DEPARTMENT OF TRANSPORTATION

OFFICE OF HEARINGS

DOCKET NO. FAA-2013-0288

IN THE MATTER OF:

AVIONICS MASTERS, INC.

_____________________________________________________

HEARING BEFORE

THE HONORABLE J.E. SULLIVAN

FRIDAY, MAY 9, 2014

9:31 A.M.

HISTORIC JORDAN SPRINGS

1160 JORDAN SPRINGS ROAD

STEPHENSON, VIRGINIA 22656
FAA vs Avionics Masters Hearing May 9, 2014 VR # 1061-1 Page 2

1 APPEARANCES

2 ON BEHALF OF THE COMPLAINANT,

3 FEDERAL AVIATION ADMINISTRATION:

4 CHRISTOPHER R. STEVENSON, ESQUIRE (via telephone)

8

9 TELEPHONE: 404.305.5200

10 FACSIMILE: 404.305.5223

11

12

13

14

15

16

17

18 TELEPHONE: 954.527.0002

19 FACSIMILE: 888.769.0745

20

21

22

23

24

25

5 FEDERAL AVIATION ADMINISTRATION

6 OFFICE OF THE REGIONAL COUNSEL, AS0-7 SOUTHERN REGION

7 1701 COLUMBIA AVENUE

8 COLLEGE PARK, GEORGIA 30320

ON BEHALF OF THE RESPONDENT,

AVIONICS MASTERS, INC.:

MOHAMMAD AHMED FARUQUI, ESQUIRE (via telephone)

AEROLAW OFFICES PLLC

633 SOUTHEAST 3RD AVENUE, SUITE 4R

FORT LAUDERDALE, FLORIDA 33301

Also present:

Cody Smith
FAA vs Avionics Masters Hearing May 9, 2014 VR # 1061-1 Page 3

1 HEARING

2 FRIDAY, MAY 9, 2014

3 9:31 A.M.

4 THE COURT: Good morning. This is

5 Judge Sullivan. Is Mr. Stevenson for the FAA on the

6 line?

7 MR. STEVENSON: Yes, Your Honor.

8 THE COURT: And Mr. Faruqui for the

9 respondent?

10 MR. FARUQUI: Yes, Your Honor. Good

11 morning.

12 THE COURT: Good morning. And I should

13 have a Lee Dean for County Court Reporters.

14 THE REPORTER: Yes, ma'am.

15 THE COURT: Okay. And I also have in

16 the office Mr. Cody Smith, who's sitting as an

17 observer only, and he has advised me that the court

18 reporter already has everybody's spellings.

19 So, Mr. Court Reporter, are you ready?

20 THE REPORTER: Yes, ma'am.

21 THE COURT: Okay. We're on the record

22 in the matter of Avionics Masters, Inc. This is

23 Docket Number FAA-2013-0288. Today is Friday, May 9,

24 2014, and the parties have convened for a second

25 motion conference on the FAA's motion for summary
FAA vs Avionics Masters Hearing May 9, 2014 VR # 1061-1 Page 4

1 judgment.

2 The FAA is represented by its attorney

3 of record, Mr. Christopher R. Stevenson. The

4 respondent, Avionics Masters, Inc., is represented by

5 its attorney of record, Mr. Mohammad Ahmed Faruqui.

6 Also present at the Office of Hearings sitting in as

7 an observer only is Mr. Cody L. Smith, an attorney

8 advisor with this office.

9 Good morning, everybody. As you may

10 recall, we, we last met on April 15, 2014, for our

11 first oral argument on the FAA's motion for summary

12 judgment. At the conclusion of oral argument, both

13 parties were given deadlines to file supplemental

14 materials. The FAA was also given a deadline to file

15 an amended complaint.

16 The next day, on April 16, 2014, a

17 written order codified the oral. Oral relief was

18 filed. On May 5, 2014, the FAA filed the following

19 two documents, number one, supplement on motion for

20 summary judgment; and number two, an amended

21 complaint.

22 Yesterday on May 8, 2014, the respondent filed

23 the two documents: one, an affidavit of Charles Hunt

24 regarding the, in compliance with the April 16, 2014,

25 order; and two, a pilot's guide.
FAA vs Avionics Masters Hearing May 9, 2014 VR # 1061-1 Page 5

1 So let's start with the new filings. Mr.

2 Stevenson, as I understand it, you have identified the

3 supplemental declaration that you filed as Exhibit L;

4 is that correct?

5 MR. STEVENSON: I believe so. Let me

6 verify that. Yes, Your Honor.

7 THE COURT: Okay.

8 And Mr. Faruqui, there were no

9 particular exhibit identifications for the materials

10 that you filed, but if we pursue the chronological

11 markers you previously submitted, I would presume you

12 want Mr. Hunt's affidavit identified as respondent's

13 Exhibit 3 and the pilot's guide identified as

14 respondent's Exhibit 4. Would that be accurate or

15 inaccurate for your client?

16 MR. FARUQUI: Yes. I would like to

17 have them numbered as exhibits. I apologize for not

18 having identified them. I was in and out of town over

19 the last few weeks because of the death of my father20 in-law. And then when I came back I, you know, had

21 other issues.

22 There were two affidavits that were

23 submitted by Mr. Hunt. One was submitted on time on

24 Tuesday. It was with respect to, I believe, paragraph

25 4 of your order. And then the affidavit was submitted
FAA vs Avionics Masters Hearing May 9, 2014 VR # 1061-1 Page 6

1 yesterday with respect to the other paragraph with

2 respect to the amount of penalty, and then the pilot's

3 guide. So I think it's 3, 4 and 5.

4 THE COURT: Okay. Just so you know, I

5 only have one affidavit of Charles Hunt filed this

6 week, and that is entitled Affidavit of Charles Hunt

7 for Court Order Served April 16, 2014, Regarding

8 Amount of Penalty. And that was filed with this

9 office on May 8, 2014.

10 MR. FARUQUI: All right.

11 THE COURT: There is no other ...

12 MR. FARUQUI: I apologize for any

13 technical issues I've had on my end. Even the

14 document that you received required me to make four

15 attempts at sending faxes over a couple of days, and I

16 don't know why the first affidavit that was sent on

17 Tuesday did not reach you.

18 THE COURT: I don't know why either.

19 Do you have it with you now? Is there some way you

20 can send it to us by fax this morning?

21 MR. FARUQUI: Yes. I can certainly

22 send you another copy by fax. I'm going to re-verify

23 with you your fax number, in case there were some

24 issues with that.

25 THE COURT: Well, I can assure you our
FAA vs Avionics Masters Hearing May 9, 2014 VR # 1061-1 Page 7

1 fax machine has been working, so I'm sorry to hear

2 that you had some trouble. But I can tell you again

3 what our fax number is. It's the second number that

4 you have handwritten on page one of the affidavit of

5 Charles Hunt for a court order served April 16, 2014.

6 It is as follows: 202.366.7536.

7 MR. FARUQUI: Okay.

8 THE COURT: So do you need a minute to

9 fax the material, or do you have a staff person who

10 can assist you while we proceed?

11 MR. FARUQUI: I'll have a staff person

12 assist me.

13 THE COURT: Okay.

14 MR. FARUQUI: Let me write this fax

15 number down on a sticky note for her. This will be

16 five pages.

17 THE COURT: Okay. And once you fax the

18 material, if you could let me know, and then I'll ask

19 Mr. Smith, who is currently in the hearing room, to go

20 and get it.

21 MR. FARUQUI: Okay. Thank you.

22 THE COURT: Okay. All right. So, Mr.

23 Faruqui, once you give that note to your staff person,

24 let me know when you're ready to proceed.

25 MR. FARUQUI: Okay. She has gone to
FAA vs Avionics Masters Hearing May 9, 2014 VR # 1061-1 Page 8

1 take care of that.

2 THE COURT: Okay. Good. Can you tell

3 me if you have any objection to the admissibility of

4 FAA Exhibit L?

5 MR. FARUQUI: No.

6 THE COURT: Okay.

7 Mr. Stevenson, turning to you, did you

8 by any chance get both of the affidavits of Mr. Hunt

9 this week that Mr. Faruqui has discussed with me just

10 now?

11 MR. STEVENSON: Yes. I did, Your

12 Honor. I received the, the affidavit of Charles Hunt

13 for a court order that was served on May 5th, which I

14 believe is the one you did not have, and I received

15 the second one which, the second affidavit with an

16 attachment of a pilot's guide for the KFC 200 flight

17 control system.

18 THE COURT: Okay. What we're going to

19 do is basically number the May 5th, 2014, affidavit of

20 Mr. Hunt as respondent's Exhibit 3; the May 8th, 2014,

21 affidavit of Mr. Hunt as respondent's Exhibit 4; and

22 the May 8th, 2014, pilot's guide exhibit as

23 respondent's Exhibit 5.

24 Starting with Exhibit 3, Mr. Stevenson,

25 do you have any objection to the admissibility of that
FAA vs Avionics Masters Hearing May 9, 2014 VR # 1061-1 Page 9

1 exhibit?

2 MR. STEVENSON: No.

3 THE COURT: How about Exhibit 4?

4 MR. STEVENSON: No, Your Honor.

5 THE COURT: And Exhibit 5?

6 MR. STEVENSON: Not for, no objection

7 for purposes of summary judgment, Your Honor.

8 THE COURT: Okay. Thank you. Then

9 let's, let's start with general oral argument, and

10 then once I get the May 5, 2014, copy of Mr. Hunt's

11 affidavit, we can talk a little bit more specifically

12 about these exhibits. But, Mr. Stevenson, why don't

13 we do this? And I want to give you about five, ten

14 minutes to just talk on behalf of your client about

15 the highlights of what you think the court should know

16 in terms of both your prima facie case and then any

17 responsive materials that you've received that you

18 think might be helpful to address.

19 I will then turn to Mr. Faruqui, and I

20 will ask him to do the same thing on behalf of

21 Avionics Masters, Inc. And then hopefully by that

22 time, I will have received respondent's Exhibit 3, and

23 I will then probably ask both of you some questions

24 about materials, if you had not already addressed them

25 in your argument.
FAA vs Avionics Masters Hearing May 9, 2014 VR # 1061-1 Page 10

1 So, Mr. Stevenson, would you like to

2 take a few minutes now to simply highlight why you

3 believe that your client should be granted dispositive

4 relief?

5 MR. STEVENSON: Thank you, Your Honor.

6 Well, the first thing, initially, as to the FAA's

7 prima facie case is that in multiple places and

8 multiple documents the respondent itself certified

9 that it had performed a repair on this component.

10 I don't think that there is any dispute

11 at this point that the respondent was not authorized

12 to perform a repair on this component under its

13 capabilities list or that it was authorized to do

14 anything at all with this component, the directional

15 gyro, except in that because it was authorized to work

16 on an autopilot system, and so it could install the

17 directional gyro as part of that system, remove the

18 directional gyro as part of that system, or perform a

19 basic functional test on that gyro when it was

20 installed with the system.

21 So as a prima facie matter, they, it's

22 undisputed that they are not allowed to do a repair,

23 and they repeatedly stated that they had done a repair

24 on their own official document approving this

25 component for return to service.
FAA vs Avionics Masters Hearing May 9, 2014 VR # 1061-1 Page 11

1 Now, the respondent has, has since

2 asserted that contrary to the representations on the

3 forms, that they really didn't do a repair, and which

4 is, which led to the, the FAA's alternative pleading.

5 But sticking to the primary pleading for now, the

6 respondent's assertions even on summary judgment are

7 not sufficient to, to preclude that. While

8 credibility determinations are generally made in favor

9 of the nonmoving party, the finder of fact is not

10 required to simply accept every assertion no matter

11 how contradictory it may be to the prior party's

12 statements or how unbelievable it may be.

13 When the FAA first sent a letter to the

14 respondent, the first letter of investigation, which

15 is included as Exhibit F to the, to the respondent,

16 their response, which was Exhibit G, said we reviewed

17 our capabilities list and discovered that you're

18 right, that this gyro is not on our list. They do not

19 appear to have even been aware that they were not

20 allowed to independently work on the gyro.

21 The respondent has asserted that they,

22 have subsequently asserted that, well, they worked on

23 the gyro, but only as a part of the overall autopilot

24 system, but there are no records that reflect that.

25 There is no approval for return to service of the
FAA vs Avionics Masters Hearing May 9, 2014 VR # 1061-1 Page 12

1 autopilot system. There is only an approval for

2 return to service for this individual component.

3 I mean, and in 145.201, it explicitly

4 says that you can only approve things for return to

5 service. They are on your, they're on your

6 capabilities list where, well, for this case a

7 capabilities list. There are other sorts of

8 authorizations for repair stages that are broader and

9 are not a, if it wasn't a limited rating. But in this

10 case it is a limited rating, so the capabilities list

11 is what controls.

12 They never asserted that this was

13 merely a typographical error, but it is unclear how

14 this possibly could have been a typographical error.

15 They typed it on their work order that it was a bench

16 check and repair of this specific component with no

17 reference to the overall autopilot system. They said

18 on the 8130 that it was a repair in two different

19 places on the form. And that was on there before it

20 was signed by the respondent.

21 I am not sure how you could possibly

22 have a typographical error that would produce the word

23 "repair" in all of those different places on this

24 component. And I, and I think that that's essentially

25 ...
FAA vs Avionics Masters Hearing May 9, 2014 VR # 1061-1 Page 13

1 I'm sorry. The one other thing I would

2 note is that the respondent keeps asserting in these

3 affidavits and in earlier [XX 00:15:15], talking about

4 how this would not have caused the problem, it

5 couldn't have caused the problem. They couldn't

6 detect it, that they corrected the form, and because

7 they later corrected the form, that eliminated the

8 problem.

9 I would again note that the documentary

10 evidence shows that the correction, the quote-unquote

11 correction to the 8130, did not occur until the month

12 after the FAA had informed the respondent that this

13 was discovered by the FAA performing an inspection at

14 the respondent's facilities, that there is no

15 indication that had the, had the FAA not arrived at

16 the facility, that this problem would ever have been

17 detected or corrected.

18 And so the documentary evidence

19 demonstrates that a repair did occur, and the

20 respondent's explanation for how it could have not

21 been a repair is contradictory to their own

22 documentation, not just the literal word "repair", but

23 the overall flavor, and it is contradictory to their

24 own letters of response to the FAA, and it frankly

25 defies belief. It's just not possible for things to
FAA vs Avionics Masters Hearing May 9, 2014 VR # 1061-1 Page 14

1 have occurred how they said and for this documentation

2 to have resulted.

3 THE COURT: Thank you.

4 Mr. Faruqui, let me ask you if you've

5 gotten a confirmation of a fax going through yet.

6 MR. FARUQUI: Yes.

7 THE COURT: Okay. Then I'll say that

8 Mr. Smith is leaving the hearing room at this time to

9 pick that up. And why don't you, Mr. Faruqui, begin

10 your primary summary judgment argument in response to

11 Mr. Stevenson while Mr. Smith goes and gets that

12 material?

13 MR. FARUQUI: Okay. Some of the

14 arguments that Mr. Stevenson has made today read to me

15 in my mind for the first time the source of some of

16 the problems that the FAA is struggling with on this

17 case.

18 Before I get to those, I would just, I

19 just want to just briefly say that these Bendix/King

20 KFC-200 autopilot systems are not a self-contained

21 unit in a box, like some autopilots might be. This is

22 basically a system that exists only by virtue of

23 several other subsystems and independent components

24 that talk to each other, and by virtue of their

25 cooperation with each other, you have an autopilot.
FAA vs Avionics Masters Hearing May 9, 2014 VR # 1061-1 Page 15

1 Now ...

2 THE COURT: And, Mr. Faruqui, I'm going

3 to stop you. I'll just note that Mr. Smith has

4 returned to the hearing room and has provided me a

5 copy with the May 5, 2014, affidavit of Charles Hunt.

6 Thank you. Go ahead.

7 MR. FARUQUI: Thank you. Some of the

8 objections that the FAA raises to the respondent's

9 statements, some of the statements being made pro se,

10 some being made after finding representation, with the

11 respondents not knowing how to address their

12 explanations to the FAA attorney and also not knowing

13 ...

14 And I struggled many times to truly

15 understand what it is that the FAA was being confused

16 about. And with each attempt I feel like I have a

17 clearer understanding as to why it is that the FAA

18 does not truly understand our argument and why they

19 continue to argue that, you know, the previous

20 documents speak for themselves and that there is no

21 other record suggesting that there was a total

22 autopilot work done.

23 The bottom line is that when you take

24 out one component of this autopilot system, that

25 doesn't mean that after it's been sent to a repair
FAA vs Avionics Masters Hearing May 9, 2014 VR # 1061-1 Page 16

1 station that's qualified to repair that component,

2 that this component when it comes back, it's going to

3 be reinstalled into the same autopilot in the same

4 aircraft.

5 The FAA has not alleged that this

6 directional gyro had to be a part of the same

7 autopilot and therefore there had to be a total amount

8 of paperwork or that the paperwork with this

9 directional gyro had to be a part of lots of other

10 paperwork that it is all pertaining to the same

11 autopilot or the same aircraft.

12 So because of that, I fail to see why,

13 you know, the FAA needs to see a total package that

14 has to do with one autopilot. The fact is that you

15 cannot, the repair stations cannot install the

16 autopilot as one self-contained unit. They can only

17 take them out one component at a time, because that's

18 the way this autopilot is built.

19 Now, if an autopilot, hypothetically

20 speaking, is not functioning properly, and it takes a

21 replacement and then installation of one component to

22 get it to work properly, obviously, there is no need

23 to replace the rest of the component. So there's just

24 a hypothetical, you know, situation.

25 The FAA has admitted that this is a
FAA vs Avionics Masters Hearing May 9, 2014 VR # 1061-1 Page 17

1 autopilot that consists of several components and

2 subcomponents and subsystems that have to cooperate

3 with each other in order for them to, you know, you

4 know, consist of a, of an autopilot. The directional

5 gyro was never installed in an aircraft. Even after

6 it was tagged as returned to service and mistakenly

7 labeled as repaired, it was stored.

8 And the, the new affidavits that you

9 will see that were Exhibits 3 and 4, they state that

10 this repair station is in the habit of re-inspecting

11 anything that they place in inventory before

12 installing it in anything, especially if they're going

13 to store something for long term. This item was

14 stored for five months.

15 The fact of the matter is that the, the

16 FAA is hanging its entire argument on the fact that

17 just because FAA inspectors came in and saw the

18 documentation and this error before the respondent

19 ever had a chance to correct its own mistake is

20 disturbing, because then that means that, that the FAA

21 is asking the judge to not count at all the fact that

22 they have a habit of rejecting everything that they

23 place in inventory before, you know, you know, sending

24 them further downstream into aviation commerce.

