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UNITED STATES DEPARTMENT OF TRANSPORTATION OFFICE OF HEARINGS
SPIRIT AVIONICS, LTD.,



### v. MICHAEL P. HUERTA, Administrator WASIDNGTON, D.C.
Applicant, FDMS No. 2015-3309 (EAJA) FounerlyFDMS No. 2014-0119 Judge J.E. Sullivan Federal Aviation Administration, Respondent.
ADMINISTRATOR'S RESPONSE TO APPLICATION FORAWARD OF ATTORNEY'S FEES AND EXPENSES UNDER THE EQUAL ACCESS TO .JUSTICE ACT PAGE 02/25

Pursuant to 14 C.F.R. 

### §§ 14.28 and 13.233, the Respondent, the Federal Aviation Administration (FAA) files this response briefto the Applicant's Application for anAward of Attorney Fees and Other Expenses. INTRODUCTION In August 2010, Spirit Avionics, Ltd. (the Applicant), holder ofRepair Station Certificate UOKR250X, enteredinto a contract with the Federal Aviation Administration (the FAA) to perform maintenance on a number oftype certificated aircrafts owned and operatedby the FAA. Exhibit A. The Applicant subcontracted major portions ofthe work to Lane Aviation. At some time prior to February 24, 2011, the Applicant fabricated orhad fablicated at least twenty-two (22) brackets and twenty-two (22) lanyards. The brackets and lanyards were replacement or modification parts for use on the FAA aircraft. The Applicant prepared an 111/02/2015 13:58 FAA GLRC PAGE 03/25
invoice, directedto Lane Aviation's Accounts Payable, which states "Lane Aviation portion of purchase and assembly ofheadliner install kits. Kits supplied to be used for the 3rd FAA aircraft through the 18th aircraft." ExhibitB. The invoice further represents that the an1.ount, $7,439.16, was paid by LaneAviation on February 25, 2011. Exhibit B. During an investigation ofLane Aviation, the FAA Agent discovered undocumentedparts thatthe Applicant fabricated onthe worktable near the vicinity ofan aircraft belonging to the FAA and found that similar parts had been installed on other FAA aircraft without airworthiness release documentation. TheFAA conducted an investigation and issued a Notice ofProposed Civil Penalty (NOPCP) on February 21,2013, asserting that the Applicant's sale offabricated parts to Lane Aviation was in violation of 14 C.P.R. § 21.9(b). The parties engaged in the informal process. During the informal process, the fAA requested thatthe Applicant produce business documents showing that the transaction was something otherthan a purchase ofthe parts by Lane, but the Applicant was not ableto produce any documentation or evidence to contradictthe plainlanguage ofthe invoice. Exhibit C. Theparties were unableto reach a resolution. ExhibitC. The FAA filed its complaint on May 8, 2014. TheApplicant filed a Motion for Decision on June l, 2015. The Applicant argued that a "sale" did not occurbecause under the contract the FAA retained title to the parts and that the transfer oftitle is necessary to perfect a sale. This was the Erst time the Applicant raised this argument. Exhibit C. Telephonic oral arguments were held on August II, 2015. At the time ofthe oral arguments, there was no evidence of recordto show thatFAA money was used in the purchase ofthe lanyards and brackets. (See Transcript ofHearing on Motion for Deci.sion Dated Aug. 11,2015, p. 42-43). Judge Sullivan gave the Applicant leave to file a supplemental affidavit stating as su.ch. (See Transcript of 211/02/2015 13:58 8472947498 FAA GLRC PAGE 04/25
Hearing on Motion for Decision Dated Aug. 11,2015, p. 42-43). The Applicant subsequently fi.led the Affidavit ofOchs, which stated for the first ti.me that FAAmoney was usedin the purchase ofthe lanyards and brackets. Judge Sullivan issued 

### her decision favorable to the Applicant onAugust 27,2015. In her decision, Judge Sullivan acknowledged that "sal<::" was not defined by regulation, "sale" should be defined by its common definition, and that there were numerous different defini.tion.s that could apply. Judge Sullivan ultimately adopted the definition of

### "sale" the Applicant advocated for and as set forth in the U.C.C. On October 2, 2015, the Applicant filed the application currently under consideration. APPLICANT'S CLAIM UNDEREAJA The Applicant seeks the full cost ofits legal representation from the time the NOPCP was issu.ed through its preparation ofits application for attorney's fees in the amount of$19,819.90. ARGUMENT UnderEqual Access to Justice Act (EAJA), evenifthe applicant is deemed a prevailing party, attorney's fees are not awarded ifthe agency's position was substantiallyjustified. 

### 5U.S.C. § 504(a)(l). In addition, the fees requested must be reasonable in smount. 

### 5U.S.C. § 504(a)(b)(I)(A). Here, the FAA both was substantiallyjustifiedand, assuming arguendo it was not, thefees Spirit seeks are not warranted by law and are unreasonable. A. Attorney's FeesAreNot Warranted Because the Agency Was Substantially.Justified The Agency's position is substantiallyjustified ifthere is "areasonable basis both in law and fact." Pierce v_ Underwood, 487 U.S. 552, 565 (1988); In the Matter qf Michael Edward Wendt, FAA Docket No. CP89GL0084; 1992 WL 1203650

### I (D.O.

### T. 1992). "'Substantiallyjustified' does 11ot mean 'justified to a high degree,' butrather has been said to be satisfied ifthere is a 311/02/2015 13:58 8472947498 FAA GLRC PAGE 05/25
'genuine dispute,' or ifreasonable people could differ as to the appropriateness ofthe contested action." Stein v. Sullivan, 966 F.2d 3J7, 320 (7th Cir. 1992) (citing Pierce, 487 U.S. at 565, 108 S.Ct. at 2550). See also Wendt, 1992 WL 12036501, at *1. This is a less stringent standard than that applied at the merits phase ofthe proceedings. 

### See Pierce, 487 U.S. at 569-69 (explaining that substantialjustification is not equivalent to the summaryjudgment standard). "Accordingly, the FAA's failure to prevail onthe merits does not preclude a finding that its position was nonetheless substantiallyjustified under tbe BAJA." Thomas v. Admini,vtralor, NTSB Order No. EA-4345 

### (April IS, 1995)(citing 

### U.S. Jet 

### v. Administrator at 3; Federal Election Commission v. Rose, 806 F.2d 1081, 1087 (D.C. Cir. 1986)). In fact, "[s]ubstantialjustification for bringing a suit does not require a subst<J-ntial expectation ofvictory." Everson v. FAA, FAA Docket No. CPOOWAOOO

### l; 2000 WL 34229116, *2 (D.O.T. 2000) (citing S & H Riggers & Erectors, Inc_ v. Occupational Safety andHealth Review Commission, 672 F.2d 426 (5 Cir. J982)). Rather, reasonableness involves an assessment of"whether sufficient, reliable evidence exists to pursue the matter."Application of Magruder, NTSB Order EA-5278 at 6 (2007). To make this assessment, the court mustreview the record in its entirety. ld. See also United States 

### v. HallmarkConst. Co., 200 F.3d 1076, 1081 (7'h Clr. 2000); In the Matter of StarkAvionics, FAA DocketNo. CP06S00034; DMS No. FAA-2006-26329; 2006 WL 3530425, *2 (2006). The Agency is substantiallyjustified so long as it had '"(l) a reasonable basis in truth for the facts alleged; (2) a reasonable basis in law for the theory propounded; and (3) a reasonable connection between the facts alleged and the legal theory advanced."' Hallmark, 200 F.3d at 1080 (citing Phil Smidt & Son, Inc. v. NLRB, 810 F.2d 638,642 (7th Cir. 1987)); Everson v. FAA, 2000 WL 34229116, *2 (D.O.T. 2000).
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The Agency was substantiallyjustified throughout the pendency ofthis litigation. Title 14 C.F.R. § 21.9 states that "aperson who produces a replacement or modification article for sale may notrepresent that part as suitable for installation on a type-certificated product." The Agency was reasonable to assertthat a "sale" occurted because the Applicant gave the parts to Lane in exchange for $7,439.16 as was stated on the invoice created by the Applicant and sent to Lane. The Applicant argued during the informal process that it was not a "sale" because the invoice was not an accurate representation ofthe transaction between the Applicant and Spirit; rather, the invoice was created to bill for the loss the parties agreed to share for underbidding the contract and not for the purchase ofthe parts. However, throughout the informal process, the FAA repeatedly asked Spiritfor documentation or other proofto showthat the transaction with Lane was something other than a sale as indicated on Ute invoice. Exhibit C. Spirit produced nothing. Exhibit C. For most ofthe proceedings, the FAA had a document showing that a "purchase'' occurred and the self-serving, un-affirmed statement ofSpirit who said that it was not a sale, buthad no documentation to support that the transaction was anything other than a "purchase" by Lane. It was reasonable for the FAA to believe that a business would keep accurate documentation ofits own transactions, particularly when such a written confirmation could have created liability for Spirit as will he explained below. In its Motion for Decision, the Applicant argued for the first time that a sale did not occur because underthe Applicant's contract with the FAA, the FAA retainedtitle to all parts and materials acquired to complete the work set forth in the contract, and a sale requiresthe passing oftitle. However, the Agency was reasonable to defend this motion. First, the Agency was substantiallyjustifiedto assert that the contract did not apply to the parts at issue, and thus the Applicant's argument that the FAA retained title under the terms of 511/02/2015 13:58 8472947498 FAA GLRC PAGE 07/25

the contract was inapplicable. The contract between Spirit and FAA stated that th.e FAA retained title to parts and materials that were "acquired" to complete the contract, and does not refer to parts that were fabri.cated. See Exhibit 

