Airport Sponsor, Make Sure You Try To Settle - by Gregory J. Reigel

Before You File A Part 16 Complaint Against An AIP Airport Sponsor, Make Sure You Try To Settle

by Gregory J. Reigel

© April 2021. All rights reserved!

Airport owners or operators

(“Airport

Sponsors”) who receive federal grant funds under the federal Airport Improvement Program (“AIP”) must agree to certain obligations Greg Reigel and conditions. These obligations and conditions are commonly referred to as “Grant Assurances.” Sometimes an airport tenant may end up in a dispute with an Airport Sponsor if the tenant thinks the Airport Sponsor is not complying with certain Grant Assurances and harming the tenant.

Some of the most commonly disputed Grant Assurances include Grant Assurance 19 (Operation and Maintenance), Grant Assurance 22 (Economic Non-Discrimination), Grant Assurance 23 (Exclusive Rights), Grant Assurance 24 (Fee and Rental Structure), Grant Assurance 25 (Unlawful Revenue Diversion), and Grant Assurance 29 (Airport Layout Plan).

If a dispute arises, an airport tenant has options for pursuing a complaint against the Airport Sponsor. However, the tenant should use reasonable efforts to try and resolve the dispute with the Airport Sponsor. Not only is this a good business practice, but it is also a requirement if the dispute cannot be resolved and a formal complaint to the FAA is needed.

Making A Complaint

An airport tenant who believes an Airport Sponsor has violated one or more of the Grant Assurances (the “Complainant”) may make a complaint to the FAA. The FAA will then investigate and, if the FAA finds non-compliance, the FAA may take enforcement action.

Informal Complaint. Under 14 C.F.R. Part 13, a Complainant may make an informal complaint to the appropriate FAA personnel in any regional or district office, either verbally or in writing. The FAA will then review the complaint, investigate as needed, and determine whether (1) FAA action is warranted, or (2) if it appears that the airport sponsor is violating any of its federal obligations.

Formal Complaint. If the matter is not resolved to the Complainant’s satisfaction, the Complainant may file a formal complaint with the FAA under

14 C.F.R. Part 16. And as the reference implies, this type of complaint involves a more involved and lengthy procedural process. It also takes significantly more time before the FAA decides whether a violation has occurred.

Informal Settlement Efforts

Before a Complainant may file a formal complaint, 14 C.F.R. § 16.21 requires the Complainant to initiate and engage in good faith efforts to resolve the disputed matter informally with those individuals or entities the Complainant believes are responsible for the noncompliance. These efforts may include common alternative dispute resolution methods such as mediation, arbitration, or the use of another form of third-party assistance. Additionally, the FAA Airports District Office; FAA Airports Field Office; FAA Regional Airports Division (responsible for administering financial assistance to the airport sponsor); or the FAA Office of Civil Rights are available, upon request, to try to help the parties resolve their dispute informally. Efforts to resolve the dispute informally are mandatory. When the Complainant files a formal complaint, 14 C.F.R. § 16.27 requires the Complainant to certify that: “(1) [t]he complainant has made substantial and reasonable good faith efforts to resolve the disputed matter informally prior to filing the complaint; and (2) [t]here is no reasonable prospect for practical and timely resolution of the dispute.” Although neither the FAA nor the regulations require a specific form or process for informal resolution, the Complainant’s certification must include a description of the parties’ efforts, which must be relatively recent prior to the filing of the complaint. If the Complainant fails to make the certification, does not sufficiently describe the settlement efforts, or if the parties did not engage in informal settlement efforts, the FAA will dismiss the Complainant’s complaint. Although the dismissal will be without prejudice, the Complainant will then be required to refile the Complainant’s complaint with the required certification.

Conclusion

If you are an airport tenant in a dispute with an AIP airport sponsor, you have options available to you for resolving the dispute. As is often the case in disputes, the parties’ mutual settlement of the dispute is preferable and encouraged.

So, it is usually a good idea to engage in settlement negotiations early. And if the matter is not settled, you should be able to document the settlement efforts in which the parties engaged. That way if a formal Part 16 complaint is required, you will have what you need to certify your informal settlement efforts and avoid dismissal of your complaint.

EDITOR’S NOTE: Greg Reigel is an attorney with Shackelford, Melton, McKinley & Norton, LLP, and represents clients throughout the country in aviation and business law matters. For assistance, call 214-780-1482, email: greigel@shackelford.law, or Twitter @ReigelLaw (www. shackelford.law).

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