Wilson Air Center, LLC v. Federal Aviation Administration

*The Honorable Nancy G. Edmunds, United States District Judge for
the Eastern District of Michigan, sitting by designation.
1
RECOMMENDED FOR FULL-TEXT PUBLICATION
Pursuant to Sixth Circuit Rule 206
ELECTRONIC CITATION: 2004 FED App. 0194P (6th Cir.)
File Name: 04a0194p.06
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
_________________
WILSON AIR CENTER, LLC,
Petitioner,
v.
FEDERAL AVIATION
ADMINISTRATION,
Respondent,
MEMPHIS-SHELBY COUNTY
AIRPORT AUTHORITY,
Intervenor.
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No. 01-4037
On Appeal from a Final Decision of the
Federal Aviation Administration.
No. 16-99-10.
Argued: March 12, 2003
Decided and Filed: June 23, 2004
Before: MARTIN and ROGERS, Circuit Judges;
EDMUNDS, District Judge.*
2 Wilson Air Center v. FAA No. 01-4037
1Memp his Aero C orporation is the predec essor to AM R Co mbs,
which purchased Memphis Aero in 1987. Thereafter, Signature Flight
Support purchased AM R. This opinion will collectively refer to these
corporations as “AM R.”
_________________
COUNSEL
ARGUED: David Wade, MARTIN, TATE, MORROW &
MARSTON, Memphis, Tennessee, for Petitioner. Anthony
A. Yang, UNITED STATES DEPARTMENT OF JUSTICE,
Washington, D.C., for Respondent. ON BRIEF: David
Wade, Richard M. Carter, MARTIN, TATE, MORROW &
MARSTON, Memphis, Tennessee, for Petitioner. Anthony
A. Yang, Michael Jay Singer, UNITED STATES
DEPARTMENT OF JUSTICE, Washington, D.C., for
Respondent. R. Grattan Brown, Jr., GLANKLER BROWN,
Memphis, Tennessee, Rise J. Peters, Jeffrey A. Schwarz,
Pablo O. Nuesch, SPIEGEL & McDIARMID, Washington,
D.C., for Intervenor.
_________________
OPINION
_________________
BOYCE F. MARTIN, JR., Circuit Judge. Wilson Air
Center, LLC appeals from the final decision of the Federal
Aviation Administration. Wilson filed a complaint with the
Administration alleging that the Memphis-Shelby County
Airport Authority’s differing treatment of Wilson and
Wilson’s competitor, AMR Combs, Incorporated,1 violated
its obligations under federal law prohibiting unjust economic
discrimination, 49 U.S.C. § 47107(a)(1), (5), as well as
prohibiting the creation of “exclusive rights,” 49 U.S.C.
§ 40103(e). The Administration rejected Wilson’s claims; we
AFFIRM.

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No. 01-4037 Wilson Air Center v. FAA 3
I. BACKGROUND
Memphis International Airport is a public-use, commercial-
service airport owned and operated by the Memphis-Shelby
County Airport Authority, which serves as FedEx’s principal
hub for its cargo operations. AMR and Wilson function as
the Airport’s fixed-base operators, commonly referred to as
FBO’s, which “are small plane gas and repair stations which
service private, nonscheduled aircraft.” Kemmons Wilson,
Inc. v. FAA, 882 F.2d 1041, 1042 (6th Cir. 1989).
The Airport’s development has been financed partly by
federal funds pursuant to the Airport Improvement Program
as authorized by the Airport and Airway Improvement Act of
1982. See 49 U.S.C. § 47101, et. seq. As a recipient of funds
under the Program, the Authority must give assurances that it
will not engage in “unjust discrimination,” 49 U.S.C.
§ 47107(a), and will not grant any aeronautical service
provider an “exclusive right” to use the airport, 49 U.S.C.
§40103(e). Wilson, believing that the Authority breached
these assurances, filed a complaint with the Administration
pursuant to 14 C.F.R. Part 16, alleging that the Authority had
violated its federal obligations. The facts underlying this
complaint are developed as follows.
A. Lease agreements with AMR
Before Wilson began its fixed-based operation, AMR was
the Airport’s only fixed-based operator. AMR had several
preexisting leasehold agreements with the Authority, which
were consolidated into a new lease agreement in December
1979. The lease, which covered the area located in the central
part of the airfield–the South Complex, granted AMR an
option to extend the lease term through 2005 if it invested
over a million dollars in capital improvements on the
property. In 1985, AMR supplemented a preexisting lease
agreement, which concerned its right to occupy the
Administration’s old control tower, by adding a parcel
described as the General Aviation Building.
4 Wilson Air Center v. FAA No. 01-4037
AMR also held preexisting leasehold agreements with the
Authority covering parcels in the North Complex. In 1986,
AMR entered into a “Consolidated and Restated Lease
Agreement” for parcels of land located at Airport’s North
Complex. After AMR exercised an option to increase the
duration of the lease, the lease term was extended to January
1998.
In 1987, after making the requisite capital improvements,
AMR requested an extension of its lease term on the South
Complex parcel. AMR also requested that the Authority
extend the lease terms on its other properties to coincide with
the 2005 expiration date of its South Complex lease. The
Authority granted this request. By 1993, when Wilson began
its own fixed-based operation, with certain parcels removed
from AMR’s lease in the meantime, AMR’s total acreage
under its various leases was approximately 38.45 acres.
In 1995, AMR indicated its intent to expand its fixed-base
operation by requesting that the Authority extend its North
Complex lease beyond its 2005 termination date. The
Authority declined this request, explaining that the extension
would interfere with FedEx’s planned expansion. Thereafter,
on June 5, 1995, AMR indicated its desire to terminate the
North Complex lease in favor of a thirty-year lease of the
South Complex, where it would relocate its entire operation
and build a “new world-class executive terminal building
along with additional hangar space to accommodate all
tenants currently at the . . . North facility.” From 1995
through 1998, AMR and the Authority negotiated the terms
of this transition–i.e., AMR’s surrender of its North Complex
leaseholds and its relocation to the South Complex.
In February 1998, the Authority and AMR entered into a
“Consolidated and Restated Lease Agreement.” This lease,
which is the source of Wilson’s complaints, provided for
AMR’s incremental abandonment of its North Complex
holdings to be completed by the end of 1999–approximately
six years before AMR’s lease of these parcels terminated.

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No. 01-4037 Wilson Air Center v. FAA 5
2Generally, there is no rental rate for taxiways as they are accessible
to the public. Because this taxiway, by virtue of changes in the Airport’s
design, became usable only to AMR, a rental agreement was reached for
the exclusive use of the taxiway.
After securing AMR’s release from the North Complex, the
Authority, on March 1, 1998, entered into a lease agreement
with FedEx for these same parcels.
On May 21, 1998, the Authority and AMR entered into a
restated lease agreement for the South Complex, which was
to expire on June 30, 2025. Under the lease, AMR agreed to
“expend a minimum of $4,500,000 in capital investments to
construct a minimum of two (2) new 10,000 square foot
hangars and to rehabilitate the General Aviation Building
over a period of seven (7) years beginning June 1, 1998 with
a completion date of June 30, 2005.”
The lease maintained the 1979 lease’s rental rates for the
South Complex until 2005–the original expiration date of the
1979 lease. The lease also maintained the rental rate for the
General Aviation Building that was established in the 1985
lease covering that building. The Authority, however, agreed
to abate AMR’s rent for the General Aviation Building for a
one year period, in exchange for AMR’s rehabilitation of the
aging building. This rehabilitation included the removal of
asbestos and lead and the updating of the building’s
plumbing, electrical and HVAC systems. A separate
agreement provided the rental rate for the 6.09 acres of
taxiway that was conveyed to AMR by the 1998 South
Complex lease.2
Additionally, the lease granted AMR options to lease three
parcels of land adjacent to the South Complex. AMR was
required to pay “option fees” for these parcels and could
originally exercise its option at any time during the 1998 lease
term. In response to Wilson’s complaints, however, the
Authority and AMR entered into an amended agreement that
6 Wilson Air Center v. FAA No. 01-4037
provided for an incremental development schedule that AMR
was required to meet in order to retain the parcels.
B. Prior Lease Agreements with Wilson: 1993-1997
In 1993, Wilson negotiated a lease with the Authority
allowing it to begin operating as the Airport’s second fixed-
based operator. Wilson began its operation, however, only
after a litigious battle with the Authority. Indeed, after the
Authority declined Wilson’s application to begin its own
fixed-base operation to compete with AMR, Wilson filed a
complaint with the Administration alleging that the Authority
had created an “exclusive right” in favor of AMR in violation
of federal law. The Administration concluded that the
Authority’s refusal was based upon its spatial restrictions and
that any available space was earmarked for other uses.
Therefore, the Administration dismissed Wilson’s complaint.
Wilson timely appealed to this Court. We found that the
Administration’s “perfunctory adjudication” based upon only
“cryptic evidence” constrained our ability to determine
whether the Administration’s decision was supported by
substantial evidence. See Kemmons Wilson, 882 F.2d at1045-
47. Thus, we vacated the Administration’s decision and
remanded the case for an administrative hearing. Id. at 1047.
On remand, the Administration determined that the
Authority’s refusal to lease land to Wilson in order for it to
open a fixed-base operation was not motivated by “nefarious
intent.” To comply with federal law, however, the
Administration ordered that the Authority negotiate with
Wilson for the opening of a second fixed-base operation.
In July 1993, as a result of these negotiations, the Authority
allowed Wilson to begin its own fixed-based operation by
granting it a thirty-year lease of approximately twelve acres
of undeveloped land for twelve cents per square foot.