### A. Lane needed the parts to complete its portion ofthe work that it was subcontracted to do. IfSpirit did not givethem the parts, they would have been required to purchase them elsewhere. Nothing in the contract gave Spiritthe right to 

### make parts and to give them to Lane for a sum ofmoney. Because the parts were made and not "acquired", the FAA was not tmreasonable in arguing that the parts were outside the contractbetween Spirit and the FAA, the FAA did not retain title, and the Applicant violated 14 C.F.R. § 21.9. Moreover, the Applicant asserted that sale requires the passing oftitle and that the FAA retained title because the materials used to make the parts atissue were purchased with FAA funds. However, the contract the Applicant and the FAA entered states that the FAA does not pay for the parts and materials until after they are purchased and an invoice is sent. 

### See Exhibit A. And, the Applicant did not produce any evidence to show that the materials were purchased with FAA money until 

### after the hearing on the motion for summaryjudgment. Itwas notuntil Ochs filed his supplemental affidavit that the record contained any evidence that FAA money purchased the parts. Although the FAAwasnot afforded an opportunity to respond to this allegation, its owu records showthat it did not pay for the work done to the brackets until after the sale to Lane. See Exhibit D. Again, the Applicant did not produce this evidence until afier the hearing on the motions for summaryjudgment and was the first time any competent evidence was presented to support its position. Therefore, the record was devoid ofany evidence supporting Spirit's argument prior to this statement and the FAA was substantiallyjustified through this point to pursue its position,
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The FAA also was substantiallyjustifiedto assert in its response to th.e Applicant's Motion for Decision that a sale occurred based on the lnvoice regardless ofwhether the FAA retained title to the parts. The term "sale" was not defined by the regulation. Nor was the term "sale" defined by case law. The court agreed tbat the common definition applied and that there were numerous definitions for the term "sale". Some ofthese definitions state that a "sale" is the transfer ofproperty for a sum ofmoney and do not speak to the transfer oftitle. See Black's Law Dictionary (lOth ed. 2014); Oxford Online Dictionary, http:l!www.oxforddictionaries.com /us/dcfinition/american_englishfsale. Under these definitions, Spirit "sold"the parts to Lane when it gave Lanethe parts in exchange for $7,439.16. The simple fact that the FAA's definition was not the successful definition does not mean that the FAA was notreasonable in pursuing its position. The law was not settled and there were definitions that supported the FAA's position. See Application of Recurrent Training Center, FAADocket No. CPlOGLOOl0, DMS No. FAA-2010-0973, 2011 WL 30280, *2 (D.O.T. 2011) (explaining thatthe government can show that it was substantiallyjustified when the question involvedwas unsettled) (citing Washington v. Heckler, 756 F.2d 959, 961-62 (3rd Cir. )985); Corona v. Barnhart, 43) F.Supp.2d 506, 511-12 (E.D. Pa. 2006)). This is particularly true because underthe term. "sale" that Spirit advocated for and the court ultimately adopted, the invoice couldhave served as a contract between Lane and Spirit. Underthe U.C.C. a written confmnation can serve as a contract betweenmerchants. "[C]ourts have quite consistently found that invoices sent contemporaneously with goods can qualify as written conflnnations under UCC 

### § 2-207." Sudenga Indus., Inc. v. Fulton**Pe~formance** Products, Inc., 894 F.Supp. 1235, 1238 n. 3 (N.D.Iowa 1995) (collecting cases). Generally, when the il.woice is the first written document ofthe parties' agreement and contains the terms of 711/02/2015 13:58 8472947498 FAA GLRC PAGE 09/25

the agreement-i.e. the price, identity ofthe goods, etc. -the invoice can serve as a written confirmation ofthe merchants' agreement. 

