WHAT HAPPENS WHEN AN FBO CANNOT SELECT ITS OWN FUEL PROVIDER? Continued from page 57 not provide much guidance, as it does not appear that this particular issue has been addressed by the courts. As such, the issue is ripe for litigation. Remedies If an airport sponsor forces a fuel provider on an FBO, the affected FBO can file a formal complaint against the sponsor pursuant to 14 C.F.R. Part 16. Complaints pursuant to Part 16 follow a process similar to traditional litigation in a civil court setting. Part 16 proceedings have strict and tight deadlines for pleading, discovery guidelines to obtain evidence, and in some cases a hearing may be held. 14 C.F.R. § 26.13 sets forth the specific requirements for a Part 16 complaint. The pleading require- ments for a Part 16 complaint are stringent. An FBO filing under Part 16 must take care to satisfy all of the requirements of § 26.13 or risk a dismissal of its complaint from the outset before the merits of the complaint are addressed. It also should be noted that there are two jurisdictional prerequisites that an FBO must satisfy prior to filing a Part 16 complaint. The first jurisdictional prerequisite is that the FBO must be directly and substan- tially affected by the airport spon- sor’s failure to satisfy its obligations under the federal grant assurances. Generally, any entity that conducts business with an airport and that pays fees and/or rent to an airport is considered to be directly and substan- tially affected by an airport spon- sor’s actions. Moreover, tenants of federally funded airports, especially FBOs, have a more expansive range of potential issues for which they claim to have standing for a Part 16 action against an airport spon- sor; such as an improper granting of an exclusive right. As such, an FBO is almost certain to have standing to bring a Part 16 action challeng- ing an airport sponsor’s forcing of a fuel provider on the FBO. The second jurisdictional pre- requisite to satisfy is that the FBO must initiate and engage in good faith efforts to resolve the disputed matter informally with the airport sponsor prior to filing a Part 16 complaint. Indeed, the FBO must provide a certification in its complaint that it made substantial and reason- able good faith efforts to resolve the disputed matter informally prior to filing the complaint, and that there is no reasonable prospect for prac- tical and timely resolution of the dispute. If an FBO fails to make such a certification in its complaint, the complaint may be dismissed. An FBO can satisfy this requirement by engag- ing in well-documented informal settlement efforts with the airport sponsor directly, or through more formal settlement efforts, including mediation, arbitration, or some other form of alternative dispute resolution. The Part 16 complaint will receive administrative review and the FAA will issue a formal, written determi- nation as to the complaint. A determi- nation that the airport sponsor is in violation of its federal grant assur- ance obligations can result in FAA action to withhold current and future grant funding for the airport. Under certain circumstances, the FAA may issue any orders that it deems neces- sary to address an airport sponsor’s noncompliance with its obligations under the federal grant assurances. An FBO may also have a civil claim for breach of contract and or a claim for tortious interference with contractual relations. This will depend upon the specific terms of the FBO’s lease agreement with the airport sponsor and on the specific facts of each matter. Therefore, it is best to consult with counsel when the FBO first learns that the airport sponsor intends to force the FBO to use a specific fuel supplier. Paul Grocki focuses his practice primar- ily on litigation, insurance, and related transactional matters. He represents clients in aviation, commercial, and general negligence matters before state and federal courts, as well as before state and federal administrative agencies. He represents purchasers and sellers of aircraft in the buying, selling, and financing of aircraft of various sizes, including creating and registering aircraft holding entities and minimizing sales and use tax. Paul also represents aircraft owners and FBOs in connection with the negotiation of management and charter agree- ments, and also represents FBOs in the negotiation of various types of ground leases. Further, Paul represents individual pilots and businesses (avia- tion and non-aviation) in administra- tive proceedings, including certificate revocations, proposed certificate actions, and proposed civil penalties. Paul can be reached at [email protected] 58 Aviation Business Journal | 4th Quarter 2015
