• ^^D•^;l,i'" ' I T n ^ ••-••-,nl:yi;:i;|M^

r UNITE D STATE S DEPARTMEN T O F TRANSPORTATIO N ^:^| ^ FEDERA L AVIATIO N ADMINISTRATIO N ' I cl uiU. i

WASHINGTON , D C ••; ; J'^i i ? 2 P 2 : i 3 I n th e Matte r

of : WESTER N AI REXPRESS , INC . FA A Orde r

No . 2011- 7 Docke t No . CP09SW000 3 FDM S No . FAA-2009-0280 ' Served : Jun e 13,201 1 DECISIO N AN D ORDER ' Wester n Ai r

Express , Inc . ("Western" ) appeale dfro mth e initia l decisio n issue d b y Administrativ e La w Judg e Isaa c D . Benki n (th e "ALJ") , denyin g Western' s applicatio n for

agen t fee s an dexpense s unde r th e Equa l Acces s t o Justic e Ac t ("th e EAJA") , 5 U.S.C . § 504. ^ Th e EAJ A provide s tha t a n agenc y tha t

conduct s a

n adversar y adjudicatio n shal l reimburs e th e prevailin g part y for fee s an dothe r

expense s incurre di n connectio n wit h tha t

adjudication , includin g reasonabl e attorne y o r agen t fees , unles s th e government' s positio n wa s substantiall y justifie do r specia l circumstance s mak e a n awar d unjust . 5 U.S.C . § § 504(a)(1) , (b)(1)(A) . Th e AL J hel dtha t Wester n was not

entitle dt o reimbursemen t

o f agen t fee s an dexpense s unde r th e EAJ A becaus e Wester n wa s neithe r apart y t o an adversar y adjudicatio n no r aprevailin g party . H e hel dfurthe r tha t th e EAJ A

' Generally , material s file

di n th e FAA Hearing Docke

t (excep t fo r material s filedi

n securit y cases ) ar

e als o availabl e fo

r viewing a t http://www.regulations.gov . 1 4 C.F.R . § 13.210(e)(1) .

' Th e Administrator' s civil penalt y decisions , alon g wit

h indexe s o

f th e decisions , th e rule s o f practice , an

dothe r information , ar

e availabl e o

n th e Internet

a t the following address : www.faa.gov/about/office_org/headquarters_offices/agc/pol_adjiidicatiori/AGC400 / Civil_Penalty . See 1 4 C.F.R . § 13.210(e)(2) . I n addition , Thomson/Wes t

publishe s Federa

l Aviation Decisions . Finally , the decision s ar e availabl e through LEXI S (TRAN S library ) an d WestLa w (FTRAN-FA

A database) . Fo

r additiona l information , se

e the We b site .

' A cop y o f

th e ALJ' s decision denyin g Western' s EAJ A applicatio n i s attache dan dwil l b e referredto i

n thi s decisio n an

dorde r a s "EAJA Initia

l Decision. "doe s no t authoriz e reimbursemen t for th e service s o f

acorporat e employee , suc h a s Western' s representative , wh o i s not a n attorney . I n it s appeal , Wester n challenge s eac h 

## M it o f

th e ALJ' s lega l determinations . ; l Western' s appea l i s denied . Thi s decisio n affirm s th e ALJ' s rejectio n o f ; f Western' s clai mtha t an adversar y adjudicatio n bega n whe n Wester n receive dth e notic e [ ; an dfinal notic e proposin g t o asses s acivi l penalty . Further , thi s decisio n hold s tha t

Wester n wa s no t

aprevailin g party , a s tha t ter mi s use di n th e EAJA , becaus e neithe r th e ALJ' s dismissa l o f

Western' s late-file dreques t for hearin g no r

th e Administrator' s dismissa l o f

Western' s appea l a s moo t constitute dadministrativel y ordere drelief . I . Histor y o f

th e Underlyin g Civi l Penalt y Actio n O n Ma y 28,2008 , th e FA A issue daNotic e o f Propose dCivi l Penalt y ("NPCP") , proposin g t o asses s a$33,00 0 civi l penalt y agains t Wester n for

allege dviolation s o f 1 4 C.F.R . § 119.5(1). ^ O n Jul y 23 , 2008 , th e FA A sen t aFina l Notic e o f

Propose dCivi l Penalt y ("FNPCP" ) t o Wester n becaus e Wester n ha dnot replied t o th e NPCP. ^ O n Augus t

11 , 2008 , a n FA A inspecto r delivere d"courtes y copies " o f th e NPC P an dFNPC P t o Jame s Nyerges , Western' s Chie f Pilot , Directo r

o f Maintenance , an d Directo r o f Operations .

• * 1 4 C.F.R . § 119.5(1 ) provide s tha t "[n] o person ma

y operat e a n aircraf t unde r thi s part , par t 52 1 o f thi s chapter , o

r par t 13 5 o f thi s chapte

r i n violatio n of

a n ai r carrie r operatin g certificate , operatin g certificate , o r appropriat

e operation s specification s issue dunde r thi s part. "

' Unde r 1 4 C.F.R . § § 13.16(f)(2)((iii ) an d(iv) , aperso n ha s n o mor e tha n 3 0 day s afte

r receivin g th e NPC P to , amon g othe r options , reques t

a n informa l conferenc e wit

h a n agency attorney or

aforma l hearing befor

e a n ALJ .O n Augus t 18 , 2008 , Wester n sen t

areques t for an informa l conferenc e t o th e agenc y attorne y b y facsimile . Th e nex t day , th e agenc y attorne y denie dth e request , an d issue dan orde r

assessin g a$33,00 0 civi l penalt y ("OACP"). * O n Septembe r

4 , 2008 , Wester n sen t

areques t for hearin g t o th e Hearin g Docket . I n response , rathe r

tha n fil e acomplaint , th e FA A filed amotio n t o dismis s Western' s reques t fo r hearin g unde r