### Id..:**Mtd~<;outh** 

### Packers, ln.c. v. 

### Shon.ey's, Inc., 761 F.2d 1 117 (5th Cir.l985);

### Altronics of Bethlehem, ln.c. v. 

### Repco, Inc., 957 F.2d 1102, 1107 (3d Cir. 1992);

### Alarm Device Mfg. Co. v. ArnoldIndustries, Inc., 417 N.E.2d 1284, 1288 (Ohio App.l979) (explaining that an invoice setting forth the quantity and price tenus, even though not signed by the seller, was a written confirmation ofthe contract); 

### Crown Foodservice Group, Inc. v. 

### Hughes, 1999 WL 33117269 (S.D. Ohio 1999)(explainingthat under the Ohio Code, invoices can serve as written confirmation ofthe parties agreement). The invoi.ce could have been an enforceable contra.ot between Lane and Spirit. Therefore, it was reasonable for the FAAto argue that the invoice was an unambiguous contract betweentwo merchants, and because the i.nvolce clearly stated 

### that Lane paid $7,439.16 for the purchase ofthe parts at issue, 

### itwas proofthat a "sale" occurred even underthe definition ofsal.e the Applicant argued in support of. For these reasons, the Agency had a reasonable basis in fact to argue that a ''sale" occurred. The FAA Inspector observedthat the parts were manufactured by Spirit and the Agency had a business document prepared by Spirit showing that Lane "purchased" the parts at issue. The Agency also had a reasonable basis in law. It was reasonable to argue that the transaction was outside the tenus ofthe contract and that the FAA did not retain title to the parts because the contract stated only that the FAA retained title to parts andmaterials purchased, and not to parts that were manufactured. Moreover, as explained above, the term "sale" could have encompassed the transaction between Spirit and Lane regardless ofwho retained title. In light of the invoice and the unsettled definition of"sale", reasonable people could have differed on the appropriateness ofthe contested action. Therefore, the Agency was substantiallyjustified in pursing this matter. 811/02/2015 13:58 8472947498 FAA GLRC PAGE 10/25



### B. Spirit Is NotEntitled To the Amount of Attorney's Fees Sought In Its Motion. Assuming, arguendo, that the FAA was not substantiallyjustified in pursuing this matter, Spirit is not entitled to attorney's fees in the amount it seeks. Attomey's fees only may be granted for the prevailing party ofan "adversary adjudication." The BAJA defines the term "adversary adjudication" as "an adjudication under [5 U.S.C.] section 554 ... in which the position ofthe United States is represented by counsel or otherwise._ .." 5 U.S.C. 

### § 504(b)(l)(C). Section 554 ofTitle 5 applies only to adjudications "required

### by statute to be detennined on the record after opportunity for an agency hearing...,"' with four exceptions not pertinentto this case. 5 U.S.C. § 554. 'The FAA's regulations implemenl'ing the EAJA cover "adjudications under 5 U.S.C. § 554 in which the position ofthe FAA is represented by an attorney ... who enters an appearance and participates inthe proceeding." 14 C.P.R.§ 14.02. The FAA's BAJA regulations provide furtber that regarding FAA civil penalty proceedings, "fees may be awarded only for work performed after the issuance ofa complaint." 14 C.F.R. 

### § 14.05(e). Although a civil penalty action is initiated by the sending ofa NOPCP by an agency attorney, an adversary adjudication, as tl1e term is used in the EAJA, does not begin with the issuance ofa NPCP. In the NPCP and FNPCP, it states that based upon an investigation, it appears that a person has violated a statute and/or regulatiOJJS and itproposes to assess a civil penalty. An administrative lawjudge is not involved during these i.nfonn.al proceedings. The FAA is not required to .file either the NPCP orthe FNPCP in the Hearing Docket 

### See )4 C.F.R. § l3.l6(f) and (g). ln contrast, when a complaint is filed in the Hearing Docket, a formal proceeding before an ALJ begins withthe agency attorney representing the FAA's position that 911/02/2015 13:58 8472947498 FAA GLRC

violations have occurred and that a civil penalty is appropriate. The parties in an adversary adjudication seek resolution oftheir dispute by an adjudicative offi.cial, such as an ALT. PAGE 11/25

In In the Matter ofWilson, FAA Order No. 1990-17 (April 9, 1990), the FAA Decisionmaker held that an applicant is not entitled to fees incurred in connection with a NPCP and informal conference with an agency attorney. In that case, the agency issued a NPCP and subsequently withdrewitafter an informal conference. Wilson submitted the EATA application. The FAArejected th.e application, holding that legal expenses incurred priorto the filing ofthe complaint are not incurred in connection with an adversary adjudication, andhence, were not reimbursabl.e under EAJA. Accordingly, Spirit cannot be awarded attorney's fees for the work performed priorto the time the FAA filed its complaint on May 12, 2014. For this reason, the request for attorney's fees should be reduced by $2,309.70. Spirit also requests an hourly rate of$275 an hour for the work perfour1ed by Jerry Eichenberger and $210 for the work performed by Patrick Moro. Title 5 U.S.C. 