25 You will see from the affidavits, from
FAA vs Avionics Masters Hearing May 9, 2014 VR # 1061-1 Page 18

1 both of the affidavits, that this autopilot is a

2 component oriented autopilot, it's not a self3 contained unit, and that the air agency certificate

4 states that the, that the respondent is authorized to

5 do a Level 1 line and/or bench test and installation

6 of the autopilot. And of course, the only way to

7 install or remove the autopilot is to take out parts.

8 When they take out the directional

9 gyro, they hook it up to a harness and some indicators

10 so that they can turn the power on and see if it's

11 functioning properly. That's all part of Level 1

12 inspection.

13 So that's the general argument. You

14 know, when you get into specifics, I'll be able to go

15 into page by page on the pilot's guide to the

16 autopilot. I picked the pilot's guide as a supplement

17 to Mr. Hunt's affidavit because for me it was a much

18 easier way to explain piece by piece how these

19 components are set up.

20 As an attorney who is also a pilot, I

21 sometimes have to use autopilots, and pilots have to

22 see a manual that tells them in pilot's language how

23 these things work. And that makes it easier for me to

24 explain it rather than showing a mechanic's guide on,

25 you know, how these things are set up, which would be
FAA vs Avionics Masters Hearing May 9, 2014 VR # 1061-1 Page 19

1 much more detailed and would then have required an

2 expert witness testimony which, you know, would be too

3 cumbersome in a summary judgment hearing over the

4 phone. And we will only have to go through four or

5 five specific pages of this 44-page autopilot guide,

6 if necessary.

7 With respect to the letter that the,

8 that the respondent sent to the FAA in response to the

9 letter of investigation, the only thing that they

10 mistakenly, you know, thought that they had sent this

11 for an installation, they've only admitted that the,

12 that the KG 102A was inadvertently tagged as part of a

13 list of equipment being installed in an aircraft.

14 However, even though it was tagged as

15 being part of equipment that was being listed in an

16 aircraft, it never got installed in an aircraft. It

17 sat in inventory for five months. So I don't see how

18 the FAA can continue to rely on this letter, on top of

19 the fact that they are relying on it in the wrong

20 manner, because their reading of the letter is only

21 conforming to what the FAA believes happened or wants

22 the court to believe happened. But the FAA is not

23 correctly reading the contents of this letter.

24 Your Honor?

25 THE COURT: Thank you, Mr. Faruqui.
FAA vs Avionics Masters Hearing May 9, 2014 VR # 1061-1 Page 20

1 Why don't we do this? Because we have

2 limited time, and I want to make sure we get to the

3 proposed civil penalty page, or part, before I go back

4 and ask certain questions to each of you, Mr.

5 Stevenson, let's talk first about the FAA's proposed

6 fine on the primary charge in your amended complaint,

7 which is the 7100 and some-odd dollar proposed fine.

8 MR. STEVENSON: Yes, Your Honor.

9 THE COURT: And I would like to limit

10 the rest of the discussion this morning to the primary

11 proposed allegations and proposed fine. So you have

12 presented in your supplemental materials by

13 declaration of David Dunn under FAA Exhibit L some

14 additional material about the proposed fine of $7,150

15 if the court makes a finding that your primary

16 allegations have been correctly charged and proven.

17 Can you answer some of the material

18 that was raised by Mr. Hunt in the respondent's

19 supplemental materials regarding that proposed fine?

20 MR. STEVENSON: Well, the, the first

21 thing I would note is that in the, I believe we're

22 referring to what we, the affidavit we've marked as,

23 as R-4. And Mr. Hunt talks about risk analysis, and

24 he cites to F-6. The F-6, there was no attachment to

25 that, but I am assuming he is referring to page F-6 of
FAA vs Avionics Masters Hearing May 9, 2014 VR # 1061-1 Page 21

1 Appendix, which is part of Appendix F of the 2150.3B.

2 Appendix F has no applicability here.

3 Appendix F and the matters that it discusses, that the

4 respondent talks about, are part of what we call an

5 enforcement decision in process. And that is a

6 process that our inspectors and that the people who

7 are reviewing their materials go through to help

8 determine how we will exercise prosecutorial

9 discretion to try to ensure uniformity as much as we

10 can between different inspectors, different offices,

11 different regions.

12 And so the final step of that process,

13 if it gets that far, is a risk analysis where there's

14 a matrix that the inspector tries to figure out what's

15 the worst possible thing that could happen as a result

16 of whatever the violation is and how likely is that

17 thing to actually happen. And then the matrix will

18 suggest to them whether or not it should be a legal

19 action or just an administrative action, so that in

20 general I would note that it, it does not have any

21 applicability here.

22 I would also note that there are a

23 number of categories of cases that are categorically

24 excluded from being anything other than legal action.

25 And one of those categories is, is doing something
FAA vs Avionics Masters Hearing May 9, 2014 VR # 1061-1 Page 22

1 you're not authorized to do, essentially, so somebody

2 who's flying that doesn't have a pilot certificate,

3 somebody who's flying RBSM but doesn't have RBSM

4 authorization.

5 And it includes the allegation here,

6 which is, which would be a repair station operating

7 beyond its rating. So an inspector, I would

8 anticipate, performing the enforcement decision

9 process in a case like would never even get to that

10 risk analysis, because it, because they would first

11 hit this, this category where it's categorically

12 excluded from, from consideration for, for non-legal

13 action.

14 And so I, I would just go back to the

15 materials that are already covered in the motion for

16 summary judgment and the supplement, which is that for

17 a repair station operating beyond its rating, the

18 guidance provided is, is maximum, a maximum range

19 penalty as, as discussed in Appendix B of the 2150.3B.

20 For a small business air agency such as a repair

21 station, that maximum range is about $7,000 to

22 $11,000. The default is that we go with the midpoint

23 of that range.

24 In this particular case, we're actually

25 at the, the bottom of the range, that we are
FAA vs Avionics Masters Hearing May 9, 2014 VR # 1061-1 Page 23

1 literally, the penalty that we proposed is the lowest

2 possible penalty that would be consistent with the,

3 with the administrator's published sanction guidance,

4 and there is ...

5 If we are in the realm of assuming that

6 the FAA has proved the violation as alleged, there's

7 nothing in this case that would be the sort of

8 extraordinary circumstance that would let us deviate

9 below that sanction guidance.

10 THE COURT: Let me ask you a question

11 or two about the respondent's Exhibit 4, which is the

12 affidavit of Charles Hunt regarding the amount of

13 penalty. And I'm going to turn to page 3 of that

14 seven-page affidavit, and I'm also going to ask you to

15 take a look as well at Exhibit J, which is the

16 declaration of Inspector McGlynn submitted by the FAA.

17 First, in its own Exhibit 4 on page 3,

18 paragraph 7, there is an assertion of mitigating

19 circumstances, first being that bench testing

20 components of the autopilot were necessary and

21 presumptively allowed, part of its Level 1 test of the

22 autopilot.

23 This seems to be contradicted by the

24 declaration of Inspector McGlynn. And if I am

25 misreading the FAA's proof, I want you to tell me. So
FAA vs Avionics Masters Hearing May 9, 2014 VR # 1061-1 Page 24

1 as I read the FAA's prima facie proof, Inspector

2 McGlynn is stating in his two-page declaration that

3 the Level 1 inspection authority granted to Avionics

4 Masters under its certification did not allow it to

5 bench test the gyro, even prior to installation.

6 Inspector McGlynn states that on page 2

7 of his two-page affidavit, paragraphs 7 through 11,

8 that essentially the respondent was limited under its

9 certification, even with a Level 1 inspection

10 authority, to only take that gyro, as one of the

11 autopilot components, out of its package and either

12 install it and test it as part of the whole autopilot

13 package or remove it.

14 According to Inspector McGlynn, as I

15 read his declaration, the respondent did not have the

16 authority and did not have certification under its

17 capabilities list to even do anything beyond a visual

18 inspection, so that a bench test of the gyro component

19 as part of the autopilot system was beyond its

20 maintenance capability.

21 I'm hearing from the respondent,

22 however, obviously from Mr. Hunt and this affidavit

23 and elsewhere in the respondent's proof, that it does

24 have the right to hook up each component to test

25 harnesses and to test them for functionality. And in
FAA vs Avionics Masters Hearing May 9, 2014 VR # 1061-1 Page 25

1 fact, the respondent is asserting that it's a

2 mitigating factor and that not to be able to bench

3 test the functionality of the gyro would make its

4 Level 1 inspection authorization absurd.

5 So am I misreading Inspector McGlynn's statement

6 identified as FAA Exhibit J, or am I reading things

7 into it that are not actually there?

8 MR. STEVENSON: No. I think you are

9 reading it correctly, Your Honor. The respondent is

10 allowed to perform functional tests on the autopilot

11 system. It can do that. It can test this gyro only

12 in, only to the extent that it is testing the entire

13 system.

14 I know that in paragraph 7 of Exhibit

15 4, the respondent asserts that bench testing a

16 component is a necessary part of a Level 1 test, but

17 that is contradicted by paragraph 4 of Exhibit, of

18 Exhibit 3, Mr. Hunt's other affidavit, where he said

19 the definition of a functional check is powering up

20 the complete system and observing the manufacturer's

21 stated operational characteristics.

22 It is possible, and what they're

23 authorized to do is test the system, test the

24 individual, or to test the overall autopilot system.

25 If there is something that they need, if there's
FAA vs Avionics Masters Hearing May 9, 2014 VR # 1061-1 Page 26

1 something that needs to be done further with the gyro

2 specifically, they need to give that to another repair

3 station that's authorized to do that or

4 hypothetically, you know, to go to the FAA and say we

5 have the capability to do this sort of work on the

6 gyro independently. Let's, let's amend our capability

7 list.

8 Obviously, that, you know, that

9 hypothetical is not something that happened here, but

10 that is, going forward, if they wanted to be able to

11 do independent work like that on the gyro, that is

12 what they would need to do.

13 THE COURT: And essentially, as I

14 understand it, from just a pure maintenance efficiency

15 standpoint, it probably would be less time consuming

16 for a repair station to individually test components

17 before they are installed as a complete system into an

18 airplane versus installing all the components, running

19 a system check, and then finding something's wrong and

20 having to remove them again.

21 MR. STEVENSON: I would, I would

22 imagine that is the case, Your Honor. I would not, I

23 could not personally, definitively speak to that, and

24 I also, frankly, could not speak to whether or not it

25 is possible to have a bench check performed that is a
FAA vs Avionics Masters Hearing May 9, 2014 VR # 1061-1 Page 27

1 bench check of the entire system.

2 I don't, I mean, I don't know, I do not

3 know what the details of their setup are. And I do

4 not know what the details of what setups are available

5 to repair stations to have at their facility. So all

6 I, I cannot really do anything other than speculate as

7 to what physically they could do to do things

8 efficiently.

9 THE COURT: Okay. Thank you.

10 MR. FARUQUI: Judge ...

11 THE COURT: Mr. Faruqui, I'll give you

12 a chance to respond.

13 MR. FARUQUI: All right.

14 THE COURT: I have another question for

15 Mr. Stevenson.

16 Mr. Stevenson, I'm going to go, ask you

17 to go to page 5 of respondent's Exhibit 4, which is

18 the affidavit of Mr. Hunt regarding the amount of

19 penalty. I believe this is, this is somewhat of a

20 mixed discussion of both the primary penalty requested

21 and the alternate penalty, given the materials. So

22 I'm going to err on the side of caution and ask you to

23 answer these questions assuming that it's, it's both.

24 So on page 5 of this declaration under

25 paragraph 16, there are, there's a discussion about
FAA vs Avionics Masters Hearing May 9, 2014 VR # 1061-1 Page 28

1 how in the middle of that paragraph it states,

2 "Respondent obtained an overhaul of the directional

3 gyro from an appropriate agency, the alleged violation

4 - if any - was inadvertent, a substantial disregard

5 for safety or security was not involved, the

6 circumstances of the alleged violation were not

7 aggravated, a trend of noncompliance is not indicated,

8 and the respondent has a constructive attitude toward

9 compliance."

10 Are these the kinds of extraordinary

11 circumstances or mitigating circumstances that you

12 have seen or that the FAA has utilized in other cases

13 that would take the proposed penalty of $7,100 and

14 some-odd cents below the range that you have provided

15 in your prima facie case?

16 MR. STEVENSON: No, your honor. What

17 I, although there is no citation based on the list

18 here, what I believe the respondent is doing is

19 looking at, again, Appendix F, FAA Order 2150.3B. And

20 I indicated, right, as I indicated, that is the way

21 for, to help the inspectors try to figure out whether

22 or not this is something they should refer for a legal

23 action or process administratively, such as with a

24 warning letter or a letter of correction.

25 And the first thing they do is look to
FAA vs Avionics Masters Hearing May 9, 2014 VR # 1061-1 Page 29

1 see if there was something categorically included, or

2 sorry, the violation is categorically excluded from

3 being something other than legal. And then the second

4 thing that they do is go through a list of eight

5 criteria for whether or not something is eligible to

6 be an administrative action. And if, if all of those

7 criteria are met, they go on to their risk analysis.

8 If they are not met, then there'd have to be a legal

9 action, and so they, they would stop the process

10 there.

11 The means are among the factors that

12 are listed for the FAA's initial examination of

13 whether or not administrative action might be

14 appropriate. If so, I mean, for example, it says the

15 violation was inadvertent. Well, if a violation is

16 deliberate, there can't be administrative action. If

17 there, if there is a substantial disregard for safety

18 or security, then it can't be administrative action

19 and, and so on and so forth.

20 So I, I would think that the inspector

21 would not even have reached these factors, because it

22 would have been categorically excluded. And even if

23 he reached these factors, that would have only gone,

24 as such would have only gone to the FAA's exercise of

25 prosecutorial discretion.
FAA vs Avionics Masters Hearing May 9, 2014 VR # 1061-1 Page 30

1 But with that said, I mean, if you look

2 through Chapter 7 of FAA Order 2150.3B, which talks

3 about what we would consider to be aggravating or

4 mitigating circumstances, those are, that there are

5 things that are on this list that relate to things

6 that are there. You know, the, the particular nature

7 of the, the violation can, obviously can affect what

8 the penalty is.

9 A simplistic example would be if you

10 had a low flight case and you weren't allowed to

11 operate the aircraft below 1,000 feet in a congested

12 area, right, if you're operating the plane at 100 feet

13 versus operating the plane at 900 feet, you know,

14 that, you know, is going to be something that is taken

15 into account whether or not that's aggravative or not.

16 But the most notable thing I would have

17 here is that they do say it's inadvertent and they say

18 there isn't a trend of noncompliance. The inadvertent

19 is the default that's referenced in, I believe, in the

20 regional specialist's affidavit. I know it's

21 referenced in the motion for summary judgment and in

22 Chapter 7 of the 2150.3B.

23 An inadvertent first-time offense is

24 the presumption. It matters that the offense was

25 inadvertent, because it's an aggravating factor if it
FAA vs Avionics Masters Hearing May 9, 2014 VR # 1061-1 Page 31

1 wasn't. But it is not a mitigating factor for an

2 offense to be inadvertent. I, I don't, I mean, the

3 other things here don't necessarily have a lot of

4 applicability. They don't say, the respondent doesn't

5 say why these things are applicable.

6 I don't see anything here that would

7 lead us to not, not just mitigate down below the

8 midpoint, but actually go beyond the range whatsoever.

9 And, and many of these things that they are asserting

10 in this paragraph are things that are just not

11 relevant, that they, or that are just incorrect.

12 You know, they said there was only one

13 typographical error. If we're talking about whether

14 or not 7,000 is the appropriate penalty, then we've

15 concluded that it was not just a, a typographical

16 error, and I'm not sure how it could have been. They

17 talk about how it was corrected. I don't think that's

18 relevant at all, because it was only corrected after

19 the FAA sent them a letter of investigation. And, and

20 those documents, you can see the date of those

21 documents that are attached to the, the motion, the

22 two motions, sorry, to the motion for summary judgment

23 and to the response to the motion for, for summary

24 judgment.

25 And so I, and then, and then they
FAA vs Avionics Masters Hearing May 9, 2014 VR # 1061-1 Page 32

1 later, as they referenced here, they later sent it out

2 to another repair station that could do gyros that

3 inspected it, found all sorts of things wrong with the

4 gyro and then did an overhaul of it. Again, it's not

5 a mitigating factor at all, much less an extreme

6 mitigating factor that would warrant going below the

7 bottom of the range for them to fix the problem after

8 we sent them a letter of investigation.

9 Essentially, it would be an aggravating

10 factor and another violation had they, for example,

11 gone and installed it on the plane anyway after we had

12 found the error. But it, but, you know, that's not

13 something you get credit. You don't get credit for

14 not doing that.

15 THE COURT: Okay. Is there anything

16 else that you would like to add before I turn to Mr.

17 Faruqui?

18 MR. STEVENSON: Not on the subject of

19 the penalty amount.

20 THE COURT: Anything else you'd like to

21 add in general?

22 MR. STEVENSON: The one observation

23 that I, I had wanted to make after Mr. Faruqui had

24 made his statement was he talks about the letter that

25 they sent. And he talked about a part of the letter
FAA vs Avionics Masters Hearing May 9, 2014 VR # 1061-1 Page 33

1 that, that I hadn't, but I think that this highlights

2 some of the inconsistency in the respondent's

3 differing versions of, of what happened in their

4 letter of ...

5 THE COURT: And when you say "the

6 letter", which exhibit are you referring to? Is it

7 Exhibit G, as in George?

8 MR. STEVENSON: Yes, Your Honor.

9 Exhibit G. And, and, and opposing counsel, as you

10 mentioned, they say in this letter that the

11 directional gyro was inadvertently tagged as part of a

12 list of equipment being installed on an aircraft. And

13 so that's the original thing that they said, and I,

14 and I know that they are now, in their very initial

15 response they're just talking about the gyro being

16 tagged as an individual component.

17 But I would then want to turn to the

18 affidavit of Charles Hunt that was attached to the

19 respondent's original response to our motion for

20 summary judgment. I think that's Exhibit 1. The copy

21 that I have does not actually have a number on it.

22 But in paragraph two of that, they say

23 in this case we were requested to form a Level 1

24 inspection of a Bendix/King autopilot. And I think

25 that's noteworthy, because it's, it's contradictory to
FAA vs Avionics Masters Hearing May 9, 2014 VR # 1061-1 Page 34

1 some of the other things, we'll say. I think it's

2 contradictory to the letter. I think it's

3 contradictory to the new affidavit, which I'll, I'll

4 get to in a second.

5 But I think it also addresses, opposing

6 counsel is saying that he doesn't understand why the

7 FAA would think that there would be documentation on

8 the system as a whole. Well, I mean, Mr. Hunt says in

9 his own affidavit that somebody asked them to perform

10 a Level 1 inspection of the system. So if you are

11 saying that what you are doing is an inspection of a

12 system for a customer or something like that, I would,

13 I would in fact expect there to be documentation about

14 the, the system as a whole.

15 But, and then I think when you look at

16 paragraph 6 of Exhibit 3, you know, they talk about

17 after the functionality was confirmed, it was assigned

18 its own FAA order and then went into stock. Well, I'm

19 sorry, it was assigned its own FAA Form 8130, and then

20 it was entered into stock. It undoubtedly was

21 approved for return to service under its own FAA Form

22 8130 and, and then was kept at their facility. But

23 that is contradictory to what Mr. Hunt is saying in

24 this affidavit.

25 If this, if they were given an, I'm
FAA vs Avionics Masters Hearing May 9, 2014 VR # 1061-1 Page 35

1 sorry, in his original affidavit, if they were given

2 an autopilot to perform a Level 1 inspection of, it

3 does not make any sense that they would then turn

4 around and break up the individual components and then

5 put them in their stock, especially if they had,

6 according to the past, according to them passed

7 whatever the, the inspection was that they conducted

8 on them.

9 And so I, in between Exhibit G and Mr.

10 Hunt's first affidavit and Mr. Hunt second affidavit,

11 you have all of these different versions for how it is

12 that this directional gyro came to be approved for

13 return to service as an individual component. And I,

14 so I don't think that, contrary to opposing counsel's

15 representation, I don't think we're confused, except

16 to the extent that anyone would be confused trying to

17 figure out all of the differing versions of events

18 that, that Mr. Hunt has presented here.

19 And that, that was the, the one thing

20 I, observation I wanted to make.

21 THE COURT: Okay. Thank you very much.

22 Mr. Faruqui, let me ask you a couple of

23 questions now, if I may. And I'm going to start again

24 in the same way with you that I started with Mr.

25 Stevenson. I'd like you to take a look at Exhibit J
FAA vs Avionics Masters Hearing May 9, 2014 VR # 1061-1 Page 36

1 and in conjunction with respondent's Exhibit 4, which

2 is the affidavit of Charles Hunt about the amount of

3 penalty.

4 And Mr. Hunt's affidavit on page 3,

5 paragraph 7, states that he believes the mitigating

6 circumstance was the bench testing of the autopilot

7 component. And as you have so clearly articulated

8 earlier today in argument, the gyro was considered to

9 be one of several components that were part of this

10 autopilot system.

11 And then in looking at the declaration

12 of Inspector McGlynn, he states with quite, quite

13 specificity that under no circumstances did Avionics

14 Masters' Level 1 inspection and capability list

15 include any type of inspection or testing of the gyro.

16 And so can you reconcile for me these

17 two different pieces of proof on behalf of your

18 client?

19 MR. FARUQUI: Yes. Roger McGlynn has,

20 before this enforcement action, I don't see any record

21 provided by the FAA or by Roger McGlynn in which Mr.

22 McGlynn articulates to the respondent before any

23 violation ever occurred in which Mr. McGlynn provided

24 a written clarification about what Level 1 inspection

25 means on the air agency certificate.
FAA vs Avionics Masters Hearing May 9, 2014 VR # 1061-1 Page 37

1 If you look at the air agency

2 certificate on the third page, who's by ...

3 THE COURT: And, and tell me what

4 exhibit number you're referring to, please.

5 MR. FARUQUI: The air agency

6 certificate. And I don't know whether either side has

7 ...

8 THE COURT: Well, the FAA has filed

9 Exhibits A, B and C ...

10 MR. FARUQUI: Yes.

11 THE COURT: ... A being the air agency

12 certificate, which is one page; B being class ratings

13 and limited ratings for your client, which are split

14 to two pages; and C being the capability list for your

15 client's repair station. So which particular exhibit

16 do you think would be most helpful in this discussion?

17 MR. FARUQUI: Exhibit B.

18 THE COURT: Okay. Thank you. Go

19 ahead.

20 MR. FARUQUI: Second page of Exhibit B

21 is a digital signature by Roger McGlynn himself.

22 THE COURT: Well, I'm, I'm looking at

23 Exhibit B as in "boy", and the second page has the

24 signature of a Vincent, it looks like Sartiv, Ortiz,

25 excuse me.
FAA vs Avionics Masters Hearing May 9, 2014 VR # 1061-1 Page 38

1 MR. FARUQUI: Yes. Vincent is, is the

2 ...

3 THE COURT: Excuse me, sir. I'm, I'm

4 still talking.

5 MR. FARUQUI: Sorry.

6 THE COURT: Are you looking at some

7 other exhibit? Because this is not signed by

8 Inspector McGlynn.

9 MR. FARUQUI: On the same page, Your

10 Honor, if you look a few inches up, on there there is

11 a digital signature.

12 THE COURT: There is, oh, I see. Thank

13 you. Next to the FAA symbol, there's a digital

14 signature by Inspector McGlynn.

15 MR. FARUQUI: Right.

16 THE COURT: What is this, and in your

17 opinion how does this support your argument that your

18 client had the ability to bench test the gyro?

19 MR. FARUQUI: The simple fact is that

20 we are getting into a very complex fact question about

21 what is or is not specifically authorized, which, you

22 know, parties can testify to. And there is no, no

23 prior written record where Mr. McGlynn or anybody else

24 from the FAA clarified to the respondent a narrower

25 interpretation of what's on the air agency
FAA vs Avionics Masters Hearing May 9, 2014 VR # 1061-1 Page 39

1 certificate.

2 THE COURT: Well, let's look at page 1

3 of the two-page Exhibit B. On page 1, it talks about

4 referring your client to the capability list. And

5 that's been submitted by the FAA as Exhibit C as in

6 "cat". And if we go to page 15 of Exhibit C, it shows

7 KFC-200 autopilot Bendix/KingLevel 1 inspection fine

8 and/or bench test and installation.

9 MR. FARUQUI: Correct. And the only

10 way bench test is possible is to take a component out

11 of the aircraft and take it to the test harness.

12 THE COURT: Okay. Well, then, let's

13 talk then next about Exhibit G, where your client

14 previously indicated that he knew that the remote gyro

15 was not part of his capability list.

16 MR. FARUQUI: As far as repairs are

17 concerned.

18 THE COURT: Okay. Anything else you

19 would like to say about this particular piece of

20 information?

21 MR. FARUQUI: Other than the fact that,

22 you know,the respondent is fighting off a $7,000 fine

23 over a paperwork error, which is every clear here.

24 The respondent did not do any repairs. That's all

25 there is to say about that. You know, they're doing
FAA vs Avionics Masters Hearing May 9, 2014 VR # 1061-1 Page 40

1 their bench test the way they're supposed to.

2 And, and if, if it's so obvious in

3 this, in this enforcement action that there is

4 confusion between the parties or dispute between the

5 parties about what the air agency certificate says,

6 then in order for the FAA to rely on Mr. McGlynn's

7 affidavit, there should have been some prior record by

8 Mr. McGlynn saying, oh, by the way, what the air

9 agency certificate says, well, this is, here is the

10 clarification. It really should be interpreted this

11 narrowly. You cannot, you know, do XY and Z.

12 First, the FAA accused the respondent

13 of performing repairs when the respondent stated that

14 they did not perform repairs, did not open the, the,

15 did not tear down the directional gyro. Now the FAA

16 wants to counter argue by saying, well, you can't do

17 anything with the directional gyro, not even a Level 1

18 inspection, not even a bench test, you know.

19 And then to, now for the first time

20 today, the FAA went so far as to say that the, they

21 cannot do inspections of just one component. You

22 would have to hook up all of the components in order

23 to do a Level 1 inspection of the entire autopilot,

24 and then try to support this argument by stating or

25 fishing for contradictions between previous affidavits
FAA vs Avionics Masters Hearing May 9, 2014 VR # 1061-1 Page 41

1 when in fact they are not contradictions. It's

2 everything that's being stated is consistent.

3 And then finally when, Your Honor

4 questioned the FAA, the FAA said, well, they're not

5 entirely sure how the inspections are supposed to be

6 done, what the setup is, and the FAA conceded that it

7 would be more efficient to do a inspection of one

8 component and not, not necessarily all of the

9 components and, you know, take them out, reinstall

10 them.

11 And then basically, the FAA admitted to

12 not doing enough homework in order to determine

13 whether this warrants such a huge enforcement action.

14 So, you know, that ...

15 THE COURT: Let me ask you. Yeah,

16 thank you. Let me ask you if you would respond

17 briefly to Mr. Stevenson's discussion of the proposed

18 penalty for the primary charge.

19 MR. FARUQUI: Sure. The discussion on

20 the primary charge, they were, Mr. Stevenson said that

21 Appendix F does not apply. Well, there's two parts to

22 my argument about that.

23 Even if Appendix F does not apply

24 because this is an action about doing things they're

25 not capable of, Appendix F still gives significant,
FAA vs Avionics Masters Hearing May 9, 2014 VR # 1061-1 Page 42

1 tremendous guidance about the common sense factors

2 that everyone in the FAA has thought about over the

3 years, common sense that apply in any of the

4 situations anyway, including in this case.

5 So for, for the FAA to say that the

6 order, Appendix F of the order does not apply in this

7 case, that still doesn't, you know, strip us of the

8 power to use common sense to determine how much of a

9 fine should be applied.

10 The second part of my argument is that

11 the FAA has made alternate pleadings with respect to

12 the paperwork error. The alternate pleadings with

13 respect to the paperwork error are not about doing

14 acts that the repair station is not capable of. And

15 in that case, if you're looking at the alternate

16 pleadings, perhaps Appendix F applies toward the

17 alternate pleadings.

18 But when the FAA is insisting that the

19 Appendix F does not apply and continues to insist on

20 the $7,000 fine, they're, they're not mentioning and

21 don't want to talk about the alternate pleadings that

22 they have made, which on Chapter 7 showed that you can

23 go to the minimum or moderate range. And for that we

24 are asking for the minimum range.

25 THE COURT: Okay. I have a question,
FAA vs Avionics Masters Hearing May 9, 2014 VR # 1061-1 Page 43

1 and I want to ask this to you, Mr. Faruqui, before I

2 turn to the FAA for final reply. You have in your

3 argument made some comments about how Inspector

4 McGlynn should have notified your client more

5 specifically about either the capabilities list or the

6 limitations of the Level 1 inspection that they were

7 allowed to do.

8 And I'm, I need to follow up on that a

9 little bit, because according to the federal aviation

10 regulation, there are very specific statements and

11 lists identified within the regulation for what the

12 instrument ratings be for someone conducting a class

13 one repair. And I'm going to refer you specifically

14 to 14 CFR Section 145.59, Subsection 3E.

15 And that particular area talks about

16 different mechanical ratings and different things that

17 you would be looking at for inspection or repair under

18 a maintenance standard. And then underneath that, or

19 as part of that, there's a Class 3 gyroscopic rating

20 that specifically defines the gyros and what

21 encompasses a gyro for someone who has a Class 3

22 rating.

23 As I understand your client's rating,

24 it didn't even have a Class 1 inspection rating, but

25 it did have a limited rating, which means that it was
FAA vs Avionics Masters Hearing May 9, 2014 VR # 1061-1 Page 44

1 very narrowly defined by the certification it received

2 and the capabilities list that it, it had.

3 And wouldn't it be in your client's

4 best interest or your client's default status,

5 position, say to itself if it's not on my capabilities

6 list, I don't, I have notice right then and there that

7 it's not something I should be doing, because I have

8 these public rules to use as a guidance tool,

9 regardless of whether someone from the FAA makes a

10 personal visit to me to explain things to me?

11 MR. FARUQUI: Okay. 145.59.3 ...

12 THE COURT: There's also a E3, talks

13 about Class 3 gyroscopic ratings. So there are

14 instrument ratings for a Class 1 certification. There

15 are Class 3 gyroscopic descriptions for someone who

16 has a Class 3 rating. I'm just concerned that I'm

17 hearing from you an argument from your client that

18 unless someone comes to their business and explains

19 things to them, they can simply carry on based on

20 assumptions versus checking the law and making sure

21 they're fully informed. And maybe I misheard your

22 argument.

23 MR. FARUQUI: I'm looking at this, and

24 I'm still struggling with the numbers listed here.

25 Class 3, when you're looking at 149.59.3 ...
FAA vs Avionics Masters Hearing May 9, 2014 VR # 1061-1 Page 45

1 THE COURT: No, wait. I'm sorry. You

2 have the incorrect citation. So 14 CFR 145.59.

3 MR. FARUQUI: Let me pull it up again,

4 then. All right. I'm looking at 145.59, and the

5 first subsection 3 I see has to do with turbine

6 engines. The next subsection 3 I see radio, okay,

7 Class 2 radio ratings, Class 3 radar equipment, 3E

8 instrument ratings, Class 1 mechanical and diaphragm,

9 bourdon 2. That's what I'm looking ...

10 THE COURT: You don't need that. You

11 don't need to read it out loud. But it looks like you

12 found the section that I'm looking at.

13 MR. FARUQUI: But I'm looking at the

14 class ratings. Certificate holder is authorized the

15 following ratings and/or limitations: Radio Class 1

16 communications equipment, radio Class 2 navigation

17 equipment, radio Class 3 radar equipment. That's

18 from, let me see if it's shown on Exhibit B.

19 THE COURT: Yes. And then if, if you

20 look at 14 CFR Section 145.61, it talks about limited

21 ratings that are even more narrowly defined for repair

22 stations. And that talks about how the repair station

23 can only perform specialized maintenance and that

24 those limited ratings are for instruments of a

25 particular make and model.
FAA vs Avionics Masters Hearing May 9, 2014 VR # 1061-1 Page 46

1 MR. FARUQUI: Right.

2 THE COURT: And then under 14 CFR

3 Section 145.215, it talks about the capability list

4 and how it must identify each article by make and

5 model or other nomenclature and be available in a

6 format acceptable to the FAA.

7 In addition, this same section, which

8 is, I'm sorry, same regulation, 14 CFR Section

9 145.215, Subsection 3C and D, talk about how that

10 article can only be listed if the, it's within the

11 scope of the ratings of the repair station

12 certificate.

13 And then it goes on to talk about that

14 the repair station has to show that it has all the

15 housing facilities, equipment, material, technical

16 data, processes, et cetera, to work on the article.

17 And then it must provide, you know, its certificate

18 holding district copies with a revised list if it

19 chooses to update, upgrade, and so forth.

20 So my concern in part with this

21 particular case is that nowhere has the respondent

22 indicated that it has approval to do any testing on a

23 specific gyro component. And the concern I have in

24 part is because gyroscopic material is very definitely

25 listed under the regulations as having a need for
FAA vs Avionics Masters Hearing May 9, 2014 VR # 1061-1 Page 47

1 specialized ratings, obviously has a need for

2 specialized equipment.

3 And at least in some of this material,

4 the FAA has been able to make a fairly strong argument

5 that your client at some point agreed with the fact

6 that his business did not have the ability or the

7 certification to work in any kind, any way, shape or

8 form on a gyro.

9 And yet I'm hearing from you in

10 argument that, in fact, that's not the case, that the

11 repair stations that are like your clients' can assume

12 that they have a broader ability unless somebody from

13 the FAA makes an in-person visit to them and tells

14 them otherwise. Have I misunderstood your argument?

15 MR. FARUQUI: Your Honor, what I'm

16 getting at is that they, the respondent was within its

17 limits when it was performing the Level 1 inspection.

18 There just is no way to do what the air agency

19 certificate says he can do without installing or, or

20 uninstalling the components and taking them to the

21 bench and testing them at the bench.

22 Why write the bench test as one of the

23 approved capabilities, if you cannot take these

24 components to the bench? That's, that's confusing.

25 And, and to, to a layman who is only a mechanic and
FAA vs Avionics Masters Hearing May 9, 2014 VR # 1061-1 Page 48

1 does not, you know, you know, have so much ability to

2 interpret regulations as a, as the FAA does, what else

3 can he rely on?

4 He's got an air agency certificate that

5 he's relying on, and Roger McGlynn is raising for the

6 first time in an enforcement action that, that even a

7 Level 1 inspection is not permissible.

8 THE COURT: Okay.

9 MR. FARUQUI: And it, and it, it goes

10 against the grain of what he signed off on on the air

11 agency certificate.

12 THE COURT: Okay. Thank you.

13 MR. FARUQUI: And that's very, it's

14 very confusing for everybody here.

15 THE COURT: I understand. Thank you.

16 MR. FARUQUI: Yeah.

17 THE COURT: Is there anything else that

18 you would like to add on behalf of your client before

19 I turn to the FAA for final reply?

20 MR. FARUQUI: Again, the, the party,

21 the respondent made its corrections on the paperwork,

22 which it probably would have anyway, irrespective of

23 whether there were investigators coming to their

24 office or not. They are in the habit of rechecking

25 anything that was in storage, and when things fail,
FAA vs Avionics Masters Hearing May 9, 2014 VR # 1061-1 Page 49

1 they go ahead and send them to whoever is allowed to

2 perform a repair.

3 THE COURT: Thank you very much, Mr.

4 Faruqui.

5 Mr. Stevenson, do you have any final

6 matters you'd like to make before we close today?

7 MR. STEVENSON: I think Your Honor

8 covered most of what I would have said with regard to

9 145.59, and we already discussed the Royal Avionic

10 case in the summary judgment motion. As to the, the

11 point that opposing counsel just made, I would again

12 note that in Mr. Hunt's own affidavit, he says that

13 the definition of a functional check is powering up

14 the, the complete system and that that is something

15 that can be done on a complete system basis.

16 They are authorized to do work on the

17 overall system. I think that they did understand,

18 based on Mr. Hunt's letter, that they could not do the

19 same sort of work on the individual component. But

20 even if they didn't understand that for some reason,

21 that doesn't mean that they didn't commit the

22 violation. Again, maybe the violation is inadvertent

23 rather than deliberate, but we're not applying any

24 aggravating factors for it being, for being

25 deliberate. I mean, there's no, we're not applying
FAA vs Avionics Masters Hearing May 9, 2014 VR # 1061-1 Page 50

1 any aggravation at all here.

2 And I would note opposing counsel says

3 the FAA does not want to talk about the alternative

4 pleading or the sanction for that. I can, if Your

5 Honor would want. My impression was that Your Honor

6 wanted us to focus on the primary pleading, but if for

7 some reason I misunderstood that and there was any

8 need to address the alternative pleading or the

9 sanction for that, I can do that.

