please the court my name is john van geffen representing sky med doing business as pacific international skydiving center i'm here today to discuss the six arguments made in our brief i would like to hold on to two minutes for bottle at the end so pacific is a skydiving facility based and during ham hawai which is next to the ocean and four thousand dollars foot mountains creating a unexpected weather patterns that can change in five to seven minutes as the f a a zz witness testified turning to our st argument regarding the subject matter jurisdiction the f a a issued two proposed notices of civil penalty each under fifty thousand brief that the term initiated should be considered as the issuance of the proposed notice of civil penalty the problem there is that the term initiated when considered in context with amount and controversy is unknown the proposed notice of civil penalty is an informal procedure the amount can be changed at the final notice it can be increased it can be decreased rarely has it ever been increased but it could be so the fact is that the responde has no notice as to what the amount of controversy is until the final notice is issued and this case the final notice was for fifty five thousand dollars which we believe exceeds the deity's jurisdiction in this case  administrator cannot assess a civil penalty greater than the amount sought in the complaint it does not discuss the proposed notice of civil penalty it does not talk about the final notice the administrator itself says regulations says that the complaint amount is the amount in on these actions they are followed and in this case the respondent would've been entitle to twice the many in iraq the tories twice as many discovery requests they would have been able to do more and build the case stronger additionally if the case had been brought before the u s district court we would have had the right to an article three judge we would have the right if they had had i mean it sounds like your answer is you would have been you were better off because they were combined in that sense they would have had more in tories if it had been divided then if they weren't divided they would have had a stronger case with a divided them combined is that what you're saying respondent would have had the ability to propose or propellor i'm sure is you're saying you would have more correct so you would have had arriving tories of the agency or to the agency regarding their investigators or witnesses we would have had more ability to develop our case and the defense and had it been brought before the u s district court following federal rules of civil procedure which it would have also had a right to a jury a lot of the items of hearsay would have been kept out by f r c p that was not kept out by the administrative role right so i understand how it might be different if you're in district court but i was just wondering before the agency if we if we just keep you before the agency what the difference is between two cases before the agency and one case before the agency it would have been two separate actions they would have been handled separately it would not have had a large effect  but if that this court were to accept the f a's interpretation that initiated is with the proposed notice and not with the final notice the new a situation where the f a a is free to initiate one hundred proposed notices and then combine them to completely ignore statutory and congressional intent of having a limit in place in theory they could also have a proposed penalty of forty nine thousand dollars and then wait till the final notice comes out and then raise it to five hundred thousand dollars and  scape that jurisdictional requirement so i believe the regulations don't interpret the statute correctly from the f a s point in short if claims can be aggregated to meet statutory minimum so they can be aggregated to exceed them turning to the nd item about pacific not being liable for independent contractors decisions the violation here was one o five point one seven regarding operation parachute operations through a cloud parish operations defined in one of fifty three which says it can include but is not limited to and then goes on to talk about the pilot tandem instructor the videographer the parachute rigger all of these people but we don't know who is liable for what you don't want us to reach this argument though right if you went on your st argument we don't have anything on the merits to review if there was an opinion that you would have found that way they'd be great but yes if they wouldn't be on the do that right now as was the proceeding without jurisdiction that is correct if the a l j lacked jurisdiction they could not come to any determinations on the merits and it would have been dropped and at this point it's beyond the time that the f a a could bring the case back so it can't be brought in district court at this point correct and regarding the parachute operations the definition in this situation the f a a zone investigator testified that the pilot once the aircraft took off was an operational control of that aircraft pacific had delegated and released any responsibility for safe operations of that aircraft once the pilot took over the pilot is individually independently certified qualified and is liable under the f a a ares the parachute master jumpers also independently qualified certified has his own equipment he makes the decision once the doors open looking straight down whether or not a parachute drop can be conducted safely not going through the clouds the testimony at the hearing is that from the ground it is impossible to determine whether an operation is safe they are jumping from three miles up you can't see them weather changes clouds are at different levels moving at different speeds there's no way to know that responsibilities delegated to independent contractors there's nothing in the regulations saying that the drop zone is prohibited from delegating  and in this situation it's a question of does the principal control the means of the results the results say skydive operation the means are operating