FAA Notice on Airport Control:
Notice of Policy on Evaluating Disputed Changes of Sponsorship at Federally Obligated Airports
There is good news; airports are considered so valuable that multiple governments are fighting over the control of two critical aviation assets. There is unfortunately bad news, too; much to the detriment of the future of these important aeronautical infrastructures, the debate is dragging on. The below FAA Notice of Policy on Evaluating Disputed Changes of Sponsorship at Federally Obligated Airports would, by its title alone, appear to resolve these battles through this new “policy” to resolve disputed changes!!!
There is an urgent need to provide the disputants with some guidance as to what constitutes lawful control under the Grant Assurances. In one case, the Charlotte-Douglas International Airport (CLT) has been embroiled in an expensive legislative and litigative battle since 2013. The exact same battle over, as to the Jackson Municipal Airport Authority, was initiated by the Mississippi State Legislature which passed a bill seeking to wrest control from the existing commissioners.
All parties have been looking to the FAA to define what tests the sponsor must meet in order to prove “ownership, sponsorship, governance, or operations, to ensure that such actions are consistent with Federal requirements.”
The Notice of Policy is really a definition of process by which the contestants see to receive the FAA judgment. Instead of defining some set of objective indicia of control, the Notice (issued without any opportunity to comment on this FAA pronouncement) only purports to do the following:
- Clarify “the FAA’s legal authority and policy for monitoring and approving requests to change the sponsorship of, and/or operational responsibility for, an airport from one public agency to another public agency when there is a dispute surrounding the proposed change.“
- “Describes the requirements for coordination between the FAA and state or local governments contemplating actions that may impact an airport’s ownership, sponsorship, governance, or operations, to ensure that such actions are consistent with Federal requirements.”
The document urges the party seeking the hostile takeover (i) to “consult” with the current sponsor; (ii) to request the technical assistance of the airport district office; and (iii) to ask for comment from the FAA on the “deliberative process.” The statement of the need to consult includes a very difficult codicil:
“…absent extraordinary circumstances, such as substantial evidence of mismanagement on the part of the current sponsor/operator.”
There are no more hints as to what constitutes “mismanagement”; what does the hostile party need to show to the FAA:
- Fraudulent awards of contracts?
- Failure to properly administer contracts that are paid for with AIP funds. Must it be proved that the sponsor’s malfeasance resulted in poor/unsafe products of these projects?
- Not addressing significant safety problems—poor concrete quality, slow snow removal, permitting construction of buildings into safety surfaces?
- Allowing some/rampant unjust economic discrimination to occur among airport tenants? Once? For six months continuously? Intermittently over years?
- Inability to raise matching funds?
- Incompetence in planning for needed future capacity?
- Not assuring the continued validity of governance legal authority?
- Or a multiple of such problems (at least 3/5/n?)
And if so demonstrated, what will the FAA do?
- Revoke the existing Part 139 certificate? (i.e., close it to commercial flights?)
- Deny future requests for entitlement or discretionary AIP grants? (i.e., cut off needed future safety, capacity and/or environmental projects?)
- FAA, on its own, sign an agreement with the hostile takeover “authority” and voiding the incumbent’s? (i.e., what impact on existing financial bonds?)
This guidance contemplates that the local parties come to some “resolve” BEFORE addressing the FAA, as articulated here:
“In matters in which a proposed change is contested by a current sponsor or operator, the FAA will not act on a part 139 application or a change of airport sponsorship and/or operating authority until the dispute is definitively resolved to the satisfaction of the FAA. Resolution may be demonstrated by issuance of a final, non-reviewable judicial decision requiring such a change, by the issuance of a consent letter between the existing airport sponsor and/or operator and the proposed new sponsor and/or operator, or by other legally definitive means deemed acceptable to the FAA.”
The FAA’s retained right to “deem,” after the final resolution is reached, what is “acceptable” is problematic. The parties have no notion of what the FAA expects. Even more trying would be a case in which federal district court finds in favor of one side. It will be a constitutional contest between two branches of the federal government, if the FAA deems such a judicial order was “unacceptable”!!! An administrative body reversing a court of competence is unprecedented.
The folks in Jackson, the incumbents, consider the Notice a victory. Charlotte Mayor Jennifer Roberts said, “We want to make sure that we understand what those guidelines actually mean. It would be great to have it end that tension that we have right now in terms of who controls it, and operates the airport.” Both of the incumbents see that having control is a great advantage.
The practical impact of the Notice is that hostile takeovers will, at best, have a heavy proof/procedure to oust the existing authority, or more likely, will be deterred from trying.
This absence of a specific statement of
- the basis for the FAA’s determination of what authority transfer is acceptable and
- when the incumbent may retain its position leaves the two airports (and other future control freaks) with the same level of policy precision as established by Mr. Justice Potter Stewart in Jacobellis v. Ohio 378 U.S. 184 (1964). There in a concurrence he explained his view of what is/is not obscenity, as follows:
“I shall not today attempt further to define the kinds of material I understand to be embraced within that shorthand description; and perhaps I could never succeed in intelligibly doing so. But I know it when I see it, and the motion picture involved in this case is not that.”
Actually, identifying what’s not protected by the First Amendment may be more intuitive than what’s prohibited by the FAA Grant Assurances. The absence of better guidance may avoid immediate political embarrassments, but future contests of control will likely be long, expensive and injurious to the future of the airport waiting the FAA’s deeming of what’s acceptable.
 The NC state bill which attempted to transfer control to a regional authority was passed on July 16, 2013; at that time the sponsor of CLT was the City; the mayor of Charlotte resigned from that post and became Secretary of Transportation on July 2, 2013.Share this article: