FAA Rejects Santa Monica’s Appeal of Grant Violations

Closing the administrative process, the Federal Aviation Administration on Monday denied the City of Santa Monica’s appeal of the FAA’s December 2015 inital decision. Monday’s decision has the effect of requiring the city’s airport to remain open at least until 2023. http://bit.ly/2b1vSjt  This result should have come as no surprise, the FAA rarely overturns its initial ruling in administrative actions. 05023AD

The City argued that a federal airport improvement grant of $240,600 accepted by Santa Monica in August 2003 was not a new grant, but an amendment to a previous. Therefore, the grant agreement between the FAA and the City had already expired. In December, 2015, the FAA ruled in its “Director’s Determination” that the 2003 grant was a new grant. As such, the airport to stay open until at least August, 2023, when the terms of the grant agreement would expire. The City tried to convince the FAA that it should not be able to write the grant agreements and then be given deference when it comes time to interpret the agreements. This is particularly true in this case, the City stated, where the City’s interpretation of the grant agreement was reasonable one and the FAA was aware of its interpretation. The FAA found that it could, indeed, interpret the grant agreements anyway it chose, since it was issuing the grants. The FAA concluded that normal rules of contract interpretation do not apply in this instance.

The City will now have 60 days to decide whether to take this issue to the U.S. Court of Appeals. The City’s Petition for Review could be filed either in the U.S. Court of Appeals for the Ninth Circuit, located in San Francisco, or the U.S. Court of Appeals for the D.C. Circuit in Washington, D.C.

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