BEFORE THE 

DEPARTMENT OF TRANSPORTATION 

OFFICE OF THE SECRETARY 

WASHINGTON, D.C. 

In the matter of the cancellation of the 

Air Taxi authority issued to: Docket DOT-OST-2012-0022 

VIH COUGAR HELICOPTERS, INC. 

VIH COUGAR'S MOTION TO DISMISS THE SHOW CAUSE PROCEEDING 

Communications with respect to this document should be sent to: 

David M. Nadler 

David Y. Yang 

Andrew E. Smith 

DICKSTEIN SHAPIRO LLP 

1825 Eye Street, NW 

Washington, DC 20006 

Telephone: (202) 420-2200 

Facsimile: (202) 420-2201 

nadlerd@dicksteinshapiro.com 

yangd@dicksteinshapiro. com 

smitha@dicksteinshapiro.com 

Counsel to VIH Cougar Helicopters, Inc. 

Dated: July 6, 2012 

DSMDB-3076898v I 
BEFORE THE 

DEPARTMENT OF TRANSPORTATION 

OFFICE OF THE SECRETARY 

WASHINGTON, D.C. 

In the matter of the cancellation of the 

Air Taxi authority issued to: Docket DOT -OST -2012-0022 

VIH COUGAR HELICOPTERS, INC. 

VIH COUGAR'S MOTION TO DISMISS THE SHOW CAUSE PROCEEDING 

Pursuant to Rule II ofthe Rules ofPractice (14 C.F.R. § 302.1I) ofthe Department of 

Transportation ("Department"), VIH Cougar Helicopters, Inc. ("VIH Cougar"), by and through 

the undersigned counsel, respectfully submits this Motion to Dismiss the Show Cause 

proceeding initiated by the Department on March I2, 20 I2 with the issuance of its Order to 

Show Cause (Order 2012-3-7) ("Show Cause Order"). As described below, VIH Cougar has 

completed its restructuring efforts, thus fully resolving the ownership and operational concerns 

identified by the Department. Accordingly, because the proceedings are now moot, VIH Cougar 

respectfully requests the Department dismiss the Show Cause Order. 

I. FACTUAL BACKGROUND 

In April 2008, the Department initiated a review ofVIH Cougar's operations. After 

numerous submissions and letters, on October 6, 2011, the Department asserted for the first time 

its tentative conclusion that VIH Cougar was under the actual control of Mr. Kenneth Norie, a 

Canadian citizen and, therefore, not a U.S. citizen eligible for an air-taxi exemption under the 

Federal Aviation Act. The Department stated that the relationship between Mr. Norie and Mr. 

William Steeper, a U.S. citizen who was VIH Cougar's President and sole Director, led it to 

believe that VIH Cougar was under foreign control. 

OSMDB-3076898vl 
Upon receiving the October 6, 2011 letter, VIH Cougar requested a meeting with the 

Department to better understand the Department's position and to determine how best to resolve 

the matter. Notwithstanding the appropriate legal structure of VIH Cougar and evidence 

presented by VIH Cougar, during a November 8, 2011 meeting the Department reiterated its 

concern that that Mr. Norie may have undue foreign influence over Mr. Steeper, and that Mr. 

Norie was in control ofVIH Cougar. Accordingly, the Department recommended that VIH 

Cougar sever that relationship by removing Mr. Steeper from VIH Cougar and replacing him 

with an independent U.S. citizen. 

On March 12, 2012, the Department issued a Show Cause Order which tentatively 

concluded that VIH Cougar is not a U.S. citizen as defined in 49 U.S.C. § 40102(a)(l5) and 

consequently proposing that it may, at some future date, issue a final order canceling VIH 

Cougar's air taxi authority under 49 U.S.C. § 40109(£) and 14 C.F.R. Part 298. See Show Cause 

Order at 1, 3, 8. The Show Cause Order, similar to the October 6, 2011 letter, focused on the 

alleged affiliations and relationship between Messrs. Steeper and Norie. !d. at 4-6. In numerous 

filings and letters subsequent to the Show Cause Order, VIH Cougar has denied (and continues 

to deny) that Mr. Steeper, a U.S. citizen, is under foreign influence. Indeed, VIH Cougar has 

adduced uncontroverted evidence demonstrating that Mr. Steeper owns and operates VIH Cougar 

under his direction and control. To date, the Department has not identified any evidence (as 

opposed to speculation, innuendo, and unfounded credibility concerns) of an undue control 

relationship. 

Nevertheless, in the interests of bringing this matter to a close, VIH Cougar advised the 

Department in its .A~pri! 2, 2012 Response and Objections to the Department's Show Cause Order 

and concurrent Motion to Stay that VIH Cougar was proceeding with restructuring effotis, that 

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DSMDB-3076898v I 
once completed, would fully address the Department's concerns consistent with the 

Department's November 8, 2011 recommendations. 

