MONTAUK-CARIBBEAN AIRWAYS, INC., d/b/a Long Island Airlines, Plaintiff-Appellant, v. Judith HOPE, Randall Parsons, Anthony Bullock, Michael J. Finazzo, and Hugh King, Individually and as the Town Board of the Town of East Hampton, Charles T. Smith, Russell Stein, East Hampton Aire, Inc., and Frank LaVigna, Defendants-Appellees.
No. 578, Docket 85-7752
United States Court of Appeals, Second Circuit
Argued Nov. 25, 1985. Decided Feb. 14, 1986.
784 F.2d 91 | 54 USLW 2466 | 1986-1 Trade Cases 66,961
Eric J. Lobenfeld, New York City (Sanford M. Litvack, Valerie A. Cohen, and Donovan, Leisure, Newton & Irvine, New York City, on the brief), for appellees Hope, Parsons, Bullock, Finazzo, King, Smith and Stein.
Thomas A. Hickey, New York City (Joseph J. Ceccarelli, and Plunkett & Jaffe, New York City, on the brief), for appellees East Hampton Aire, Inc. and Frank La Vigna.
Before TIMBERS, PIERCE and MINER, Circuit Judges.
TIMBERS, Circuit Judge:
Appellant Montauk-Caribbean Airways, Inc., d/b/a Long Island Airlines, appeals from a judgment entered October 1, 1985 in the Eastern District of New York, Henry Bramwell, District Judge, dismissing, pursuant to
Appellant commenced this action on February 8, 1985 against members of the Town Board of East Hampton, New York; the Town‘s attorney; the manager of the Town‘s airport; East Hampton Aire, Inc. (“EHA“), a competitor airline; and the latter‘s chief executive officer. The complaint alleged violations of the Sherman Act,
In an order dated May 28, 1985, the district court, pursuant to
We entered an injunction prohibiting interference with appellant‘s operations pending this appeal. For the reasons set forth below, we dissolve the injunction which we entered pending appeal and we affirm the judgment of the district court dismissing appellant‘s claims.
This dispute arises from appellant‘s desire to obtain a lease permitting it to serve as a year-round fixed-base air carrier operator at the East Hampton Airport owned and operated by the Town of East Hampton. In 1978, appellant and the Town entered into a lease under which appellant was to operate as a fixed-base operator and air carrier at the airport. In December 1979, appellant and the Town entered into a ten-year lease which did not require appellant to provide year-round services. Appellant thereafter operated on a seasonal basis between May 1 and September 30 of each year. In 1983 and 1984, apparently after the arrival of new management, appellant sought permission to operate after September 30. The Town Board informed appellant that the lease did not authorize such post-seasonal operations.
In the Fall of 1984, appellant filed a complaint with the Federal Aviation Administration (FAA) under
On February 8, 1985, appellant commenced the instant action, seeking the relief set forth above. Appellees, pursuant to
II.
The principal issue raised on appeal is whether the Act or the state action doctrine, or both, bar appellant‘s antitrust action against a municipality which owns and operates a local airport. In determining whether the district court, pursuant to
The complaint alleged that appellees Town and EHA conspired to restrain trade and create a monopoly in favor of EHA in violation of the Clayton and Sherman Acts. Appellant submitted to the Town Board a proposed lease amendment which provided for the elimination of any seasonal restriction on appellant‘s operation. The Board held a public hearing but reached no formal decision. The lease has not been modified. Appellant argues that EHA has usurped a significant share of appellant‘s air carrier business.
Judge Bramwell held that the Act barred appellant‘s antitrust claim for treble damages under the Clayton Act. The Act insulates municipalities and their representatives from monetary claims arising under the antitrust laws. This recently enacted statute provides:
“No damages, interest on damages, costs, or attorney‘s fees may be recovered under section 15, 15a, or 15c of this title from any local government, or official or employee thereof acting in an official capacity.”
