In my last blog I discussed the Ninth Circuit’s review of the City of Santa Monica’s appeal of the procedural dismissal of the City’s lawsuit asking for a judicial “declaration” of the legal status of the Santa Monica Airport (SMO). This week the City took actions that will ultimately lead to a judicial determination of the City’s rights even if the Ninth Circuit dismisses the City’s case.

Namely, the City Council adopted a policy for leasing its properties at SMO, which include all the land, buildings, and other facilities at the airport used for both aviation and non-aviation activities. The City needed a leasing policy because last July all of the leases at the airport terminated concurrently with the expiration of the 1984 Agreement that settled litigation with the Federal Aviation Administration.

While many current tenants at the airport are, naturally, aviation businesses, the leasing policy hardly mentions aviation beyond saying that alternative fuels will be used within an “Airport Operations Area.” Instead it establishes criteria for granting leases that are all based on impacts on the surrounding environment, criteria that are the same for all activities. It lists examples of authorized uses under these criteria that are all low impact; none are aviation uses.

But then, the authorized uses also include “uses required by law.”

“Uses required by law.” Hmmm. Maybe you’re asking, “what uses does the law require?” Well, that’s a good question, and it’s one that leads to a prediction that at some point the City is going to deny a lease to an aviation business that in turn leads to the business or the FAA going to court to claim that the City, by not leasing to aviation businesses, is violating legal obligations to operate an airport.

In fact, the City’s leasing policies, or non-leasing policies, are already being challenged. In February the usual suspects—the National Business Aviation Association (NBAA) and the Aircraft Owners and Pilots Association (AOPA)—brought an administration action (called a “Part 16 Complaint”) in the FAA claiming that the City was not fulfilling obligations to operate the airport arising under statute, under the “grant assurances” it gave in a 1994 contract with the FAA (the subject of anther Part 16 proceeding), and under the 1948 “Instrument of Transfer” by which the federal government relinquished control of the airport back to the City after World War II. While the new Part 16 action raises several objections to City policies, a significant basis for it is the City’s not giving new leases to aviation businesses.

The City is not due to respond to the February complaint until late April, at which point we might see something about what the City considers its legal obligations to be. We already know, however, from the City’s federal lawsuit, that the City doesn’t believe it has any obligation to keep the airport open under the 1948 agreement, and we know from the City’s response in the grant assurances Part 16 action that it believes that the grant assurances expired in 2014. I doubt there are other statutory obligations the City is willing to acknowledge. It seems likely, then, that the issue will soon be joined, at least in the interminable bowels of the FAA administrative process, as to whether the City has any obligation to continue aviation operations at SMO.

But it’s a different question when the Part 16 complainants or the FAA will determine that they need to go to court to seek an injunction to force the City to lease property to aviation businesses to keep operations going at the airport. What straw breaks that back we don’t know. Some community members seem to think that the FAA, NBAA and AOPA will stand aside while all the airport’s aviation businesses go away, so long as the runway is left open for takeoffs and landings, but I suspect this is unlikely. At the same time the FAA has resisted having the 1948 agreement tested in court, and the NBAA and the AOPA showed such little faith in the 1948 agreement that they spent nearly $1 million in 2014 trying to preserve the airport by passing Measure D. The agency and the aviation business will have to strategize about what their best options are.

But it will be a good thing if and when that suit finally comes. Why? Because it will ultimately lead to a federal court, not the FAA, determining whether the 1948 agreement prevents the City from closing the airport, without the City having to close the airport. In other words, it will be as if the City gets past the procedural hurdles in the declaratory relief case, and can get an answer without taking the risk (by closing the airport) of a catastrophic loss (however remote that risk may be) under the 1948 agreement.

But there are complications. For one, so long as the grant assurances case is pending in the FAA the FAA will be able to say that the City is obligated to keep the airport operational independent of the 1948 agreement. Until the grant assurance case is resolved, courts might take the position that they needn’t venture into interpreting the 1948 agreement if the City couldn’t close the airport anyway.

Even more complicating, the courts might grant an injunction and then throw the whole thing back into the FAA for an administrative determination first. This could be worse than a complication, because if the FAA rules against the City, which, let’s face it, is likely, then the City will have to appeal an administrative ruling, and the courts give these a considerable level of deference.

All in all, the best outcome is for the Ninth Circuit to reverse the District Court and remand the City’s action for declaratory relief. But failing that, never fear, the City will someday get the FAA into court for a fair determination of the City’s rights.

Thanks for reading.