St. Augustine-St. Johns Cnty. Airport Auth. v. Boomerang, LLC, No. 3:19-cv-573-34PDB

CourtUnited States District Courts. 11th Circuit. United States District Court of Middle District of Florida
Writing for the CourtPATRICIA D. BARKSDALE United States Magistrate Judge
Docket NumberNo. 3:19-cv-573-34PDB
Decision Date09 June 2020

BOOMERANG, LLC, Defendant.

No. 3:19-cv-573-34PDB

United States District Court Middle District of Florida Jacksonville Division

June 9, 2020

Report and Recommendation

St. Augustine-St. Johns County Airport Authority brought this action in state court1 requesting a declaration and an injunction to resolve a dispute over whether Boomerang, LLC, must execute an operating agreement with minimum operating standards and minimum insurance-policy limits to continue flights from Northeast Florida Regional Airport to Marsh Harbour, Bahamas. Doc. 3.

Boomerang removed the case here, contending this Court has subject-matter jurisdiction under 28 U.S.C. § 1331 because the Airport Authority's claims arise under the rules and regulations of the Federal Aviation Administration ("FAA") and the Airline Deregulation Act, Pub. L. No. 95-504, 92 Stat. 1705 (codified at 49 U.S.C. §§ 40101, et seq.). Doc. 1 at 2.

Three matters are before the Court.

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First, before the Court is the threshold issue of whether the Court has subject-matter jurisdiction, raised sua sponte:

Upon review of the Complaint and the Notice [of Removal], the Court is unable to readily discern whether Plaintiff's causes of action in fact "arise under the laws of the United States" as Defendant suggests in its Notice. Indeed, aside from alleging that its Minimum Operating Standards are "in accordance with the rules and regulations of the Federal Aviation Administration," Plaintiff's Complaint does not reference any federal statute or otherwise assert that its claims for relief arise from a particular federal statute. Accordingly, the Court finds that the allegations in the Complaint and in the Notice are insufficient to allow the Court to satisfy its obligation to assure that federal question jurisdiction exists over this action.

Doc. 13 at 3 (internal citations omitted). The parties have briefed the issue. Docs. 14, 22, 25. The Airport Authority contends the Court has no jurisdiction. Doc. 22. Boomerang disagrees. Docs. 14, 25.

Second, before the Court is Boomerang's motion to dismiss, Doc. 6, and the Airport Authority's response in opposition, Doc. 7. Boomerang argues dismissal is warranted for three reasons: (1) federal law preempts the Airport Authority's claims; (2) the complaint fails to state a claim on which relief may be granted because the Airport Authority failed to exhaust administrative remedies under a comprehensive administrative remedial scheme for resolving a dispute affecting a public airport; and (3) the Airport Authority failed to join a necessary party—the FAA. Doc. 6.

Third, before the Court is the Airport Authority's motion for rulings on subject-matter jurisdiction and the motion to dismiss, Doc. 33, and Boomerang's response in opposition, Doc. 34. To enable the parties to investigate obtaining discretionary declaratory relief from the FAA under the declaratory-judgment provision of the Administrative Procedures Act, 5 U.S.C. § 554(e), rather than continuing litigation, the Court deferred ruling on subject-matter jurisdiction and the motion to dismiss. Doc. 29. The Airport Authority now requests rulings because its informal discussions

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with FAA representatives suggest the FAA would decline to provide declaratory relief. Doc. 33.

The Court vacated the deadlines in the case management and scheduling order pending a ruling on subject-matter jurisdiction and the motion to dismiss. Doc. 27. Should the case remain here, the parties are prepared to file a new case management report. At a telephone conference in April 2020, the parties agreed a controversy remains despite the slowdown in international air travel due to the global pandemic. Doc. 36.

I. Background

The Airport and Airway Improvement Act of 1982, 49 U.S.C. §§ 47101-47144, provides background for the matters before the Court.2

The Airport and Airway Improvement Act authorizes the FAA to provide grants to airports. 49 U.S.C. § 47104. The FAA makes the grants through the Airport Improvement Program. 49 U.S.C. §§ 47101(a)(11), 47107; see FEDERAL AVIATION ADMINISTRATION, What is AIP?, (last visited April 29, 2020).

To receive and maintain a grant, the Airport and Airway Improvement Act provides that an airport must make assurances, including that the airport will be available for public use on reasonable terms and without unjust discrimination and that each carrier using the airport will be subject to substantially comparable rules, regulations, and conditions applicable to all carriers similarly using the airport (except for differences based on reasonable classifications, like between tenants and non-tenants). 49 U.S.C. § 47107(a)(1)-(2); Doc. 6-5.

