Airport Operator Options for Delivery of FBO Services (2018)

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88 When a disagreement arises between an airport sponsor and a fixed base operator (FBO) or other airport user, the result can become a Part 13.1 Informal Complaint or a Part 16 action seeking a final agency decision. “The informal complaint pro- cess is available for reporting statutory, safety, and regulatory violations to the Region/ADO. In addition the FAA uses the informal complaint process to investigate allegations of an airport sponsor’s violation of a federal obligation … such as grant agreements and surplus property deeds” (FAA 2014). The target evaluation period is set at 120 days for the FAA to review, investigate, and conclude each informal complaint, but it can take longer. Part 16 of Title 14 of the Code of Federal Regulations is the FAA’s formal administrative process to address complaints that an airport sponsor is not complying with its federal obligations, including the airport sponsor’s grant assurances. See 14 CFR §16.1(a) for a list of statutes and other authorities under which a Part 16 action may be brought. The primary issue in a Part 16 proceeding is whether the airport sponsor is in violation of its federal obligations. It is not about whether, or in what amount, the complainant has been damaged by the alleged noncompliance. If the airport sponsor is not in compliance, the FAA may impose various remedies to bring the airport sponsor into compliance or, in egregious circumstances, may take punitive compliance actions against the airport sponsor. Part 16 sets out detailed procedures for filing, investigating, and adjudicating formal complaints against airport sponsors. A Part 16 proceeding is initiated by the filing of a formal written complaint by a “person directly and substantially affected by any alleged noncompliance” by the airport sponsor. As a rule, an existing FBO tenant will satisfy the standing require- ment of 14 CFR §16.23(a). Whether a complainant who is a prospective FBO tenant satisfies the standing requirement may be a bit more complicated and depends on the particular circumstances. In addition to satisfying the standing requirement, a complainant must, prior to filing a complaint under Part 16, “initiate and engage in good faith efforts to resolve the disputed matter informally with those individuals or entities believed to be responsible for the noncompliance” (14 CFR §16.21). A Part 16 complaint will be dismissed unless the complainant certifies that such good faith efforts have been made to resolve the disputed matter and that no reasonable prospect exists for the practical and timely resolution of the dispute (14 CFR §16.21(b)). A complaint may also be dismissed by the Director of the FAA Office of Airport Compliance and Management Analysis (Director) if the complainant lacks standing, if it appears on the face of the complaint that the complaint is outside the jurisdic- tion of the FAA, or if it does not state a claim that warrants an investigation or further action by the FAA (14 CFR §16.25(a)). If the pleadings disclose a reasonable basis for further investigation, the FAA will investigate the subject matter of the complaint. The FAA’s investigation may include a review of the written submissions and pleadings of the parties, as supplemented by any informal investigation by the FAA, as well as additional information furnished by the parties at the FAA’s request. The FAA also has the authority to demand additional oral and documentary evidence per 14 CFR §16.29. After the FAA’s investigation concludes, the Director will issue an initial determination supported by an explanation of the factual and legal bases for the Director’s decision. This Director’s determination is the initial nonagency decision on the matters alleged in the complaint, and any party adversely affected by this determination may appeal it to the FAA Associate Administrator for Airports. If the Director’s determination finds that the airport sponsor is in compliance with its federal obligations, the Part 16 pro- ceeding will terminate unless an adversely affected party makes a timely appeal. Conversely, if the Director’s determination finds the airport sponsor is not in compliance, the FAA may issue, or propose to issue, one of a variety of compliance orders including the following: • An order terminating eligibility for grants • An order suspending the payment of grant funds • An order withholding approval of any new application to impose a passenger facility charge • A cease and desist order • An order directing the refund of any unlawfully collected fees The Director may also direct the airport sponsor to submit a corrective action plan. If a corrective action plan is submitted and approved by the FAA and the Director concludes the airport sponsor has fully complied with the corrective action plan or has otherwise corrected the areas of noncompliance, the Director will terminate the Part 16 proceeding (14 CFR §16.109). If APPENDIX B Part 13 and 16 Actions

89 the Director’s determination finds that the airport sponsor is not in compliance with its federal obligations and proposes the issuance of a compliance order, a hearing may be required (14 CFR §16.31). If a hearing is required or otherwise afforded pursuant to an appeal of the Director’s determination, that hearing will be conducted by a hearing officer in accordance with the procedures outlined in Part 16. The hearing officer will issue an initial decision based on the record developed during the proceeding. As with the Director’s determination, an adversely affected party to the Associate Administrator may appeal the hearing officer’s initial decision. The hearing officer’s initial decision will become the final agency decision unless an appeal is made or the Associate Administrator decides to review the case on the Associate Administrator’s own motion. Upon review, the Associate Administrator may accept the hearing officer’s decision, may issue an order in lieu of the hearing officer’s decision, or may remand the matter for further proceedings as the Associate Administrator deems necessary (14 CFR §16.245). Ultimately, an adversely affected party may seek judicial review of a final agency decision and order by a United States Court of Appeals (14 CFR §16.247). It should be apparent from the foregoing discussion that an existing or prospective FBO tenant that is contemplating a Part 16 proceeding should retain competent legal counsel, as should an airport sponsor that finds itself in the position of defending a Part 16 complaint.