Atlanta Journal & Constitution v. City of Atlanta Department of Aviation

322 F.3d 1298
CourtCourt of Appeals for the Eleventh Circuit
DecidedFebruary 28, 2003
Docket00-14413, 00-15181 and 00-15185
StatusPublished
Cited by32 cases

This text of 322 F.3d 1298 (Atlanta Journal & Constitution v. City of Atlanta Department of Aviation) is published on Counsel Stack Legal Research, covering Court of Appeals for the Eleventh Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Atlanta Journal & Constitution v. City of Atlanta Department of Aviation, 322 F.3d 1298 (11th Cir. 2003).

Opinions

BIRCH, Circuit Judge:

In this appeal, we decide whether a government agency, statutorily charged to be self-sufficient and acting in such proprietary capacity, is permitted to assess profit-conscious fees on expressive activities for use of distribution facilities in a non-public forum. The district court found that the assessment of any fee in excess of administrative costs was contrary to the First Amendment of the United States Constitution and precedent in this circuit under Sentinel Communications Company v. Watts, 936 F.2d 1189 (11th Cir.1991). The district court granted a permanent injunction against the City of Atlanta Department of Aviation, prohibiting, inter alia, the City of Atlanta from charging newspaper publishers any fee for the use of the Hartsfield Atlanta International Airport’s newsracks in excess of the administrative costs associated with that use.1 On appeal, we affirmed the district court’s permanent injunction.2 Subsequently, we vacated our decision and granted a rehearing en banc.3 After rehearing, we overrule part of our [1302]*1302prior decision and hold that a government agency, statutorily mandated to be self-sufficient and acting pursuant to that charge, is permitted to assess a reasonable profit-conscious fee to newspaper publishers for the use of the airport’s distribution facilities. Accordingly, the district court’s grant of summary judgment with regard to the 1996 Plan4 fees provision and consequent injunction is VACATED and the case is REMANDED.

I. BACKGROUND

A. Hartsfield Atlanta International Airport

Hartsfield Atlanta International Airport (the “Airport”), located in Atlanta, Georgia, is owned by the City of Atlanta (the “City”). Pursuant to statutory authority, the City of Atlanta Department of Aviation (the “Department”) operates the Airport. O.C.G.A. § 6-3-1, 6-3-20; City of Atlanta Charter § l-102(c)(9). The Department is required to operate the airport in a proprietary manner and is vested with authority to charge fees for the use of airport space by any “revenue-producing activity.” Atlanta City Code §§ 22-62 & 22-82. The City Code also restricts the use of these fees to the “cost of constructing, paying debt service on maintaining and operating the airport, together with the incidental navigation facilities, and maintaining the airport in a reasonably safe condition.” Id. § 22-81. The fees cannot be used by the City as general revenues.

Moreover, the Airport receives federal funding and therefore is required, to the extent reasonable, to operate the airport in a self-sufficient manner. 49 U.S.C. § 47107(a)(13). The federal law, with few exceptions, mandates that airport revenues be used exclusively for capital or operating costs of the airport, and prescribes provisions for accountability and enforcement of same. See §§ 47107(b)(1) and (l). The intent of Congress is clear. The statutory policy statement, found in § 47101, provides that the “airport fees, rates, and charges must be reasonable” and

that airports should be as self-sustaining as possible under the circumstances existing at each particular airport and in establishing new fees, rates, and charges, and generating revenues from all sources, airport owners and operators should not seek to create revenue surpluses that exceed the amounts to be used for airport system purposes and for other purposes for which airport revenues may be spent under section 47107(b)(1) of this title, including reasonable reserves and other funds to facilitate financing and cover contingencies.

§ 47101(a)(12) and (13). Thus, on both federal and state levels, the Airport is charged with the responsibility to operate its facility focused on its “bottom line.”

The Airport is uniquely situated to profit from the patronage of the travelers frequenting its concourses. On a yearly basis, over sixty-three million people pass through the Airport. Although located in the City, the Airport is an island of commercial activity. Thus, given the captive market of the harried travelers, the Airport and its vendors have virtually monopolistic access to supply items of convenience, refreshment and entertainment, often at prices stretching the outside capacity of an otherwise inelastic demand curve. Approximately one-half of the Airport’s revenue is generated by concessions and parking. This monopoly position also extends to any vendor or advertiser desir[1303]*1303ing to lease space in the Airport facility because the Department has sole authority to lease the premises to whomever it chooses. For example, in 1996 the Airport, through an agency, charged between $62 and $111 per square foot per month for advertising space.

B. Pre-Plan Netvspaper Distribution Methods

In the fifteen years prior to 1995, the Airport was party to a master concessions agreement, which delegated the exclusive right and responsibility to market concessions to Dobbs, Pascal, Midfield Corporation. Airport News, the newsstand concessionaire, sub-contracted for the exclusive right to sell newspapers in the Airport. Initially, only newsstands sold newspapers.5 As part of its contract, Airport News newsstands were required to carry The Atlanta Journal and Constitution, USA Today, and The New York Times. In 1980, The Atlanta Journal-Constitution (“AJC”) attempted to place its own newsracks in the Airport, and Airport News sued AJC’s publisher, Cox Enterprises, over the unauthorized placement of newsracks in the Airport. Pursuant to a settlement agreement with AJC, Airport News permitted that newspaper publisher to distribute newspapers in eighteen stand-alone newsracks, located as approved by Airport News so as not to detract from the newsstand revenues. AJC paid Airport News a fee of 30% of the gross revenue from newspapers sold through newsracks at the Airport, a portion of which (approximately 11%) was remitted to the City by the concessionaire. USA Today paid a 20% fee derived from gross newsrack sales under a similar arrangement. In eom-parison, the Airport received not less than 20% of the gross revenue from other vending machines. The master concession agreement expired in September 1995.

In 1995, the Airport and the City were undertaking a physical and operational restructuring in preparation for the 1996 Summer Olympic Games. The Airport management took this opportunity to renovate the Airport and revamp the appearance and services available to the public coming to and through the Airport. A main focus of their efforts was to provide a more customer-friendly concession selection and to “giv[e] a sense of place” to the Airport. Baker Dep. at 40:4-11. When the master concessions agreement expired, the City resumed sole control over the newsracks. During the renovation construction period, most newsracks were removed, and the newspapers stopped paying the monthly assessment on the remaining newsracks. The Airport sought to establish a uniform newsrack policy and developed a plan for appropriating standard newsracks and leasing them to the newspaper publishers (the “Plan”). The Plan spawned six years of litigation, culminating in this appeal.

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Bluebook (online)
322 F.3d 1298, Counsel Stack Legal Research, https://law.counselstack.com/opinion/atlanta-journal-constitution-v-city-of-atlanta-department-of-aviation-ca11-2003.