Additionally, the lease contained an option to lease an
additional two and a half acres, which Wilson exercised. In
December 1997, Wilson leased, under a separate agreement,

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No. 01-4037 Wilson Air Center v. FAA 7
an additional 1.35-acre parcel at twelve cents a square foot,
thereby increasing its leasehold to just over sixteen acres.
Wilson continually sought to expand its fixed-based
operation at the Airport from 1997 through 1999.
Specifically, Wilson expressed interest in leasing several
pieces of Airport property including: a plot of land referred
to as Hurricane Creek that was under a lease agreement with
FedEx, a plot of land on which the Northwest Airlink
Building was located, and the option parcels that, unknown to
Wilson, the Authority had leased to AMR one week before its
inquiry. The Authority entered into negotiations with Wilson
regarding the Hurricane Creek and Northwest Airlink parcels.
The negotiations included Wilson’s proposals that the
Authority lease Wilson the Northwest Airlink Building rent-
free until June 2010, that the Authority demolish certain
buildings on the Northwest plot and that the Authority, at its
own expense, construct a ramp for Wilson’s exclusive use
across the Hurricane Creek parcel to provide access to the
airfield.
For its part, with regard to the Northwest Airlink property,
the Authority agreed to relocate FedEx at its own expense,
demolish the buildings on the Northwest plot, and consider
abating the rent for the Northwest Airlink building for one
year in exchange for capital improvements. The Authority
also noted that it would charge eighteen cents per square foot
for unimproved ground rent and twenty cents per square foot
for improved ground rent through the fifth year of any new
lease term, at which time, the rent would be based upon the
land’s appraisal value. In response to Wilson’s proposal for
the Hurricane Creek Parcel, the Authority noted that it would
not install the ramp as requested, but it would consider its
other proposals once Wilson had provided the Authority with
its master plan for development of the property.
8 Wilson Air Center v. FAA No. 01-4037
C. Procedural Background
On August 16, 1999, unhappy with the Authority’s
response to its effort to expand its fixed-base operation,
Wilson filed a complaint under 14 C.F.R. Part 16, alleging
that the Authority’s treatment of Wilson as compared to its
treatment of AMR constituted unjust economic discrimination
in violation of 49 U.S.C. § 47107(a), and created “exclusive
rights” in violation of 49 U.S.C. § 40103(e).
The Director of the Administration’s Office of Airport
Safety and Standards after evaluating Wilson’s complaint and
the parties’ pleadings, concluded that the Authority did not
violate its federal obligations and dismissed the complaint.
Wilson appealed to the Administration, which affirmed the
factual findings and legal conclusions in the Director’s
decision. This timely appeal followed. On appeal, Wilson
raises several arguments, which will be addressed in turn.
II. STANDARD OF REVIEW
When reviewing an order of the Federal Aviation
Administration, we apply the standards of review as
articulated in the Federal Aviation Act, 49 U.S.C. § 46110(c),
and by default, the Administrative Procedure Act, 5 U.S.C.
§ 706. Under the Federal Aviation Act, the Administration’s
findings of fact are conclusive if supported by substantial
evidence. 49 U.S.C. § 46110(c) (“Findings of fact by the . . .
Administrator, if supported by substantial evidence, are
conclusive.”). “Substantial evidence is such relevant
evidence as a reasonable mind might accept as adequate to
support a conclusion.” Singer v. Garvey, 208 F.3d 555, 558
(6th Cir. 2000). We “must consider ‘the record in its entirety
. . ., including the body of evidence opposed to the [agency’s]
view.’” Loral Def. Systems-Akron v. NLRB, 200 F.3d 436,
448 (6th Cir. 1999) (quoting Am. Textile Mfrs. Inst. v.
Donovan, 452 U.S. 490, 487-88 (1981)), when reviewing the
record for substantial evidence. Even if two different
conclusions can be drawn from the evidence, we may still

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No. 01-4037 Wilson Air Center v. FAA 9
find that the agency’s factual findings are supported by
substantial evidence. Id. Substantial evidence review “gives
the agency the benefit of the doubt, since it requires not the
degree of evidence which satisfies the court that the requisite
fact exists, but merely the degree which could satisfy a
reasonable factfinder.” Allentown Mack Sales & Serv., Inc.
v. NLRB, 522 U.S. 359, 377 (1998).
Given the Act’s silence regarding the appropriate standard
for reviewing the Administration’s nonfactual findings, we
must look to the Administrative Procedure Act to supply the
appropriate standard of review. Penobscot Air Servs., Ltd. v.
FAA, 164 F.3d 713, 717 (1st Cir. 1999). Thus, we review de
novo questions of law, see 5 U.S.C. § 706, but we must give
some deference “to the agency because it is charged with
administering the statute.” Am. Nuclear Res., Inc. v. U.S.
Dep’t. of Labor, 134 F.3d 1292, 1294 (6th Cir. 1998).