Congress enacted this statute prior to the Supreme Court‘s decision in Hallie. Its legislative history reflects the desire of Congress to broaden the shield protecting municipalities from antitrust claims for damages. The statute was enacted, in part, “in response to concern with Supreme Court decisions over the past few years that appear to have limited the extent that antitrust immunity applicable to States will be accorded to local governments.” H.R.Rep. No. 98-965, 98th Cong., 2d Sess. 2, reprinted in 1984 U.S.Code Cong. & Ad. News 4602, 4603. Thus, it is fair to assume that Congress intended greater protection for municipalities than the parameters of the pre-Hallie state action doctrine provided.
Appellant argues, however, that, in the absence of an articulated state authorization for the town board members’ conduct, appellees were not acting “in an official capacity“, and therefore fall outside the protection of the Act. This narrow interpretation, which would provide no greater protection than that which the federal common law afforded, is not what Congress intended.
“The definition of official local conduct is intended to be as broad as the local government‘s authority--encompassing ‘legislative, regulatory, executive, administrative, or judicial authority’ of a local government. The Committee assumes that this authority will most often stem from broad home rule grants, or from more specific State grants of authority to the local entity. The definition thus removes any requirement imposed by the Supreme Court in Community Communications Co. v. City of Boulder, [455 U.S. 389 (1978) ] that there be a specific and affirmative grant of a State‘s authority to the local government in every instance.”
H.R.Rep. No. 98-965, 98th Cong., 2d Sess. 20-21, reprinted in 1984 U.S.Code Cong. & Ad. News 4602, 4621-22.
In light of the desire of Congress to grant broad immunity from damages for noncriminal acts by local officials and the authority which New York law grants to municipalities in the operation of local airports,2 we believe that the district court was correct in holding that appellant failed to state a claim upon which relief can be granted under the Clayton Act for damages against the Town of East Hampton. The Act bars such a claim.
The Act, however, does not apply to claims for injunctive relief under the Sherman Act. See
The question therefore of whether the court properly dismissed the instant claims must be examined in light of the Supreme Court‘s decision in Hallie. There, certain townships sought injunctive relief, alleging that the City of Eau Claire violated the Sherman Act by acquiring a monopoly over the provision of sewage treatment services and by tying such services to sewage collection and transportation services. In holding that the municipality was immune from such antitrust actions, the Court reexamined the line of cases which established the state action immunity doctrine. Parker v. Brown, 317 U.S. 341 (1943); City of Lafayette v. Louisiana Power & Light Co., 435 U.S. 389 (1978); Community Communications Co. v. City of Boulder, 455 U.S. 40 (1982).
Hallie broadened the immunity available to municipalities. To be exempt from antitrust violations, municipalities must establish “that their anticompetitive activities were authorized by the State ‘pursuant to state policy to displace competition with regulation or monopoly public service.’ ” Hallie, supra, 105 S.Ct. at 1716 (quoting City of Lafayette, supra, 435 U.S. at 413). A municipality will be entitled to the protection of the state action exemption where it “demonstrate[s] that it is engaging in the challenged activity pursuant to a clearly expressed state policy.” Hallie, supra, 105 S.Ct. at 1717.
The Hallie Court, however, interpreted broadly a “clear articulation” requirement of state policy. It is not necessary for the state legislature to have stated explicitly that it expected a municipality to engage in conduct having anticompetitive effects. Id. at 1718. Rather, if the legislature ” ‘contemplated the kind of action complained of‘, this is sufficient to satisfy the clear articulation requirement of the state action test.” Hallie, supra, 105 S.Ct. at 1719 (quoting City of Lafayette, supra, 435 U.S. at 415). The Court also abandoned the requirement that, to be exempt, the state must supervise actively the municipality‘s activity. Id. at 1721.
In light of the Supreme Court‘s recent holding with respect to the immunity of municipalities from antitrust violations, we turn to the New York statutes which confer authority on municipalities to operate local airports. Under
“1. Construct, develop, improve, equip, maintain and operate the same.
