A week ago Friday (March 11) a three-judge panel of the federal Ninth Circuit Court of Appeals heard arguments in the City of Santa Monica’s lawsuit against the Federal Aviation Administration (FAA) about the future of Santa Monica Airport (SMO). You’re probably wondering, of all the litigation the City has with the FAA, just which case was this? Well, it’s the case the City brought in 2013 to get what’s called “declaratory relief,” which means the City is asking the courts to tell the City and the FAA what their respective rights are with respect the airport before the City makes decisions about SMO’s future.
American legal doctrine disfavors courts making decisions before there is what’s called an “actual controversy,” but in certain circumstances, federal courts will declare ahead of time, before fateful decisions are made, what are the rights of parties to a potential dispute. The City has since 1981 expressed its desire to close SMO, but if it tries to do so and it doesn’t have the right to do so, it could potentially be subject to serious penalties. Given that risk, it would make sense for the courts to analyze the situation ahead of time and declare what the City’s and the FAA’s rights are before the City takes action.
One avenue for requesting declaratory relief when a party has issues with the federal government over the ownership of property is an action under the federal Quiet Title Act, under which the federal government has promulgated rules by which it can be sued. (The government starts with something called “sovereign immunity,” which means it can’t be sued, but under laws like the Quiet Title Act (QTA) it allows suits against under specific rules.) One of the rules under the QTA is that there is a 12-year “statute of limitations,” meaning that if you have a dispute with the feds over a piece of property, you have 12 years from the time you know of the feds’ claim against the property to bring your lawsuit.
The key document for the question whether the City has the right to close the airport is a 1948 agreement, the “Instrument of Transfer” (IOT),” between the City and the federal government whereby the feds transferred back to the City certain improvements made to the airport during World War II when the feds leased the airport from the City. In return for the transfer, the feds had the City promise to operate the airport in perpetuity. The City argues that the government’s rights under the perpetuity clause are not enforceable, or, if even if they were enforceable, they were voided by a subsequent agreement the City and the FAA entered into in 1984.
But to get a court to consider these arguments (the “merits” of the case), the City first has to get past the procedural hurdle of the 12-year statute of limitations. The feds’ position, and one that the District Court judge who heard the case in 2014 agreed with, is that the City was on notice in 1948 that the federal government had a claim on the City’s land, a “cloud” on its title. The City’s argument is that it was only in 2008, when the FAA informed the City that if the City closed the airport the FAA could demand ownership of the land (as opposed to demanding return merely of the non-real property that had been transferred in 1948), that the City knew of a federal claim against the land, and that the 12 years only started to run then.
It took more than two years from the District Court’s 2014 decision against the City for the City’s appeal finally to be heard by the Ninth Circuit panel, which goes to show that in the interest of justice Congress must expand the federal courts of appeal. They are, or at least the Ninth Circuit is, overwhelmed. It’s unconscionable that any case, but particularly one that affects so many people, gets stuck in its tracks for this long over a procedural issue. “Justice delayed is justice denied.”
So what happened at the hearing? It was interesting. (You can watch the hearing yourself at this link; the case starts at around the 3:00 hour mark and the hearing last about 45 minutes.) The three judges were generationally diverse: the legendary 92-year-old Harry Pregerson, who was appointed by Jimmy Carter, and who is now on senior status; Judge Richard Paez, appointed by Bill Clinton; and an Obama appointee who joined the court in 2012, Jacqueline Nguyen. They asked good questions of the lawyers from both sides, and it’s impossible to predict what they will do.
If you want to be optimistic that the City will win, the best question came from Judge Nguyen. She asked the U.S. Attorney, Alisa Klein, how the statute of limitations issue could be separated from the merits of the case, since whether the 12 years started to run in 1948 depends on what was the subject matter of the 1948 IOT. Meaning, that if the court found that the IOT only applied to non-real property, that would dispose of both the statute of limitations issue but also, incidentally, the whole case.
Not surprisingly, U.S. Attorney Klein fervently tried to keep the case limited to the procedural question; she repeatedly argued that the City would have ample opportunity to raise the substantive issues if it closed the airport and if (“hypothetically” she said) the government brought an action to enforce its rights under the IOT. (The statute of limitations only limits the City’s rights under the Quiet Title Act; it does not limit the City’s arguments in a case the government should bring against it for closing the airport.)
In the strongest moments of the presentation from Deanne Maynard, the attorney from the firm of Morrison and Foerster representing Santa Monica, she argued that it was precisely this “Sword of Damocles” that the FAA held over the City’s head that compelled the court, for reasons of justice, to allow the City’s case to proceed. It’s wrong that a local government should be forced to make important decisions without knowing what its rights are vis-à-vis the powerful federal government.
Still, I left the hearing more than half expecting that the judges will do what judges in our tradition often do, which is to search for the narrowest grounds for making their decision. In this case that would be the statute of limitations. The Justice Department sent Klein, a highly regarded and experienced appellate lawyer, from Washington to argue the case, indicating the government thinks it’s important. Given, however, that Klein went out of her way to disassociate her arguments from the question whether the 1948 perpetuity clause could actually be enforced, I was left with the impression that the case was important to the Justice Department not necessarily because of the airport alone, but because the department didn’t want a hole opened in the Quiet Title Act’s statue of limitations.
Anyway, no use guessing what the court will do. We’ll know soon enough . . . well, check that, we’ll know whenever they get around to it.
Thanks for reading.