1 4 C.F.R . § 13.208(d) . I n th e motion , th e FA A argue dtha t Western' s Septembe r

4 , 2008 , reques t

for hearin g was late-filed . Th e agenc y attorne y explaine dtha t

whil e Wester n ha d1 5 day s fi^omth e receip t o f th e FNPC P t o reques t

a hearin g unde r

1 4 C.F.R . § § 13.16(d)(2 ) an d13.16(g)(2)(ii), ^ i t di dnot submi t th e reques t unti l 4 3 day s after

th e FNPC P wa s maile doriginall y an d2 4 day s after th e FA A inspecto r hand-delivere da"courtes y copy. " (Motio n t o Dismis s a t 4. ) Wester n responde dt o th e motio n t o dismiss , arguin g tha t i t di dno t receiv e th e copie s o f th e NPC P o r

FNPC P tha t

th e agenc y attorne y ha dsen t b y certifie do r

b y regular mail ^ an dtha t

th e loca l pos t

offic e i s unreliable . (Answe r t o Complainant' s Motio n t o Dismis s Respondent' s Reques t for aHearin g a s Untimel y Filed , date dSeptembe r 24 ,

* A person ha s no mor

e tha n 1 5 day s afte

r receip t of th e FNPCP t

o reques t aforma l hearin g an ddoe s no t hav e th e right

b y regulatio n to a

n informa l conferenc e unde

r 1 4 C.F.R . § 13.16(g)(2) . The agenc y ha s stated , however , tha t a n agency attorney ha s th e discretio n an d authorit y t o hol da n informa l conferenc e eve

n afte r issuin g a n FNPCP . 5 5 Fed . Reg . 27548 , 2755 9 (July 3 , 1990) . Th e agency ma y issu e a n Orde r Assessin g Civil Penalt

y i f th e person doe s no t reques t ahearing withi n 1 5 day s afte r receip t of th e FNPCP . Unde

r 1 4 C.F.R . § 13.16(d)(2) , a n agency attorney ma

y issu e a n "orde r assessin g civi l penalt

y .. . i f aperso n chargedwit

h a violatio n doe s no

t reques t ahearin g unde

r paragraph (g)(2)(ii ) of

thi s section withi

n 1 5 day s afte

r receip t of afinal notic e o f

proposedcivil penalty. " ^ See n . 6 supra . * The certificate s o f

servic e attachedto th e NPC P an dFNPC P sho w tha t th e agency sen

t thes e document s t

o Wester n b y certified , retur

n receipt mail , a s wel

l a s b y regula r mail . Th e certifiedmail envelope s wer e returne dt

o th e agency attorney stampe d"UNCLAIMED. " Accordin g to the agenc y attorney , the NPC P an dFNPCP sen

t b y regula r mail wer e not returned .2008. ) Wester n explaine dtha t i t ha dfiledit s reques t

fo r hearin g withi n fewe r

tha n 3 0 day s after th e FA A inspecto r

delivere dth e NPCP , an dtherefore , it s reques t for hearin g was timel y filedunde r

1 4 C.F.R . § 13.16(f)(2). ' Th e AL J rejecte dWestern' s argumen t tha t i t ha dfiledth e reques t

fo r hearin g i n a timel y fashion . Th e AL J explaine dtha t Wester n wa s no t

entitle dt o ignor e th e FNPCP , whic h "plainl y an dunmistakabl y advised " Wester n tha t i t ha d1 5 day s firomth e dat e o f receip t t o reques t

ahearing . Th e AL J wrote : Eve n i f w e accep t

th e contentio n tha t

th e 15-da

y perio dfor

filing areques t

for hearin g di dnot

begi n t o ru n unti l Augus t 1 1 (th e dat e o n whic h th e FA A inspecto r hand-delivere dth e notice s t o Mr . Nyerges) , th e Respondent' s reques t fo r a hearin g wa s stil l ou t

o f time . Th e 15-day perio dexpire do n Augus t 26 , 1 5 day s after th e dat e o f

hand-delivery . (Initia l Decisio n a

t 3.)^ ° Wester n filed anotic e o f appea l fro mth e ALJ' s orde r dismissin g th e reques t

for hearing , an dsubsequentl y perfecte dtha t appea l b y filing a

n appea l brief . O n Februar y 17 , 2009 , th e FA A withdre w th e NPCP , FNPC P an dOACP , an dfiled amotio n requestin g tha t

th e Administrato r

dismis s Western' s appeal a s moot . Th e Administrato r dismisse dWestern' s appea l a s moo t o n Marc h 12 , 2009 , b y FA A Orde r No . 2009-5 .

' See n . 5 , supra .

' " The AL J rejectedWestern' s contentio n tha t bot h certifiedletter s "went

astray " and , instead , foun

dtha t Wester n ha dneglecte dt o pic

k u p the certifie

dletter s eve

n though notice s ha

d bee n placedi n it s mai l bo x abou t tha t certifiedmai

l fromthe FAA . He wrote : A progra mo f regulation , suc

h a s tha t administere db

y th e Federa

l Aviatio n Administration , cannot

b e carrie dout

i n th e publi c interes t

if partie s subjec t

t o th e regulation s couldavoidtheir responsibilitie s simpl

y b y refiising t o accep t

mai l fromth e regulator y agency . I

t i s plain to m

e tha t tha t i s wha t Responden

t sough t t o do . (Initia l Decisio n at

3-4. )II . Histor y of th e EAJ A Actio n O n Apri l 1,2009 , Wester n applie dfo r a n awar dunde r

th e EAJ A o f

fee s an d expense s tha t

i t incurre di n connectio n wit h thi s civi l penalt y action . Wester n sough t reimbursemen t

fo r fee s pai dt o Mr . Nyerges , it s non-attorne y agen t an drepresentative , for wor k startin g o n Augus t

