Spokane Airports, operated jointly by the city of Spokane and Spokane County, lacked legal authority to use eminent domain to force fixed-base operator Spokane Airways to vacate leased buildings it was occupying at Spokane International Airport, says a Washington state Court of Appeals panel of judges based here.

The three-member panel reversed and dismissed a condemnation action filed against Spokane Airways by Spokane Airports, which oversees Spokane International Airport, the Airport Business Park, and Felts Field Airport. The appellate judges held that state statute prohibits the city and county from delegating powers of eminent domain to an entity such as Spokane Airports, and requires them instead to file condemnation petitions in their own names.

"If the decision is upheld, it is a tremendous vindication of my client's property rights," says William D. Symmes, lead attorney for RMA Inc., doing business as Spokane Airways. "We think it's extremely significant, and it's going to give rise to a big damage claim."

Spokane Airports is asking the appellate court to reconsider its decision. However, Kevin Roberts, one of the attorneys representing Spokane Airports, downplays the significance of the ruling and says he considers the eminent domain matter a side issue to the central dispute over whether his client adhered to contractual obligations when it required Spokane Airways to move.

Spokane Airways has contended repeatedly that its contracts with Spokane International Airport required the airport to relocate the buildings it had occupied or to construct new quarters for it. Spokane Airports has filed a motion for summary judgment on the contractual dispute, but that matter has been put on hold until the current appellate court issues are resolved, Roberts says.

Spokane Airways moved into smaller quarters at the airport more than two years ago and a number of the buildings it formerly occupied have been demolished. The Federal Aviation Administration required the buildings to be removed to provide adequate lines of sight from a new $26 million air traffic control tower built along Electric Avenue.

RMA sued Spokane International Airport and the Spokane Airport Board for breach of contract and inverse condemnation in April 2007, claiming their actions had destroyed its ability to continue as a full-service fixed-based operator.

Fixed-base operators, often referred to by their FBO acronym, are businesses, located on airport property, that provide support and maintenance services to private and commercial aircraft. They typically refuel, park, and service or repair planes, and often also rent aircraft and provide flight training and flight-planning resources, as well as other convenience amenities for pilots.

The suit filed by RMA accused SIA and its seven-member governing body of forcing Spokane Airways to vacate six of the nine buildings it occupied at the airport without paying for the company to relocate or providing replacement buildings. It asserted that Spokane Airways' long-term lease agreements for those buildings required such compensation.

The lawsuit was part of a protracted battle between SIA and Spokane Airways, the airport's oldest fixed-base operator, which had complained previously that the airport's actions could leave it without enough space to operate profitably.

In its lawsuit, Spokane Airways said it was told by SIA in 2000 that it would need to relocate due to several expansion projects the airport was planning. It said that as a result of uncertainty caused by SIA's plans, a pending $4.2 million sale of 85 percent of its fixed-based operator business was scrapped.

The parties agreed to move Spokane Airways to a site at the west end of Pilot Drive, just south of the six buildings that were to be demolished, then couldn't agree on the terms of a lease for a new building that had designed. After seeking proposals for commercial use of the site, SIA agreed in December 2006 to lease that land to XN Air LLC, the other fixed-base operator there.

In late October, Spokane Airways filed a $10 million claim with the Airport Board, which it said would cover the cost of replacing the six buildings, which comprised a total of 63,000 square feet of floor space. Shortly thereafter, the Airport Board filed the condemnation petition in Spokane County Superior Court against Spokane Airways to acquire the company's leases of those buildings through eminent domain.