 755 of the Session Laws of 1959 authorizing the Authority to charge 'reasonable and adequate' fees and rents, and the provision of G.S. § 63--53(5) stating that the charges for the use of its properties 'shall be reasonable and uniform for the same class of service and established with due regard to the property and improvements used and the expense of operation to the municipality.' No provision in these statutes requires that the Authority conduct a hearing, receive evidence and make findings of fact or that it follow any other procedural course in determining the landing fees or rentals to be charged by it. Nothing in these statutes requires the Authority to give notice to present or prospective users of its properties that the Authority is contemplating a change in such fees and rental charges. The petitioners were notified of the increases more than three months before they were to become effective.

G.S. Ch. 143, Art. 33, provides a procedure by which a person aggrieved by a final 'administrative decision' may obtain a judicial review of such decision. This article was repealed and a substitute therefor provided by Ch. 1331 of the Session Laws of 1973, but the repeal is not effective until 1 July 1975, and the repealing act provides that it shall not affect any pending administrative hearing. Thus, if, by its terms, G.S. Ch. 143, Art. 33, applies to the present matter, the petitioners' right to proceed thereunder is not affected by the repeal.

The judicial review for which G.S. Ch. 143, Art. 33, provides is limited to the review of an 'administrative decision' as that term is therein defined. G.S. § 143--306(2) defines 'administrative decision,' for the purposes of this article, to mean 'any decision, order, or determination rendered by an administrative agency in a proceeding in which the legal rights, duties,...