In 1999, BMI Salvage, Inc., a small aviation business engaged in salvage demolition of aircraft, entered into a five-year lease for space at the Airport on a concrete ramp to conduct operations. The leased property did not include a building or utilities. Despite numerous requests from BMI, the County refused to give BMI a new lease that included a building. BMI's five-year lease expired and BMI continued to operate from the concrete ramp on a month-to-month tenancy.
BMI’s owner also owned Blueside Services, which provided aircraft fuel and repair services. In 2004, Blueside entered into an agreement with Opa-Locka Community Development Corporation (“CDC”) to sublet property at the Airport on CDC's 30-year lease with the County, and it was Blueside's plan to construct a building on this subleased property to conduct both the BMI salvage operations and the Blueside service operations. However, the sublease required the County's approval which had not been given.
BMI and Blueside complained to the FAA that the County violated Federal Grant Assurance 22 by withholding leases which would permit BMI and Blueside to occupy or build facilities at the Airport, while granting such leases to other similarly-situated tenants. The FAA Associate Administrator for Airports (the “Administrator”) denied the complaint, and BMI and Blueside petitioned the Eleventh Circuit for review.
First, BMI and Blueside alleged that they were discriminated against in favor of a similarly-situated tenant Clero Aviation. The Administrator held that BMI/Blueside and Clero Aviations were not in fact similarly-situated, so that disparate treatment was permissible. The distinctions included that BMI/Blueside wanted to conduct a new rather than an existing repair business, and BMI/Blueside did aircraft demolition in addition to repair.
The Court of Appeals concluded that the distinctions were irrelevant. The Court further found that BMI/Blueside had been treated disparately, given that Clero Aviation’s lease gave it access to a building whereas BMI/Blueside was denied such access.
Next, BMI alleged that it was unjustly discriminated against in favor of Miami Executive Aviation (“MEA”). It alleged that the County entered into a 35-year development lease with MEA following the expiration of its 5-year lease, which was precisely what the County refused to do for BMI/Blueside.
Although the Administrator found that MEA was not similarly-situated with BMI/Blueside, the Court of Appeals again found no material distinction between the businesses, and that they were treated disparately.
The Court observed that the record merely indicated that the County denied a competitive lease to BMI/Blueside on the basis that there was already a similar service at the Airport. The Court stated that reason alone was insufficient, but the record did not disclose if there were valid reasons why another operator should not be permitted. The Court reversed the FAA's decision and remanded the matter to the FAA to either negotiate in good faith for a long-term lease with BMI/Blueside, or demonstrate sufficient factual reasons why there should not be two similar operators at the Airport.
Jurisdiction: U.S. Court of Appeals, Eleventh Circuit
Related Categories: Transportation
|Appellant Lawyer(s)||Appellant Law Firm(s)|
|Ted Bartelstone||Ted H. Bartelstone PA|
|Appellee Lawyer(s)||Appellee Law Firm(s)|
|Thomas P. Abbott||Miami-Dade County Attorney's Office|
|Cynji Antoinette Lee||Miami-Dade County Attorney's Office|
|Michael Jay Singer||U.S. Department of Justice|
|Constance A. Wynn||U.S. Department of Justice|