As we previously advised, VIH Cougar maintained two business lines: ( 1) VFR 

operations based in Boise, Idaho which support U.S. Forest Service firefighting contracts and 

(2) IFR operations based in Galliano, Louisiana supporting off-shore oil platform customers in 

the Gulf of Mexico and one Alaska customer. In a May 7, 2012letter, VIH Cougar informed the 

Department that VIH Cougar was in the final stages of consummating an agreement to sell its 

VFR business to a licensed U.S. commercial air carrier 

based in 

is also a helicopter 

service provider to the U.S. Forest Service and the Department of Defense. -President and 

owner IS a U.S. military veteran, experienced helicopter pilot, and 

commercial helicopter owner/operator. Mr. -has owned and managed as its President 

for the past 17 years. Neither nor Mr. is affiliated with VIHAG, VIH Helicopters 

USA, Inc., VIH Western, its affiliates, subsidiaries, or principals, including Messrs. Steeper and 

Norie. 

In a June I, 2012 letter, VIH Cougar advised the Department that the transaction 

described in the May 7, 2012 letter, which would sell the VFR business to had closed on 

April24, 2012. VIH Cougar also informed the Department on June 1, 2012 and June 15,2012 

that it was continuing good faith negotiations to reorganize its remaining IFR business. VIH 

Cougar noted that on May 25, 2012, it had entered into a Letter oflntent with an unrelated and 

unaffiliated U.S. purchaser for the business and which would also result in the separation of Mr. 

Steeper from the company. VIH Cougar stated in its June I, 2012 letter that it anticipated that 

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DSMDB-3076898vl 
the transaction would be finalized on or before June 30, 2012, and that it would advise the 

Department once this transaction related to the IFR business had closed. 

Effective June 27, 2012, a Share Purchase and Sale Agreement concerning the remaining 

IFR business has been executed between Mr. Steeper's company, VIH Western LLC anda holding company controlled by 

Per the agreement, VIH Western LLC sold all its 76% interest in VIH Cougar to 

Similar to ., is not affiliated with VIHAG, VIH Helicopters USA, Inc., VIH 

Western, its affiliates, subsidiaries, or principals, including Messrs. Steeper and Norie. Nor is 

Mr. or .. related to any entity that is affiliated with those individuals or companies. 

In addition, Mr. Steeper resigned from VIH Cougar and is no longer its President and 

sole Director. With the resignation of Mr. Steeper, Mr.- has been appointed President, and 

Secretary ofVIH Cougar. With Mr. Steeper's resignation as sole Director, VIH Cougar has 

formed a four-person Board of Directors including Mr. -and two senior managers from his 

organization, both of whom are U.S. citizens who reside in and who are unaffiliated 

with VIHAG, VIH Helicopters USA, Inc., VIH Western, its affiliates, subsidiaries, or principals, 

including Messrs. Steeper and Norie. Mr. Norie, in proportion with his 24% ownership of the 

company, will also be a member of the board. 

The FAA Flight District Standards Offices (Seattle) for VIH Cougar is being notified of 

the ownership changes in VIH Cougar. Because of Mr.-'s long affiliation withFlight District Standards Offices in the 

because of the location of his headquarters in 

(-FSDO)and 

Mr. - will be contacting 

the FSDO regarding his acquisition of VIH Cougar and the relocation of VTH 

Cougar's principal base of operations and FSDO in due course. 

4 

DSMDB-3076898v I 
II. ARGUMENT 

The purpose of the Department's Show Cause proceedings is remedial and intended to 

direct the air carrier to take corrective action to ensure that it is under the control of U.S. citizens. 

See e.g., Air-Evac Air Ambulance Inc. Concerning US. Citizenship, Order 96-6-13, at 1-2 (June 

7, 1996). 1 Where an air carrier makes good faith restructuring efforts to address concerns 

articulated by a Show Cause Order, the Department has not hesitated to withdraw the order, 

dismiss the proceedings, and find that the carrier now meets the formal citizenship requirements 

of 49 U .S.C. § 401 02( a)(l5). I d. at 2-3 (indicating that the subsequent sale of stock under 

foreign control to U.S. citizens along with other changes made after the issuance of a formal 

Show Cause Order cured the Department's concerns). 

Even before the Department issued its Show Cause Order on March 12, 2012, VIH 

Cougar had already begun steps to implement the Department's earlier November 8, 2011 

recommendation, and has now accomplished those efforts by selling its VFR business to 

and both of which are companies and by 

VIH Western LLC selling its controlling 76% interest in VIH Cougar to and 

.. are completely owned and controlled by Mr. a U.S. citizen who is not affiliated 

1 In its June 25, 2012 letter to the Department, Petroleum Helicopters, Inc. ("PHI") claims that 

VIH Cougar cited Air Evac and Application of Virgin America, Inc., Final Order, Docket No. 