11 , 2008 , th e dat e o n whic h th e FA A inspecto r delivere dth e NPC P an dFNPCP . Wester n argue di n it s applicatio n tha t i t wa s th e prevailin g part y becaus e th e FA A withdre w th e NPCP , FNPC P an dOAC P an dth e Administrato r subsequentl y dismisse dWestern' s appea l fro mth e ALJ' s order . (Applicatio n a t ^ ^ -1-8. ) I n it s answe r

t o th e application , th e FA A argue dtha t Wester n wa s no t

entitle dt o an awar dbecaus e Wester n wa s not aprevailin g part y i n an adversar y adjudicatio n an d tha t th e EAJ A doe s not

permi t reimbursemen t

o f fee s pai dt o an employee . Wester n subsequentl y filedit s reply . It argue dtha t

Ki mHall , Western' s president , wa s Western' s onl y employe e an dth e corporation' s "tru e alte r eg o an d principal, " an dtha t

Mr . Nyerges , an independen t consultant , was it s agent . (Repl y at 5-6. ) Th e AL J issue dhi s initia l decisio n denyin g Western' s applicatio n for fee s an d expense s o n Jun e 19 , 2009 , finding tha t (1 ) ther e wa s n o adversar y adjudication ; (2 ) Wester n wa s no t

aprevailin g party ; an d(3 ) th e EAJ A doe s not permi t reimbursemen t o f th e tim e spen t

b y acorporat e employee . (EAJ A Initia l Decisio n at 2-3. ) Wester n filed anotic e o f appea l fro mth e ALJ' s EAJ A initia l decisio n an d perfecte dtha t

appea l b y filing an appea l brie f Th e FA A filed arepl y brief .i n . Discussio n

A . Adversar y Adjudicatio n Unde r th e EAJA , an agenc y tha t conduct s an adversar y adjudicatio n shal l awar d t o aprevailin g part y fee s an dothe r expense s incurre db y tha t party i n certai n circimistances . 5 U.S.C . § 504(a)(1 ) Contrar y t o Western' s assertion , a n adversar y adjudicatio n di dnot

begi n wit h it s receip t

o f th e NPC P an dFNPCP . Th e EAJ A define s th e ter m"adversar y adjudication " a s "a n adjudicatio n unde r [ 5 U.S.C. ] sectio n 55 4 .. . i n whic h th e positio n o f th e Unite dState s i s represente db y counse l o r

otherwis e .... " 5 U.S.C . § 504(b)(1)(C) . Sectio n 55 4 o f Titl e 5 applie s onl y t o adjudications " "require db y statut e t o b e determine do n th e recor dafter opportunit y fo r an agenc y hearin g ..., " wit h si x exception s no t pertinen t i n thi s case . 5 U.S.C . § 554 . Th e FAA' s regulation s implementin g th e EAJ A cove r "adjudication s unde r

5 U.S.C . § 55 4 i n whic h th e positio n o f th e FA A i s represente db y a n attorne y .. . wh o enter s an appearanc e an dparticipate s i n th e proceeding. " 1 4 C.F.R . § 14.02 . Th e FAA' s EAJ A regulation s provid e furthe r tha t regardin g FA A civi l penalt y proceedings , "fee s ma y b e awarde donl y for

wor k performe dafter

th e issuanc e o f

acomplaint. " 1 4 C.F.R . § 14.05(e) . Wester n argue s tha t

"i t i s clear tha t th e essentia l characteristi c o f an adversar y adjudicatio n i s th e opportunit y fo r an agenc y hearing " an dtha t "[t]h e poin t

a t whic h thi s opportunit y [for

ahearing ] arise s .. . i s th e poin t at whic h aproceedin g ca n first b e considere da

n adversar y adjudication. " (Appea l Brie f a t 5. ) I n response , th e FA A argue s tha t a n adversar y adjudicatio n doe s no t begi n unti l acomplain t

i s filed.

" The ter m"adjudication " i s definedbroadl y i n th e Administrativ e Procedur e Act , 5 U.S.C . § 551(7) , a s th e "agenc y proces s fo r the formulation o f

a n order" , an

dth e ter m"order " i s define da t 5 U.S.C . § 551(6 ) a s "th e whol e o r apar t of afinal disposition , .. . o f

a n agency i n a matte r other tha n rul e making bu t

includin g licensing. "Althoug h acivi l penalt y actio n i s initiate db y th e sendin g o f aNPC P b y an agenc y attorney , 1 4 C.F.R . § 13.16(f) , an adversar y adjudication , a s tha t ter mi s use di n th e EAJA , doe s no t

begi n wit h th e issuanc e o f aNPCP . I n th e NPC P an dth e FNPCP , th e agenc y attorne y state s tha t basedupo n a

n investigation , i t

appear s tha t

aperso n ha s violate dastatut e an do r

regulation s an di t

propose s t o asses s acivi l penalty . A n admuiistrativ e la w judg e i s no t involve ddurin g thes e informa l proceedings.' ^ Th e FA A i s no t require dt o file eithe r

th e NPC P o r

th e FNPC P i n th e Hearin g Docket . Se e 1 4 C.F.R . § § 13.1 6 (f

) an d(g) . I n contrast , whe n acomplain t i s filedi n th e Hearin g Docket , aformal proceedin g befor e a n AL J begin s with th e agenc y attorne y representin g th e FAA' s positio n tha t

violation s hav e occurre dan dtha t acivi l penalt y i s appropriate . Th e partie s i n a