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To minimize the potential for violating an assurance, the FAA "highly recommends" that each grant recipient establish "reasonable minimum standards that are relevant to the proposed aeronautical activity with the goal of protecting the level and quality of services offered to the public." Doc. 7-1 at 1, 3 (FAA Advisory Circular 150/5190-7). The FAA will not approve a grant recipient's minimum standards but will review them upon a grant recipient's request and may advise the grant recipient on appropriateness. Id. at 1, 2, 4. If a grant recipient is contemplating denying an "on-airport aeronautical activity," the FAA encourages the grant recipient to contact a local or regional office for a reasonableness assessment. Id.

Regulations under the Airport and Airway Improvement Act establish a formal procedure for complaining about a grant recipient's noncompliance with a grant assurance. 14 C.F.R. §§ 13.3(d), 16.1. The regulations are referred to as "Part 16."

Under Part 16, "a person directly and substantially affected by any alleged noncompliance" with a grant assurance may file a complaint with the FAA, 14 C.F.R. § 16.23(a), after first making a good faith effort to informally resolve the matter with "the individuals or entities believed responsible for the noncompliance," id. § 16.21(a).3

If informal resolution fails, the complaint may proceed through pleadings, an investigation, an initial determination (with or without a corrective plan), a hearing before a hearing officer, an initial decision, an administrative appeal, and a final agency decision. Id. §§ 16.23-16.26, 16.29, 16.31, 16.109, 16.241. The parties are the

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complainant, the respondent, and—from the hearing and beyond—the FAA. Id. §§ 16.3, 16.203(b)(1). From the hearing and beyond, the style must name the respondent as the appellant and the FAA as the agency. 14 C.F.R. § 16.203(b)(1). Upon a finding the respondent is in "noncompliance on all identified issues," the complainant's standing ends, and the complainant cannot administratively appeal. Id. §§ 16.109(g), 16.31(c). Before issuance of a final decision, the FAA and the respondent may resolve the matter through a consent order. Id. § 16.243(a).

After an unsuccessful administrative appeal, a person may judicially appeal a final FAA decision to a United States Court of Appeals. Id. §§ 16.245(g), 16.247(a); see also 49 U.S.C. § 46110(c) (giving courts of appeals jurisdiction over final FAA decision). A district court lacks jurisdiction over the appeal. See Ass'n of Citizens to Protect & Preserve the Env't of the Oak Grove Cmty. v. FAA, 287 F. App'x 764, 766-67 (11th Cir. 2008) (affirming district court's order dismissing appeal of final order of FAA for lack of subject-matter jurisdiction).

II. Complaint

In the complaint, the Airport Authority alleges these facts. For resolving the current matters, the parties consider the facts undisputed.

The Airport Authority owns and operates the Northeast Florida Regional Airport.4 Doc. 3 ¶ 3. The airport is in an unincorporated area of St. Johns County,

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Florida. Doc. 3 ¶ 4. Through its executive director, the Airport Authority operates and administers the airport. Doc. 3 ¶ 7.

The Airport Authority maintains a "Lease Policy" and "Minimum Commercial Aviation Operating Standards." Doc. 3 ¶ 8; Doc. 3-1. The minimum operating standards "are intended to be the threshold requirements for those desiring to provide commercial aeronautical or aviation[-]related services to the public" at the airport under FAA rules and regulations. Doc. 3 ¶ 10. The minimum operating standards also prescribe minimum insurance-policy limits. Doc. 3 ¶ 12. Other types of aeronautical activities must meet minimum operating standards that the executive director establishes on a case-by-case basis. Doc. 3 ¶ 11.

The Airport Authority's "Minimum Commercial Aviation Operating Standards" provide that all persons who want to conduct commercial aeronautical or aviation-related activities or services at the airport must execute an operating agreement or a composite lease/operating agreement specifying compliance with the minimum operating standards. Doc. 3 ¶ 9; Doc. 3-1 at 1.

Boomerang owns aircraft and wants to use the airport for taking off and landing the aircraft, selling tickets for flights, loading and unloading passengers and luggage, and conducting "other operations associated with a scheduled FAR Part 135 operator and on-demand FAR Part 135 operator." Doc. 3 ¶ 13. ("FAR Part 135" references aviation regulations at 14 C.F.R. Part 135, which provide operating requirements for commuter and on-demand operations and rules for persons onboard such aircraft.) Boomerang owns or operates a Pilatus aircraft with tail number N360DA and other aircraft associated with FAA-issued charter certificate OBGA623K. Doc. 3 ¶ 14.

On October 3, 2018, the Jacksonville Business Journal published an article stating that Boomerang would "soon begin offering individual tickets on direct flights to the Bahamas," would "offer up to nine seats on each flight from St. Augustine to

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Marsh Harbo[u]r," and would "offer a morning and afternoon flight on Fridays, Saturdays and Sundays between Apr. 1 and Aug. 31 next...

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