As an airport tenant, you may find yourself in a situation where your business interests differ from that of your landlord, the airport sponsor. The airport sponsor is often in a difficult situation of trying to manage an airport with a variety of tenants who have different, and often competing, interests. The airport sponsor has contractual obligations to each of the tenants, it is responsible for enacting and enforcing reasonable minimum standards, and it must comply with state and local laws. The airport sponsor must do all of that while making sure it does not run afoul of the FAA grant assurance obligations that it agreed to be bound by when it accepted federal Airport Improvement Program (AIP) funding, or federal obligations due to receiving airport land through the Federal Surplus Property Act. As the tenant, you will be best poised to resolve your dispute with the airport sponsor by taking the time to recognize and explore the different business interests that the airport sponsor is balancing. The purpose of this article is to outline the steps that an airport tenant should take when it finds itself in a dispute with its landlord.
Identify the Cause of the Dispute.
What is frustrating you may not be the actual cause of the dispute but rather a symptom of the dispute. Airport sponsors are constantly juggling competing interests and sometimes that results in a change of an airport rule, policy or procedure. As a tenant, the airport’s change in position may create strains on your business and operations. Merely complaining to the airport sponsor that you are harmed by the change in procedure or policy is not likely to resolve the dispute unless you have an understanding of what the reason/rationale for the change was.
Identify the Legal Obligations that the Airport Sponsor May Be Violating.
In order to have meaningful discussions with the airport sponsor regarding the dispute, and to help persuade them to resolve the dispute, you should identify what legal obligations the airport sponsor’s conduct may be violating. Some common examples are: (i) the airport’s minimum standards; (2) the FAA grant assurances (most often Grant Assurance 22, economic nondiscrimination, and/or Grant Assurance 23, exclusive rights); (iii) your lease with the airport sponsor; and/or (iv) applicable state and local laws. In some instances, your discussion of the legal obligations with the airport sponsor may be the first time the airport sponsor is made aware of the specifics of one or more of those obligations or how its actions may be running afoul of the obligations.
Gather and Preserve all of the Relevant Facts and Evidence.
Once you identify the root cause of what is creating the dispute, and the airport sponsor’s relevant legal obligations, it is important to gather all the relevant information and evidence relating to the issue. At this point, you are likely considering pursuing your legal options. As soon as you begin to consider pursuing a legal remedy, it is imperative that you immediately segregate and preserve all the materials, records, communications, and emails that could be relevant to your claim. Failure to preserve evidence may expose your business to claims of spoliation and undermine your ability to prosecute and/or recover for your claims. Additionally, you should review airport commission (or other governing body having jurisdiction over the airport) meeting minutes. Meeting minutes and agendas are often available on the airport sponsor’s website, and they should be saved in the event that they are subsequently removed from the website. Additionally, you should issue a freedom of information request to the airport sponsor seeking all information relevant to your claim to which you are entitled under your state’s specific freedom of information laws.
Analyze the Airport Sponsor’s Position.
As you are gathering and preserving the relevant evidence, you should review and carefully evaluate why the airport sponsor is taking the actions at issue. You can learn a significant amount about why the airport sponsor is taking a particular action or making a change by reviewing airport commission meetings for the days and weeks surrounding the airport’s actions that are the subject of the dispute. Understanding the airport sponsor’s reasons for taking actions that are the subject of your dispute can help you to propose synergistic solutions that work for both you and for the airport sponsor.
Identify Achievable Resolutions to Resolve the Dispute.
Now that you have identified the cause of the dispute, identified the airport sponsor’s relevant legal obligations, analyzed the airport sponsor’s position, and gathered your evidence, you have the tools to identify achievable proposals to resolve your dispute. Ideally, you will have more than one proposal. The proposals should be simple and easy to implement, and they should have measurable deliverables and timetables to accomplish those deliverables. It is also persuasive to explain to the airport sponsor that your proposed resolutions benefit the airport sponsor by ensuring that it is legally compliant, thus ensuring the airport’s continued viability. A proposal that exposes the airport sponsor to claims from other tenants is unlikely to gain much traction.
Meet with the Airport Sponsor.
Once you have accomplished steps 1-5, you are ready to meet with the airport sponsor. Your meeting with the airport sponsor will be most productive if you provide the relevant evidence in advance of the meeting for the airport sponsor to review. Be sure to bring to the meeting copies of all relevant evidence that you wish to discuss. Be sure to clearly and succinctly outline the cause of dispute, the airport sponsor’s legal obligations, each parties’ respective interests, and your proposals to achievably resolve the matter. The meeting will be more likely to yield positive results when the parties take a collaborative approach rather than a combative approach. If the initial meeting was productive but you did not ultimately reach a resolution, consider additional meetings or other forms of alternative dispute resolution. Indeed, 14 C.F.R. § 16.21(a) provides that the “FAA Airports District Office, FAA Airports Field Office, FAA Regional Airports Division responsible for administering financial assistance to the sponsor, or the FAA Office of Civil Rights will be available upon request to assist the parties with informal resolution.”
Document Efforts to Resolve the Dispute with the Airport Sponsor.
As discussed in more detail below, it is essential to ensure that you document your efforts to resolve your dispute with the airport sponsor. One way to do this is by sending emails and/or written correspondences. Also, to the extent you have phone calls and/or in-person meetings, be sure to either document those encounters with contemporaneous confirming emails and/or notes to your file.
Ensure that you have Taken all Reasonable Efforts to Resolve the Dispute.
Prior to filing a Part 16 complaint, C.F.R. §16.21(b) specifically mandates that: (i) you informally make “substantial and reasonable good faith efforts to resolve the disputed matter” in and (ii) there is “no reasonable prospect for practical and timely resolution of the dispute.” If you cannot satisfy this requirement, it will result in dismissal of your Part 16 complaint. See KC FXE Aviation Investments, LLC and Terminal Ventures, LLC d/b/a W Aviation FBO v. City of Fort Lauderdale (FAA Order of Dismissal dated February 15, 2023; FAA Docket No. 16-23-20).
Proceed with a Part 16 or Part 13 Complaint to the FAA.
Make sure you enlist the help of a legal professional experienced in this area of the law. There are various reasons why you may choose a Part 13 complaint as opposed to a Part 16 complaint, and vice versa. A legal professional can help you determine which suits your needs best. If you opt to file a Part 16 complaint, there are several procedural rules that must be complied with when filing the complaint. Failure to satisfy all the applicable rules could result in your Part 16 complaint being dismissed by the FAA without consideration.
Paul Grocki is an attorney with the Law Offices of Paul A. Lange, LLC with offices in New York and Connecticut. He focuses his practice primarily on litigation, insurance and aircraft transactional matters. Grocki also represents aircraft owners and fixed-based operators (FBOs) in connection with negotiation of management, charter agreements, various types of ground leases and airport disputes.