### § 504 states that "fees shall not be awarded in excess of$125 an hour unless the agency determines by regulation that au increase in the cost ofliving or a special factor, such as the limited availability of qualified attorneys or agents for the proceedings involved,justifies a higher fee'' This language "mustbe strictly construed in favor ofthe United States." Ardestani 

### v. INS., 502 U.S. 129, J37 ( 1991) (explaining thatthe "EAJA renders the United States liable for attorney's fees for which it would not otherwise be liable, and thus, amounts to a partial waiver ofsovereignimmunity"). The plain language ofthe statute caps attorney fees at $125 unless an agency determines by regulation that the cost ofliving or a "special factor" applies. The agency has not detennined by regulatlo11 that permitting EAJA applicants a higher hourly rate isjustified. SeeApplication 1011/02/2015 13:58 8472'3474'38 FAA GLRC PAGE 12/25
ofEmpireAirways, FAA DocketNo. CP10EA0008, FDMS No. FAA-2010-0787, 2010 WL 5066080 (D.O.T. 201 0) (explaining thatthe attorney's fee rate is capped at $125 because the agency hasnot determined that

### EAJA applicants are not entitled to 

### a higher reward and the applicant did notpresent any special factors warranting a higherrate). Nor has the Applicant made any argument that the "special factor" wan-ants a higherfee. By failing to address whether "special factors" apply in its initial motion, Spirit has waived any argument 

### ithas to the contrary" See United States v. Lopez-Medina, 461 F.3d 724, 743 

### n. 4 (6th Cir. 2006) (deeming an argument waived whenit was not raised until a

### reply brief); Palmer v. Marion County, 327 F.3d 588, 597-98 (7th Cir. 2003) (explaining that arguments not raised in initial motion or response are waived). Even ifthe Applicant still hadthe opportunity to argue that a "special factor" warrants a higher fee, expertise in either administrative or aviation law does is not sufficient 

### to showthat a "special factor exists." The only "special factor" cited in the EAJA, section 504, warranting a fee enhancement is "the limited availability ofqualified attorneys or agents for the proceedings involved.'" 5 U.S.C. § 504(a)(b)(l)(A). 1 The United States Supreme Court stated that this language: Must refer to attorneys qualified for the proceedings in some specialized sense, rather thanjustin their general legal competence. 

### We think it refers to attorneys having some distinctive knowledge or specialized skill needful for the litigation in
1 The United States Supreme Court has stated explicitly that 5 U.S.C. §504 allows fees and expenses for administrative proceedings, while the EAJA provisions in 28 U"S.C. § 2412 govern only proceedings thatcome under thejurisdiction ofthe courts. Melkonyan v. Sullivan, 501 U.S. 89,94 (1991). Both provisions provide for a $125 fee cap. 5 U.S"C. § 504(a)(b)(I)(A); 28 U$"C § 2412(d)(2)(A)" However, only section 2412 has been interpreted to allow an enhanced fee based on the government's common law liability stated in section 2412(b). Sec Mendenhall v" NTSB, 213 F.3d 464.466-68 (9th Cir. 2000), after remand to NTSB OrderNo. EA-4612 at 2. By contrast, 5 U.S.C. §504, applicable to administrative proceedings such as the present proceeding, has no analogous common law !lability provision. /d. Therefore, under section 504, fees awarded may exceed the $125 statutory cap only upon the finding ofa "special factor"' as stated in section 504. 5 U.S.C. § 504(a)(b)(I)(A). 1111/02/2015 13:58 8472947498 FAA GLRC
question-as opposed to an extraordinary level ofthe general lawyerly knowledge and ability useful in all litigation. Pierce, 487 U.S. at 572. Similarly, the difficulty orundesirability ofthe case, the work and PAGE 13/25

ability ofcounsel, and the results obtained do not qualifY as "special factors" warranting fee enhancement under the statute. Jd. The courts ofappeal have consistently applied the Court's decision in Pierce, finding that an. attorney cannot be awarded enhanced fees underthe "special factor" exception based solely on expertise the attorney acquired through practice in a specific area ofadministrative Jaw. Select Milk Producers, Inc. v. Sec