This Court reviews an agency’s other findings and
conclusions to determine whether they are “arbitrary,
capricious, an abuse of discretion, or otherwise not in
accordance with law.” 5 U.S.C. § 706(2)(A); Penobscot, 164
F.3d at 719 (“With respect to other agency action, findings,
and conclusions, the [Administrative Procedure Act] requires
the reviewing court to hold them unlawful and set them aside
if they are found to be arbitrary, capricious, an abuse of
discretion, or otherwise not in accordance with law.”)
(internal quotation marks omitted). Generally, we consider an
agency’s action “arbitrary and capricious” when the agency
“‘has relied on factors which Congress has not intended it to
consider, entirely failed to consider an important aspect of the
problem, offered an explanation for its decision that runs
counter to the evidence before the agency, or is so implausible
that it could not be ascribed to a difference in view or the
product of agency expertise.’” Henry Ford Health Sys. v.
Shalala, 233 F.3d 907, 911 (6th Cir. 2000) (quoting Motor
Vehicle Mfrs. Ass’n v. State Farm Mut. Auto. Ins. Co., 463
U.S. 29, 43 (1983)).
10 Wilson Air Center v. FAA No. 01-4037
III. ANALYSIS
A. Evidentiary Hearing
On appeal, Wilson argues that the Administration abused
its discretion by failing to provide it with an evidentiary
hearing, as he argues the statute requires. Before addressing
the merits of this claim, however, we must address the
Administration’s argument that Wilson has waived its right to
argue this issue on appeal by not presenting it to the agency
for review.
“The administrative waiver doctrine, commonly referred to
as issue exhaustion, provides that it is inappropriate for courts
reviewing agency decisions to consider arguments not raised
before the administrative agency involved.” Coalition for
Gov’t Procurement v. Fed. Prison Indus., Inc., 365 F.3d 435,
461-62 (6th Cir. 2004). Administrative issue exhaustion is
typically required by statute. Sims v. Apfel, 530 U.S. 103, 107
(2000) (“Initially, we note that requirements of administrative
issue exhaustion are largely creatures of statute.”). The
statute at issue in this case requires that an objection be made
before the agency or that there exists a reasonable ground for
not having made the objection in order to obtain review of
that objection. 49 U.S.C. § 46110(d). Section 46110(d)
provides:
(d) Requirement for prior objection. --In reviewing an
order under this section, the court may consider an
objection to an order of the Secretary, Under Secretary,
or Administrator only if the objection was made in the
proceeding conducted by the Secretary, Under Secretary,
or Administrator or if there was a reasonable ground for
not making the objection in the proceeding.
49 U.S.C. § 46110(d).
Our review of the record convinces us that Wilson has
waived the argument that the Administration abused its

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No. 01-4037 Wilson Air Center v. FAA 11
3W hile W ilson argues that it did “raise the hearing issue in its appeal
of the Initial Determination and the Administrator even quoted that
concern,” our review of the record demonstrates that Wilson’s argument
challenged only the adequacy of the Administration’s investigation and
that it did not request or argue that the Administration erred by failing to
hold an evidentiary hearing. In its appeal of the D irector’s Determination,
W ilson noted: “The explicit statutory and regulatory language under
which the FAA is to conduct Part 16 proceedings requires the FAA to
conduct a ‘fair and complete hearing.’ The FAA has broad latitude in its
discharge of that requirement. In this case, however, the FA A not only
failed to carry out its exp licit statutory requirement to conduct a full and
fair investigation, it also denied Complainant’s Motion for Limited
Discovery.” We do not understand this argument as a request for an
evidentiary hearing, nor do we understand it as an argument that the
Administration erred by failing to conduct an evidentiary hearing.
discretion by failing to conduct an evidentiary hearing. As
the Administration notes, Wilson expressly stated that it was
not asking that the Administration conduct a full evidentiary
hearing. In its motion for limited discovery, Wilson noted:
“To be clear, Wilson is not requesting at this stage a full-
blown ‘evidentiary hearing.’” Again in its motion for limited
discovery, Wilson noted that it “is not requesting a hearing at
this time. Wilson is simply requesting that the Director
exercise the FAA’s discretionary powers . . . in order to
permit leave for Wilson to conduct limited discovery . . . .”
Wilson has not argued that there was a “reasonable ground for
not making the objection,” 49 U.S.C. § 46110(d), nor does
our independent consideration of the issue supply one.
Given the foregoing, we refuse to allow Wilson to bypass
the statutory requirement of administrative issue exhaustion
by raising this issue for the first time in this appeal. See Sims,
530 U.S. at 108. Furthermore, we find Wilson’s due process
claims that are predicated upon the argument that the
Administration erred in failing to conduct an evidentiary
hearing similarly unexhausted, thereby foreclosing our ability
to review those claims.3
12 Wilson Air Center v. FAA No. 01-4037
B. Failure to Conduct a Site Visit, Allow A Surreply,
Grant Limited Discovery and Further Investigate
Wilson also argues that the Administration erred in failing
to further investigate its complaint by limiting its review to
the pleadings; by refusing to grant its motion for limited
discovery; by refusing to conduct a site visit and by striking
its surreply from the record. Relatedly, Wilson argues that
the Administration’s failure to conduct an investigation and
permit discovery constituted a denial of its due process rights.
