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CITY OF LOS ANGELES v. COLEMAN

June 23, 1975

CITY OF LOS ANGELES, Plaintiff,
v.
Hon. William T. COLEMAN, Jr., Secretary of Transportation of the United States, et al., Defendants



The opinion of the court was delivered by: PARKER

MEMORANDUM OPINION

The dispute in this case centers around whether on not the plaintiff City of Los Angeles is entitled to $ 9,585,000 for airport development under the Airport and Airway Development Act of 1970, 49 U.S.C.A. § 1701 et seq. (1970) (the Act). The defendants are the Secretary of Transportation, the Acting Administrator of the Federal Aviation Administration, the Secretary of the Treasury and the Director of the Office of Management and Budget, who are charged with the responsibility of distributing the funds authorized by the Act. This Court on May 2, 1975, granted a Temporary Restraining Order which prohibited the federal defendants from obligating to anyone other than plaintiff the disputed $ 9,585,000. On May 14, 1975, while the restraining order was still in effect, the Court entered an order granting a preliminary injunction based on its Findings of Fact and Conclusions of Law, which had the effect of holding the funds intact pendente lite.

At issue before the Court is whether plaintiff is entitled to a grant-in-aid in the amount of $ 9,585,000 which represents the sum which has been apportioned to plaintiff under the Act for fiscal years 1974 and 1975. The plaintiff is basically seeking three types of relief in this lawsuit: (1) a permanent injunction restraining defendants from obligating any portion of the $ 9,585,000 apportioned to plaintiff under the Act to any airport sponsor other than plaintiff; (2) a declaratory judgment to the effect that the actions of the defendants were in violation of the law; (3) relief in the nature of mandamus by issuance of a writ commanding defendants to immediately process plaintiff's project application and to obligate prior to June 30, 1975 the funds due plaintiff under the Act. The defendants contend that there are not enough funds available to obligate to all sponsors the amounts which have been apportioned to them under the statute and that therefore a priority system was instituted under which plaintiff would not be able to receive the funds it seeks. By agreement between counsel, the matter was heard on the merits on June 10 and 11, 1975.

 The Court has reviewed and considered the testimony, the affidavits, exhibits* and the memoranda and oral arguments of counsel, and concludes that plaintiff should be granted the injunctive, declaratory and mandamus relief requested.

 The Statutory Scheme

 The Airport and Airway Development Act of 1970 was declared by Congress to be a vehicle for expanding and improving the nation's airport and airway system. 49 U.S.C.A. § 1701. The preamble of the Act outlines a 10 year program from 1970 to 1980 with an authorization for grants totalling $ 2,500,000,000. Id. The operative sections of the Act, however, provide specific authority for the obligation of funds only until June 30, 1975. 49 U.S.C.A. § 1714(b). No funds can be obligated after that date unless Congress passes new legislation.

 The Federal Aviation Agency (FAA) under the direction of the Secretary of Transportation is in charge of administering airport development funds. An Airport and Airway Trust Fund was established in the United States Treasury, with revenues from various taxes on aviation activities, for the purpose of meeting obligations incurred under the Act. 49 U.S.C.A. § 1742. $ 193,000,000 in funds authorized to be, but not, obligated in prior fiscal years remain in the Trust Fund at the present time.

 The Act specifies certain minimum yearly amounts for airport development projects on a nationwide basis. For fiscal years 1971-73 the amount was $ 280,000,000 per year and for fiscal years 1974-75 it was $ 310,000,000. 49 U.S.C.A. § 17 14(a)(1) and (2). The total amount authorized for each year is to be apportioned by the Secretary in accordance with the following formula: *fn1" (1) 1/3 to the States on the basis of population and area; (2) 1/3 to sponsors of airports served by air carriers certificated by the Civil Aeronautics Board *fn2" in the same ratio as the number of passengers enplaned at each airport of the sponsor bears to the total number of passengers enplaned at all such airports (enplanement formula); and (3) 1/3 to be distributed at the discretion of the Secretary. 49 U.S.C.A. § 1715(a)(1). The amounts apportioned according to the enplanement formula are to remain available to the designated airport sponsors for approved airport development projects for the fiscal year in which apportioned and for the next two fiscal years. After that time, the Secretary of Transportation is given discretion to distribute these funds as he sees fit. 49 U.S.C.A. § 1715(a)(3).

 The Facts

 Plaintiff City of Los Angeles is a California municipal corporation which, through its Board of Airport Commissioners, owns and operates the Los Angeles International Airport. Plaintiff's airport is served by air carriers certificated by the Civil Aeronautics Board, and therefore is entitled to have funds apportioned to it under the Act's enplanement formula.

 On September 5, 1973, the FAA and the Department of Transportation announced the apportionment of the 310 million dollars authorized for fiscal year 1974 under the Act. The share apportioned to the City of Los Angeles was $ 5,694,301. *fn3" Similarly, on August 14, 1974, the FAA and the Department of Transportation announced the apportionment to Los Angeles of $ 5,377,597, its enplanement entitlement for fiscal year 1975. *fn4" Plaintiff has received grants for airport development of considerably less than the apportioned amounts for fiscal years 1974 and 1975. Plaintiff's remaining apportioned share of funds under the enplanement formula is $ 9,585,000, a sum acknowledged as accurate by both sides. *fn5"

 Plaintiff City of Los Angeles committed itself to projects involving land acquisition in 1974 and 1975 in reliance on receiving funds under the enplanement formula of the Act. Accordingly, Los Angeles timely and properly applied for a grant under the Act in October of 1974, *fn6" but was told by FAA officials in March of this year that it would not be approved because no funds were available and that plaintiff's project was of an insufficiently high priority under the FAA's priority system of rating airport projects.

 FAA's Priority System and the 'Limitation' of § 302

 Defendants seek to justify their refusal to obligate to Los Angeles its 1974 and 1975 entitlement by claiming that there are insufficient funds available to satisfy all the demands for monies apportioned under the statute. As a result of this shortage, defendants have set up their own 'priority system' for approving airport grants, rather than strictly abiding by the mandatory formula set forth in § 1715 of the Act. Three factors are offered to justify the establishment of the 'priority system'; (1) the yearly limitation of the Appropriations Acts; (2) the duty to spend the full amount authorized each year by § 1714; and (3) the inability of smaller airports to finance average projects on their statutory enplanement funds alone.

 Although §§ 1714 and 1715 of the Airport Act set forth minimum yearly enplanement entitlements which are to remain available to airport sponsors for three years, defendants argue that they cannot obligate all of the money authorized by the Act because of § 302 of the Appropriations Act for fiscal year 1975, which reads as follows:

 None of the funds provided in this Act shall be available for administrative expenses in connection with commitments for grants-in-aid for airport development aggregating more than $ 310,000,000 in fiscal year 1975. Pub.L. 93-391, § 302 (1974).

 Defendants have interpreted this language as imposing a ceiling on the amount of money which can be obligated under the Airport Act in any given year, *fn7" despite the minimum authorizations which were supposed to have accumulated. Indeed, the defendants admit that because less than the full authorizations have been obligated, 193.7 million dollars in enplanement, ...


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