FAA Upholds Airport Funds Use for HTO Lawsuits

 - August 11, 2020, 11:29 AM

The FAA recently upheld an earlier agency determination that the town of East Hampton, New York, can use airport funds to pay for legal fees associated with its attempt to restrict access to East Hampton Airport (HTO). NBAA, joining a number of local aviation businesses and other aviation advocates, had appealed the 2018 determination, calling such use of airport money a “misappropriation of funds.”

But in a decision released last month, the FAA’s Office of Airport Compliance and Management Analysis said the previous determination was supported by law and precedent.

In the 2018 determination, the agency had found that “nothing exists in FAA policy to restrict a sponsor from using airport revenue to pay for legal obligations, activities, and costs, and further…nothing in law specifically requires a ‘benefit to an airport or its users.'" Further, the agency stated, “The fact that the town did not prevail, given the totality of circumstances involved in this matter, does not equate the payment of legal fees to revenue diversion.”

NBAA, along with other aviation advocates, however, disagreed. They argued and continue to believe that “use of airport revenue to pay for its legal fees is contrary to agency precedent, is bad policy, and is at odds with congressional instructions.”

“We are disappointed with the FAA’s decision,” said NBAA president and CEO Ed Bolen. “Operators at HTO were effectively double-charged in the fight for their right to use the airport. The town of East Hampton significantly raised the landing fees at HTO to generate additional revenue at the same time that it was incurring the legal expenses associated with defending the unauthorized restrictions.”

East Hampton has attempted a range of restrictions at HTO, including bans and limits on “noisy aircraft.” However, the aviation organizations fought those efforts and prevailed in federal court.

In the appeal to the FAA on the use of the airport funds, NBAA and the other organizations had stressed that East Hampton proceeded with to fight for various restrictions even when advised by the town’s own counsel that the restrictions were illegal. “The town had an explicit anti-airport and bad-faith agenda,” they said. “The town openly refused to utilize the opportunities provided by, much less comply with, the applicable federal laws…the FAA is unlikely to ever have before it, in its own words, a clearer ‘unique’ case of the ‘abuse’ of airport accounts to fund impermissible legal expenditures.”

Concerning to the groups is that the determination “sends an entirely inappropriate message to and sets an appalling new precedent for airport sponsors generally,” they said in the appeal.

“The FAA’s recent decision essentially allows East Hampton to use airport monies to defend the indefensible, burdening the airport users with the costs,” added Bolen, stressing that the association would continue to urge the FAA and airport sponsors to promote responsible use of airport funds.