Southwest Air Ambulance Inc. v. The City of Las Cruces, 99-2344

• Decision Date: 16 October 2001
• Docket Number: No. 99-2344,99-2344
• Parties: (10th Cir. 2001) SOUTHWEST AIR AMBULANCE, INC., a New Mexico corporation, and JOHN RICHARDSON, Plaintiffs - Appellants, v. THE CITY OF LAS CRUCES, a political subdivision of the State of New Mexico, Defendant - Appellee
• Court: U.S. Court of Appeals — Tenth Circuit

Page 1162

268 F.3d 1162 (10th Cir. 2001)

SOUTHWEST AIR AMBULANCE, INC., a New Mexico corporation, and JOHN RICHARDSON, Plaintiffs - Appellants, v. THE CITY OF LAS CRUCES, a political subdivision of the State of New Mexico, Defendant - Appellee.

No. 99-2344

UNITED STATES COURT OF APPEALS TENTH CIRCUIT

October 16, 2001

APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW MEXICO (D.C. No. CIV-99-622-LFG/DJS)

[Copyrighted Material Omitted] Randolph B. Felker (Mariana G. Geer, with him on the briefs), Felker, Ish, Ritchie & Geer, P. A., Santa Fe, New Mexico, for Plaintiffs-Appellants.

Mary T. Torres, Modrall, Sperling, Roehl, Harris & Sisk, P.A., Las Cruces, New Mexico, for Defendant-Appellee.

Before SEYMOUR, HOLLOWAY and MURPHY, Circuit Judges.

HOLLOWAY, Circuit Judge.

This appeal comes to us from the granting of a Fed. R. Civ. P. 12(b)(6) motion to dismiss the plaintiffs' action challenging the legality and enforcement of a municipal ordinance setting fees at the Las Cruces International Airport. We affirm in part and reverse in part as explained below.

I

Southwest Air Ambulance, Inc. (Southwest) operates an air ambulance service from points in and outside of New Mexico, transporting patients to and from hospitals and providing emergency medical assistance during flight. John Richardson is the president of Southwest. Some of Southwest's flights operate out of the Las Cruces International Airport (the Airport), which is owned and operated by the City of Las Cruces (the City).

On June 1, 1998, the City enacted Las Cruces Municipal Code, Art. II, 7.5031 (Ord. No. 1677, 6-1-98), an ordinance requiring all businesses conducting flight operations from the Airport to execute "non-exclusive leases" with the City as a predicate for the right to land at or take off from the Airport. In part the ordinance provides:

All commercial operations, other than transient commercial aircraft operators shall enter into an airport commercial lease, at those terms and conditions established by resolution of the city council, before beginning the conduct of any commercial activity, basing an aircraft at the Airport, or occupying any property upon the Airport.

Id. at 7.5-31(c).

The ordinance further provides that

Persons not in possession of an airport commercial lease, other than transient aircraft operators, or those otherwise permitted by this chapter, are prohibited from offering any commercial service to the public upon or within the boundaries of the Airport.

Id. at 7.5-31(d).

The ordinance specifies that "[f]ailure to pay city council approved fees and charges in the time and manner established by the city council, shall be considered a violation of this ordinance," id. 7.5-33(b), and that "[a]ny violation of this chapter shall be a misdemeanor and punishable as provided in 1-10 of the Las Cruces Municipal Code," id. at 7.5-96(a). This provision establishes that "[e]xcept as otherwise provided, a person convicted of a violation of this Code shall be guilty of a petty misdemeanor and shall be punished by a fine not exceeding $500.00, imprisonment for a term not exceeding 90 days, or both." Id. at 1-10(c). The Municipal Code also provides that "[f]or violations of this Code that are continuous with respect to time, each day the violation continues is a separate offense." Id. at 1-10(c).

Pursuant to its authority under 7.5-31(c), the Las Cruces City Council mandated that "Residents shall pay a percentage of their Gross Receipts . . . as their lease fee," and established a fee of 0.5% for operators engaged in "On-demand Flying Services." See City Council Resolution 98-371, Las Cruces International Airport Policies, 5(3)(a)(2). In other words, the City's airport lease fee is calculated by assessing not just the receipts from an airline's operations at the Las Cruces airport, but also by taking into account the gross receipts from an airline's entire operations regardless of location, thereby including activities carried out entirely outside the confines of the City of Las Cruces or even outside the State of New Mexico.

Southwest claims that the City threatened to "shut down" its operations at the Airport unless it signed the proposed lease. When Southwest refused and its president John Richardson spoke in opposition to the ordinance, the City threatened to criminally prosecute both Southwest and Richardson unless they "voluntarily" executed the lease. When they continued to refuse to do so, on approximately March 8, 1999, the City commenced a criminal action against Richardson in the Las Cruces Municipal Court alleging violation of the ordinance, and sought penalties of up to $500 and incarceration of Richardson for up to 90 days for each day the lease was not signed under 1.10(a) of the Municipal Code.

