In The Matter Of: 

### SERVED: 

### January 24, 2017
U.S. DEPARTMENT OF TRANSPORTATION OFFICE OF HEARINGS WASIDNGTON, DC

DocketNo. FAA-2014-1116 Pacific International Skydiving Center ) ) ) ) ) ) Respondent Case Nos. 2014WP130012 & 2014WP130023



### ORDERDENYING RESPONDENT'S MOTION TO DISMISS
The undersignedjudge conducted a hearing inthe above captioned case from December 13 to 15, 2016. Atthe start ofthe hearing, the Respondent orally movedto dismiss the case due to a lack ofsubject matterjurisdiction, withoutproviding any authority for the motionto dismiss. 1 The undersignedjudgetook the matter under advisement and proceeded withthe hearing due to the parties having traveled to Honolulu, Hawaii, for the purposes ofthe hearing. Atthe close of the hearing, the undersignedjudge set deadlines for the parties to submit briefs onthe jurisdictionissue. OnDecember 27, 2016, the Respondent filed a briefin support ofits motionto dismiss due. to lack ofsubject matterjurisdiction ("Motionto Dismiss"). On January 10, 2017, the Respondent filed a briefin support ofits renewed and amended motion to dismiss due to lack ofsubject matterjurisdiction and to vacate the order setting a deadline for posthearing briefs ("Renewed Motionto Dismiss")? On January 12, 2017, the Complainant filed a briefopposing the Respondent's Motionto Dismiss, as well as its Renewed Motionto Dismiss ("Complainant's Reply").

1 After Respondent's counsel briefly discussed its lack of jurisdiction argument, the undersignedjudge specifically asked, "what's the rule you're citing to for the fact that it would-- the case would be void? Do you have regulation for me, orthat citation?" Respondent's counsel responded, "I don't. It's case law and I don'thave it handy. I have it in my notes but it would take a while to find it." Following this exchange, the undersignedjudgerequested that counsel find authority in support ofhis motion while the hearing continued. See transcript at 1-17-18. 2 On January 11,2017, the Complainant filed a motion to strike the Respondent's Renewed Motion to Dismiss, arguing that this motion was filed after the undersignedjudge'sDecember 29, 2016 deadline. The Complainant's motion to strike is moot, as the reliefsought in the Respondent's Motion to Dismiss and Renewed Motion to Dismiss is denied.For the reasons explained below, the Respondent's Motionto Dismiss is denied.3 

### 1. Pertinent Procedural History OnMarch 27,2014, the Complainant mailed the Respondent a Notice ofProposed Civil Penalty ("FirstNPCP") inthe amount of$22,000 in Case No. 2014WP130012. The proposed civil penalty stemmed from alleged violations of 14 C.F.R. §§ 91.13(a) and 105.17 as a result of skydiving activities that occurred onDecember 8, 2013 and January 5, 2014.4 On October 30, 2014, the Complainant mailed the Respondent a second Notice ofProposed Civil Penalty ("SecondNPCP") inthe amount of$33,000 in CaseNo. 2014WP130023. The proposed civil penalty stemmed from alleged violations of 14 C.F.R. §§ 91.13(a) and 105.17 as a result ofskydiving activities that occurred onMarch 22 and 25, 2014. 5 OnDecember 18, 2014, the Complainant mailed the Respondent a Final Notice ofProposed Civil Penalty ("FNPCP"), which referenced both the FirstNPCP inthe amount of$22,000 for Case No. 2014WP130012, as well as the Second NPCP in the amount of$33,000 for Case No. 2014WP130023. 

### Inresponse, the Respondent filed its request for one hearing in both cases on December 29,2014. 6 OnJanuary 7, 2014, the Complainant filed its complaint seeking a total civil penalty of $55,000. 