10 THE COURT: No. The court specifically

11 asked the parties to limit their discussion today to

12 the primary allegation. I did receive and review all

13 of the materials regarding the alternate violation,

14 but I wanted to preserve the time today for the

15 primary allegation. But thank you for offering.

16 MR. STEVENSON: And that's all I have,

17 Your Honor.

18 THE COURT: Okay. Then I'm going to

19 thank both counsel very much for your presentation

20 today, for the filing of the supplemental materials,

21 and for your patience in answering all the court's

22 questions. I want to thank you both very much for the

23 work you've done on this case.

24 I will be issuing a written decision

25 next week, and I know that you have a due date next
FAA vs Avionics Masters Hearing May 9, 2014 VR # 1061-1 Page 51

1 week of May 16, 2014, for the list of witnesses and

2 exchange of exhibits. And what I'm going to do is I'm

3 going to extend that to May 22, 2014, by court motion

4 just so that whatever decision I reach can be issued

5 and read by the parties without having to have done

6 additional work that may or may not need to have been

7 done. So instead of May 16, 2014, I am extending your

8 due date for filing exhibits and witness lists to May

9 22, 2014. And then that means I'll be able to issue

10 the decision on this case, hopefully, by next

11 Wednesday, May 14, 2014.

12 With that, Mr. Stevenson, on behalf of

13 your client, anything else that we need to address

14 today before we close?

15 MR. STEVENSON: No, Your Honor.

16 THE COURT: And Mr. Faruqui, on behalf

17 of your client? Same question.

18 MR. FARUQUI: No, Your Honor.

19 THE COURT: Okay. Thank you both very

20 much again. I hope you have a good weekend. With

21 that, we can go off the record. And I wish you all a

22 good day. Thank you.

23 MR. FARUQUI: Thank you.

24 MR. STEVENSON: Thank you.

25 (WHEREUPON, the hearing was concluded at 10:53.)
FAA vs Avionics Masters Hearing May 9, 2014 VR # 1061-1 Page 52

1 STIPULATION

2

3 The foregoing matter was taken on the date, and

4 at the time and place set out on the title page

5 hereof.

6

7 It was requested that the matter be taken by the

8 reporter and that the same be reduced to typewritten

9 form.

10

11

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CERTIFICATE OF REPORTER AND SECURE ENCRYPTED

I, Ernest L. Dean, Jr., Notary Public, do hereby

 certify that the foregoing matter was reported by 

 stenographic and/or mechanical means, that same was 

 reduced to written form, that the transcript prepared 

 by me or under my direction, is a true and accurate 

This transcript and certificate have been digitally

 or otherwise interest in the action filed or its outcome.

 record of same to the best of my knowledge and ability; 

 or counsel employed by the parties hereto, nor financial

 that there is no relation nor employment by any attorney 

Court Reporter / Notary

SIGNATURE AND DELIVERY OF CERTIFIED TRANSCRIPT

 signed and securely delivered through our encryption

 server.

IN WITNESS HEREOF, I have here unto set my hand 

 this day of , .

Notary Registration Number: 7528819

My Commission Expires: 

Ernest L. Dean, Jr.

