Background
Paragon Skydive sought to operate a commercial skydiving business at the Grand Canyon National Park Airport, which ADOT owns and sponsors. Paragon alleged that ADOT imposed discriminatory fees, insurance requirements, and operational restrictions, including a prohibition on solo jumps. ADOT’s Civil Rights Office found unfair fees and discriminatory unwritten rules in 2017, and the FAA later found that ADOT violated Grant Assurance 22 through certain insurance requirements and restrictions on solo jumps.
After the FAA’s March 2023 Final Decision, Paragon sued the State for contract-related damages and a declaration that lease provisions found to conflict with Grant Assurance 22 were unenforceable. The superior court dismissed the damages claims for inadequate notices of claim, later dismissed the declaratory claim for lack of subject-matter jurisdiction, and awarded the State $100,000 in attorney fees.
The Court’s Holding
The Court of Appeals held that Paragon’s notices of claim sufficiently supported its $275,000 settlement demand. The statute did not require an itemized damages calculation or proof that the demand was reasonable; Paragon’s account of the allegedly unlawful fees, restrictions, and insurance requirements supplied an adequate factual foundation.
Paragon cannot recover damages sustained before it began the FAA administrative process in January 2018 because it did not timely present those claims. But its administrative complaint tolled accrual for damages sustained after that point until the FAA’s March 2023 Final Decision, making its notices and July 2023 lawsuit timely as to those later damages. The court also held that the superior court has jurisdiction to decide the enforceability of lease provisions under state contract law. It vacated the fee-and-cost award because the State was no longer the prevailing party.
Key Takeaways
- A notice of claim need not itemize damages or show that its settlement demand is reasonable.
- FAA proceedings were required to establish the alleged grant-assurance violations and tolled the claims period for post-January 2018 damages.
- FAA authority to enforce grant assurances does not eliminate state-court jurisdiction over airport-tenant contract disputes.
Why It Matters
The decision distinguishes FAA enforcement of airport grant assurances from private contract remedies. Airport tenants may pursue state-law relief after the FAA resolves grant-assurance issues, although they must still comply with Arizona’s notice-of-claim deadlines for damages that accrued before the administrative process began.
The court affirmed only the time bar for pre-2018 damages, vacated the dismissals otherwise, and remanded for further proceedings.