### In additionto referencing Case Nos. 2014WP130012 and 2014WP130023 inthe subject line, the body ofthe complaint explained that the $55,000 civil penalty sought was comprised of$22,000 for Case No. 2014WP130012 and $33,000 for Case No. 2014WP130023.7 

### 2. Legal Authority The governing statute for these proceedings states inrelevant part: (d)

... (4)

... the district courts ofthe United States have exclusivejurisdiction ofa civil action involving a penaltythe

... Administrator initiates if- (A) the amount in controversy is more than

... (iii) $50,000 ifthe violation was committedby an individual or small business concern ...8

3 On January 11, 2017, the undersignedjudge denied the Respondent's Renewed Motion to Dismiss inpart in that the requestto vacate the Order Setting Deadline for Posthearing Briefwas denied. The remaining requested reliefin the Renewed Motionto Dismiss mirrors that within the Motion to Dismiss and, as such, is denied bythis order. 4 See Complainant's Reply, Ex. 1. 5 See Complainant's Reply, Ex. 2. 6 Notably, the document indicatedthatthe Respondent filed this "Request for Hearing in the matters ofthe Final Notice ofProposed Civil Penalty, Case Nos. 2014WP130012 & 2014WP130023

... seek[ing] to impose a civil penalty in the amount of$22,000 in CaseNo. 2014WP130012 and a civil penalty inthe amount of$33,000 in Case No. 2014WP130023, for alleged violations of 14 C.F.R. 105.17 and 14 C.F.R. 91.13(a)." See Respondent's Request for Hearing. 7 See Complaint. 8 49 U.S.C. § 46301(d)(4)(A)(iii).**Docke~**No. FAA- 2014-1116 Order Denying Respondent's Motion To Dismiss, page 2This statutory language is implemented at 14 C.F.R. 

### § 13.16(b)(3), which states: (b)

..; the United States district courts have exclusivejurisdiction ofany civil penalty action initiated bythe FAA for violations described in those paragraphs, under49 U.S.C. 4630l(d)(4), if

... (3) The amount in controversy is more than $50,000 for a violation committed by an individual or a small business concern on or after December 12, 2003.9 

### 3. Analysis Complainant has concededthat Respondent is a small business concern. Specifically, during discovery the Complainant stated ''the Respondent was determined to be a small business." 10 Further, at the start ofthe hearing, Complainant's counsel stated ''we've always figured that Pacific International Aviation was a small business concern...'' 11 The question, then, is whether the amount in controversy inthese cases dictates thatthey must be heard in a United States district court. Itdoes not. The governing statute at 49 U.S.C. 

### § 46301(d)(4)(A)(iii) directs thatthe amount pertinent to determining properjurisdiction is the amount whenthe Administrator "initiates"the civil penalty action. Jurisdiction is exclusive to the United States district courts ifthe amount in controversy whenthe civil penalty action was initiated exceeds $50,000. Pursuantto 14 C.F.R. 

### § 13.16(f), "[a]civil penalty action is initiated by sending a notice of proposed civil penalty to the person charged with a violation

..." Therefore, underthe regulation, the dispositive amount for determiningjurisdictionis the amount contained inthe notice of proposed civil penalty. The Administratorhas, in past cases, reiterated this interpretation ofthe meaning of"initiated" inthe context ofcivil penalty actions. 12 When the notices ofproposed civil penalties were issued in CaseNo. 2014WP130012 and Case No. 2014WP130023, they each sought civil penalties belowthe $50,000 threshold for exclusivejurisdictionby United States distri.ct courts. Therefore, the rule conferring exclusive jurisdictionto the United States district courts did not apply when each case was initiated. 13 These cases couldbe, and were, properly brought to a hearing before anAdministrative Law Judgepursuantto 14C.F.R. 

### § 13.16(i).

9 14 C.F.R. § 13.16(b)(3). 10 Respondent's Mot. toDismiss, Ex. 2. 11 See Transcript at 1-14. 12 SeeIn re RoyalAvionicsSystems, Inc., FAA OrderNo. 2002-6 at 7-8 (Decision and Order, Apr. 16, 2002). See also In re High Exposure, Inc., FAA OrderNo. 2003-7 at 8 (Decision and Order, Sept. 12, 2003) (fmding a case "initiated" atthe time the agency issues the notice ofproposed civilpenalty to the Respondent). 13 The initiated dates correspondwith when the Notice ofProposed Civil Penalty was served upon the Respondent in each case. See Complainant's Reply, Ex. 1 and 2.
DocketNo. FAA- 2014-1116 OrderDenying Respondent's Motion To Dismiss, page 3It is worth discussing the fact that Complainant in this case did not follow the guidance found in Chapter 6 ofFAA Order 2150.38, which states in relevant part: Legal counsel may initiate separate [Enforcement Investigative Reports] EIRs in one legal enforcement action provided consolidating these EIRs does not change thejurisdictional forum of any one ofthe EIRs. For example, ifthere are three separate EIRs regarding unrelated inspections proposing to assess civil penalties of$30,000 each against a small business concern, legal counsel cannot combine them into a single civil penalty action because that would change the forum from the DOT Office ofHearings to a U.S. district court. Once complaints have been filed, legal counsel may move to consolidate the cases for litigation purposes. 14 The Complainant's decision to consolidate Case No. 2014WP130012 and Case No. 2014W0130023 prior to filing the complaint was inconsistent with this guidance. However, FAA Order 2150.3B is regulatory guidance that is not binding, 15 and does not alter the law which states that the amount in controversy at the initiation ofa civil penalty action, which occurs when the notice ofproposed civil penalty is served, determinesjurisdiction. Accordingly, the undersignedjudgeretainsjurisdiction in these cases.
Pursuant to 14 C.F.R. 

### § 13.205(a)(8), IT IS 

### HEREBY ORDERED: the Respondent's Motion to Dismiss is denied. 16

Attachment: Service List

14 FAA Order 2150.3B, at 6-5,**~** 6 (Oct. I, 2007). 

# ;;;;<----

DOUGLAS M. RAWALD Administrative Law Judge

15 See In re Delta, FAA Order No. 2014-814 at 9 (Order Denying the Respondent's Motion to Dismiss for Insufficiency ofPleadings, Apr. 19, 2016) (finding the FAA Administrator expressed an intent that FAA Order 2150.3B should not be deemed binding); see also FAA Legal Interpretation at 2 (May 6, 2011), 2011 WL 1874485 (finding that as a general principle, guidance material such as FAA Order 8900.1 does not have the force and effect ofa regulation, and to the extent material in the FAA Order conflicts with a binding regulation, the regulation takes precedence). 16 At the start ofthe hearing, the Complainant orally moved to amend the complaint. In particular, Complainant's counsel stated that he "wanted to issue an amended complaint to separate the cases back into their original form where there's two separate cases." Transcript at 1-13. Both parties addressed the issue ofthe Complainant amending the complaint in their briefs regarding thejurisdictional issue. The Respondent argued that the Complainant lacked the good cause required under 14 C.F.R. § 13.214(b)(2) to amend a complaint less than 15 days before the scheduled hearing date, and that the Complainant's proposed amendment would prejudice its case. In addition to noting the undersignedjudge's September 29, 2016 deadline for filing all motions, the Complainant argued that the correction was minor and would not prejudice the Respondent. Given the finding that the undersignedjudgeretainsjurisdiction overthese cases despite their being filed with the Office ofHearings together in one complaint, Complainant's motion to amend the complaint is moot.
DocketNo. FAA- 2014-1116 Order Denying Respondent's Motion To Dismiss, page 4

### SERVICE LIST

- BY U.S. MAIL ORIGINAL 

### & ONE COPY Federal Aviation Administration 800 Independence Avenue, S.W. Washington, DC 20591 Attention: Hearing Docket Clerk, AGC-430 Wilbur Wright Building-Suite 2W100017



### ONE COPY. Robert L. 

### Feldman, Respondent's Counsel 

### 8900 SW 107thAvenue, Suite 203 Miami, FL 33176 TEL: 305-598-4841 FAX: 305-598-4842
Don Bobertz, Complainant's Counsel 

### Office ofthe Regional Counsel, AWP-7 Federal Aviation Administration Western-Pacific Region P. 

### 0. Box 92007 Los Angeles, CA 90009-2007 TEL: 310-725-3454 FAX: 310-725-6816
The Honorable Douglas M. Rawald,AdministrativeLawJudge 

### Office ofHearings, M-20 U.S. Department ofTransportation 1200 NewJersey Avenue, S.E. (E11-310) Washington, DC 20590 TEL: 202-366-5121 StaffAssistant FAX: 202-366-7536 Docket No. FAA-2014-1116 (Civil Penalty Action)

17 Service was byU.S. Mail. For service in person orby expedited courier, use the following address: Federal Aviati9n Administration, 600 Independence Avenue, S.W., Wilbur Wright Building-Suite 2WIOOO, Washington, DC 20591; Attention: Hearing Docket Clerk, AGC-430.