United States District Court, D. Arizona
Dominic W. Lanza United Slates District Judge.
Territory Tours ACC (“Dakota”) is a company that
offers helicopter tours in northern Arizona. For years,
Dakota subleased space at the Sedona Airport and ran its
tours from that location. In 2014, Dakota became embroiled in
litigation concerning its lease with the Sedona Oak-Creek
Airport Authority, Inc. (“SOCAA”), the non-profit
entity that operates the airport on behalf of Yavapai County
(“the County”). In 2017, the parties entered into
settlement agreement to resolve that litigation. Among other
things, the settlement agreement terminated Dakota's
sublease but required SOCAA to issue a request for proposal
(“RFP”) so that interested parties, including
Dakota, could submit new bids to use space at the airport.
Dakota submitted a bid in response to the RFP but its bid
wasn't accepted. Instead, SOCAA accepted a competing bid
from Guidance Air Service, LLC (“Guidance”), a
rival helicopter tour operator that already leased other
space at the airport.
their amended complaint, which was filed in August 2018,
Dakota and Solid Edge Aviation (collectively,
“Plaintiffs”) allege the RFP process was a
“sham” designed to exclude Dakota from the
airport. Among other things, Plaintiffs allege that SOCAA
altered the selection criteria at the last moment in an
effort to disadvantage them, accepted Guidance's bid even
though it was 32% lower than theirs, refused to produce
Guidance's full bid during a subsequent bid protest,
presented false testimony during a state-court hearing
related to the bid protest, conducted a pretextual audit of
their taxes, and lodged a false complaint about their
operations with the Federal Aviation Administration.
Plaintiffs have raised troubling allegations about how the
RFP process was conducted, this case does not involve a
challenge to that process in the traditional sense
(ordinarily, bid protests alleging improprieties in RFP
processes are governed by state law and brought in state
court). Instead, the amended complaint asserts antitrust
claims against four different defendants: SOCAA, SOCAA's
former director Amanda Shankland (“Shankland”),
Guidance, and the County (collectively,
have now voluntarily dismissed their claims against SOCAA,
Shankland, and Guidance (Doc. 115), but their claims against
the County remain pending. The County has moved for judgment
on the pleadings (Doc. 79) and, as discussed below, its
motion will be granted for two independent reasons. First,
time and again over the last half-century, plaintiffs have
attempted to bring antitrust claims against airports and
airport operators under the theory that the airport's
refusal to provide a lease (or similar concession) amounted
to anticompetitive conduct and/or contributed to
monopolization. The courts have, almost without exception,
rejected such lawsuits because (1) municipal airports
generally enjoy immunity from antitrust liability in this
context pursuant to the so-called “state action”
doctrine, which was first established in Parker v.
Brown, 317 U.S. 341 (1943), and (2) run-of-the-mill bid
protests can't, in any event, be repackaged as antitrust
claims. These principles generally doom Plaintiffs'
attempt to transform their dissatisfaction with the RFP
process into an antitrust lawsuit.
the amended complaint is devoid of any plausible allegation
that the County was responsible for transforming the RFP
process into a sham. Thus, although the County perhaps could
have exercised more care in overseeing how SOCAA was
administering the RFP process, Plaintiffs have not
articulated facts that would permit the County to be sued
under a conspiracy theory. It is a tertiary player in this
dispute-Plaintiffs' true dispute lies with SOCAA, and
that dispute doesn't sound in antitrust law.
August 2017, Dakota filed its original complaint. (Doc. 1.)
2018, the Court issued a pair of orders rejecting
Dakota's claims against the County and Guidance. (Docs.
68, 69.) First, the Court concluded the County was entitled
to judgment on the pleadings because its “only
involvement in this matter is as owner of the Sedona Airport
and landlord to SOCAA. . . . [Dakota] has not demonstrated
that Yavapai County meaningfully participated in the RFP
process that awarded the sublease to Guidance. . . . Yavapai
County was not involved in SOCAA's decision-making
process and was a passive lessor during the RFP
process.” (Doc. 69 at 4-5.) Second, as for Guidance, the
Court similarly concluded that although Dakota “alleges
that SOCAA came up with the plan to replace [Dakota] with
Guidance . . . at no point does [Dakota] allege that Guidance
colluded with SOCAA to do so.” (Doc. 68 at 3-5.) The
Court further concluded that Dakota's allegations
“demonstrate that Guidance was not involved in
SOCAA's decision-making process and was a passive bidder
during the RFP process” and that Dakota was seeking to
improperly “blame Guidance for actions that, even if
taken as true, could only have only been plausibly committed
by SOCAA.” (Doc. 68 at 3-5.)
August 2018, Dakota, along with new plaintiff Solid Edge,
filed an amended complaint alleging violations under sections
1 and 2 of the Sherman Act against all Defendants. (Doc. 72.)
September 2018, Defendants filed a trio of dispositive
motions: the County filed a renewed motion for judgment on
the pleadings (Doc. 79), Guidance filed a motion to dismiss
under Rule 12(b)(6) (Doc. 80), and SOCAA and Shankland filed
a separate motion to dismiss under Rule 12(b)(6) (Doc. 81).
October 2018, this case was transferred to the undersigned
judge. (Doc. 94.)
November 2019, the three dispositive motions became fully
briefed. (Docs. 85, 88, 89, 99, 100, 101.)
April 4, 2019, the Court issued an order setting oral
argument on the dispositive motions on April 10, 2019. (Doc.
April 9, 2019, Plaintiffs filed a stipulation dismissing
their claims against SOCAA, Shankland, and Guidance without
prejudice. (Doc. 115.)
April 10, 2019, the Court heard oral argument on the
County's motion. During the argument, Plaintiffs asked
the Court to defer ruling on the motion because the parties
were hoping to finalize a settlement within the next week.
The County disagreed and asked the Court to rule on the
motion because the potential settlement was still tentative.
Factual Allegations In The Amended Complaint
operates helicopter and fixed wing air tours out of the
Sedona Airport. (Doc. 72 ¶ 5.) Solid Edge has common
ownership with Dakota and serves as Dakota's Part 135
Operating Company. (Id. ¶ 6.)
like Dakota, operates air tours out of the airport and
“is a direct competitor of . . . Dakota.”
(Id. ¶ 10.)
is a non-profit corporation that “purports to be an
independent airport authority and is empowered to operate,
manage and oversee the Sedona Airport pursuant to a long-term
written lease agreement with Yavapai.” (Id.
¶ 7.) SOCAA maintains subleases on buildings, aircraft
parking pads, and facilities on the airport premises.
(Id.) It also owns and operates the airport's
only fixed base operator, Red Rock Aviation. (Id.)
The airport is operated according to a Master Plan.
(Id. ¶¶ 15-16.)
was the General Manager and/or Airport Director of the
airport acting on behalf of SOCAA since at least 2016.
(Id. ¶ 9.)
County, which owns the airport, has a long-term contract with
SOCAA under which SOCAA must manage the airport for the
“public good” and in a prudent and businesslike
manner. (Id. ¶ 8.)
Dakota's Sublease with SOCAA and Litigation Involving the
had a sublease with SOCAA that originally ran until August
2014 and was later extended until April 2017. (Id.
¶ 24.) Plaintiffs ran their air tour operations out of
the subleased on-airport space. (Id. ¶ 25.)
November 2014, Plaintiffs and SOCAA became involved in
litigation over, among other things, SOCAA's ...