We find these arguments unpersuasive.
First, we address Wilson’s argument that the
Administration erred in refusing to conduct a site visit. As
the Administration notes, Wilson never explicitly requested
a site visit, but rather simply offered to provide one. Because
Wilson never explicitly objected to the Administration’s
failure to conduct a site visit, this argument is unexhausted
and has been waived.
Second, we address Wilson’s argument that the
Administration erred in striking its surreply from the record.
On November 14, 2000, Wilson filed a motion for leave to
file a surreply. The Administration, citing 14 C.F.R. § 16.33,
denied the motion, noting that Part 16 proceedings provide
only for an appeal and a reply. Thus, the Administration
concluded that the record was complete without Wilson’s
surreply. While acknowledging that the right to file a
surreply is permissive, Wilson argues that the Administration
used its discretionary powers to “abdicate its search for the
truth.” Specifically, Wilson argues that the surreply was
necessary to correct a misstatement that the Administration
made concerning Wilson’s failure to file a master plan for the
Northwest Airlink Building. We find Wilson’s argument
unpersuasive. As the Administration notes, Wilson does not
argue that these materials contain new evidence or were
unavailable to it to file with its administrative appeal, and
under these circumstances we conclude that the

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No. 01-4037 Wilson Air Center v. FAA 13
4The regulations on which W ilson’s argument relies in pertinent
parts, provide:
(a) If, based on the pleadings, there appears to be a reasonable
basis for further investigation, the FAA investigates the subject
matter of the co mplaint.
(b) The investigation may include one or more of the following,
at the sole discretion of the FAA:
(1) A review of the written submissions or pleadings of the
parties, as supplemented by any informal investigation the
Administration did not abuse its discretion in striking the
surreply.
Third, we address Wilson’s argument that the
Administration erred in failing to conduct further
investigation and permit limited discovery. On September 7,
1999, Wilson filed a motion for limited discovery. The
Director denied this motion reasoning that Part 16
proceedings contemplate an expedited process, which does
not provide for discovery during the investigation stages of a
complaint. See 14 C.F.R. § 16.213. We find no error in this
ruling, nor do we find that the Administration improperly
investigated Wilson’s complaint.
The regulations require the Administration to conduct
further investigation of a complaint when the pleadings set
forth a reasonable basis for doing so. 14 C.F.R. § 16.29.
Wilson argues that its complaint set forth a reasonable basis
for investigation and as such the complaint necessitated
“further investigation.” We agree with this statement, but we
believe that Wilson’s complaint was further investigated as
articulated in the regulations and therefore, we reject the
factual basis for this argument.
The regulations provide the Administration with
considerable discretion in choosing how best to fulfill its
investigatory duties.4 Under the process as delineated in
14 Wilson Air Center v. FAA No. 01-4037
FAA considers necessary and by additional information
furnished by the parties at FA A requ est. In ren derin g its
initial determination, the F AA may rely entirely on the
complaint and the responsive pleadings prov ided und er this
subpart.
14 C.F.R. § 16 .29 (emphasis added).
(a) Under the authority of 49 U.S.C. § 40113 and 47121 , the
Director may conduct investigations, issue orders, and take such
actions as are necessary to fulfill the purposes of this part,
including the extension of any time period prescribed where
necessary or appropriate for a fair and complete hearing of
matters before the agency.
14 C.F.R. § 16 .11 (emphasis added).
Part 16, it is clear that the Administration has the discretion
to determine its own need for further investigation and what
that investigation should entail. Even Wilson apparently
recognizes the Administration’s discretion in conducting
investigations as it notes in its appellate brief that “the
procedure is permissive . . . and not mandatory.”
Wilson’s argument rests on its misreading of the
regulations at issue. Wilson contends that “[t]he regulatory
language concerning further investigation ‘based on the
pleadings’ cannot reasonably be interpreted to mean only a
pleadings review.” We find this argument contrary to the
plain language of the regulation. See Henry Ford Health Sys.,
233 F.3d at 910 (“We read statutes and regulations with an
eye to their straightforward and commonsense meanings.”).
As quoted above, the plain language of the regulation
indicates that “further investigation” may entail only a review
of the pleadings, but that requirement may also involve more,
if the Administration determines it is necessary. 14 C.F.R.
§ 16.29(b) (“The investigation may include one or more of the
following, at the sole discretion of the FAA . . . .”) (emphasis
added). The Administration apparently determined more
documentation was unnecessary and we cannot, from our

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No. 01-4037 Wilson Air Center v. FAA 15
5In denying the motion for limited discovery, the Director noted:
The record shows that Wilson filed a reply to the answer with 38
exhibits and subexhibits without the need for limited discovery.
The parties’ other plead ings also contain ample supporting
documentation. We are not convinced that production of
additional documents is required. Should we find during the
investigation of this matter that a sp ecific document or category
of documents are required to supplement the record we will
request the same from the parties pursuant to our authority under
14 C .F.R. § 16.2 9.
J.A. 1073
6The order denying the discovery motion noted:
Depositions of witnesses are not required at this juncture and
would unnecessarily delay the proceedings. Should the
investigation find that there are relevant facts in dispute the FAA
may adjudicate them based on the record, or it may exe rcise its
discretion, and supplement the record by compelling production
of additional documentary and/or oral evidence. 14 C.F.R.
§ 16.29.
J.A. 1074.
review of the record, conclude that this was an abuse of
discretion.
Further, we note that the Administration clearly understood
its authority to request supplemental information in the event
that it determined that this information was necessary for
resolution of the complaint.5 Moreover, the Administration
indicated that it was not reluctant to request additional,
needed information.6 The Administration apparently felt that
it could decide the case without any additional materials, and
we find no basis to conclude otherwise.
Finally, to the extent that Wilson argues that its due process
rights were violated by the Administration’s alleged failure to
conduct further investigation and permit discovery–as distinct
from its failure to hold an evidentiary hearing, which as
16 Wilson Air Center v. FAA No. 01-4037
discussed we believe is not properly before this Court–we
find that this argument lacks merit. To implicate the
protections of the due process clause, there must be a
deprivation of a property interest. Bd. of Regents v. Roth, 408
U.S. 564, 576 (1972). Wilson argues that it has a property
interest as a beneficiary of the restrictive covenant in the
Airport’s deed prohibiting the creation of exclusive rights.
Even assuming that Wilson has alleged a sufficient property
interest so as to trigger the due process protections, we hold
that the Administration’s actions did not violate the due
process clause.
The balancing test that we apply to determine how much
process is due under these circumstances is “flexible and calls
for such procedural protections as the particular situation
demands.” Mathews v. Eldridge, 424 U.S. 319, 334 (1976)
(internal quotation marks omitted). Thus, we consider the
following three interests:
First, the private interest that will be affected by the
official action; second the risk of an erroneous
deprivation of such interest through the procedures used,
and the probable value, if any, of additional or substitute
procedural safeguards; and finally, the Government’s
interest, including the function involved and the fiscal
and administrative burdens that the additional or
substitute procedural requirements would entail.
Id. at 335. We find that the balance of these interests weighs
in favor of the Administration.
The first factor–the private interest at stake–weighs in favor
of the Administration. As the First Circuit described in
Penobscot, Wilson “essentially benefits from the covenant as
any member of the public benefits from the requirement of
non-exclusive access to the airport. [Wilson] stands to earn
a certain amount of profits if the requirement is enforced,
while members of the public as consumers, would benefit

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No. 01-4037 Wilson Air Center v. FAA 17
7Section 47107(a)(1), (5) provide:
(a) General written assurances. –The Secretary of Transportation
may approve a project grant application under this subchapter
for an airport development project only if the Secretary receives
from purchasing airport services at lower prices from more
efficient companies.” Penobscot, 164 F.3d at 723.
Likewise, we find that the second and third factors–the risk
of an erroneous deprivation and the administrative burden of
additional procedure–weigh in favor of the Administration.
The Administration, while limiting its review of the
complaint to the pleadings, conducted an extensive review of
the voluminous record and produced a thorough and well-
reasoned opinion. In so doing, contrary to Wilson’s
argument, the Administration followed the statutory
procedures and federal regulations for review of a complaint
brought pursuant to 14 C.F.R. Part 16. Although under the
relevant statutory and regulatory framework the
Administration had the authority to require more procedural
process in investigating and resolving this complaint, this
authority was at the Administration’s discretion to exercise.
See 14 C.F.R. §§ 16.11, 16.29. Requiring the Administration
to do more than it has done in this case would not only
constrain the Administration’s discretion in resolving
complaints brought pursuant to 14 C.F.R. Part 16, but it
would also “force the [Administration] to over-invest
procedurally in claims that might be assessed just as
accurately without,” requiring more procedural process.
Penobscot, 164 F.3d at 724. Thus, under these facts, we hold
that there was no violation of the due process clause.
C. Unjust Economic Discrimination
Finally, Wilson argues that the Authority engaged in
prohibited economic discrimination. An airport receiving
funds under the Airport Improvement Program cannot engage
in unjust discrimination, 49 U.S.C. § 47107(a)(1), (5).7
18 Wilson Air Center v. FAA No. 01-4037
written assuranc es, satisfacto ry to the Secretary, that--
(1) the airport will be availab le for public use on reasonable
conditions and without unjust discrimination; . . .
(5) fixed-base operators similarly using the airport will be
subje ct to the same charges . . . .
49 U .S.C. § 471 07(a)(1), (5).
Wilson argues that the Authority unjustly discriminated
against it in violation of 49 U.S.C. 47 U.S.C. § 47107(a)(1),
(5), by not offering Wilson the same rental rates, incentives
and abatements that AMR received under the 1998 lease for
General Aviation Building and South Complex. Also, Wilson
argues that the Authority engaged in economic discrimination
in favor of AMR by allowing AMR to acquire the option
parcels to its exclusion. Wilson argues that these collectively
hampered its ability to compete with AMR’s fixed-base
operation, resulting in unjust discrimination.
1. Rental Rates/Incentives/Abatements
Wilson raises a number of arguments alleging that the
Authority’s 1998 lease with AMR constituted economic
discrimination against Wilson and in favor of AMR. First,
Wilson argues that AMR’s 1998 lease constituted a new
leasing agreement and that the rates should have risen to
reflect Wilson’s rates. Second, Wilson argues that the
Authority charged AMR less than the appraisal value for the
six-acre taxiway. Third, Wilson argues that the rental rate
that the Authority charged AMR for the General Aviation
Building ($.0189 per square foot) as compared to the rental
rate it offered to lease the Northwest Airlink building for
($6.00-$6.50 per square foot) demonstrates that the Authority
engaged in unjust economic discrimination. Relatedly,
Wilson argues that the rental rate that the Authority charged
for the General Aviation Building and the one-year rent
abatement that the Authority offered AMR was unjustified

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No. 01-4037 Wilson Air Center v. FAA 19
and constituted economic discrimination. Wilson argues that
the fact that AMR was required to expend considerable sums
of money for renovating these areas does not justify the low
rental rates. Specifically, Wilson argues that these rental rates
allowed AMR to avoid having to do the repairs itself, because
AMR was able to keep its rent low for its subtenants,
allowing for the subtenants to make the improvements.
Wilson essentially argues that this constituted unjust
discrimination because under its lease rates it could not
reduce its subtenants’ rent to a point that “would make it
economical for them to” make required capital improvements.
Each argument will be addressed in turn.
First, when the Authority negotiated the 1998 AMR lease,
it preserved the rental rates for the South Complex that were
provided in the 1979 lease through the original expiration
date of the 1979 lease–2005. The Administration found that
the Authority was “justified in choosing to live up to its prior,
valid contractual agreements (i.e., the 1979 Lease) in an
amended or ‘new’ lease document.” The Administration
reasoned that the fact that the rate differences would be
effectively eliminated in 2005, when AMR’s 1979 lease was
set to expire, demonstrated that the Authority was honoring
its previous agreement. Thus, the Administration concluded
that to the extent that any rate disparities existed, they were
not the result of economic discrimination, but rather were a
consequence of the fact that the leases were negotiated at
different times. See Penobscot, 164 F.3d at 726 (reasoning
that different rental rates were justified by the different
circumstances under which each lease was negotiated); City
of Pompano Beach v. FAA, 774 F.2d 1529, 1544 (11th Cir.
1985) (“[O]ur affirmance of the hearing officer’s findings and
order is not a signal to cities and potential lessees of
municipal property that all municipal leases must be
identical.”). We hold that this finding is supported by
substantial evidence and is not arbitrary or capricious.
Second, with respect to Wilson’s argument concerning the
rental rate charged to AMR for the exclusive use of the six-
20 Wilson Air Center v. FAA No. 01-4037
acre taxiway, the Airport’s reconfiguration made the taxiway
property unusable to others beside AMR. Although access to
taxiways are generally free, the Authority assessed a rental
value for that property because of AMR’s exclusive use. The
Administration found that the rate charged for AMR’s
exclusive taxiway use was comparable to the rates that the
Authority charged Wilson and was the “then going rate for
improved land.” Wilson fails to offer any serious challenge
to this reasoning. We hold that the Administration’s findings
of fact are supported by substantial evidence and its
determination is not arbitrary, capricious or otherwise not in
accordance with the law.
Third, the Administration determined that the rental rates
and one-year rent abatement for the General Aviation
Building were justified by its dilapidated condition and the
requirement that AMR expend a considerable amount of
money to recondition the building. We agree. Simply put,
the buildings were not similarly situated. As the Director
noted, the buildings varied in age, location, condition,
potential uses and needed improvements. The statute
prohibits only unjust discrimination, not all discrimination in
rates. 49 U.S.C. 47107(a)(1). The Administration
determined that the Authority is not statutorily prohibited
from offering different lease terms for dissimilar properties.
See FAA Order 5190.6A § 4-14(d)(1)(c) (“[A] sponsor may
charge different rates to similar users of the airport if the
differences can be justified as nondiscriminatory and such
charges are substantially comparable.”). This determination
is “consistent with applicable agency guidelines and not in
violation of the statute.” Penobscot, 164 F.3d at 726.
