Arlet Aviation, LLC v. Puerto Rico Ports Authority – No. 16-17-17

FAA Docket No:

FAA Docket No. 16-17-17

Author:

Kevin C. Willis, Director, Office of Airport Compliance and Management Analysis

Complainant(s):

Respondent(s):

Airport(s):

Fernando Ribas Dominicci Airport (Isla Grande Airport) Jose Aponte de la Torre Airport (Ceiba)

Holding:

Abstract:

Complainant alleged that the Ports Authority violated Grant Assurance 22(c) and (d), Economic Nondiscrimination, by allowing Million Air San Juan Corp. (“Million Air”) to operate without a valid and current lease. More specifically, the Complainant claimed that Million Air occupied a hangar and exercised commercial privileges at the Isla Grande airport without a contract or authorization. The Complainant further claimed that the Ports Authority allowed Million Air the commercial privilege to supply and distribute aviation fuel to two other airports owned by the Ports Authority. Finally, the Complainant alleged that this commercial privilege has since been transferred to the Ceiba airport—again without the benefit of an agreement, permit, or contract. (After the complaint was filed, the Ports Authority and Million Air entered into an agreement allowing Million Air to lease property and provide services (directly and through providers) at both Ceiba and the Isla Grande airports.)

The Ports Authority moved to dismiss, asserting that the Complainant lacked standing to bring the complaint and was not compliant with the FAA’s requirement of good faith pre-filing negotiations to avoid such a complaint. In the alternative, the Respondent claimed that the complaint should be dismissed as moot. The Complainant opposed the motion to dismiss and requested leave to file an amended complaint stating that the Ports Authority’s new agreement with Million Air provided illegal subsidies and did not collect sufficient rents from Million Air, violating the requirements of Grant Assurance 25, Airport Revenues.

The Director found that the Complainant lacked standing under 14 C.F.R. § 16.23(a) because it failed to state or show how it was directly and substantially affected by the Port Authority’s alleged noncompliance with Grant Assurance 22. (Order, p. 7.) For example, “In its Complaint, Arlet fails to show how it is similarly situated to Million Air (the two new FBOs operate at different airports) or that it requested and was denied similar treatment to operate without a contract or a fuel permit.” (Order, p. 7.)

Next, the Director noted that, “[t]he FAA may conclude past noncompliance issues are moot as a result of an airport sponsor correcting a wrong … Therefore, even assuming the absence of a contract or agreement between the Ports Authority and Million Air was discriminatory and constituted a violation of Grant Assurance 22, it has been mooted by the new agreement. The Director finds the dispute is now moot with respect to those claims.” (Order, p. 8.)

Finally, the Director denied the Complainant’s motion for leave to amend its complaint. “The new claims raised in the proffered amended complaint are so factually different and legally distinct from the original complaint that it completely changes the nature of the complaint. Prior to seeking leave to amend its complaint, Arlet alleged that the absence of a contract between the Ports Authority and Million Air was discriminatory because Arlet was required to operate under a contract. Now that the Ports Authority and Million Air have a contract, Arlet seeks to allege that subsidies and free rent place Million Air in a position of economic superiority, and the Ports Authority is not receiving the airport revenues it should. (Order, p. 9.) “The Director finds the amended complaint amounts to the commencement of anew proceeding and does not relate back so as to avoid the regulatory provision of 14 C.F.R. § 16.21. Accordingly, the new claims in the amended complaint must satisfy the pre-complaint resolution requirements of 14 C.F.R. § 16.21. They do not.” (Order, p. 9.)

Index Terms: