Monthly Archives: May 2016

Santa Monica Airport: wheels of justice speed up a bit

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The wheels of justice have ground slowly when it comes to the Santa Monica Airport, but yesterday a unanimous three-judge panel of the Ninth Circuit Court of Appeals kicked them into a higher gear with a ruling that upended the balance of power between the City of Santa Monica and the Federal Aviation Administration (FAA).

The unsigned, seven-page “Memorandum” decision reinstated the City’s lawsuit, filed in 2013, that asked that the federal courts declare what the City’s rights are to the land at the airport. In 2014 a district judge dismissed the case, ruling that the City had filed the action too late, i.e., after the applicable 12-year statute of limitations had expired. He ruled that the clock had begun to tick in 1948. That was when the City and the federal government signed a post-World War II “Instrument of Transfer” (IOT) that returned control of the airport to Santa Monica, but which contained a clause requiring Santa Monica to operate the airport in perpetuity. If the City didn’t operate the airport, then the IOT said that property the feds were transferring to the City would “revert.” In the lawsuit, Santa Monica argues that the perpetuity clause is unenforceable or, alternatively, that it was superseded by a subsequent agreement, in 1984, that allowed the City to close the airport after July 1, 2015.

In its appeal of the district court’s dismissal of the case, Santa Monica argued that it could not have known in 1948 that the land, as opposed to other property, could be subject to reversion, and that the 12-year period began in 2008, when the FAA first notified the City that if Santa Monica did not continue to operate the airport, the feds could claim the land.

It took almost two years for the City’s appeal to reach oral argument in the Ninth Circuit. Since hearing the case in March, however, the appeals court has acted fast. In yesterday’s ruling the court, echoing questions that one of its members, Judge Jacqueline Nguyen, had asked the federal government’s lawyer during oral arguments, found that the statute of limitations issue could not be decided separately from the substantive merits of the case. Specifically, whether the City was on notice in 1948 of a federal claim that would trigger the start of the 12 years depended upon whether the IOT threatened the City’s ownership of the land, as opposed to being applicable only to other property transferred from the feds to the City. Since the essence of the City’s case is that the IOT did not transfer ownership of the land, the court ruled that the scope of the IOT had to be determined before the statute of limitations issue could be determined. The court sent the case back to the district court for trial.

The Ninth Circuit judges went even further, however, and that’s where the ruling fundamentally changes the litigation landscape. While the court said it could not determine from the record what the City knew or should have known in 1948, and left that to the trial court, the judges were not satisfied with simply remanding the case. Instead, the court went out of its way to prospectively validate the City’s arguments that the 1948 perpetuity clause did not apply to the land, and prospectively invalidate as irrelevant the primary evidence the FAA has put forward as support for its argument that the perpetuity clause in the 1948 agreement is enforceable.

As for the City’s arguments, the court emphasized, by quoting three times from the IOT, that the IOT, including its penalties for violating the perpetuity clause, only applied to property transferred in the IOT. Pointedly, the judges reminded everyone that neither side disputed the fact that the City had owned title to the land when it leased it to the federal government during the War.

The evidence that the FAA has put forward to prove that the IOT did apply to the land consists chiefly of actions and legal opinions from the ’50s, ’60s and ’70s. For each case, the Ninth Circuit panel suggested reasons why the evidence could not prove that the parties understood the IOT to mean that the City could lose the land if it didn’t operate the airport.

The three judges, in effect, laid out the case the City should make at trial.

When asked by the Santa Monica Lookout News for the FAA’s reaction to the Ninth Circuit decision, a representative said that the agency was reviewing it. I imagine that this review will be accompanied by some consternation because, at the least, the FAA is now going to find itself in a place, an impartial federal court, where it did not want to be, litigating a question, the present day validity of the IOT, that it did not want to litigate.

On the other side of the coin, the decision validates a strategy that the City decided on a 2013 (disclosure: a strategy that I had advocated for previously), namely to seek a federal court declaration of its rights before doing anything that might precipitate a stronger reaction from the FAA.

Thanks for reading.

(The Ninth Circuit decision can be accessed here. It’s worth reading.)

How to plan a park; how to close an airport

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A lot, as usual, is going on in Santa Monica, mostly of the garden-variety category, such as people filing petitions to stop change, but 30 years from now historians of the city are going to look back to our time mainly at two things: one, that on May 20, 2016, mass transit returned to Santa Monica, and two, that in 2016 the City and its residents were working hard to turn Santa Monica Airport (SMO) into the great park that people 30 years from now will take for granted. This post is about the airport.

To start, tomorrow night the Santa Monica Airport2Park Foundation is hosting an event where the public can learn more about the process, both procedural and intellectual, that is to going lead to the creation of a 12-acre expansion of Airport Park, representing the beginning of the conversion of the airport into parkland.

The event is a talk by designer Mark Rios, whom the City of Santa Monica has hired to design the new parkland. Tomorrow night Rios will give a preview of the public process for designing the park expansion that gets underway officially with a city-sponsored workshop in June. Rios will discuss his own process when tasked with designing a park, and what he sees as the challenges for this project. It’s worth mentioning that Rios is one of the most accomplished park designers in the country, if not the world. Among many other projects, he recently designed Grand Park in downtown Los Angeles. (He has also worked often in Santa Monica, so he knows the territory.)

