Say you want to know more: The City, the 9th Circuit & Quiet Title

On March 11, 2016, a panel of three judges of the U.S. Court of Appeal for the Ninth Circuit heard an appeal by the city in its lawsuit against the FAA.  What is the appeal about and what does it mean if the city wins the appeal?

 The city’s lawsuit is about the Instrument of Transfer, a 1948 agreement that the city signed with the United States.  In the early months of World War II, the city leased about 169 acres of land to the U.S. Department of War, including the existing Santa Monica municipal airport and a municipal golf course.  The airport was of great importance to the war effort as it was home to the Douglas Aircraft factory, which would end up employing tens of thousands of workers and build thousands of military aircraft during the war.  The War Department also built a training facility at the airport, and it built a new, larger 5000-foot runway and taxiway system, which is essentially the runway and taxiway system that we have today.

 After the war had ended but before the leases had expired, the city asked that the federal government return the land to the city, and the 1948 Instrument of Transfer was the result.  Among other things, this agreement returned the leased land to the city, but in exchange the city agreed to a number of legal conditions, which according to the agreement last “forever” or until the federal government agrees to release the city from the conditions.  Among the legal conditions is a requirement that the land be used “for public airport purposes for the benefit of the public, on reasonable terms and without unjust discrimination” and a requirement that the city maintain “the entire landing area.”

 The FAA has the power to enforce conditions like this by going to court and obtaining an injunction against the city, like it did when the city tried to ban category C&D jets in 2008.  But, the Instrument of Transfer also has a provision saying that if the city violates any of the conditions in the agreement, the federal government can chose to have the property rights covered by the Instrument of Transfer “revert” to the federal government.  The FAA has stated that it interprets this reversion provision to mean that the federal government can take ownership of the 169 acres of land from the city, if the city violates the agreement.  The city argues that the reversion provision only means the federal government can get its lease to that property back.  However, that lease would have expired in 1953 so, according to the city, the federal government cannot take any land back under the reversion provision.

 This dispute over the reversion provision is the main basis of the lawsuit the city brought against the federal government in October 2013.  The lawsuit was brought under the federal Quiet Title Act, which allows parties to bring lawsuits in federal court to resolve property disputes they have with the federal government.  However, the Quiet Title Act contains a “statute of limitations” which says that a party has to sue the federal government within 12 years after it learns that the government claims a right in the property, or that party loses the ability to file a suit under the Quiet Title Act.

 The federal government responded to the city’s lawsuit by asking the court to dismiss the lawsuit, because according to the government, the city had known the government claimed rights in the land going all the way back to 1948.  The city responded that it didn’t know about the FAA’s exact interpretation of the reversion provision until 2008, and therefore was within the 12-year limit.  The district court judge agreed with the federal government and dismissed the case.  The city appealed that dismissal, and that appeal is what the Ninth Circuit hearing was about.

 The judges did not indicate how they were going to rule at the hearing, and we will most likely have to wait another few months before they announce their decision.  Regardless of how they rule, the dispute will not be over.  The losing party could attempt to appeal the decision to the U.S. Supreme Court, though the Supreme Court only agrees to accept a small percentage of appeals.  If the city ultimately wins the appeal (in the Ninth Circuit or the Supreme Court), the case will go back to the district court, where each side will have the opportunity to present evidence and the court will likely decide how the reversion provision should be interpreted.  If the city loses the appeal, then the lawsuit will be over, but we still won’t have a definitive interpretation of the reversion provision.  Most likely, that would only happen if the city tried to close the airport and the FAA tried to actually use the reversion provision.

 Even without the reversion provision, the FAA says that the city has to keep operating the airport, both because of the conditions in the Instrument of Transfer and because of grant assurances related to money the city accepted from the FAA in 2003.  Regardless of how the Ninth Circuit rules, the airport isn’t closing anytime soon, and there will be lawsuits about the airport for years to come. If you just can't get enough and want to see for yourself:



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