Delux Public Charter, LLC v. County of Westchester, New York

Background

Delux Public Charter, LLC, JetSuiteX, Inc., XO Global, LLC, and Blade Urban Air Mobility, Inc. provide air services at Westchester County Airport. The County’s Terminal Use Procedures (TUPs), codified in local laws enacted in 2004 and 2005, require certain passenger services to operate from the airport’s main terminal and comply with requirements including terminal-use agreements, flight-capacity limits, and allocation procedures.

The plaintiffs operate from privately run fixed-base operators at the airport rather than the main terminal. They challenged only the 2005 amendment, which defined “Passenger Service” as air service for which seats are offered or sold to the public or a segment of the public. They claimed that the amendment was preempted—overridden—by the Airport Noise and Capacity Act of 1990 and the Airline Deregulation Act of 1978. They also brought an equal-protection claim under 42 U.S.C. § 1983, alleging that the County singled them out without a rational basis.

The County moved for summary judgment dismissing the complaint and sought relief on its first counterclaim, which requested a declaration that the TUPs applied to the plaintiffs. The County did not seek relief on its second counterclaim, which sought a permanent injunction based on alleged violations of local law. The plaintiffs opposed the motion and asked the court to grant them summary judgment under Rule 56(f).

The plaintiffs had withdrawn claims concerning the County’s 2022 operational policy and the 2004 law. The court therefore dismissed those abandoned claims and did not decide whether the 2004 law complied with the two federal aviation statutes.

ANCA preemption

The court granted summary judgment to the County on the plaintiffs’ first claim. It held that the 2005 amendment was a grandfathered amendment under the Airport Noise and Capacity Act (ANCA). ANCA generally requires specified procedures for new local airport-use restrictions, but restrictions that predate ANCA—and amendments that do not reduce or limit aircraft operations or affect aircraft safety—may remain grandfathered.

The court concluded that the 2005 amendment merely clarified the 2004 law rather than expanding the TUPs to cover new operations. The record showed that the County intended the TUPs to cover commercial passenger services that offered or sold seats to the public, including services authorized under Part 380 of the Federal Aviation Administration’s regulations. Because the amendment did not change the aircraft operations to which the TUPs already applied, the court held that it was not preempted by ANCA. The court denied the plaintiffs’ requested injunction under ANCA and dismissed the first claim.

Airline Deregulation Act preemption

The court also granted summary judgment to the County on the second claim. It recognized that the TUPs directly concerned aviation and could relate to an air carrier’s prices, routes, or services, which ordinarily falls within the Airline Deregulation Act’s express preemption provision. But the statute contains a “Proprietor Exception” for actions taken by an airport proprietor in exercising its proprietary powers and rights.

The court held that the TUPs fell within that exception. The County had shown that the rules were intended to allocate scarce airport space, terminal capacity, and landing and takeoff slots. The court found that the TUPs were reasonable, nonarbitrary, and nondiscriminatory because they applied equally to airlines selling seats to the public, regardless of the operator’s federal certificate. The 2005 amendment therefore was not preempted by the Airline Deregulation Act. The court denied the requested injunction under that statute and dismissed the second claim.

Equal protection

The court granted summary judgment to the County on the plaintiffs’ third claim under Section 1983. The plaintiffs proceeded under a “class-of-one” theory, which requires proof that a government intentionally treated the plaintiffs differently from others who were extremely similar, without a rational basis for the difference.

The court considered the three alleged comparators emphasized by the plaintiffs: Bakers Bay, NetJets, and Wheels Up. It found that Bakers Bay sold seats to its members rather than directly to the public, that NetJets operated through fractional ownership rather than public ticket sales, and that Wheels Up operated aircraft with nine or fewer seats. The court held that none was sufficiently similar to the plaintiffs to support the claim.

The court also held that, even if the plaintiffs had shown a sufficiently similar comparator, they had not disproved every conceivable rational basis for the County’s classification. The County had explained that the rules were intended to control airport space and traffic and relied on distinctions involving public sales and aircraft size. The court therefore dismissed the third claim.

Laches and other equitable defenses

The County sought dismissal of the plaintiffs’ equitable defenses. The plaintiffs’ fourth affirmative defense asserted waiver, estoppel, laches, and other equitable defenses against the County’s counterclaims. The plaintiffs argued specifically that the County waited several years before notifying them that their operations violated the TUPs.

The court granted summary judgment to the County on the laches defense. It held that the County was enforcing airport rules in its governmental law-enforcement capacity, rather than acting like a private entity in a private transaction. Under those circumstances, equitable defenses such as laches do not prevent a municipality from enforcing its ordinances. The court also treated the plaintiffs’ failure to address the other equitable defenses as abandonment of those defenses.

First counterclaim

The County’s first counterclaim sought a declaration under New York Civil Practice Law and Rules § 3001 that the TUPs applied to the plaintiffs. The court denied the County’s request for summary judgment on that counterclaim. It explained that the cited New York declaratory-judgment statute is a state procedural rule, and a federal court applies federal procedural rules rather than that state rule.

The court further held that the County’s request for a declaration concerning possible future disputes with other air carriers did not present a sufficiently immediate and concrete controversy. The County therefore could not obtain an advisory opinion about hypothetical future litigation. Under Rule 56(f), the court granted summary judgment to the plaintiffs dismissing the first counterclaim.

Second counterclaim and final disposition

The second counterclaim sought a permanent injunction based only on alleged violations of local law. The court determined that this claim did not raise a federal question. After dismissing the claims over which it had original federal jurisdiction, the court declined to exercise supplemental jurisdiction—the authority to hear related state or local claims—in the remaining matter. It dismissed the second counterclaim without prejudice under Federal Rule of Civil Procedure 12(h)(3) for lack of subject-matter jurisdiction.

The conclusion stated that the County’s motion for summary judgment was granted in part. It was granted insofar as the plaintiffs’ complaint claims and fourth affirmative defense were dismissed, and it was denied insofar as the County sought summary judgment granting relief on its first counterclaim. The court instead granted summary judgment to the plaintiffs on that counterclaim, dismissed the second counterclaim without prejudice, denied the plaintiffs’ request for oral argument as unnecessary, and directed the Clerk of Court to close the case.