Readers may also recall that in October 2013 Rios gave a fantastic talk, also sponsored by Airport2Park, showing how all over the world cities were turning airports and other industrial sites into parks. It was that talk that energized the political process to replace the airport with a park. Consider this is a return engagement for Rios.

The event is tomorrow night, at the Mt. Olive Church, 14th and Ocean Park Boulevard. Doors open at 6:30. For more information, and to RSVP, click here.

* * *

In March I wrote about a new “Part 16 Complaint” that aviation interests, including the National Business Aviation Association (NBAA) and the Airport Owners and Pilots Association (AOPA), had filed against the City with the Federal Aviation Administration (FAA). The NBAA and AOPA, and aviation businesses and pilots using SMO, alleged various ways by which the City was violating laws and FAA regulations in its operation of SMO. In particular, they complained that the City was not giving aviation businesses long-term leases.

When I wrote about it in March, the next step in the case was the City’s response to the complaint, which was due in April. The City filed its brief about a month ago. It is a relatively short (16 pages), but fascinating document. The City has engaged new aviation lawyers for this case, a firm called Anderson & Krieger, which has both an environmental practice and a strong practice representing municipal airports.

Initially the new lawyers’ brief follows, I have to say, a line of argument that I anticipated in my March post, namely that the City would use this new Part 16 action to make the argument that it has no obligations to any of the complainants because the City is no longer obligated to operate SMO. This is a logical argument to make from the twin facts that (i) the City has brought a case in federal court to prove that it has no obligations to operate the airport under the 1948 “Instrument of Transfer” by which the federal government returned to the City control of the airport after World War II, and (ii) the City is appealing the FAA’s 2015 administrative ruling that the City has to operate the airport until 2023 because of money the City received from the FAA in 2003. (In case you’ve lost track, the FAA’s “final” decision in that case is due June 15; if the FAA rules against the City, the City will appeal the case to the U.S. Court of Appeals.)

As anyone who has followed the federal litigation knows, the FAA has gone to extraordinary lengths to keep the question of the validity of the 1948 agreement out of court, and the City’s case about that is still marooned in the Ninth Circuit Court of Appeals. By bringing this case against Santa Monica, the aviation industry has, however, given the City the opportunity to litigate the 1948 agreement. As this latest brief, along many others the City has filed, shows, it’s not pretty for the FAA because in 2000 the FAA ruled, in another case involving leases, that after 2015 the City would have no obligation to operate SMO. The FAA is going to have to try to explain to a judge why it was wrong then.

Where the new brief goes further than any argument I predicted is that in it the City argues that the very fact that it is litigating its claims in good faith changes the legal landscape. While so far the aviation industry has used FAA administrative complaints to muddy the waters when it comes to the City’s rights, the City is turning the tables and arguing that the claims that it is litigating strengthen its rights as the owner of the airport land. As the brief states, “[u]ntil the City’s claims to be free of any continuing federal obligation to operate SMO as an airport have been resolved, the FAA cannot properly compel the City to give up the proprietary rights it is advancing in those [cases].”

Meanwhile, as has been reported, a major aviation business at SMO, and one of the complainants in the new Part 16 case, Justice Aviation, has settled with the City and is moving out. Justice is not the first nor will it be the last aviation business to leave. The City is already earning much higher rents from non-aviation tenants at SMO than it was from aviation businesses, rents that will someday pay for the operations of a park.

Thanks for reading.

P.S. After I posted this article earlier today, Airport2Park posted a terrific video interview of Mark Rios by Gavin Scott. The video was shot in Rios’ offices and it’s a great preview for his talk tomorrow night. To see the video, click here.

Hueston: you have a problem

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In my post last week I wrote about certain aspects of John Hueston’s report to the Santa Monica City Council on the Elizabeth Riel firing and the Oaks Initiative. Last Tuesday evening Hueston presented his report to the council. There was a public hearing where members of the public gave their views, mostly about O’Connor’s culpability in the firing of Riel or, alternatively, her virtues as a longtime councilmember and regional leader.

As for Hueston’s report, he makes some good recommendations. For one, Hueston recommends that the City use, except in unusual circumstances, a formal interview process when hiring “at will” (i.e., non-civil service) employees, and identify ahead of time whether a position is politically sensitive, to allow questions in the interview process about applicants’ histories of political activities specifically relating to councilmembers with whom they may need to interact. The latter recommendation more or less tracks the law as Federal District Judge Beverly Reid O’Connell described it in her rejection of Santa Monica’s motion to dismiss Riel’s complaint; she said that if political history (or lack thereof) is going to be factor in whether someone is going to be hired, that has be made clear as part of the job description.

