FAA Docket No:
FAA Docket No. 16-17-02
Westlaw Cite:
2017 WL 4155085 (FAA Docket No. 16-17-02, July 21, 2017)
Author:
Kevin C. Willis, Director, Office of Airport Compliance and Management Analysis
Complainant(s):
Signature Flight Support Corp.
Respondent(s):
County of Orange, California
Airport(s):
John Wayne Airport (SNA)
Holding:
Complaint dismissed (summary judgment).
Abstract:
The Complainant, Signature Flight Support Corp. (“Signature”), a national fixed base operator (“FBO”) and tenant at SNA for more than 20 years, filed a complaint alleging that the County violated Grant Assurance 22, Economic Nondiscrimination, by choosing another entity (ACI Jet) in a request for qualifications (“RFQ”) for an interim two year lease at the airport and by refusing to immediately lease land to the Complainant so that it could develop another FBO. The Complainant and others submitted their applications under the RFQ and the County convened a selection panel to rank the applicants. Despite being ranked the highest by the panel, the Complainant was not awarded the lease.
The County moved for summary judgment, arguing that: (1) Signature’s claims lacked a genuine issue of material fact or showing of grant assurance noncompliance; (2) Signature failed to provide evidence and has not met its burden under § 16.23(b); and (3) Orange County was compliant with Grant Assurance 22, because it followed a public process that allowed all applicants an equal chance to present credentials in the RFP process.
Moreover, the County stated that it replaced Signature as an FBO following a deliberative, lawful and transparent process, that it issued an RFQ to consider all responding firms and encourage competition, and that it intended to consider fuel-pricing policies as part of its review. (p. 3.) According to the County, after 20 years of a “virtual duopoly at the Airport” by Signature and another FBO, and given “the expiration of leases to Signature and Atlantic, the County sought to open the full-service FBO opportunities to new entrants that can provide airport users relief from the incumbents’ oppressive aviation fuel prices.” (p. 3.)
Upon review, the Director found nothing unjustly discriminatory in the RFQ criteria. (p. 6.) Moreover, although the panel had ranked the Complainant first and ACI Jet fifth, “the County indicated that pricing was the most important factor. Signature acknowledges that it had the opportunity to address the board and provide its own pricing analysis … we find nothing in the procedures followed by the Board or in its ultimate decision that violates Grant Assurance 22. Airport sponsors when selecting FBO operators have a right and responsibility to consider pricing in FBO selection, such a decision does not violate Grant Assurance 22. Nor is FAA in a position to second-guess the Board’s analysis of pricing or the weight it accorded the pricing information provided by the bidders.” (p. 6.) “Grant Assurance 22 does not require that an airport adhere to any particular methodology for letting or assigning leases. Discretion is left to the airport sponsor using practices that best suit its individual needs.” (p. 6.)
Finally, the Director considered whether the County was in violation of Grant Assurance 22, Economic Nondiscrimination, by not immediately making land available to the Complainant for use as a FBO. (p. 7.) The County countered that the Complainant failed to demonstrate that the locations it identified for a third FBO were available. Moreover, the County argued that then-existing conditions at the airport had legal and practical roadblock to a third FBO, including the Complainant’s admission that aeronautical users were already using the parcels it had identified. Finally, the County noted that it was in the process of a comprehensive, multi-year review of the airport (General Aviation Improvement Program) to better accommodate the general aviation community, which represented the majority of airport users.
Given this, the Director found that the “County is within its proprietary powers to conduct planning for future use and can reasonably delay decisions on land uses that are under consideration in a bona fide process. Whether there is current space that is appropriate for immediate use by an FBO is dispute. But, even if the complaint is viewed in the light most favorable to Signature, and we assume that there is currently unoccupied land, a Sponsor may, as a matter of law, refrain from making immediate leasing decisions.” (p. 8.). “Such a position does not, without more, violate the grant assurances. A sponsor is not required to develop any and all parcels of land in a manner consistent with the wishes of any one party, but rather may exercise its proprietary rights and powers to develop and administer the Airport’s land in a manner consistent with the public’s interest.” (p. 8.)
Index Terms:
Duopoly; Grant Assurance 22: Economic Nondiscrimination: Fixed Base Operator (“FBO”); Request for Qualifications (“RFQ”); General Aviation Improvement Program; Fuel Prices; General Aviation; Proprietary Powers; FBO Competition; FBO Pricing; Lease (Expiration); Proprietary Powers