Rectrix Aerodrome Ctr.S Inc v. Barnstable Mun. Airport Comm'n
Decision Date | 23 June 2010 |
Docket Number | No. 09-2173.,09-2173. |
Citation | 610 F.3d 8 |
Parties | RECTRIX AERODROME CENTERS, INC., Plaintiff, Appellant,v.BARNSTABLE MUNICIPAL AIRPORT COMMISSION, Michael A. Dunning, Bruce P. Gilmore, Francisco Sanchez and Quincy Mosby, Defendants, Appellees. |
Court | U.S. Court of Appeals — First Circuit |
Marc E. Kasowitz with whom Kasowitz, Benson, Torres & Friedman LLP was on brief for appellant.
Scott P. Lewis with whom Kevin D. Batt, Melissa C. Allison and Anderson & Kreiger LLP were on brief for appellees.
Before LYNCH, Chief Judge, BOUDIN and LIPEZ, Circuit Judges.
Rectrix Aerodrome Centers, Inc. (“Rectrix”) is a tenant at the Barnstable Municipal Airport that provides certain aviation services to planes using the airport. It sued the Barnstable Municipal Airport Commission (“BMAC”),1 two airport commissioners, two airport managers, and its outside counsel, claiming that they prevented Rectrix from competing with BMAC in the sale of jet fuel. The district court dismissed some of Rectrix's claims and on others granted summary judgment against Rectrix. The facts are as follows.
Beginning in 2002, Rectrix operated a hangar at the Barnstable Municipal Airport for private jets. Rectrix's lease with BMAC provided that it could apply to BMAC to expand the scope of Rectrix's operations and become what is known in the industry as a “fixed base operator” or “FBO”-a service center that provides such things as fuel, oil, and hangar storage. At the time, BMAC had in place a code of rules and regulations, which the parties refer to as the “minimum standards,” that imposed standards of operation and maintenance on FBOs at the airport. Rectrix says it did not see a copy of the minimum standards until 2004.
These standards (which have since been altered) provided in Article III.e as follows:
A Fixed base operator shall provide all fuel services, including the sale and storage of 80-octane, 100-octane, and jet fuel, for as long as these grades are normally available for resale. The Barnstable Municipal Airport Commission may limit the types of fuel to be sold.
Not surprisingly, in this controversy about Rectrix's ability to sell jet fuel, Rectrix relies heavily on the first sentence; Barnstable, on the second.
According to BMAC, at least since 1979 it has reserved for itself the right to sell jet fuel at the airport, has declined to allow FBOs to do so, refused specifically on a prior occasion in 1983 to allow another FBO (Griffin Avionics, Inc.) to sell jet fuel, and has the blessing of both Massachusetts law and the Federal Aviation Administration (“FAA”) for its right to follow this policy. Rectrix claims that revenues generated by jet fuel sales were illegally diverted to help support the town as well as the airport, but BMAC disputes any charge of unlawful conduct.
BMAC also asserts that when Rectrix first became a tenant in 2002, it had full notice of this reservation. BMAC points to a set of so-called “self service standards”-which are distinct from the minimum standards referenced above-dated August 15, 2000, that Rectrix received prior to signing its lease; this document says that “[a]s the proprietor of the Barnstable Airport, the Airport Commission reserves the exclusive right unto itself to sell jet fuel on the Barnstable Airport.” The lease thereafter signed with Rectrix in August 2002 gave it the right to operate a hangar for corporate jets, but not to conduct FBO operations, and contained the following terms:
Rectrix says it first learned of the minimum standards (as opposed to the self-service standards) in May 2004 and that it obtained a copy of those standards only in June 2004. Soon after, in October 2004, Rectrix requested permission to expand its operations and become a full-service FBO; it says it wanted to become a full-service FBO at this point because it believed that the minimum standards would give it the right to sell jet fuel.2
Rectrix says that to prevent it from selling jet fuel, BMAC refused to give proper consideration to its application to become an full-service FBO, delayed approval on other applications as well, and imposed operating restrictions that complicated Rectrix's ability to serve its customers. It says that it in various respects has been treated, to its disadvantage, differently than Griffin Avionics. After arguments back and forth with BMAC, Rectrix began the law suit that has led to this appeal.