the aircraft which only the pilot had control of and making the determination whether it 's safe to jump which only the parachute the master jumper makes when they open that door pacific was determined to have control because they had a radio but the only thing that the radio does is tell the people in the aircraft what the ground conditions are in the pilot overrule the master jumper the pilot makes the decision whether to open the door so so once the doors open can the pilot say don't jump yes the pilot could absolutely do that he's an operational control he has all reliability for safety people but it fails to define under what situations which person would be liable it doesn't say that a dropzone operator can't delegate duties it doesn't say want to drop zone operators strictly liable for the pilot even though the pilot is an operational control of the aircraft himself as written under this the regulation under the same set of facts the f a a could have instead gone after the parachute rigger who may have packed the chute a week earlier and wasn't there they could have gone after the fuel truck operator that filled the aircraft they could even go after me as the attorney because i'm supporting a skydiving operation it's vague there's no way for respondent to know when they are going to be the target and as a absolutely that's always an attractive and that kind of dovetails and into the next argument is that fourteen c f r one of five the definition of parish operation shouldn't apply to pacific as a drop zone operator because pacific did not authorize permit participate in a parachute operation through a cloud they prohibit it they put signage in the aircraft warning against it they hold staff meetings telling the independent contractors that they will be terminated if it's determined that they've jumped through a cloud so didn't you have a post on your website that said the coolest part was falling through the cloud that's another reason why if we had f r c p that hearsay would have been kept out because a rip review from youtube or hotline or wherever it was posted we don't know who posted it we don't know what they were talking about again they could be saying there is a cloud here there's a cloud here i looked up it was awesome then i looked down i was closer we don't know we don't know who that was we couldn't interview him it wasn't posted on on pacific's website it was disaffected i don't know if they read it i don't know if it's automatically generated based on reviews but again just the quote itself you don't know if that person jumped through a cloud jumped around a cloud jumped near a cloud again where these operations take place there's clouds at multiple levels moving at different distances anyone that's jumping is going to have a great time they're going to be exhilarated so i don't know what the purpose of their quote was and pacific's decision to have that on their website i don't know that they even read it they just saw five star review and said awesome let's post  s could i could i go back to the question i was asking earlier about the number of iraq and tories and things so so you're saying that if it had been two cases before the agency you would have had more opportunity for discovery so were you limited to the amount of discovery for one case the way this did proceed in this action a nd set of discovery was sent that the f a a objected to as to the litigation decision not to proceed on a motion to compel to get that additional  items i can't speak to what why the reasoning for that was i think it was just a decision that there are other items that need to be addressed beforehand but yes the f a a denied additional iraq at tory's based on only being want to action instead of two and so you maxed on cases finner and gatewood regarding applying operational control to some of that was in operating an aircraft but those are highly distinguishable because in fenner it's a case where an aircraft owner gave the aircraft to a rd party that rd party operated careless and reckless and then the owner of fused to tell the f a a who it was leaving the f a a with no option but to smoke out the pilot by going after the owner so those cases i don't really think  turning to the appropriateness of sanction the burden on justifying a pony amount falls on the agency the administrative law judge may credibility in fact terminations funny at the f a a failed to provide any testimony as to how they came to  determination the administrator and overturning the l j sites to the closing argument of the f a's attorney which is not evidence the only evidence was the sanction guidance table which is guidance it's not binding and there no explanation of how it was used we believe that the agency did not provide a articulate reason or rationale for overturning the elad a l j who heard all the mitigating facts you heard all the  and five parachute operation section ninety one dollars governs pilot operations of an aircraft it was determined by the administrative law judge that no evidence exists that the aircraft was operated in a careless or reckless manner nonetheless the f a a is saying that we're still going to apply it as a derivative finding against the drop zone operator operational control was with the pilot so finding that a pilot acted careless and reckless when the facts are there was no evidence of careless or reckless and then applying that to a rd party drop zone just violates these standards of of fairness impropriety and it really makes no sense and that is my time thank you thank  violations were known to your client correct yes your honor however the when there is a violation we have inspectors who have to go out and vest a gate that violation will have to collect evidence once they sent out that st case had been with f a legal for some time and they had prepared the notice to go out the nd case nd set of violations which had just occurred were still being investigated and as you can see because the notice was issued a number of months later in october it took some time for that to proceed through the f a a investigation and then preparing a legal