14th

8/31/2016

May 2014
FAA vs Avionics Masters Hearing May 9, 2014 VR # 1061-1 Page 54

$

$11,000 22:22

$7,000

22:21 39:22

42:20

$7,100 28:13

$7,150 20:14

0

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18:11 23:21

24:3 24:9

25:4

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33:23 34:10

35:2

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39:2 39:3

39:7

40:17 40:23

43:6

43:24 44:14

45:8

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10:53 51:25

100 30:12

102A 19:12

11 24:7

14 43:14 45:2

45:20

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4:18 4:22

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6:9 7:5

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8:22 9:10

15:5 51:1

51:3 51:7

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30:2 30:22

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9:22 17:9

23:13 23:17

25:18 34:16

36:4

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44:13 44:15

44:16 44:25

45:5 45:6

45:7 45:17

3C 46:9

3E 43:14 45:7

4

4 5:14 5:25

6:3 8:21

9:3 17:9

23:11 23:17

25:15 25:17

27:17 36:1

44-page 19:5

5

5 4:18 6:3

8:23 9:5

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27:17 27:24

5th 8:13 8:19

6

6 34:16

7

7 23:18

24:7

25:14 30:2

30:22

36:5 42:22

7,000 31:14

7100 20:7

8

8 4:22 6:9

8130 12:18

13:11 34:19

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8th 8:20 8:22

9

9 3:2 3:23

9:31 3:3

900 30:13

A

A.M 3:3

ability 38:18

47:6

47:12 48:1

able 18:14

25:2

26:10

47:4 51:9

absurd 25:4

accept 11:10

acceptable

46:6

according

24:14

35:6 35:6

43:9

account 30:15

accurate 5:14
FAA vs Avionics Masters Hearing May 9, 2014 VR # 1061-1 Page 55

accused 40:12

action

21:19 21:19

21:24 22:13

28:23

29:6 29:9

29:13 29:16

29:18 36:20

40:3

41:13 41:24

48:6

acts 42:14

actually

21:17 22:24

25:7 31:8

33:21

add 32:16

32:21 48:18

addition 46:7

additional

20:14 51:6

address

9:18

15:11

50:8 51:13

addressed

9:24

addresses

34:5

administrativ

e 21:19

29:6

29:13 29:16

29:18

administrativ

ely 28:23

administrator

's 23:3

admissibility

8:3 8:25

admitted

16:25 19:11

41:11

advised 3:17

advisor 4:8

affect 30:7

affidavit

4:23 5:12

5:25 6:5

6:6 6:16

7:4 8:12

8:15 8:19

8:21 9:11

15:5

18:17 20:22

23:12 23:14

24:7

24:22 25:18

27:18 30:20

33:18

34:3 34:9

34:24

35:1

35:10 35:10

36:2 36:4

40:7 49:12

affidavits

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13:3 17:8

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18:1 40:25

against 48:10

agency 18:3

22:20

28:3 36:25

37:1 37:5

37:11 38:25

40:5 40:9

47:18

48:4 48:11

aggravated

28:7

aggravating

30:3

30:25

32:9 49:24

aggravation

50:1

aggravative

30:15

agreed 47:5

ahead 15:6

37:19 49:1

Ahmed 4:5

air 18:3

22:20 36:25

37:1 37:5

37:11 38:25

40:5 40:8

47:18

48:4 48:10

aircraft 16:4

16:11

17:5

19:13 19:16

19:16 30:11

33:12 39:11

airplane

26:18

allegation

22:5

50:12 50:15

allegations

20:11 20:16

alleged

16:5 23:6

28:3 28:6

allow 24:4

allowed 10:22

11:20 23:21

25:10 30:10

43:7 49:1

already

3:18 9:24

22:15 49:9

alternate

27:21 42:11

42:12 42:15

42:17 42:21

50:13

alternative

11:4 50:3

50:8

am 12:21

20:25 23:24

25:5 25:6

51:7

amend 26:6

amended

4:15 4:20

20:6

among 29:11

amount 6:2

6:8 16:7

23:12 27:18

32:19 36:2

analysis

20:23 21:13

22:10 29:7

and/or 18:5
FAA vs Avionics Masters Hearing May 9, 2014 VR # 1061-1 Page 56

39:8 45:15

answer

20:17 27:23

answering

50:21

anticipate

22:8

anybody 38:23

anyone 35:16

anything

10:14 17:11

17:12 21:24

24:17

27:6 31:6

32:15 32:20

39:18 40:17

48:17 48:25

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anyway

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42:4 48:22

apologize

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appear 11:19

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22:19 28:19

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41:23

42:3 42:6

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approval

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area 30:12

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17:16 18:13

36:8

38:17 40:24

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43:3

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47:10 47:14

arguments

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arrived 13:15

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46:4

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articulated

36:7

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11:21 11:22

12:12

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13:2 25:1

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11:10 23:18

assertions

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assigned

34:17 34:19

assist 7:10

7:12

assume 47:11

assuming

20:25

23:5 27:23

assumptions

44:20

assure 6:25

attached

31:21 33:18

attachment

8:16 20:24

attempt 15:16

attempts 6:15

attitude 28:8

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15:24

16:3 16:7

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16:16 16:18

16:19

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18:1 18:2

18:6 18:7

18:16

19:5

23:20 23:22

24:11 24:12
FAA vs Avionics Masters Hearing May 9, 2014 VR # 1061-1 Page 57

24:19 25:10

25:24 33:24

35:2 36:6

36:10

39:7 40:23

autopilots

14:21 18:21

available

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Avionic 49:9

Avionics 3:22

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aware 11:19

B

based 28:17

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basic 10:19

basically

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begin 14:9

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believe 5:5

5:24 8:14

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27:19 28:18

30:19

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19:21 36:5

bench 12:15

18:5

23:19

24:5

24:18

25:2

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27:1 36:6

38:18

39:8

39:10

40:1

40:18 47:21

47:21 47:22

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14:19 33:24

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39:7

best 44:4

beyond 22:7

22:17 24:17

24:19 31:8

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bottom

15:23 22:25

32:7

bourdon 45:9

box 14:21

boy 37:23

break 35:4

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12:8 47:12

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22:20 44:18

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10:13 11:17

12:6 12:7

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capability

24:20

26:5 26:6

36:14 37:14

39:4

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capable 41:25

42:14

care 8:1

carry 44:19

case 6:23

9:16 10:7

12:6

12:10 14:17

22:9

22:24

23:7

26:22 28:15

30:10 33:23

42:4 42:7

42:15 46:21

47:10 49:10

50:23 51:10

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categorically

21:23 22:11

29:1 29:2

29:22

categories

21:23 21:25

category

22:11

caused 13:4

13:5

caution 27:22

cents 28:14

certain 20:4

certainly

6:21

certificate

18:3 22:2

36:25

37:2 37:6

37:12

39:1 40:5

40:9

45:14 46:12

46:17 47:19

48:4 48:11

certification

24:4 24:9

24:16

44:1

44:14 47:7

certified

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cetera 46:16

CFR 43:14

45:2

45:20

46:2 46:8

chance 8:8
FAA vs Avionics Masters Hearing May 9, 2014 VR # 1061-1 Page 58

17:19 27:12

Chapter

30:2

30:22 42:22

characteristi

cs 25:21

charge 20:6

41:18 41:20

charged 20:16

Charles

4:23 6:5

6:6 7:5

8:12 15:5

23:12 33:18

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25:19 26:19

26:25

27:1 49:13

checking

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chooses 46:19

Christopher

4:3

chronological

5:10

circumstance

23:8 36:6

circumstances

23:19

28:6

28:11 28:11

30:4 36:13

citation

28:17 45:2

cites 20:24

civil 20:3

clarification

36:24 40:10

clarified

38:24

class 37:12

43:12 43:19

43:21 43:24

44:13 44:14

44:15 44:16

44:25

45:7 45:7

45:8

45:14 45:15

45:16 45:17

clear 39:23

clearer 15:17

clearly 36:7

client 5:15

9:14 10:3

36:18 37:13

38:18

39:4

39:13

43:4

44:17

47:5

48:18 51:13

51:17

clients 47:11

client's

37:15 43:23

44:3 44:4

close 49:6

51:14

codified 4:17

Cody 3:16 4:7

comes 16:2

44:18

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comments 43:3

commerce

17:24

commit 49:21

common 42:1

42:3 42:8

communication

s 45:16

complaint

4:15 4:21

20:6

complete

25:20 26:17

49:14 49:15

complex 38:20

compliance

4:24 28:9

component

10:9

10:12 10:14

10:25

12:2

12:16 12:24

15:24

16:1 16:2

16:17 16:21

16:23

18:2

24:18 24:24

25:16 33:16

35:13

36:7

39:10 40:21

41:8

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components

14:23

17:1

18:19 23:20

24:11 26:16

26:18

35:4 36:9

40:22

41:9

47:20 47:24

conceded 41:6

concern 46:20

46:23

concerned

39:17 44:16

concluded

31:15 51:25

conclusion

4:12

conducted

35:7

conducting

43:12

conference

3:25

confirmation

14:5

confirmed

34:17

conforming

19:21

confused

15:15 35:15

35:16

confusing

47:24 48:14

confusion

40:4

congested
FAA vs Avionics Masters Hearing May 9, 2014 VR # 1061-1 Page 59

30:11

conjunction

36:1

consider 30:3

consideration

22:12

considered

36:8

consist 17:4

consistent

23:2 41:2

consists 17:1

constructive

28:8

consuming

26:15

contained

18:3

contents

19:23

continue

15:19 19:18

continues

42:19

contradicted

23:23 25:17

contradiction

s 40:25

41:1

contradictory

11:11 13:21

13:23 33:25

34:2 34:3

34:23

contrary 11:2

35:14

control 8:17

controls

12:11

convened 3:24

cooperate

17:2

cooperation

14:25

copies 46:18

copy 6:22

9:10 15:5

33:20

correct 5:4

17:19 39:9

corrected

13:6 13:7

13:17 31:17

31:18

correction

13:10 13:11

28:24

corrections

48:21

correctly

19:23 20:16

25:9

counsel

33:9 34:6

49:11

50:2 50:19

counsel's

35:14

count 17:21

counter 40:16

County 3:13

couple 6:15

35:22

course 18:6

court 3:4 3:8

3:12 3:13

3:15 3:17

3:19 3:21

5:7 6:4 6:7

6:11 6:18

6:25 7:5

7:8 7:13

7:17 7:22

8:2 8:6

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14:7 15:2

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26:13

27:9

27:11 27:14

32:15 32:20

33:5

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50:18

51:3

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court's 50:21

covered 22:15

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11:8

credit

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criteria 29:5

29:7

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customer

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date 31:20

50:25 51:8

David 20:13

day 4:16

51:22

days 6:15

deadline 4:14

deadlines

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Dean 3:13

death 5:19

decision 21:5

22:8

50:24

51:4 51:10

declaration
FAA vs Avionics Masters Hearing May 9, 2014 VR # 1061-1 Page 60

5:3 20:13

23:16 23:24

24:2

24:15 27:24

36:11

default 22:22

30:19 44:4

defies 13:25

defined

44:1 45:21

defines 43:20

definitely

46:24

definition

25:19 49:13

definitively

26:23

deliberate

29:16 49:23

49:25

demonstrates

13:19

descriptions

44:15

detailed 19:1

details

27:3 27:4

detect 13:6

detected

13:17

determination

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determine

21:8

41:12 42:8

deviate 23:8

diaphragm

45:8

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12:18 12:23

21:10 21:10

21:11 35:11

36:17 43:16

43:16

differing

33:3 35:17

digital 37:21

38:11 38:13

directional

10:14 10:17

10:18

16:6 16:9

17:4 18:8

28:2

33:11 35:12

40:15 40:17

discovered

11:17 13:13

discretion

21:9 29:25

discussed 8:9

22:19 49:9

discusses

21:3

discussion

20:10 27:20

27:25 37:16

41:17 41:19

50:11

dispositive

10:3

dispute 10:10

40:4

disregard

28:4 29:17

district

46:18

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Docket 3:23

document 6:14

10:24

documentary

13:9 13:18

documentation

13:22

14:1

17:18

34:7 34:13

documents

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31:21

dollar 20:7

done 10:23

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earlier

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easier

18:18 18:23

efficiency

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efficient

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efficiently

27:8

eight 29:4

either 6:18

24:11

37:6 43:5

eligible 29:5

eliminated

13:7

else 32:16

32:20 38:23

39:18

48:2

48:17 51:13

elsewhere

24:23

encompasses

43:21

enforcement

21:5 22:8

36:20

40:3

41:13 48:6

engines 45:6

ensure 21:9

entered 34:20

entire

17:16 25:12

27:1 40:23

entirely 41:5

entitled 6:6
FAA vs Avionics Masters Hearing May 9, 2014 VR # 1061-1 Page 61

equipment

19:13 19:15

33:12

45:7

45:16 45:17

45:17 46:15

47:2

err 27:22

error 12:13

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FAA vs Avionics Masters Hearing May 9, 2014 VR # 1061-1 Page 62

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fact 11:9

16:14 17:15

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general 9:9

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FAA vs Avionics Masters Hearing May 9, 2014 VR # 1061-1 Page 63

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George 33:7

gets 14:11

21:13

getting 38:20

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given 4:13

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FAA vs Avionics Masters Hearing May 9, 2014 VR # 1061-1 Page 64

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I'm 6:22

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FAA vs Avionics Masters Hearing May 9, 2014 VR # 1061-1 Page 65

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involved 28:5

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FAA vs Avionics Masters Hearing May 9, 2014 VR # 1061-1 Page 66

36:14

material

7:9 7:18

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note 7:15

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13:9 15:3
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noteworthy

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FAA vs Avionics Masters Hearing May 9, 2014 VR # 1061-1 Page 68

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FAA vs Avionics Masters Hearing May 9, 2014 VR # 1061-1 Page 69

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pull 45:3

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purposes 9:7

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30:19 30:21

32:1

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20:22 20:25

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4:24 6:7

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regardless

44:9

regional

30:20

regions 21:11

regulation

43:10 43:11

46:8

regulations

46:25 48:2

re-inspecting

17:10

reinstall

41:9

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16:3

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17:22

relate 30:5

relevant

31:11 31:18

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remove

10:17

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12:16 12:18

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15:25

16:1

16:15 17:10

22:6

22:17 22:20
FAA vs Avionics Masters Hearing May 9, 2014 VR # 1061-1 Page 70

26:2

26:16

27:5 32:2

37:15 42:14

43:13 43:17

45:21 45:22

46:11 46:14

47:11 49:2

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repeatedly

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Reporters

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n 15:10

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ns 11:2

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safety 28:5

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selfcontained

14:20 16:16

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sending

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42:1 42:3
FAA vs Avionics Masters Hearing May 9, 2014 VR # 1061-1 Page 71

42:8

sent 6:16

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19:8

19:10 31:19

32:1 32:8

32:25

served 6:7

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stations

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status 44:4

step 21:12
FAA vs Avionics Masters Hearing May 9, 2014 VR # 1061-1 Page 72

Stevenson 3:5

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ten 9:13

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testify 38:22

testimony
FAA vs Avionics Masters Hearing May 9, 2014 VR # 1061-1 Page 73

19:2

testing 23:19

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36:6

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43:18

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verify 5:6

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W

wait 45:1

warning 28:24

warrant 32:6

warrants

41:13

wasn't 12:9

31:1
FAA vs Avionics Masters Hearing May 9, 2014 VR # 1061-1 Page 74

Wednesday

51:11

week 6:6

8:9 50:25

51:1

weekend 51:20

weeks 5:19

we'll 34:1

we're 3:21

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WHEREUPON

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whether 21:18

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whoever 49:1

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51:1

work 10:15

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X

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Y

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yet 14:5 47:9

you've 9:17

14:4 50:23