In its complaint filed in federal district court, Rectrix asserted a variety of claims against BMAC and the individuals named above arising under the Racketeer Influenced and Corrupt Organizations Act (“RICO”), 18 U.S.C. § 1961 et seq. (2006), the Constitution and section 1983, 42 U.S.C. § 1983 (2006), and federal and state antitrust laws, 15 U.S.C. § 2 (2006); Mass. Gen. Laws ch. 93, §§ 1-14A (2010), along with various common law claims.
The district court granted a motion to dismiss Rectrix's antitrust claims Rectrix Aerodome Ctrs., Inc. v. Barnstable Mun. Airport Comm'n, 534 F.Supp.2d 201 (D.Mass.2008) (“ Rectrix I ”), and later granted summary judgment in favor of Barnstable on its RICO and section 1983 claims Rectrix Aerodome Ctrs., Inc. v. Barnstable Mun. Airport Comm'n, 632 F.Supp.2d 120 (D.Mass.2009) (“ Rectrix II ”). The district court then declined to retain supplemental jurisdiction over the remaining state law claims. Id. at 132.
Rectrix now appeals both the grant of the motion to dismiss and the grant of summary judgment, both rulings being subject to de novo review. Gargano v. Liberty Int'l Underwriters, Inc., 572 F.3d 45, 48 (1st Cir.2009); Paparo v. M/V Eternity, 433 F.3d 169, 172 (1st Cir.2006). We address first the RICO and antitrust claims, both of which directly attack BMAC's restriction on jet fuel sales; the remaining claim, complaining of a civil rights violation under section 1983 and the Constitution, is considered thereafter.
RICO. Rectrix's first, and most detailed, argument on appeal is that the district court erred in rejecting Rectrix's RICO claim. A civil RICO claim, 18 U.S.C. § 1962(c), requires proof of several elements including the existence of a racketeering “enterprise” and its conduct through a “pattern” of racketeering activity, which requires at least two acts of racketeering so related id. § 1961(4)-(5); the acts are ones specified in the statute and include mail and wire fraud as possible predicate acts. Id. §§ 1961(1), 1962(c).
Rectrix's claim of fraud rests at bottom on the proposition that it was entitled under the minimum standards then in force to sell jet fuel, that the defendants falsely represented that Rectrix lacked that right and concealed the minimum standards until they were discovered by Rectrix in mid-2004, and that these acts of misrepresentation and concealment reflected a pattern of fraudulent acts that damaged Rectrix and are within the purview of the RICO statute. Rectrix also says that the defendants diverted revenues thus gained to Barnstable for its municipal use in violation of law and sought to conceal this as well.
The answer, as the district court ruled Rectrix II, 632 F.Supp.2d at 126-27, is that the minimum standards did not entitle Rectrix to sell jet fuel. Those standards provide that an FBO operator must supply fuel, including jet fuel, but qualify this in the next sentence by saying that BMAC “may limit the types of fuels to be sold.” Before the lease was signed, and before Rectrix ever sought FBO status, the self-service standards BMAC gave to Rectrix told it that BMAC “reserves the exclusive right unto itself to sell jet fuel on the Barnstable Airport,” and the lease itself expressly forbade Rectrix from selling any fuel.
Rectrix counters that the first sentence of the minimum standards describes jet fuel as a “grade” and the second sentence merely reserves BMAC's right to limit the particular “types” within the grade (Rectrix claiming there are separate “types” of jet fuel, such as Jet A-1, Jet A, and Jet B); but the straightforward reading is that the word “types” refers to the varieties given in the prior sentence, i.e., 80-octane, 100-octane, and jet fuel. In addition, the lease itself forbids Rectrix from providing any fuel.
It appears that the FAA itself is content to have municipal airports reserve jet fuel sales to themselves, seemingly so as to allow airports to fund maintenance and improvements.3 Rectrix says that it was improper for BMAC to funnel any of the jet fuel profits for municipal use and that BMAC committed further acts of fraud by concealing this diversion from the FAA. But whether or not the diversion occurred or was improper-the district court made no finding-it was the reservation to BMAC of exclusive rights, not the diversion of BMAC profits, that caused damage to Rectrix.
Finally, Rectrix complains that when it sought FBO status, BMAC engaged in delays, proposed burdensome terms and otherwise hindered its application and operations. But nothing in the lease compels BMAC to surrender its exclusivity, and so long as BMAC maintained its exclusive rights, the premise of the RICO claim-that BMAC had no such exclusive rights-fails.
BMAC's minimum standards could have stated expressly its position that no one except itself could sell jet fuel at the airport instead of leaving this to the self-service...
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