document issue so to address some of the arguments that were raised by a petition or petition or  today has argued that the final notice determines the amount of controversy now must know this is and you argue can i i know it's important but i want to make sure that i had a chance to ask this question i'm not sure there's any jurisdiction could we skip to that this process of having administrating who we always run to these problems because we don't have administrative judges a civil lawyer could your stiction does and so congress created right and then they experimented with it in the you didn't have the power to issue fines until ninety two so what is the limit could you get a one million dollars fine a two million dollars fine there was a committee a legislative committee that reported to the congress it was a senate committee on commerce science and transportation reported to congress that the limit should be a one million dollars and so that was before the congress the congress didn't move on it which indicates that they were aware that there should be in between in principle is no difference between adding two and adding twenty or thirty where you get well over a one million dollars and still not take it to the article three judge i think we have to face the issue of whether the f a a a system is in violation of separation of powers and taking away the responsibility from an article three judge who has that there's no power in the administration to correct what the decisions that he or she makes could you respond to that i know that's real general but it strikes me that we need to a b the judge and the prosecutor well your honor the juristic the jurisdictional man does actually very based on if it's a small business or large business against large businesses we can actually proceed for up to four hundred was it is in the statute forty six dollars to one dollar which says that we if we initiate a case where the amount of controversy is greater than fifty thousand dollars against a small business jurisdiction is where the district court but again the term initiate was not defined by congress and is important to the statute not only for the amount in controversy but also the statute of limitations another section of forty six dollars career one requires the f a a to initiate their cases within two years of a violations that know that the argument that was made today by petitioners that this is some sort of informal document that is not the case that you agree here or your argument is that you could compound as many as you wanted to and put them and one case indeed could go over a one million dollars which the congress has already rejected in fact because it was proposed and they never acted on it it seems to me that your argument overlooks that part of the state of the statutory limitation and i believe that the statute speaks clearly the f a a can negotiate cases that properly for itself if they're under fifty thousand dollars the fact that we could have had a hearing on monday in case number one in this case and then on tuesday have a hearing in case number two properly had we left them separate i think speaks to the fact that congress was not attempting to prevent the f a a from consolidating cases that are properly separately initiated under your interpretation yes what strikes me is that you have both the prosecutor and the judge in the same organization you have no differentiation and maybe at the time a few years ago with a small business you could do that it's only going to be fifty thousand dollars obviously with the position that you've taken it could be vastly more than wouldn't have strike you as being somewhat in tension with with the the history we have in this area well your honor i think that in the unusual case where we had you know numerous violations by the same alleged violator and they were separate investigations that were occurring months apart you know and they end up being consolidated i think that would be appropriate i don't think that is and intentioned what the statute is providing the authority it's providing to the f a a well it would certainly it would certainly push back against her and her petition that you can add on as many as you want to out on if that's your interpretation it could be it would overrule congress has already told us that they don't want to go to a one million dollars correct and fifty thousand correct in one action that is properly initiated your honor but i don't you know that that's not the case in front of us the f a a the administrative complaint that started the actual proceeding before the l j was for fifty five thousand dollars right that is correct around so i mean i understand your point about initiation of essentially a prosecution but usually when we're thinking of jurisdiction in court still we think about the complaint and i'm having a little trouble why we wouldn't look at the fact that the actual proceeding where we have to ask should it be before the l g or should be before the district court the complaint that started that part of the proceeding was for more than the l g is allowed to decide well your honor the complainant in an f a a enforcement action is only filed when so the f a a when they initiate a case now we do it if it's under fifty thousand dollars we issued a notice of proposed civil penalty which you know has the allegations of fact violations law and the amounting controversy if it's greater than fifty thousand dollars the f a a does not issue a notice or proposed civil penalty when actually send the person letter indicating that you know it's one hundred thousand dollars we're willing to compromise that amount but if they don't want to do that we actually have to refer that case to the pardon of justice for them to file the complaint in district court so a very different the skynet was only punished per day not per junk right so if there were ten jumps through the clouds that they proved on december th and four jumps on january th that's not fourteen violations right i believe it was actually two jumps here and well but my point is they were they were fined per day now believe or jump