## y of Agric., 400 F.3d 939,950-51 (D.C. Cir. 2005) (attorney'sprevious experience in the dairy industry and knowledge ofthe "federal milk marketing regime," was insufficient to establish a specialized skill needful for the litigation in question); In reSealedCase 00-5116,254 F.3d 233,235-36 (D.C. Cir. 2001) (fee enhancement notjustified where attorney had experience in federal electionlaw, federal litigation, and was familiar with the administrative record); Estate (!(Cervin v. Comm 'r, 200 F.3d 351, 354 (5th Cir. 2000) (attorney's expertise in tax. law, insurance law, and Texas property does not constitute a "special factor"justifYing fee enhancement under the EAJA); Raines v. Shalala, 44 F.3d 1355, 1361 (7th Cir. 1995) (fee enhancement notjustifiedbased on attorney's expertise in social security law). Even expertise in the particular field ofadministrative law, i.e. aviation, that is gained through experience is not sufficient to satisfy this "special factor." See In re Sealed Case 00-5116, 254 F.3d at 236 (explaining that expertise in election lawwas not a special factor). Because the agency has not determined that a higher fee is warrantedby regulation and there is no evidence that the special factor applies, the cap of$125 an hour must be applied. Therefore, the fees must be reduced to $7,900 (63.2 hours x $125). 1211/02/2015 13:58 8472947498 FAA GLRC PAGE 14/25

CONCLUSION The FAA was substantiallyjustified to consider the invoice the Applicant created W3S an accurate business record recording the "purchase" ofthe parts at issue by Lane. This is particularly true because the document could have created liability for the Applicant. Moreover, the Agency wasjustified to argue that the contract between itand Spirit did not encompass 

### parts that Spirit made because the contract stated that the FAAretained title only to parts and material "acquired", not fabricated. Even so, the exchange 

### ofgoods between Lane and Spirit wouldhave been a "sale" under some definitions. Moreover, there was no evidence that FAA funds were used in

### the purchase ofthe lanyards and brackets 

### and that the FAAcould have had title to the parts at issue until after the hearing on the motion for summaryjudgment. Therefore, the FAA was substantiallyjustified in the pursuit ofthis matter at all times and the Applicant's claim shouldbe denied in its entirety. Alternatively, the amount should be reduced because the Applicant is not entitled to fees for the work its attorneys performedpdor to the Complaint and because the

### rate charged exceeds the statutory cap. Respectfully submitted on this the 2nd day 

### ofNovember, 

### 2015**L~enHOyson** Federal Aviation Administration Enforcement Division, Midwest Team 2300 East Devon Avenue, Room 479 Do;s Plaines, Illinois 60018-4696 Phone: (847) 294-7165 FAX: (847) 294-7498

1311/02/2015 13:58 8472947498 FAA GLRC PAGE 15/25

Certificate ofService I hereby certify that the foregoing Administrator's Response to EAJA Application has been sent via

### facsi.mi.le and First Class Mail this day, to the following: 

### P

AAHeating Docket 800 Independence Ave., SW Washington D.C. 20591 Attn: Hearing Docket Clerk AGC-430, WHber Wright Building Suite 2W1000 Pax: 202-267-1293 The Honorable J.E. Sullivan U.S. Administrative Law Judge 

### Offi.ce ofHearings, M-20 U.S. Department ofTransportation 1200NewJersey Ave, 

### S.E. (Ell-310) Washington, D.C. 20590 Fax: 202-366-7536 Jerry A. Eichenberger PatrickMoro Eichenberger & Associates 6037 FrantzRoad, Suite 107 Dublin, OH 43017 Fax: 614-798-1620 Dated this 2"d day ofNovember, 2015.

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### with tflefklaliUYolge raqarr!fe§s of contracttype; 

### MJ CO!JtriJctw's assfsnmentpfl"l!fUnd. rebat:re. and credits. (2} COI!frncto!'S mlaase, {d) All 

### con!rad;pm lnXt!leiM saMQ!'!s to !he FAA !n labor hoyrs ;iihaU 

### maintain an file. and subJ.gft when ffl!!(!!lred fpT Y£lli6c!!!lon oraudit, certfijad tlme !gqs. the dallY total af**P!'!¥1!!~** hgqrscbargedtothe contrao;;t, a daHy entryfor i!!IV non-prcduct!vework:IJouf!l and gmm!a·ve totalsfOreachpavpetjg!f. ·



### m P;mnentAddl'l!SS; FAA. Financial Operations DIYls!on (AMZ-11/02/2015 13:58 8472947498 FAA GLRC

(al Thl;! lllllldorshall send caplea oftheln'lpJ£e asfp!!qws: One copyto:

orvia

### &mail tothe Contrl!ct!M Officer

**Ona~pyto;**

ur

### XI!! emailtothe Program Man"!9er DTPAhe-10-D-00039 MDd. 

### cDIIJ., • .ll».ggmt 21110 11"!!e 2'2 of liS

3.1•1

**Clau~s** and Provislcps

**lncorpnra~ed** byreference (December2005) This SCI1lenlog infonnatlon request (SIR) orccntratlt, as appHcable, lncorpomlel'! by roferenm itte provisions orclausss fisted below\Mih;the sameforce and effect as iftheywere given InfUll

