Airport Commission Shielded from Tenant’s Monopoly Claims

This posting was written by Jeffrey May, Editor of CCH Trade Regulation Reporter.

A Massachusetts municipal airport commission and its officials were shielded from monopoly claims based on the airport commission’s restriction on jet fuel sales, the U.S. Court of Appeals in Boston has ruled. Dismissal of an airport tenant's antitrust claims (2008-1 Trade Cases ¶76,045) was affirmed.

State Action Immunity

The tenant, which operated a hangar at the airport for private jets, claimed that it was prevented by the restrictions from competing with the airport commission in the sale of jet fuel. Municipal entities, such as the airport commission, and municipal officials acting for them could invoke state action immunity if they acted pursuant to a “clearly articulated and affirmatively expressed” state policy to displace competition with regulation.

The policy to suppress competition was expressed in a Massachusetts statute governing municipal airports. The statute granted airport commissions the power to adopt rules and regulations for the use of municipal airports and the authority to determine the charges or rentals for the use of any facilities and services. It also permitted airport commissions to lease airport land “under such terms and conditions as it may prescribe, for hangars, shops, storage, industrial purposes, offices and other space rental, and for concessions.”

The fact that the Massachusetts statute specifically prohibited exclusive contracts related to transportation to and from the airport suggested that the legislature perceived that the airport might otherwise employ exclusivity restrictions and chose to ban only this narrow set.

Dubious Claims

Even if the state action doctrine was inapplicable, the airport commission was “mistaken in its notion that its antitrust claim would otherwise face fair sailing.” The appellate court said that the antitrust claim was “dubious on the merits.”

The appellate court also rejected the tenant’s claims under the Racketeer Influenced and Corrupt Organizations Act. The tenant failed to establish that the airport commission engaged in a “pattern of fraudulent acts” in an effort to prevent the tenant from becoming a “fixed base operator” or “FBO” qualified to sell fuel and offer other services.

The June 23 decision is Rectrix Aerodrome Centers, Inc. v. Barnstable Municipal Airport Commission, 2010-1 Trade Cases ¶ 77,068.