Santa Monica Loses Airport Lawsuit In Victory For GA Proponents

 - February 14, 2014, 3:30 PM
The city of Santa Monica has been working for years to close its airport, but a recent ruling has made that plan more unlikely. (Photo: Matt Thurber)

Yesterday, U.S. District Court judge John Walter dismissed the city of Santa Monica, Calif.’s complaint against the U.S. government, in which the city sought to clarify its rights to do what it wishes with the Santa Monica Airport (SMO) property.

While the city has not officially declared recently that it wants to close its airport, it has been preparing for July 1, 2015, when the city believes its obligations to run the airport end in accordance with a 1984 settlement agreement with the FAA. In 2010 the city embarked on a public process to consider the future of the airport property, the result of which it released in March last year as a three-phase visioning process. “Although the report did not take a position on whether SMO should be closed at the expiration of the 1984 Settlement Agreement, the report concluded that maintaining the status quo at SMO was not acceptable to City residents,” according to the dismissal.

What led to the city’s complaint, filed last October, was a series of discussions held with the FAA. The city was trying to respond to its citizens’ concerns and clarify its “authority to determine SMO’s future operations.” The FAA pointed out that the city is obligated to keep SMO operating in perpetuity, based on the 1948 Instrument of Transfer, which returned the airport to city control following its lease to the government during World War II. “The Instrument of Transfer expressly provides that, in the event the Airport Property is used ‘for other than airport purposes without the written consent of the Civil Aeronautics Administrator,’ ‘the title, right of possession and all other rights transferred by this instrument to the [City], or any portion thereof, shall at the option of [the United States] revert to the [United States]…’”

The city’s complaint “claims that the Instrument of Transfer could not possibly allow the United States to take title to, or assert ownership of, the Airport Property in the event that the City ceases to operate SMO as an airport because United States never owned the land. The City contends that its obligation to operate SMO as an airport will end on July 1, 2015, when the term of the 1984 Settlement Agreement expires.” The complaint centered on four claims for relief: a quiet title action, usually used for boundary disputes; a regulatory taking in violation of the Fifth Amendment and a due process violation of the Fifth Amendment; and a violation of the Tenth Amendment of the U.S. Constitution.

The government responded to the city’s complaint and asked for the case to be dismissed because the 12-year statute of limitations has expired for the quiet title claim, and also because the constitutional claims were not applicable in this case. In his dismissal of the case, Walter ruled that indeed the statute of limitations has expired and, according to NBAA, “The court also rejected constitutional claims asserted by the city, holding that a claim for ‘takings’ damages could be heard only in a specialized tribunal, the U.S. Court of Federal Claims in Washington, D.C. The court further held that the city’s claims of violations of due process and its sovereignty were premature, because the city had not tried to close the airport, and therefore, the FAA had not been called upon to enforce the requirement that the airport remain open.” The quiet title claim was dismissed with prejudice, meaning that the city cannot re-file this claim or pursue any legal remedy related to that claim in the future.

“While we cheer this latest victory in preserving a valuable Southern California airfield, we know that we must remain vigilant and focused in our work to preserve access to this airport, and all airfields in our nation’s aviation system,” said NBAA president and CEO Ed Bolen.

“The city was stopped in its tracks yesterday in its most recent effort to strangle Santa Monica Airport,” said AOPA president Mark Baker. “The city is not representing its citizens. Surveys have proved that the majority of Santa Monica residents support the airport, yet the city continues to spend millions of dollars of taxpayer money to shut down this economic engine that provides jobs and annual revenue of more than $200 million. Santa Monica Airport is vital to the city and to our nation’s air transportation system and it must not close.”

While the judge’s dismissal of the Santa Monica lawsuit is viewed as a victory in general aviation circles, the city could still choose to close the airport and allow the government to take it over. All airport business leases are set to expire on July 1, 2015, when the city believes its obligation to keep operating the property as an airport expires.

According to law professor and pilot Lon Sobel, “There is nothing in the decision that prevents the city from closing the airport, or even says that it can’t. It simply says that if the city closes the airport, and if the FAA takes possession of the airport, the city’s exclusive remedy is to seek just compensation–i.e., money–in the Court of Claims. That’s helpful, because it means that the FAA can take over the airport, and if it does, the city can make a claim for money, but the city can’t insist on keeping the airport and closing it.”

Precedent-setting Decision

Sobel pointed out that the likelihood of the FAA not taking over the airport if it were to be closed is extremely slim, because the government would not want to set a precedent where cities could choose to close their airports without penalty. As NBAA and AOPA explained in an amicus brief filed to support the government’s response to the city’s complaint, there are about 200 airports in the U.S. where the city has a similar agreement requiring it to keep its own airport open. Allowing other cities to close their airports, he explained, “will play havoc with the national airspace. I am all but certain that the FAA will take over [SMO].”

While Chicago Meigs Field is often cited in arguments about SMO, it was not a similar case, according to Sobel. The city of Chicago had no agreement to keep the airport open in perpetuity and thus was not required to keep Meigs open, beyond its obligations attached to government grants. Sobel believes that Chicago’s then-mayor Richard Daley decided to bulldoze the runway because he wanted to avoid protracted legal actions that could have kept the airport open and in limbo for many years. “Santa Monica is subject to a contract,” he said, “one reading of which requires it to be operated in perpetuity. If somebody tore up the [SMO] airport with a bulldozer in the middle of the night it would be a federal crime. It’s not going to happen, and Chicago is not a precedent for it happening.”

What concerns Sobel now is whether the government takeover of SMO would begin immediately after the Santa Monica city council decides to close the airport or whether the takeover would be delayed until the actual date of closure on July 1, 2015. The latter would create great uncertainly for airport businesses and tenants. An airplane owner, for example, might feel that the status of the airport is so uncertain that it would be prudent to make hangar arrangements at the nearest alternative, which is underutilized Hawthorne Airport. Otherwise that owner runs the risk of having to make a last-minute decision to leave the airport and possibly end up having to move much farther away. The same issue might affect airport businesses.

The city could also decide, if it keeps control of the airport, to raise landing fees and lease rates to levels so high that tenants are discouraged from staying at SMO and flying to the airport. The city, after all, already more than doubled landing fees last year and applied them to based tenants. The 1948 agreement does specifically require the city to set reasonable and nondiscriminatory terms, but those definitions could be subject to debate. And the city could end up overseeing what is essentially a dying airport that caters only to the wealthy.

The bottom line, Sobel said, is that Walter’s decision “is a victory for those who want the airport to stay open, but it’s really only a stage-one victory.” The city can still appeal and the city can also make operating at the airport unpleasantly expensive.