n adversar y adjudicatio n see k resolutio n o f

thei r disput e b y a

n adjudicativ e official , suc h a s a n ALJ . I n Ernes t Wilson , FA A Orde r

No . 1990-1 7 (Apri l 9 , 1990) , th e Administrato r hel d tha t an applican t

i s no t entitle dt o fee s incurre di n connectio n wit h aNPC P an dinformal

' ^ The FA A explaine dth e rational e fo r thi s informa

l proces s i n th e preambl e t o th e final rul e settin g fort

h revise dinitiatio n procedure s an dne w procedura

l rule s i n FA A civil penalt

y action s afte

r Congres s authorize dth e FA A to asses s som

e civil penalties . The FA

A wrote : Basedo n th e FAA' s experienc e i

n certificat e action , th e FA

A believe s tha

t ahearing o

n th e allegation s containedi

n anotice , whic

h i s merel y aproposal , i s premature . Th e notic e i s issuedafte

r th e FA A ha s completeda

n investigatio n o

f th e allegations . However , th e individua

l ma y o r ma y not have take n par t i n th e investigator

y process... . Therefore , th e rul e provide s a n opportunit

y fo r informa l proceeding s i

n whic h a n individua l ma y submit information o

r discus s the matte

r wit h a n agency attorney . Thes e informa l proceeding s enabl e a

n individua

l to submi t information includin g mitigating factor s o r extenuatin g circumstance s tha t ma y affec t th e FAA' s decisio n t

o continu e to prosecut e acivil penalt

y action . Th

e FA A view s the informa

l proceeding s as a

n opportunit y to narro w the difference s betwee n th e partie s wit

h th e intentio n of

settlin g a civi l penalt

y action . Eve

n i f the partie s cannot

agree to settl e th e matter , th e informa l proceeding s serv e to focu s an y remainin g unresolve dissues . 5 3 Fed . Reg . 34646 , 3464 8 (Septembe r 7 , 1988 ) (emphasi s added. )conferenc e wit h a n agenc y attorney . I n tha t case , th e agenc y issue daNPC P an d subsequentl y withdre w i t afte r an informa l conference . Wilso n submitte dan EAJ A application . Th e Administrato r rejecte dth e application , holdin g tha t lega l expense s incurre dprio r

t o th e filing o f

th e orde r o f civi l penalt y a s th e complaint' ^ ar e not incurre d i n connectio n with an adversar y adjudication , an dhence , wer e no t reimbursabl e unde r

th e EAJA . Accordingly , contrar y t o Western' s argument , th e issuanc e an dreceip t o f th e NPC P an dth e FNPC P i n thi s cas e di dno t mar k th e beginnin g o f

an adversar y adjudicatio n althoug h i n thes e documents , th e FA A offere dWester n th e optio n t o reques t aforma l hearin g governe db y 1 4 C.F.R . Par t 13 , subpar t

G . I n thi s case , Wester n forfeite dtha t

optio n b y failin g t o reques t ahearin g i n atimel y fashion.' " B . Prevailin g Part y Statu s Ordinarily , i n th e Unite dStates , eac h part y i s responsibl e for it s ow n attorney' s fee s an dcosts , an dtherefore , th e winne r i s not abl e t o obtai n reimbursemen t o f it s litigatio n expense s fi-omth e loser . However , numerou s statute s permi t acour t t o awar d

' ^ The origina

l procedura

l rule s require dtha

t afte r receivin g areques t

fo r hearing , th e agency attorney wouldissu e a n orde r o f civi l penalt

y an dfile i t a s th e complain

t i n th e Hearin g Docket . 1 4 C.F.R . § § 13.16(h) an d13.20 8 (publishe da

t 5 3 Fed . Reg . 34646 , 34655 , 3465 7 (Septembe r 7 , 1988) . Subsequently , the FA A receive dobjection s tha

t th e issuanc e of

a n orde r o f civi l penalt

y prio r to ahearin g "create s a

n apparen t presumptio n of

guilt befor e an y hearin g ha s bee n held. " 5 5 Fed . Reg . 7980 , 798 1 (March 6 , 1990) . hi response , th e FA A proposedt o amen

d th e rule s s o tha

t i f a n agency attorney receivedareques t fo r hearing , th e agency attorney would file acomplain

t bu t wouldno t issu e a n orde r of civi l penalty , an

dthes e change s wer

e adoptedi

n a final rule . 5 5 Fed . Reg . 15110 , 15112 , 15129 , 1513 0 (Apri l 20 , 1990) . Als o i n tha t final rule , the FA A conformedthe EAJ

A procedura

l rule , 1 4 C.F.R . § 14.05(e) , changing i t from"[f]ee s ma

y b e awardedonl

y fo r wor k performe dafte r th e issuanc e of

a n Order o f Civi l Penalt y (5 4 Fed . Reg . 46196 , 4620 1 (Novembe

r 1 , 1989) ) to "[fjee s ma

y b e awardedonl

y fo r wor k performe dafte r the issuanc e o f acomplaint. " 5 5 Fed . Reg . a t 1512 5 an d1513 1 (emphasi s added) .

' " The issu e of

whethe r a n adversar y adjudication begin s whe

n a n agency attorne

y files a motion t o dismis s alate-filedreques t fo r hearing , instea

dof acomplaint , i s no t

decidedherein becaus e i t was no t raisedor briefe db y either party .attorney' s fee s an d expense s t o th e prevailin g part y i n certai n circumstances .

