Docket OST-97-2329 (Docket 50176) Docket OST-95-474 / June 12, 1997

In an attempt to limit the scope of this remand proceeding, the Airlines seek to bar LADOA from raising the "new" and "dead" argument that LADOA's fees are entitled to a presumption of reasonableness or deference. Contrary to the Airlines' belated suggestion, raised in a sur-reply brief that is itself beyond the scope of this proceeding, this argument is neither "new" nor "dead." As discussed below, it was both addressed in LADOA's opening brief on remand and is responsive to the Airlines' opening brief. DOT cannot rule on the reasonableness of FMV without first assessing the presumption or deference which attaches to LADOA's FMV methodology and resulting rates. This inquiry is inextricably linked to what the Airlines refer to as "burden of proof," and must be resolved at this time.

LADOA has not raised a "new" issue in its reply brief that is beyond the purview of this remand. First, both LADOA and ACI-NA argued in their opening briefs that the Airlines had the burden of proving that LADOA's fees were unreasonable. LADOA Br. At 4-5; ACI-NA Br. at 8. The Airlines themselves concede this fact. Airlines Reply Br. at 1. The issue of whether LADOA's fees are presumed reasonable is related to and subsumed within this burden of proof inquiry. It is only because the fees are presumed "reasonable ' that the burden, as the Secretary found, then shifts to the Airlines to prove that they are "unreasonable." See Final Decision at 17. /1

Second, not only was this supposedly "new" issue raised in LADOA's opening brief on remand, it is also responsive to the Airlines' opening brief. The Airlines' brief, as did its precursors, implicitly (and sometimes explicitly) erroneously assume that the burden is on LADOA to prove that its fees are reasonable. For example, the Airlines repeatedly state that LADOA is "claiming," "contending," or "arguing" that its FMV-based fee is "reasonable." E.g., Airlines Br. at 2. They even go so far as to assert that LADOA must present 'special circumstances justifying an exception" to the alleged "Federal policy" rendering LADOA's fees "necessarily unreasonable." Id. at 9 n.4. In light of these statements, LADOA's attempt to correct this misimpression through a brief discussion of presumptions in its reply brief can hardly be deemed "new" or "belated" or otherwise improper.

Third, the presumption issue is clearly within the scope of this remand. The remand was specifically intended to "consider whether the airport may include a charge for the fair market value of the airfield land ...." Remand Order at 5. The parties were instructed to "make any arguments they consider appropriate" on the reasonableness of the FMV charge.

1/ Contrary to the Airlines' suggestion, this same burden of proof issue was, in fact, raised in the Court of Appeals. The Airlines claimed that LADOA had the "heavy burden" of justifying its FMV charge. Airlines Opening Br. in LAXI at 16 n.5. In response, LADOA explained (as it has here) that the law was exactly the opposite. LADOA Reply Br. in LAXI at 8. Thus, this argument is more omnipresent than "new."

Id. at 7. While DOT requested briefing on several particular issues, it then added that the parties should, of course' present any other argument they consider relevant to the issue.'' Id. /2 The fact that DOT previously rejected a presumption of reasonableness—just as it previously rejected the FMV charge and was reversed on appeal—is thus irrelevant on remand.

Indeed. even if LADOA had not raised the presumption issue—which it did—the Secretary unquestionably would have to address it before issuing a decision on remand. Any decisionmaker, including DOT, must decide what burdens and presumptions apply in order to rule on the merits. This is true regardless of whether the parties raise the issue. In making this assessment on remand, DOT should not summarily reject, as it previously did, the presumption of reasonableness that attaches to LADOA's FMV charge.

It is well-settled that rates set by municipalities pursuant to ordinance are accorded a presumption of reasonableness. E.g., Alamo Rent-a-Car v. Sarasota-Manatee Airport Auth 825 F.2d 367, 370 (I Ith Cir. 1987)(airport user fee presumed valid); American FI.P. Limousines v. Dade County Comm'rs, 757 F. Supp. 1382, 1393 (S.D. Fla. 1991); Carlton Santee Corp. v. Padre Dam Munic. Water Dist., 174 Cal. Rptr. 413, 423 (Cal. Ct. App. 1981); Arcade County Water Dist. v. Arcade Fire Dist., 85 Cal. Rptr. 737, 741 (Cal. Ct.

2/ As DOT acknowledged, there are no procedures governing remands under § 47129. Id. at 5. In light of this fact, DOT simply gave the parties 37 pages each to address what they deemed relevant and persuasive on the FMV issue. Thus, for DOT's purposes, it makes no difference whether the presumption issue is presented in LADOA's opening brief or reply brief. It is relevant to the issue before DOT, and nothing proscribes its appearance in a reply brief.

App. 1970); State of Iowa v. City of Iowa City, 490 N.W.2d 825 (Iowa 1992); City of Novi v. City of Detroit, 446 N.W.2d 118, 124 (Mich. 1989); Inland Real Estate Corp. v. Village of Palatine, 496 N.E.2d 998, 1002 (Ill. App. 1986); Suffolk County Water Autht v Board of Fire Comm'rs, 452 N.Y.S.2d 909, 911 (1982), aged, 449 N.E. 2d 1269 (1983): Kliks v. Dalles City, 335 P.2d 366, 372 (Ore. 1959).

Neither the Airlines nor DOT have squarely refuted this principle or presented the requisite evidence that Congress intended to overturn this presumption with respect to municipal airport rates. Ct Franklin v. Massachusetts, 505 U.S. 788, 816 (1992) (presumption of judicial review cannot be overcome without clear and convincing evidence); Allen v. McCurry, 449 U.S. 90, 103 (1980) (nothing in the language or legislative history of 42 U.S.C. § 1983 discloses any congressional intent to deny binding effect to a state-court judgment decision in a subsequent federal court proceeding.)

Dated: June 12, 1997

Respectfully submitted,

Steven S. Rosenthal

Jonathan Band

Anthony L. Press

Gregory B. Koltun

MORRISON & FOERSTER ALP

2000 Pennsylvania Ave., N.W., Suite 5500

Washington, D.C. 20006

(202) 887-1500