OST -2005-23307 (May 18, 2007) for the proposition that the Department lacks authority to 

impose penalties for violations of the Federal Aviation Act. VIH Cougar has never asserted that 

the Department lacks such authority. Instead, VIH Cougar has asserted that show cause 

proceedings are intended to be remedial and are designed by the Department to encourage the 

carrier to achieve corrective action. Here, the Department has not Issued a final order finding 

that VIH Cougar is in violation of law. Further, VIH Cougar, in response to the Show Cause 

Order, has taken good faith corrective actions to restructure its operations to address the exact 

concerns stated by the Department, thus obviating the need for such an order. 

5 

DSMDB-3076898v 1 
with Mr. Steeper, Mr. Norie, VIHAG, VIH Helicopters USA, Inc., VIH Western, or their 

affiliates, subsidiaries, or principals. 

While Mr. Norie will remain a minority shareholder, such an interest does not implicate 

any actual control by Mr. Norie. Indeed, the Department has never expressed a concern with the 

fact that Mr. Norie owns 24% ofVIH Cougar. In fact, the Department affirmed in its Show 

Cause Order that a 24% minority foreign ownership interest is consistent with, and indeed 

expressly allowed under, the statutory requirements of 49 U.S.C. § 40102(a)(15). See Show 

Cause Order at 4. Further, the actual control requirement has never been construed by the 

Department to preclude U.S. carriers from maintaining relationships with foreign carriers, firms, 

or investors. See Actual Control of US. Air Carriers, 2006 WL 4504779 at *3-4 (Dec. 5, 2006). 

Instead, the requirement only evaluates whether a foreign interest will have a substantial ability 

to influence the carrier's activities. See In re DHL Airways, Inc. n/k/a ASTAR Air Cargo, Inc., 

Order 2004-5-10, Docket No. OST-2002-13089, 2004 DOT Av. LEXIS 404, at *22 (May 13, 

2004). Mr. Norie's 24% minority interest in VIH Cougar does not implicate, let alone trigger, 

such concerns and the Department has never claimed that it does. 

The Department's position regarding the potential for foreign control in this case has 

centered on Mr. Steeper's role as President and sole Director ofVIH Cougar and his relationship 

with Mr. Norie. That concern, however, has now been fully addressed. Pursuant to the 

restructurings, Mr. Steeper has resigned from VIH Cougar as an owner, officer, and director, and 

is no longer running the company's day-to-day affairs. Further, Mr. Steeper has sold his 

ownership interest in VIH Cougar. As a result, Mr.-' a U.S. citizen who is unaffiliated 

v;ith Messrs. Steeper and Norie and their respective companies and a highly-experienced 

helicopter owner/operator in his own right, is now in control ofVIH Cougar's day-to-day 

6 

DSMDB-3076898v I 
operations. In light of the fact that VIH Cougar has voluntarily undertaken the actions 

recommended by the Department, VIH Cougar has fully resolved the Department's concerns. 

The Show Cause proceedings are, therefore, now moot and should be dismissed. 

III. CONCLUSION 

As a result ofVIH Cougar's restructuring efforts, the concerns raised by the Department 

in the March 12, 2012 Show Cause Order have been fully resolved. Accordingly, VIH Cougar 

respectfully requests that the Department rescind the Order and dismiss the proceedings. 

Dated: July 6, 2012 Respectfully submitted, 

By: D~ )'Y).'()~/AGi 

7 

David M. Nadler 

David Y. Yang 

Andrew E. Smith 

DICKSTEIN SHAPIRO LLP 

1825 Eye Street, NW 

Washington, DC 20006 

Telephone: (202) 420-2200 

Facsimile: (202) 420-2201 

nadlerd@dicksteinshapiro.com 

yangd@dicksteinshapiro.com 

smitha@dicksteinshapiro. com 

Counsel to VJH Cougar Helicopters, Inc. 

DSMDB-3076898v I 
CERTIFICATE OF SERVICE 

I certify that I have on this 6th day of July 2012 served the foregoing upon the persons 

listed below: 

Susan L. Kurland 

Office of the Assistant Secretary for 

Aviation and International Affairs 

U.S. Department of Transportation 

1200 New Jersey Avenue, SE 

Room W96-495 

Washington, DC 20590 

Lauralyn Remo 

Office of the Assistant Secretary for 

Aviation and International Affairs 

U.S. Department ofTransportation 

1200 New Jersey Avenue, SE 

Room W96-495 

Washington, DC 20590 

Jonathan Blank 

John Longstreth 

Timothy Hobbs 

K&L Gates LLP 

1601 K Street NW 

Washington, DC 20006-1600 

Peter Lynch, AGC-300 

Asst. Chief Counsel for Enforcement 

Federal Aviation Administration 

800 Independence Ave. SW 

Washington, DC 20591 

William J. Weber 

Certification Section Manager 

FAA AFS-900 

45005 Aviation Drive Suite 131 

Dulles, VA 20166 

Roy Hardie 

Aviation Safety Inspector 

Federal Aviation Administration 

1601 Lind Avenue SW, Suite 260 

Renton, W A 98057 

Andrew E. Smith 

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DSMDB-3076898vl