Buckhanno n Bd . an d Car e Home , Inc . v . Wes t Virgini aDept . o f

Healt h an d Huma n Resources , 53 2 U.S . 598 , 60 2 (2001) . Th e EAJ A i s on e o f thos e fee-shiftin g statutes . Th e EAJ A i s als o awaive r b y th e Federa l governmen t o f it s sovereig n immunity , an d consequently , i t

"mus t b e construe dstrictl y i n favo r o f th e government. " Arono v v . Napolitano , 56 2 F.3 d 84 , 8 8 (f ' Cir . 2009) . Buckhanno n i s th e leadin g cas e regardin g wh o i s aprevailin g part y unde r fee

shiftin g statutes . Tha t

cas e aros e afte

r th e Wes t Virgini aDepartmen t

o f Healt h an d Huma n Resource s (Wes t Virgini aHHS ) issue dceas e an d desis t order s requirin g th e closur e o f th e assiste dlivin g facilitie s operate db y Buckhaimo n because , contrar y t o Wes t Virgini alaw , som e o f

th e resident s o f

thos e facilitie s wer e incapabl e o f escapin g i n th e even t o f a n emergency . Buckhanno n filedalawsuit , arguin g tha t th e Wes t Virgini a"self

preservation " requiremen t violate dth e Fai r

Housin g Amendment s Ac t (FHAA ) an d th e American s wit h Disabilitie s Ac t (ADA ) an d seekiti g declaratory an d injunctiv e relief. Whil e th e cas e was pending , th e Wes t Virgini alegislatur e eliminate dth e "self

preservation " requirement , an d th e distric t court grante dth e Wes t

Virgini aHHS' s motio n t o dismis s Buckhannon' s lawsui t a s moot . Subsequently , Buckhanno n sough t reimbursemen t

o f it s attorney' s fee s an d expense s unde r

th e FHAA' s an dADA' s fee-shiftin g provisions . Th e Suprem e Court hel dtha t th e ter m"prevailin g party " i s ater mo f art , an d tha t

i t applie s t o apart y whic h ha s bee n awarde dsom e materia l relie f b y acourt

o n th e merit s o f

at leas t som e o f it s claims . Buckhannon , 53 2 U.S . a t 603 . Th e Court

explaine dtha t

"enforceabl e judgment s o n th e merit s an d court-ordere dconsen t decree s creat e th e 'materia l alteratio n o f th e lega lrelationshi p o f th e parties ' necessar y t o permi t a n awar do f

attorne y fees. " Id . a t

604 . Th e Cour t

rejecte dth e "catalys t

theory, " unde r

whic h aplaintif

f i s th e "prevailin g party " i f i t achieve dwha t

i t sough t i n th e lawsui t

simpl y becaus e th e defendan t voluntaril y change dit s conduc t

whe n face dwit h alawsuit . Th e Court state dtha t

" adefendant' s voluntar y chang e i n conduct , althoug h perhap s accomplishin g wha t th e plaintif

f sough t t o achiev e b y th e lawsuit , lacks th e necessar y judicia l imprimatu r o n th e change. " Id . at 605 . Base dupo n thi s reasoning , th e Suprem e Court affirme dth e judgmen t

o f th e cour t o f appeal s tha t

Buckhanno n wa s not

th e prevailin g party . Th e court s hav e hel dtha t th e Buckhanno n standar dfor prevailin g part y statu s applie s broadl y t o othe r

federa l fee-shiftin g statute s usin g th e ter m"prevailin g party. " E.g . Aronov , 56 2 F.3 da

t 88-89 . Th e court s hav e applie dth e Buckhanno n standar dwhe n determinin g whethe r

apart y wa s aprevailin g part y imde r th e portio n o f

th e EAJA , codifie dat

2 8 U.S.C . § 2412(d)(1)(A) , permittin g a n awar do f

attorney s fee s an d expense s incurre db y aprevailin g part y othe r than th e Unite dState s i n acivi l actio n brough t b y o r agains t th e Unite dStates.' ^ E.g. , M av . Chertoff , 54 7 F.3 d34 2 (2 dCir . 2008) ; Biodiversit y Conservatio n Allianc e v . Stem , 51 9 F.3 d122 6 (10* ^ Cir . 2008) ; Carbonel l v . Immigratio n an dNaturalizatio n Service , 42 9 F.3 d894 , 897-89 8 (9 * Cir . 2005) ; Thoma s v . Nationa l Scienc e Foundation , 33 0 F.3 d48 6 (D.C . Cir . 2003) . Likewise , Buckhanno n wa s applie di n arecen t cas e involvin g th e simila r EAJ A provisio n codifie da

t 5 U.S.C . § 50 4 - th e EAJ A provisio n involve di n thi s cas e - permittin g a n

' ^ "Excep t a s otherwis e specificall

y providedb

y statute , acour

t shal l awar dt o a prevailin g part

y othe r tha n th e Unite dState s fee s an

dothe r expense s .. . incurre db

y tha t part y i n an y civi l action .. . brough

t b y o r agains t the UnitedState s .. . unles s the cour t finds tha t the positio n o f

the Unite dState s wa s substantially justifie dor tha t specia l circumstance s mak

e a n awar dunjust. " 2 8 U.S.C . § 2412(d)(1)(A) . 1 0adjudicativ e office r t o awar dattorney' s fee s an dexpense s incurre di n connectio n wit h an agenc y adversar y adjudication . Turne r v . NTSB , 60 8 F.3 d1 2 (D.C . Cir . 2010. ) Th e Buckhanno n standar dha s bee n "distilled " b y th e Unite dState s Court o f Appeal s for

th e Distric t

o f Columbi aCircuit

a s follows : (1 ) ther e mus t

b e acourt-ordere dchang e i n th e lega l relationshi p o f th e parties ; (2 ) th e judgmen t

mus t b e i n favo r

o f th e part y seekin g fees ; an d (3 ) judicia l relie f

mus t accompan y th e judicia l pronouncement . Turner , 60 8 F.3 dat

1 5 (citin g Distric t

o f Columbi av . Strauss , 59 0 F.3 d898 , 90 1 (D.C . Cir . 2010) ; Thomas , 33 0 F.3 dat 493 . Th e first

an dthir dstep s "combin e t o requir e th e movan t t o demonstrat e th e existenc e o f som e for mo f court-ordere djudicia l relie f tha t result s i n achang e i n th e lega l relationshi p o f th e parties. " Poet t

v . Unite dStates , 74 2 F.Supp . 2 d113,11 6 (D.D.C . 2010) . Court s hav e applie dBuckhanno n i n case s i n whic h th e part y seekin g fee s wa s th e defendan t i n th e underlyin g litigation . Fo r example , i n Mr . L . v . Sloan , i t was explaine d tha t "th e rul e o f

Buckhanno n applie s at

th e first ste p o f th e analysis , regardles s o f whethe r th e part y seekin g fee s i s aplaintif f o r defendant. " 44 9 F.3 d405,40 7 (2 dCir . 2006) . Th e court explained , "[a] s applie dt o prevailing-defendan t cases , Buckhanno n require s onl y tha t th e judgmen t

or consen t decre e b e entere di n th e defendant' s favor , no t tha t th e defendan t b e accorde dsom e 'relie f i t ha dsought. " Id . at

407 , n.l . Similarly , i n Turne r

v . NTSB , acour t

applie dBuckhanno n t o determin e whethe r th e respondent s - tw o pilot s whos e airma n certificate s ha dbee n suspende db y th e FA A - wer e prevailin g partie s for EAJ A purposes . I n tha t case , th e FA A withdre w th e order s o f

1 1suspensio n whic h i t ha dfileda s th e complaints,' ' an dth e Nationa l Transportatio n Safet y Boar d(NTSB ) AL J dismisse dth e cases . O n petitio n for revie w o f

th e NTSB' s decisio n rejectin g th e pilots ' EAJ A application , th e cour t hel dtha t th e pilot s wer e no t

prevailin g partie s becaus e th e ALJ' s orde r dismissin g th e cas e wa s withou t prejudic e and , consequently , di dnot

provid e administrativ e relie f Th e court

explaine dtha t

"th e orde r o f th e AL J dismissin g th e case s was jus t an administrativ e housekeepin g measure , no t a for mo f relief , becaus e th e FA A di dno t nee dth e ALJ' s permissio n t o withdra w a complainf ' unde r

th e applicabl e NTS B procedura l rule.' ' Turner , 60 8 F.3 dat 16 . I n ligh t o f th e foregoin g discussion , therefore , i t i s appropriat e t o appl y Buckhanno n whe n determinin g whethe r arespondent' ^ i n aFA A civi l penalt y actio n wa s aprevailin g party . Likewise , Buckhanno n shoul db e applie dt o determin e whether , a s i n thi s case , th e recipien t

o f aNPCP , FNPC P o r

a n OACP , i s aprevailin g part y i n aFA A civi l penEilt

y actio n after

th e FA A withdraw s thes e documents . Unde r Buckhannon , Wester n wa s no t aprevailin g party . First , th e AL J di dnot issu e an orde r

i n Western' s favor . O n th e contrary , th e ALJ foun dtha t Westem' s reques t for hearin g was late-file dand , consequently , Wester n was no t entitle dt o ahearing . Second , th e Administrator' s orde r finding tha t

th e cas e wa s moo t

an ddismissin g Westem' s appea l wa s no t ajudicia l pronouncemen t i n Westem' s favor . Wester n

' * Unde r th e NTSB' s rule s o f

practice , acertificat

e holde r whos e certificat

e i s suspended b y th e FA A Administrator

ma y file a n appea l fromth e Administrator' s orde r of suspension wit

h th e NTSB . 4 9 C.F.R . § 821.30(a) . Whe n th e certificat

e holde r files a n appeal , th e Administrato

r files th e orde

r of suspension a s the complaint . 4 9 C.F.R . § 821.31(a) . ' ^ "Excep t i n th e cas e of.. . acomplaint... , pleading s ma y b e withdraw n onl

y upo n approva l of the la w judg e o r th e Board. " 4 9 C.F.R . § 821.12(b) . ' ^ Th e ter m"respondent " i s define

di n th e FA A procedura

l rule s a s " aperson , corporation o r compan y name di n acomplaint. " 1 4 C.F.R . § 13.20 2 ("Responden

t " ) 1 2benefite dfro mth e agenc y attorney' s unilatera l withdrawa l o f th e NPCP , FNPC P an d OACP , bu t

th e Administrator' s orde r i n n o wa y adde dt o tha t

benefi t becaus e i t

di dno t direc t o r requir e th e FA A t o tak e o r refirain fro man y action . Th e Administrator' s dismissa l neithe r

approve do f

th e withdrawal s no r

protecte dWester n agains t future enforcemen t

actio n o n th e sam e allegation s becaus e th e dismissa l wa s no t adecisio n o n th e merit s regardin g an y allege dviolations . Indeed , becaus e acomplain t wa s not filed, th e agenc y attorne y neve r presente dan y allegation s o f regulator y violation s t o th e ALJ . Th e dismissa l di dnot

specif y whethe r

i t wa s wit h o r

withou t prejudice , an da s aresult , i t was withou t

prejudice . Se e Turner , 60 8 F.3 da t 15-1 6 (findin g tha t

th e NTS B ALJ' s dismissa l o f

acomplain t

tha t wa s silen t

o n th e issu e o f

prejudic e constitute dadismissa l withou t prejudice. ) Hence , th e Administrator' s orde r dismissin g th e appea l a s moo t di d not brin g abou t

amateria l chang e i n th e lega l relationshi p betwee n th e FA A an dWestern . Th e Administrator' s orde r dismissin g Westem' s appea l wa s n o mor e tha n ahousekeepin g matter , becaus e unde r

1 4 C.F.R . § 13.16 , th e agenc y attorne y di dnot nee dpermissio n t o withdra w th e NPCP , FNPC P o r th e OACP . Thus , an y relie f tha t Weste mreceive dlacke d administrativ e imprimatur . Weste margue s tha t

th e Administrator' s decisio n i n KD S Aviatio n Corp. , FA A Orde r

No . 1991-5 2 (Octobe r

28 , 1991 ) support s it s argumen t tha t i t i s aprevailin g party . I n tha t

case , th e Administrato r

hel dtha t th e EAJ A applican t

wa s aprevailin g part y whe n th e FA A withdre w th e NPC P an dth e complaint , an dth e AL J dismisse dth e case . Th e Administrato r

pointe dt o 1 4 C.F.R . § 14.20(c)(4 ) (no w 1 4 C.F.R . § 14.20(c)(5)) , whic h provide dtha t

afinal dispositio n [3 0 day s fi"omwhic h an EAJ A applicatio n i s due ] include s afinal orde r

o r an y othe r

final resolutio n o f

aproceeding , suc h a s asettlemen t o r

1 3voluntar y dismissal , whic h i s no t subjec t t o apetitio n for

reconsideration . Id . a t

5 . Th e Administrato r

conclude dfiro

mth e inclusio n o f

"voluntar y dismissal " i n th e definitio n o f "fina l disposition " tha t

th e agency' s EAJ A rule s contemplate dtha t th e FAA' s voluntar y withdrawa l o f

acomplain t

coul dserv e a s th e basi s fo r an EAJ A claim . Id . Westem' s relianc e upo n KD S Aviatio n Corp . i s misplaced . KD S Aviatio n Corp . involve dth e withdrawa l o f acomplaint , whil e i n th e cas e a t bar , th e agenc y attorne y neve r filed acomplaint . Also , a s th e Administrato r note di n Gree n Aviatio n Managemen t Co. , "[i] n ligh t

o f Buckhannon' s requiremen t for ajudiciall y sanctione dorde r causin g a materia l alteratio n i n th e lega l relationshi p o f th e partie s .. . i t

appear s tha t

th e principle s announce di n KD S Aviatio n Corp . shoul db e reconsidered. " FA A Orde r No . 2010- 4 at

4 (Jun e 14 , 2010) . Further , th e cour t i n Cadki n v . Loose , 56 9 F.3 d114 2 (9 * Cir . 2009 ) overturne dth e cas e o n whic h th e Administrato r reliedi n KD S Aviatio n Corp. , Corcora n V . Columbi aBroadcastin g System , Inc. , 12 1 F.2 d57 5 (9'* ' Cir . 1941), " t o th e exten t tha t it wa s contrar y t o Buckhannon . Th e AL J hel dtha t

h e wa s require dt o conclud e tha t Weste mwa s no t

th e prevailin g part y becaus e th e recor dcontaine dn o evidenc e regardin g th e reaso n behin d th e FAA' s withdrawa l o f it s allegation s agains t

Westem . (EAJ A Initia l Decisio n a t 3. ) I n Buckhannon , th e Suprem e Court rejecte dadefinitio n o f

prevailin g part y tha t

migh t requir e court s t o analyz e " adefendant' s subjectiv e motivation s i n changin g it s conduct. " Buckhannon , 53 2 U.S . at 609 . Accordingly , whil e affirmin g th e ALJ' s fiinding tha t

" I n Corcoran , th e cour

t hel dtha t th e defendant s wer

e prevailin g partie s afte

r th e plaintif f move dvoluntarily fo

r dismissa l o f it s complain

t an dth e judg e issueda

n orde r dismissing th e cas e without

prejudice . Corcoran , 12 1 F.2da t 576 . 1 4Weste mwa s no t aprevailin g party , th e Administrato r doe s no t aidop t thi s aspec t

o f th e ALJ' s decision.^ " rV . Conclusio n Fo r th e reason s discusse dabove , Westem' s appea l i s denied.^ '

' J . RANDOLP H BABBIT T ADMINISTRATO R Federa l Aviatio n Administratio n

^ ° I n ligh t o f the Administrator' s rejection of Westem' s adversar

y adjudication an

d prevailin g part

y arguments , i

t i s no t necessar y fo r th e Administrator

to decide Westem' s remainin g argumen

t regardin g whethe

r th e EAJ A permit s a

n awar dfo r th e service s o

f a n agent . ^ ' Within 3 0 day s o

f thi s determination , Weste

mma y file a n appea l wit h a n appropriat

e Unite dState s cour

t o f appeals . 5 U.S.C . § 504(c)(2) ; 1 4 C.F.R . 14.29 . See 4 9 U.S.C . § 4611 0 an d1 4 C.F.R . § § 13.235(a)-(c ) (regardin g petition s fo r review o f order s issue db

y th e Administrator. ) 1 5

# SERVE D JUN E 19,200 9 U.S . DEPARTMENT O F TRANSPORTATIO N DE;P T 

### O F TRWORTATIO

N OFFIC E O F HEARING S DOCKET S WASHINGTON , D.C . I N TTI E MATTE RO F WESTER N AI REXPRESS , INC . Fo r fee s an dexpense s under

th e Equal Acces s t o Justic e Ac t

. .EAJA-13002 3 FAA DOCKET NO . CP09SW000 3 DM S NO . FAA-2009-028 0 ADMINISTRATIV E LA W JUDGE' S INTriA L DECISIO N DENYIN G APPLICATIO N FO RFEE S AN D EXPENSE S UNDE RTH E EQUA L ACCES S T O JUSTIC E AC T I n aNotic e o f

Propose dCivi l Penalt

y issue do n Ma

y 28 , 2008 , Weste mAi r

Express , Inc . (Weste mo r Applicant ) wa s charge db y th e Federa l Aviatio n Administratio n (FAA ) wit h operatin g a

n aircraf t o n 6 6 revenu e flight s wit

h a n engin e that

wa s beyon dit s overhau l requirements , i n violatio n o f

§ 119.5(1 ) o f

th e Federal Aviatio n Regulation s (FAR) , 1 4 C.F. R § 119.5(1) . O n September 4,2008 , Weste mattempte dt o challeng e thi s charg e b y requestin g aforma l hearing . Th e FAA move dt o dismis s th e reques t fo r ahearin g a s untimel y and , i n a n order serve do n December

