WASHINGTON - Airline user fees imposed by Kent County, Mich., are illegal because they are not fairly allocated and because they allow the county to reap excessive profits, a lawyer representing several major carriers told the Supreme Court yesterday.
The fees should also be struck down because they place an undue burden on interstate commerce in violation of the Constitution's commerce clause. the lawyer. Walter A. Smith, told the high court during oral arguments. The case, Northwest Airlines, et al., v. County of Kent, Michigan, could have a major financial impact on airlines or airports, depending on the outcome.
The commerce clause generally prohibits states from imposing barriers to the free flow of goods and services across state lines.
Smith, however, did not focus on commerce clause concerns as much as on the airlines' other objections to the charges, which include landing fees and terminal rental fees.
Kent's methodology for determining its fees did not meet a standard for reasonableness set by Congress in legislation passed in 1973 that limits so-called airport "head" taxes, Smith said. In addition, the fees "are not fairly allocated among airlines," and the revenues generated by the fees are "vastly in excess of the airport's own costs," he said.
But Kent County's lawyer, William F. Hunting, told the court that the 1973 law does not apply in this case because the fees in no way represent head taxes.
Lobbyists for the airport industry said the justices' decision, which will probably be handed down sometime early next year, would reverberate throughout the industry.
"This is a very major case for airports in terms of rates and charges and their ability to asses charges to the airlines," said Robert Wigington, senior vice president for government and economic affairs for the Airport Operators Council International. "The outcome is going to have a big impact, one way or another."
During the arguments, justices' questions indicated that they were concerned that deciding the case meant setting standards for rates. Chief Justice William Rehnquist suggested that the airlines should have considered an administrative remedy 6r their grievance rather than looking to the court system for relief.
"The Secretary [of Transportation] could establish a uniform system for he whole country," Rehnquist said.
Assistant U.S. Solicitor General Edward C. DuMont, arguing in support of Kent County, agreed that the administrative approach was the best way to determine the reasonableness of the airline fees. "Ratemaking belongs in an administrative rather than ajudicial forum." DuMont said.
DuMont said the airlines should have either paid the tax and sued for a refund or petitioned the Secretary of Transportation for a ruling on the reasonableness of the fees.
The dispute between Kent County and the airlines began in 1986 when Kent changed its airport fee structure and sharply increased the fees. On April 1, 1988, the day the new rates became effective, seven airlines filed a lawsuit against the county in the U.S. District Court for the Western District of Michigan. The district court sided with Kent County, as did the U.S. Court of Appeals for the Sixth Circuit, prompting the airlines to appeal to the Supreme Court.
The high court agreed to hear the case even though the solicitor general urged against a review. The solicitor general, invited by the court to file the views of the federal government, said that the case had been properly decided in the lower courts.