California FBOs Use Surcharge to Fight 100LL Lawsuit

August 31, 2012

Costs associated with an ongoing legal battle over the sale of leaded aviation fuel have resulted in additional fees for some California pilots. The issue stems from litigation filed by the Center for Environmental Health (CEH) claiming environmental damage from the distribution, sale and use of 100LL. The Oakland-based independent group filed a “Notice of Violation” in May 2011 against 38 airport fixed- base operators (FBOs) throughout the state, identifying the companies as potential targets for “a citizen enforcement lawsuit” under California’s 1986 Safe Drinking Water and Toxic Enforcement Act (also known as Proposition 65), which allows entities like CEH to sue companies alleged to be acting against the public interest and in violation of the law.

The notice of violation evolved into a formal lawsuit in October 2011, by which time it also included major oil producers, such as ExxonMobil and Chevron, as litigants. Under Proposition 65, the burden of proof in the CEH lawsuit is on the FBOs and oil companies to demonstrate that their use of leaded aviation fuel complies with California regulations and is safe to the surrounding environment.

Should the court rule in the group’s favor, penalties of more than several hundred million dollars could be assessed against each of the companies named in the lawsuit, with CEH allowed to retain 25 percent of those fines.

Facing a long and potentially debilitating legal battle, several of the involved FBOs formed the California Avgas Coalition in 2011 to present a united front against the CEH allegations. The significant costs associated with that fight – several hundred thousand dollars’ worth – led some FBOs to independently recoup a portion of those costs, in the form of an added fee for avgas users.

“CEH’s action against the avgas community is disappointing given the work the industry has underway with NBAA and the FAA on transitioning to an alternative fuel source to replace avgas,” said Patrick Sniffen, vice president of marketing for Signature Flight Support, which implemented a 25-cent-per- gallon “California Proposition 65 Defense Fee” at its locations across the state. “Despite making this point to CEH, they continue to pursue their claims.

“The purpose of Signature’s California Proposition 65 Defense Fee is simply to cover our share of litigation costs, and to increase awareness among the users in the community,” Sniffen added.

Another company named in the suit, ACI Jet Centers, is assessing a 5-cent-per-gallon fee. “The most common reaction we receive from customers is frustration directed toward the Center for Environmental Health,” said Andrew Robillard, vice president of FBOs and facilities for Aviation Consultants, Inc.

CEH announced in February that both sides had engaged in settlement talks, which appears to be a common method of resolution for the group. CEH research director Caroline Cox conceded in past media interviews that “virtually all” cases pursued by the organization over the past 15 years have ended in cash settlements, which would still subject the FBOs and oil companies to substantial penalties, fees, costs and other administrative obligations.

“If CEH prevails with its claims, the user community in California will have to live with the ultimate result, whether financial or operational,” Sniffen said. The case could also portend difficulties for other airport service providers across the country.

“The financial cost of this lawsuit and the potential consequences will not stop at the state line,” Robillard concluded. “We encourage all of those living in California to contact their local and state representatives and ask to repeal or amend Proposition 65.”