no i believe that it was two alleged actual jumps through clouds so for the st case not per day just you did two jumps three clouds and then the nd case involved eight jumps so the the nd case so they were punished per job or jumped or per violation of the regulations and i do want to stress that the notice is a legal document that sets out that it you know we are required to issue to provide notice and the opportunity for hearing it is not inform on you know i would like in this can i go back to your answer though about what happens about when you refer things to the u s attorney so if you start an initial what you call investigating and determined that thirty thousand dollars was the appropriate civil penalty and we had not taken any you know legal action enforcement action that point well i thought your initiation was the initial notice so you have taken some action you've given an initial notice of one hundred thousand saying no we do not issue a notice of proposed civil penalty if it's greater than fifty thousand dollars that is only in cases where it's fifty thousand dollars or less your honor when it's greater than fifty thousand dollars we send them basically just a letter indicating that we're willing to compromise the amount but we can't begin that action because ron as i noted you know if you send a letter that says you want a one hundred thousand dollars what happens if you do compromise on twenty thousand dollars who is handling that at that point is it the u s attorney handling that negotiation it would still have to be if they had if the only if the party agrees essentially to compromise with the f a a we can then essentially accept their payment and the amount and the as the end of the matter but you know if any further proceeding takes place it's got to be with the u s attorney and i would like in this you know this amount of controversy is similar to sort of divert i diversity jurisdiction you know when you when a case is removed any amount of controversy has to be seventy five thousand dollars but if something changes that amount in controversy and it drops below the seventy five one thousand dollars typically does not oust the district  jurisdiction that's similar to what happened here your honor where they actually if there are claims i think between the same parties multiple claims you add them up to get to the seventy five thousand dollars you don't say we look at each claim separately which is kind of what you want  know what we want to do here is look at when the case began what was the amount in controversy because they met the f a a there is no dispute had jurisdiction over each of these separate civil penalty actions when the case is began they could not have been brought in district court they had to be brought before the f a a and the fact that we later combined them for a hearing did not oust the f a a of jurisdiction because we combined them for hearing so if you had ten or twenty or thirty of the same principles apply could go to a one million dollars on your theory as long as you keep them separate your honor if there was a circumstance where there was a single respondent who somehow was committing these violations sarratt and we were doing investigations quickly and moving them from we don't force in actions that's what we think about jurisdiction i understand then yes i think that would be appropriate if they were all properly initiated by the f a a as separate enforcement actions now i think that they might have a good argument then why aren't you bringing you know these are our print cases that should be brought together but that's not the argument that has that has not ever been argued in this case and stead in this case it's undisputed the f a a had jurisdiction when they began ourselves of it by combining these cases in jurisdiction issues we don't we have to sort of say we're just go in the next case and and i i think the point is made by all of us that there is we have a concern about that that the administrator as a prosecutor and the judge could do something that congress really doesn't want him to do we know from the legislative history that you tell us are there other administratively agencies that have a similar power that you do i haven't done that research but it would seem to me that might be helpful do you have any idea on the your honor i don't have any specific examples i mean i will say with regard to us interpret in the statute here and even you know we do receive deference on our interpretation of the statutory language here even if that interpretation could play into yeah i've heard for example that there's certain in the immigration area certain cases have to go right directly to the sort of the federal district the federal court in washington d c are are unique in washington like we could decide that the lack of jurisdiction arises from the fact that the final notice was for more than fifty thousand or that the administrative complaint was for more than fifty thousand i know that you don't want to do either one of those but say we're going to do one of those is there one that would be more dribble for the agency or easier to manage if the rule is going to be going forward that you need to be less than fifty thousand dollars to stay before an l j say either at the final notice stage or the complete stage while you are either one  purpose you know i see my time has expired i will note that you know the argument the amount of controversy is not fixed until the final note is that is a new argument that was raised by a petition in their reply brief much like my you know as i said in my argument regarding diversity jurisdiction once we've initiated the case the fact the amount of controversy could potentially change doesn't our stress of jurisdiction if there are no more questions we just get council we've we've haven't you i'm sure with things that you didn't think through and you've done a fine job on your feet answering them and we appreciate it there's just the issues we have to deal with it may not have been in the briefs and we appreciate your willingness to did a good job i certainly understand thank you