East Hampton Must Reimburse HTO for Legal Fees Improperly Funded with Airport Revenue
The town of East Hampton, NY cannot divert airport revenue to pay for legal fees stemming from its unsuccessful effort to impose access restrictions at East Hampton Airport (HTO). One appeal originating from NBAA comes in response to a preliminary FAA 14 C.F.R. Part 16 decision that declined to address the misappropriation of airport funds.
Airport users were essentially double-charged in the fight for their right to use the airport. The town of East Hampton hiked landing fees at HTO to generate revenue to cover the legal fees associated with defending the restrictions.
“There should be no doubt that the airport dollars spent by the town in litigation seeking to perpetuate the illegal restrictions constituted an improper use of airport revenue.” NBAA had written in its appeal, which was joined by 11 companies that operate at the Long Island airport. “This is not a case in which an airport sponsor was called upon to mount a defense to an unanticipated agency or court challenge.”
The town explicitly adopted an anti-airport agenda, declined to utilize FAA administrative procedures and represented to its taxpayers that – even though litigation would almost inevitably result from its campaign – the consequences would be cost- and risk-free,” the appeal states. NBAA argues that the town now should be required to make HTO whole again.
The appeal further explains that the enforcement of the prohibition on revenue diversion, as has occurred at HTO, is not just a matter of FAA precedent and policy, or even of congressional policy, but rather a matter of congressional commands. Rather than complying with the requirement to apply airport funds only for the benefit of the airport, “the town had an explicit anti-airport and bad-faith agenda. The town has spent millions of dollars over the past several years in its attempts to impose access restrictions that the federal courts concluded violated federal requirements.