Firm client the Town of East Hampton, NY prevailed in a long-running dispute with the National Business Aviation Association and other aviation interests over the Town’s use of airport revenue to pay legal fees in the Town’s efforts to control noise from helicopters. NBAA and others filed a Part 16 complaint with the FAA in 2015 asserting that the use of airport revenues to pay legal fees incurred in defending curfews and other restrictions on loud aircraft were an impermissible use of airport revenue because they sought to “perpetuate illegal restrictions on aeronautical operations.”
On July 23, 2020, the FAA issued a Final Agency Decision affirming a prior Director’s Determination finding that the Town was entitled to use airport revenue to pay those legal fees for the simple reason that legal fees are a permissible use of airport revenue and the litigation itself was an operating cost of the airport. The FAA rejected NBAA’s argument that the FAA should consider whether the underlying efforts of the Town were intended to “benefit” aviation or that the FAA should require airports to obtain prior approval before making certain expenditures of airport revenue. This decision rejected NBAA’s invitation to make a broad policy pronouncement and instead reflects a practical approach to what constitutes a capital or operating cost of an airport in general, and the ability of an airport sponsor to use airport revenue to defend itself in legal actions even when the airport loses that litigation or seeks to defend measures opposed by aviation interests.
Firm attorneys Catherine van Heuven and Eric Pilsk represented the Town in the initial phases of the Part 16 proceedings and obtained a favorable Directors Determination for the Town. A copy of the FAA Final Agency Decision can be found here. Contact Eric or Katie if you would like additional information.