Moving onto the Oaks Initiative, Hueston made an excellent and common sense suggestion that enforcement of the law be entrusted to an attorney in the Criminal Division of the City Attorney’s office. Although under the City Attorney’s purview, the Criminal Division nearly always operates independently and in any case does not give legal advice to the City Council. Having a designated attorney in the Criminal Division, who would not report to the City Attorney on Oaks matters, would seem to solve the problem of the City Attorney having conflicts of interest when investigating councilmembers.

In last week’s post about Hueston’s report I wrote about how Hueston was able to interview City Attorney Marsha Moutrie and shed more light on the interplay between her and City Manager Rod Gould preceding Gould’s decision to fire Riel. Hueston also interviewed people who had been involved in the Riel hiring process, but who had not given depositions in the lawsuit. Information from them has given us a better understanding of what Riel’s mindset might have been when, in the fateful phone call of May 23, 2014 with Gould, he asked her to explain why she had not revealed her past political activities in the interview process. It was her answer to Gould’s question, namely that she had disclosed her political past, that angered him and led to her being fired.

Why did Riel answer that way? The answer now seems to be that Riel had in fact disclosed her past political activities, or had at least disclosed enough to believe in good faith that she had been open about them. On page 13 of his report Hueston recounts testimony from a member of the panel that interviewed Riel for the job (a panelist who requested anonymity) that this panelist supported Riel for the job precisely because Riel had been upfront about her past involvement in Santa Monica politics (and that this showed she was comfortable with politics). Although the panelist could not recall if Riel’s disclosures extended to disclosing that she had worked on campaigns for councilmembers (or against them, as in the case of O’Connor), this could easily explain why Riel had in that phone call with Gould told him that she had disclosed her political activities.

It’s too bad that Gould did not know about what Riel had disclosed in the interview process. If he had, he might have been able to diffuse O’Connor or at least not become angry himself. As it is, again this is evidence that rule number one should be that if there is a process, then trust it.

One gripe I have about Hueston’s report is that he didn’t interview Riel, who would have been able to tell Hueston what she disclosed during the hiring process. The reason Hueston gives is that Riel requested compensation for her time, as well as that her attorney be paid to attend the interview. In Hueston’s opinion he already had enough testimony from Riel from her lawsuit deposition and the City didn’t need to spend the money. In my opinion, Riel’s requests were perfectly reasonable, and I don’t understand why Hueston (or if he didn’t have the authority, whoever did) didn’t authorize the expenditure. The City is paying something like $400,000 (or more) for Hueston’s investigation; it would have been worth a few thousand dollars more to hear from the person who was at the center of the controversy, particularly with respect to questions that didn’t come up in her deposition.

Alas, the upshot is that Riel comes across as mercenary, which is unfair. As I said, her requests for compensation and for her lawyer’s presence in the interview were reasonable. After enduring litigation, even if you prevail, there’s no reason to be philanthropic with the other side, and you certainly shouldn’t talk to them without your lawyer. I haven’t agreed much with Diana Gordon, of the Santa Monica Coalition for a Livable City, about the Riel controversy, but Gordon was 100% correct when she spoke Tuesday night about how in all the uproar about O’Connor and Gould, we tend to forget what a victim Riel was.

While I would never call City Attorney Marsha Moutrie a victim, she is being victimized by a growing meme that she was grossly incompetent in not advising Gould that he would violate Riel’s First Amendment rights if he fired her. As I said in my post last week, Moutrie’s advice that Gould could fire Riel because she was an at-will employee turned out to be bad advice when Judge O’Connell rejected, mostly on First Amendment grounds, the City’s motion to dismiss Riel’s complaint. There’s nothing, however, in O’Connell’s ruling, the only legal ruling on these questions I know of in the case, that indicates that the issue was cut and dried.

But that’s not according to how the story is being spun. At Tuesday’s City Council meeting a resident said that according to the ruling any “first year law student” should have known that Gould would violate Riel’s free speech rights if he fired her. That was just the start. By the time, a little later in the evening, that Councilmember Sue Himmelrich was giving her two cents, she said (quoting from the Daily Press’s coverage), “I agree that the federal court did say that even a first grader would know this was a violation of her federal rights.”

I know that all first graders in Santa Monica are brilliant, but this seems to take hyperbole to a new level. In fact, Judge O’Connell had to use 19 closely reasoned, single-spaced pages to conclude that notwithstanding the basic rule that in public employee First Amendment cases public employers have “wide discretion and control over the management of their personnel and internal affairs,” the ultimate burden of proof, after Riel had satisfied a preliminary threshold, was on the City to prove that Riel’s rights had not been violated and the case should go to trial. Even following the rule that on a motion to dismiss everything in a complaint must be viewed in the plaintiff’s favor, O’Connell’s decision was not a slam-dunk. (For more on Judge O’Connell’s ruling, see my post from Oct. 16.)

I word-searched O’Connell’s ruling for “first year” and “first grader” and didn’t come up with any hits. Someone please tell me if there is another ruling in the case I don’t know about, and I’ll correct myself, but until then I’ll attribute Moutrie’s bad advice to human fallibility and the complexity of the law, rather than to not having the legal knowledge of a six-year-old.

Thanks for reading.