Finally, we address Wilson’s argument that although AMR
was required to expend considerable sums of money under the
1998 lease to make renovations to the General Aviation
Building, this did not justify the low rental rates that the
Authority charged AMR. Wilson essentially argues that these
low rental rates constituted unjust discrimination because it
allowed AMR to avoid paying for the required capital

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No. 01-4037 Wilson Air Center v. FAA 21
improvements under the 1998 lease while the rate that the
Authority charged Wilson made it impossible to similarly
avoid making capital improvements. Under its lease with the
Authority, Wilson argues, it was unable to pass on low rental
rates to its subtenants that would make it economical for the
subtenants to make any improvements that Wilson’s lease
with the Authority required. We find this argument
unpersuasive.
This argument essentially reiterates an argument that we
have already addressed–namely, that the 1998 lease should
not have continued the rental rates as established in the
original lease agreements through the original expiration of
those agreements. As we have already found, the
Administration’s determination that the Authority was
justified in honoring its past contractual obligations with
AMR is supported by substantial evidence and is not arbitrary
or capricious. Moreover, while we reject Wilson’s argument,
we note Wilson’s failure to present convincing evidence that
AMR was able to pass on all of the costs to its subtenants to
make the required improvements. While Wilson points to
evidence suggesting that AMR’s subtenants paid for the
construction of the two new hangers as the 1998 lease
required, our review of the record did not reveal that Wilson
similarly presented evidence that AMR was able to pass on
the costs to its subtenants for the millions of dollars that AMR
was also required to expend under the 1998 lease to make
improvements to the General Aviation Building. Finally, we
note that the Authority’s willingness to give Wilson similar
abatements if it made capital improvements to the Northwest
Airlink building seriously undermines Wilson’s argument on
this point.
In sum, we find Wilson’s arguments regarding the rental
rates, abatements and incentives contained in AMR’s 1998
lease to be unconvincing. The Administration engaged in a
searching and thorough review of the record. The
Administration’s findings of fact are supported by substantial
evidence, and we hold that its determinations are neither
22 Wilson Air Center v. FAA No. 01-4037
arbitrary or capricious nor “otherwise not in accordance with
law.” See 5 U.S.C. § 706(2)(A).
2. Option Parcels/Land Allocation
Additionally, Wilson argues that the Authority engaged in
unjust discrimination when it granted AMR the option
parcels. Wilson argues that the evidence does not
demonstrate that these parcels were given to AMR in
exchange for its relinquishment of its leasehold in the North
Complex and as the reasonably equivalent replacement of its
North Complex investments. To this end, Wilson argues that
the evidence demonstrates that AMR, itself, desired to be
released from its lease in the North Complex, which suggests
that the Authority was under no obligation to provide AMR
with the option parcels in order to secure AMR’s release.
Moreover, Wilson argues that it was unjustly denied land to
permit its expansion. Wilson argues that because AMR had
no current need for the option acres, whereas Wilson has such
a need, the exclusion of Wilson from these parcels constituted
unjust discrimination. Furthermore, Wilson argues the
comparison between the land allocation that the Authority has
granted to AMR, as opposed to those parcels offered to it,
demonstrates that the Authority has engaged in unjust
discrimination. Specifically, Wilson compares the option
parcels that were given to AMR and the Hurricane Creek
parcel that it was offered. Wilson argues that the Hurricane
Creek parcels are essentially unusable without the
construction of a paved ramp across the parcel, and that it
does not have the resources to undertake this costly project.
The Administration determined that the evidence reflected
that the option parcels were indeed given to AMR in
exchange for its release from the North Complex lease and
that Wilson requested access to these parcels only after the
Authority had already granted them to AMR. Indeed the
Administration noted: “AMR was not granted a preferential
right to additional land. Rather, the Option Parcels were in
exchange for land released in the North Complex.”

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No. 01-4037 Wilson Air Center v. FAA 23
Additionally, the Administration determined that from the
record it could not find that Wilson “was unjustly denied
access to additional land for its [fixed-based operation]
expansion purposes.” As the Administration noted, the
Authority offered Wilson additional land and even offered to
shoulder some of the costs associated with making this land
usable to Wilson by offering to pay for FedEx’s relocation
from this parcel. Moreover, the Administration determined
that AMR’s desire to relocate was not particularly relevant to
the question of whether the Authority provided the option
parcels in exchange for AMR’s release of its North Complex
holdings. We uphold these determinations.
Again, the Administration throughly reviewed the record
and Wilson’s arguments in rendering its decision. Based on
this thorough review and comprehensive opinion, we
conclude simply by noting that we find that Administration’s
findings are supported by substantial evidence and its
determinations are not arbitrary or capricious.
CONCLUSION
Based on the foregoing, we AFFIRM the decision of the
Federal Aviation Administration.

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