On June 2, 1999, Richardson and Southwest filed suit against the City in the federal district court for the District of New Mexico, alleging that the City's ordinance violated the federal Anti-Head Tax Act (AHTA), 49 U.S.C. 40116. They also asserted claims under 42 U.S.C. 1983 for violations of the Commerce Clause and the First Amendment of the United States Constitution, and the AHTA. The Plaintiffs also asserted pendent state claims, and sought declaratory and injunctive relief and damages. Additionally, Richardson himself alleged that the City's criminal action against him was initiated and carried through for ulterior purposes and constitutes malicious prosecution and/or abuse of legal process, in violation of his constitutional rights of due process of law and freedom of speech. Complaint at 6, App. at 9.

On June 11, 1999, a hearing was held before the Las Cruces Municipal Court concerning the criminal charges. Richardson avers that at the meeting the municipal judge was informed of the concurrent federal suit, and that he ordered the municipal proceedings to be held in abeyance until the federal action was concluded. App. at 53.

On July 6, 1999, the City filed a Fed. R. Civ. P. 12(b)(6) motion to dismiss in the federal case, arguing that the AHTA does not afford a private right of action; that the AHTA forecloses Commerce Clause review; that the Plaintiffs had not stated proper 1983 claims; that the abstention doctrine of Younger v. Harris, 401 U.S. 37 (1971), barred Plaintiffs' claims concerning the criminal prosecution; and that the court should decline to exercise jurisdiction over the pendent state law claims. App. at 20.

A magistrate judge, sitting as a district judge by agreement of the parties,¹ granted the motion to dismiss. See Memorandum Opinion and Order, Appendix at 78-98. He held that the Plaintiffs had no private right of action under the AHTA; that they could contest the validity of the ordinance only by filing a complaint with the Department of Transportation; and that no claim under 1983 had been stated. He also dismissed the pendent state law claims. The Plaintiffs filed a motion to reconsider and to alter or amend the judgment, pursuant to Fed. R. Civ. P. 59(e). Id. at 101. The magistrate judge denied the motion. See Memorandum Opinion and Order Denying Motion for Reconsideration. App. 130-132.

This appeal follows. The Plaintiffs contend: (1) the magistrate judge erred in ruling that there is no private right of action under the AHTA and that Plaintiffs' redress lies with administrative remedies that must be pursued before the Federal Aviation Administration; (2) the magistrate judge erred in ruling that Plaintiffs had not stated claims under 1983; (3) the magistrate judge erred in dismissing Plaintiffs' Commerce Clause claim; and (4) the magistrate judge erred in ruling that the Younger v. Harris abstention doctrine barred federal court consideration of Plaintiffs' claims.

For the reasons discussed below, we affirm the magistrate judge with respect to his rulings regarding the lack of an implied private right of action under the AHTA and the dismissal of the Commerce Clause claim, but reverse his rulings with respect to 1983 and the Younger abstention doctrine.

II DOES THE ANTI-HEAD TAX ACT PROVIDE A PRIVATE RIGHT OF ACTION?

Plaintiffs contend that the magistrate judge erred in ruling that there is no private right of action provided by the AHTA. We disagree with their position.

A

Congress enacted the Anti-Head Tax Act in 1973 in response to the Supreme Court's decision in Evansville-Vanderburgh Airport Auth. Dist. v. Delta Airlines, Inc., 405 U.S. 707 (1972), which held that state and local authorities were not precluded by the Constitution from assessing a charge of $1 per commercial airline passenger to help defray the costs of airport construction and maintenance. Id. at 709. In response, Congress enacted the AHTA to "ensure . . . that local 'head' taxes will not be permitted to inhibit the flow of interstate commerce." Northwest Airlines, Inc. v. County of Kent, 510 U.S. 355, 363 (1994) (quoting S.Rep. No. 93-12, p.4 (1973)); see also Aloha Airlines, Inc. v. Director of Taxation of Hawaii, 464 U.S. 7, 9-10 (1983) (discussing history of AHTA).

Two provisions of the AHTA are important for the instant case. The first, originally codified as 1513(a) and now codified as 49 U.S.C. 40116(b),² provides in part:

(b) Prohibitions.--Except as provided in subsection (c) of this section and section 40117 of this title, a State, a political subdivision of a State, and any person that has purchased or leased an airport under section 47134 of this title, may not levy or collect a tax, fee, head charge, or other charge on

(1) an individual traveling in air commerce;

(2) the transportation of an individual traveling in air commerce;

(3) the sale of air transportation; or

(4) the gross receipts from that air commerce or transportation.

Id. (emphasis added).

The second provision, originally codified as 1513(b) and now codified as 49 U.S.C. 40116(e), is read in conjunction with the first. Northwest Airlines, 510 U.S. at 365-66 ("But 1513(a) does not stand alone. That...