2. Adopt regulations and establish fees or charges for the use thereof, and fix civil penalties for the violation of such regulations and provide for their enforcement.
3. Provide and charge for all services, concessions or other usual or incidental facilities rendered, conducted or maintained thereat.
4. Purchase and sell aviation petroleum products, aircraft accessories and parts, and provide and charge for the servicing and repairing of aircraft, and for all other services reasonably necessary or incidental to the operation of such airport or landing field.
5. Lease, or sub-lease the real property or lease, contract or otherwise agree, on an exclusive or non-exclusive basis, for the entire operation of such airport or landing field, or of any part thereof, or for the rendering of various services or the conduct of business activities, on or at said airport or landing field subject to the provisions of section three hundred fifty-two-a of this chapter; provided, however, that no such lease or contract shall be made until the governing body of the municipality shall have held a public hearing in respect thereto on at least ten days notice published in two newspapers having general circulation in the municipality, and provided further that any lease of an entire or portion of an airport or landing field, together with the facilities thereon, or contract for the operation of an airport or landing field or portion thereof shall be for a term not exceeding forty years and shall expressly provide that the said airport or landing field shall be used only for aviation purposes and for other purposes required for or necessary to the efficient and successful operation of an airport or landing field, upon such terms as shall require the operation of the same as a public airport or landing field for the general use of the public and for the benefit of such city, county, village or town....”
Appellant also claims that the state action exemption of Hallie is not available because the Federal Aviation Act,
We find no authority to support appellant‘s claim that the Town of East Hampton, as owner of the Airport, must allow appellant to serve as a fixed-base operator at the East Hampton Airport year-round. Nor do we find support for appellant‘s claim that the Town is compelled to lease to appellant the necessary equipment and services that would permit such year-round air service.4 Absent such authority, the leases are valid exercises of the Town‘s proprietary rights granted under
Having held that the Act and the state action doctrine bar the antitrust claims against the Town of East Hampton, there is no basis for holding that East Hampton Aire conspired with the Town to violate the antitrust laws. E.W. Wiggins Airways, Inc. v. Massachusetts Port Authority, 362 F.2d 52, 56 (1 Cir.), cert. denied, 385 U.S. 947 (1966). See Transport Limousine of Long Island v. Port Authority, 571 F.Supp. 576 (E.D.N.Y.1983).
III.
Appellant also asserts that the court erred in dismissing its claims under the Federal Aviation Act. The court held that there is no private right of action under
To determine whether there is an implied private right of action under the statute, we apply the factors set forth in Cort v. Ash, 422 U.S. 66 (1975). Those factors are whether the plaintiff is a member of the class for whose benefit the statute was enacted; whether Congress intended to create a private right of action; whether a private right of action is consistent with the underlying purpose of the legislative scheme; and whether the matter is traditionally relegated to state law. Id. at 78. Although regulation of interstate air carrier activity traditionally has been a matter of federal law, congressional intent is the most significant of these factors. Touche Ross & Co. v. Redington, 442 U.S. 560, 579 (1979).
We agree with those courts which have decided after careful analysis that a private right of action is not available under
The statute contains no explicit designation of fixed-base operators as beneficiaries. Rather, the law was enacted to benefit the general public as part of a statutory scheme to monitor the expenditure of federal funds. Guthrie, supra, 494 F.Supp. at 959-60. Moreover, as both the Guthrie and Hill Aircraft courts observed, the legislative history of
Section
Finally, appellant asserts that the court erred in dismissing its claim under
We hold that the district court was correct in dismissing appellant‘s claims under the Federal Aviation Act and
IV.
To summarize: The district court correctly held that the Local Government Antitrust Act of 1984 bars appellant‘s Clayton Act claims for damages. The broad delegation of authority which
The injunction pending appeal is dissolved and the judgment of the district court is affirmed substantially for the reasons set forth in Judge Bramwell‘s opinions of May 28, 1985 and September 4, 1985.
Affirmed.