Coutches v. City of Hayward, Cal.-176 – ACRP Legal Research Digest 21

FAA Docket No:

13-92-08

Author:

Mudd, Leonard E., Director

Author Title:

Director

Complainant(s):

Coutches, Michael, d/b/a American Sales Co.|Coutches, Frances, d/b/a American Sales Co.

Respondent(s):

Hayward (Cal.)

Airport(s):

Hayward Air Terminal (HWD)

Holding:

Dismissing complaint.

Abstract:

Complainants Michael and Frances Coutches d/b/a American Aircraft Sales Co., filed a complaint against Respondent, the City of Hayward, owner of Hayward Air Terminal, alleging that Respondent violated Grant Assurances 22 and 23 by offering Complainants rent and lease terms that were less favorable than those offered to another FBO. The Director found no violation and dismissed the Complaint.|Economic Nondiscrimination (Grant Assurance 22):|"A disparity in lease terms does not in and of itself constitute a violation of the City's Federal obligation to make the Airport available on fair, reasonable and not unjustly discriminatory terms to commercial aeronautical activities, nor does it constitute a violation of the City's assurance that each commercial aeronautical activity will be charged the same rents as are uniformly charged all other such activities making the same or similar use of the airport and utilizing the same or similar facilities." (p. 15).|Because Complainants' location was superior to Aviation Training Institute's (ATI's) site "in terms of visibility from the taxiway and accessibility from the main access road to the commercial aeronautical activity area on the Airport," the differential in Complainants' and ATI's leasehold rents properly reflected the disparity in leasehold size, location, and fair market value in a manner consistent with Respondent's federal obligations despite the fact that Complainants and ATI were making same or similar use of the Airport. (p. 15).|Respondent's proposal to increase rent for Complainants' leasehold was not unfair, unreasonable or discriminatory, because the proposed adjustment was properly based on the appraised fair market value of the leasehold and was consistent with current rental rates charged other commercial aeronautical tenants at the Airport. (p. 16).|Respondent's federal obligations and FAA policy do not require "any specific index on which required period rate increases should be based." The Consumer Price Index was only one acceptable basis on which to calculate periodic leasehold rent adjustments, and so long as Respondent applied the index of its choice in a fair, reasonable, and not unjustly discriminatory manner, the matter was more appropriately left to the discretion of Respondent. (p. 17).|Fair market value was an acceptable index on which to base leasehold rents. (pp. 17-18).|Exclusive Rights (Grant Assurance 23):|Complainants' allegation that the disparity between its leasehold rents and ATI's violated the prohibition against the granting of an exclusive right was without merit where Complainants did not specify the aeronautical service(s) for which alleged exclusive rights were being granted, identify the manner in which ATI received alleged exclusive rights, specify unreasonable requirements for access or minimum standard applied to exclude Complainant, or provide any evidence that any entity was being denied the opportunity to provide any aeronautical services. (p. 15).|Other Allegations and Assertions:|The collection of unpaid rent and the status of oral agreements concerning the unpaid rent were matters of contract law falling outside the scope of Respondent's federal obligations. (p. 19).|Complainants were not entitled to interim relief from Respondent's enforcement of an arbitration award against it pending completion of the administrative proceeding in this docket, because the FAA "does not have the authority under the FAAct or the AAIA to provide interim relief by enjoining" enforcement of an arbitration award. Although FAA has authority to take emergency action in certain circumstances, this circumstance fell outside the scope of those emergency powers. (p. 19).

Index Terms:

Coutches v. City of Hayward, Cal. -- No. 13-92-08