### text. Upon request,the Contract!ng Ofllll>!r

## wm make !llafull

### textava!IBbte, oroffefD!'!l and con1ractors may obtain !he

## runtextvia lnlernatat: htfp:l/conWJite.faa.go'( (on this Wlib psge, select "Sea!th andVlew Clauses•). 3.10.1-22 CONTRACTING OFFICER'S TECHNICAL Re!"RISSJ::NTA.TlVI: (JANUARY20!J8} , PAGE 19/2511/02/2015 13:58 8472947498 FAA GLRC 

# EXHIBIT 

# B 

# .3) I.OP 

# '11:. .. Spirit



## ~lcs Ltd. '

**~008 E.lil!l:~l'"'"**  

## ·I .a! **eol""'~l~Ra2.19**

.... ' . •. . l/1'•

**Phdl1~.Nl'**AQ11 Fox:S14.237.63S7 Flll:31Ail9!5&a

**www.gpi.rin~:vion.ies.£;m:o** laneAviation Corp Atten: Ace!& Pa)'l!ble 4389 lrrtamatlcnal Gateway Columbus, OH 43219

WORII ORDER # 1102? OESCFtiPTION TERMS NO! 30 PAGE 20/25


## Invoice DATE INVOICE# Z/:241201 1 515M9

CUSTOMER P.O. # AIRCRAfT N II Q1Y RA'I'E AMOUNT Llme A..,;allcn pOfllon

**cf·~u-** onrt _.mbly ofhoadllnor ln!llalll<lts. !iils s..,pli<l<l

**~**bo 

## "'""lor !lto 3!t! 1 FAA ail<:ro!t lhtoUilh th•

**181~**

# -·It . -·..,.... **7,4~>191** 7,41<>91T 

# ""- 7.4"1&:91 CMH:

### r:"e 0,30% 22:25



## ~;

# ..•·1111



# J!\~' ·' ', ..., J I ·' '•' .' ,:·

## .. ' ' \ Subtotal $7,439.16. Sales Tax {0.00) $0,00

**M~ka** all

**c.m~~** paylilbteto: Spitlt

**Av«:mi~**t.rcr. Total $7.439.16 P'afDue

**.lnw1ca~J are-st~b,r.mta**  a 1.SO.% tale rea plar rnmtlh. Paym9nts/Credlts $0.00

**B~lance** 

### Due

**$1,~~9;16**11/02/2015 13:58 FAA GLRC PAGE 21/25 

### EXHIBIT

In the Matter Of: 

### U.S. DEPARTMENT OF TRANSPORTATION OFFICE OF HEARINGS

WASHINGTON, D.C. DOCKET NO. FAA-2014-0119 SPIRIT AVIONICS, LTD., ) ) ) ) 

### CASE NO. 2012-GL-07-0056 Respondent.

.Foran award ofattorney fees and oth.er

Expenses pursuant to the Equal Access to Justice Act 

### AFFIDAVIT OF FEDERAL AVIATION ADMINISTRATION ATTORNEY KATE 

### BARBER I, Kate Barber, hereby declare the following under the pains ofpenalties ofperjury: 

### 1. I am currently an Attorney for the Federal Aviation Administration (FAA), Midwest Enforcement Team located at 

### 2300 E. Devon Ave., Des Plaines, 

### IL 60018. 2. I have been employed as an attorney for the FAA since 

### 2008. 3. I havebeen an attorney in good standing since I have licensed to practice law in 

### 2003- 4. I am familiar with the facts alleged in the above-captioned matter. 5. After an extensive review ofthe EIR it was determinedthat sufficient, credible infono.ation. existed to proceedwith legal action for the above matter. 6. OnFebJ:UatY 21, 2013, theFAA issued aNotice ofProposed Civil Penalty. 7. Afterextensive discussion betweenthe parties an agreement was not reached in the case and on May 8, 

### 2014 the FAA filed a Complaint. 8, Spirit argued thata "sale" had not occurred throughout thediscussions. The Agency requested documentation or other evidence to show that the transaction between Spirit and Lan.e was something other than a purchase as indicated on the invoice but Spirit failed to provide any documents that detailed a credible explanation for the purchase orders andpaid invoices indicatingthe sale ofthe parts. 9. The first time that Spirit argued that the FAA money was used topurchase the parts in question. was during the oral argument that occurred onAugust 11,2015. Atthis time 111/02/2015 13:58 8472947498 FAA GLRC

there was no evidence o:frecord to show thatFAAmoney was usedto purchase these parts. PAGE 22/25



### THIS AFFIDAVIT IS SIGNED UNDERTHE PAINS AND PENALTY OR PERJURY



# ~ Kate 

### Barber Attorney

211/02/2015 13:58 8472947498 FAA GLRC
EXHIBITD

.480S E. 5ft'. A1.1e. Columb\..!9., Ohio 43219 614-237-4271 phoM 61H37·63671ax W'i'fW.sp\ritavlcriiC!!".l;.:!OITI Ffv.\Co!rtlfled

**"~pair** Statttm: UOKR2SOX Attn: Brenda Hagar COTR. FAAJ AVN Offic--e: 405-954-4514 Fax:

**40~·954-3983** March 7, 2011
gr

**~·::·::,·.~~!- i~**  ....

**!~** ..: ..

**~C_t9_;:~**.

**.\J.biJ.?~~LJ~Ii-:~**';{ Re: King Air 300 Avionics Upgraries: Ms, Hagar, The following proposal contains the time required 

### to change the engi!1<>ering document 105014-33201·3, N75"s existil'lg bracket thatthis 

### mol•nt replaces is quite different and requires significant changes to this drawing. Changes to this

**dr~wing** will include rivet placemem, length of brackets and attachment hal"dware, Nates will be added lothis drawing lo hopefully cover 

### eny additional changes that 

### we may find on subsequent aircraft Engineering Change: 1.) Engineering labor to change !0501 4-3:3201-3, labor: 4 haLJrs @ $84/ hour 

### Total:

Spitit-11-INT·017 $336,00 

### $336.00

1 ot 2 PAGE 23/2511/02/2015 13:58 8472947498 FAA GLRC

SPIRIT AVIONICS LTD. TERMS A!jD CONDIT!Qil.li Reierence FAA cMtrecl DTFAAC..1 0-0.{}0039 deled 04/07/W for curr»nt terrns

**~nd** cond•1ions.. AGREED TO AND At;CEP,T£1): SPIRIT

**AVIO~CS** ..**~rp/·><**

# ·' ey: .

**,~:.'~**

# ··/.>:'._,::.()

... '( / ,·· Justii'i· Hahn 1/ By
**-~-··---------** Program Manager Title: Pate: 03107111 Date:

Spirit-11-INT-017 2 of2 PAGE 24/2511/02/2015 13:58 8472947498

**'~j~·'** Spirit Avionics Ltd. 

# lJfiitt 4MB E. 51h Av.ouo :'

**·r~l!!:'.~(-~**i':.

**~::**.•, G(!fumbus.j O:H 43tt9

.... -· "'' '""
- Ph:B14.237.<;m

**F"":~u.2r,.G3ll1** FIN; 31-1!9956S \>"'\'\"

**,~<op.iri**l<t'

**i!Joi«:~.com** f"AA AAO ACCTG OFC OOT/ F.AA AMZ-110 PO Box25710 Okll'lhoma City, OK 7S125
WORK ORDER # 

## I f'[(]Gt ',

**~-----** DgSCRIPTiON E!'lgkteerlog labor to r.!'a.rtg.e

**tDOOU-3.~1-3** Sr!h(ol"'

**C::~nt~·uct** #-. ClTfACC-

**l0..0·~003S** D.

**O.uJ~f.;** 0003

**Rt:I'I!!n:!l'l~ l.~f\!r**  S)>l:1l·1·l·l:llf·r117 FAA GLRC



## Invoice DATE INVOICE# 3/15!201 1 5154B2

ToRMS CUSTOMER. P.O.# AIRCRAFT N If


### ··-- Nol30 N76 QTY RATE Al.IOUNT



## •

**a~.{IO ~J:J"!J.t.IOr**  JlJr:J.OQ


### G,.._ ... __,"·'

# 1'''''::

# [Q)

•c

# .?/fJr./JL.J

tr1W?J't$ f'"--

' Subtolal $JJ6.0D Ms\a aU-el'lllt;IJ;J; pl'ly:rt'lkt u·; Safes Tax (O.OD) $0.00 Splrfl AvkJnlc...o;

**~OCt** Total

**~336.00** P?l'.:rf 01.-e

**tnve.i..-C$\1r~** '!l\.ll.Jjl((l( tv <J: i .00% Jttle leE!' per Paymonts/Cred;ts 1nt:11\h. $000 

### Balance Due $336,00 PAGE 25/25



## 1209ACV406.00.WB3030.AC8JAC0000.25105.01/03/2011.12182A0090.2E04AO 6L;J,/

**~(18~** f

**3U.~**11/02/2015 13:58 8472947498 FAA GLRC

Company. 

### --------------------~---

**~F<** Pages w/cover: · 

## (A·'J RE: PAGE 01/25 

### Federal Aviation Administration

**Region~l** Counsel's Qflice,AGL-7 2300 Eost Devon Avemue Des Pl<11nes, Illinois 60018 

## ·r 847·294- 

# I?J/?J F 847-294-7498 Facsimile 

# a7J.