1 , 2008, 1 grante dth e FAA' s motion . Weste mAi r Express . Inc. . FA A Docke t No . CP08SW0007 , DM S No . FAA-2008-1050 , Orde r Grant' g Mo t

t o Dismis s Req . fo

r Hr' g at 4 (Dec . 1 , 2008) . Weste mappeale dm y order . Whil e th e appeal wa s pending , th e FA A withdre w it s clai magains t Westem , an dth e Administrato r

dismisse dth e appea

l a s moot . Weste mAi r

Express . Inc. . FA A Order

No . 2009-5 , Order

Dismiss' g Appeal a

t 2 (Mar . 12 , 2009 ) (Osmtjs , Act' g Adm'r). '

' Thi s order , alon g wit

h other material s relatin g t o civi l penalt y cases , i s availabl e o n th e Interne t a t http://fea.gov/about/ofBcc_org/headquarters_ofFices/agc/pol_adjudication/AGC400/Civil_Penalty/ .

•itt w

### O n Apri l 1,2009 , Wester n filed.th e instant

applicatio n unde r

th e Equa l Acces s t o Justic e Ac t (EAJA) , 5 U.S.C . § 50

4 (2006) , seekin g to recove r fee s an dexpense s allegedl y incurre din it s effor t t o challeng e th e FAA' s assessment . Th e FAA o n May 1 , 200 9 fileda n answer t o th e application , opposin g i t

i n it s entirety . Th e EAJ A entitle s a"prevailin g party " (other than th e Unite dStates ) i n an "adversary adjudication " conducte db y th e federa l agenc y t o recove r fee s an dothe r

ejqjense s incurre db y that part y unles s th e "adjudicativ e ofBcer " o f

th e agenc y wh o conducte dth e adjudicatio n finds that th e positio n o f th e agenc y wa s "substantiall y justified " o r tha t specia l circumstance s make an awardunjust . 5 JJ.S.C . § 504(a)(1) , (b)(1)(D) . T o b e eligibl e for a n award , afor-profi t

corporation , suc h a s Westem , mus t ha dha dane t

wort h o f $ 7 millio n o r

les s an d50 0 o r

fewe r employee s a

t th e tim e th e governmen t initiate dth e adjudicativ e proceeding . 5 U.S.C . § 504(b)(1)(B ) I hol dthat , fo

r several reasons , Weste mdoe s no t qualif y fo r a n award unde r th e EAJA .

. First . Th e Applican t

wa s no t aparty to an "adversar

y adjudication. " Unde r th e FA A regulation s tha

t implemen t

th e EAJA , 1 4 C.F. RPar

t 1 4 (2008) , a n applican t

i s entitle dt o reimbursemen t onl y o f expense s incurre d fo r "wor k performe dafte

r th e issuanc e o f

acomplaint. " 1 4 C.F.R . § 14.05(e) . I n thi s case , rib complain t wa s eve r issued . I n Ernes t

Wilson . Docke t Nos . CP89SW016 6 & EAJA90SW0001 , FAA Orde r No . 90-0017 , Decisio n an dOrder

a t 3 (Apt : 9 , 1990 ) (Busey , Adm'r) , th e Administrato r rejecte da n applicant' s reques t

fo r reimbursement

o f attorney' s fee s unde r th e EAJA , observin g tha t

a"complaint. . .begin s th e adversar y adjudication. " Under

th e FAA' s Rule s o f

Practice , acomplain t

i s filedonl y afte r th e Responden t

make s atimel y reques t

fo r ahearing . 1 4 C.F.R . § 13.16(g)(2)(ii) . I n thi s case , I rule dthat suc h areques t

ha dno t bee n made . Hence , n o complain t

wa s filed, an dther e never wa s a n adversar y adjudicatio n t o whic h th e Applican t coul db e aparty . Th e EAJ A simpl y doe s no t provid e fo

r relie f o n accoim

t o f ever y squabbl e betwee n amember o f th e aviatio n commtmit

y an dth e FAA . Second . Th e Applican t

wa s riot th e "prevailin g party. " Althoug h Weste mmigh t

qualif y a s a"party " unde r

th e definitio n foun di n th e EAJA ^ 5 U.S.C . § 504(b)(1)(B)) , th e court s hav e hel dtha t an applican t

canno t b e regarde da s a"prevailin g party " unles s i t ha s succeede do n th e merit s o f th e

### case . Hanrahan v . Hampton . 44 6 U.S . 754 , 75 8 (1980 ) (Fee s ma y b e

awarde donl y whe n " apart y ha s prevaile do n th e merit s o f at leas t some o f hi s claims,") . I n Buckhanno n v . Wes t Virgini aDepartment

o f Healt h an d Huma n Resources . 53 2 U.S . 598 , 60 5 (2001) , th e Cour t hel dthat apart y wa s entitle dt o fee-shiftin g relie f under .th e American s wit

h Disabilitie s Ac t

an d th e Fai r Housin g Amendment s Ac t only i f tha t part y obtaine da"judicial imprimatur^ that

change dit s relationshi p t o th e opposin g party . Las t year , th e Secon dCircui t

rule dtha t th e Buckhanno n definitio n o f th e term "prevailin g party " applie s t o fee application s unde r th e EAJA . M av . ChertofF . 54 7 F.3 d342,34 4 (2 dCir . 2008) . Tli e Applicant' s paper s assume tha t i t wa s th e "prevailin g party " fo r EAJA purpose s becaus e th e FAA' s clai magains t

i t wa s withdrawn . Tha

t i s a n unwarrante dassimiption . Th e questio n i t

mus t answer is : Wh y wa s th e clai mwithdrawn ? Th e recordo f th e underlyin g proceeding,.o n whic h adecisio n tmder th e EAJ A mus t

b e based , 1 4 C.F.R , § 14.04(a) , i s silen t o n thi s poin t

Absent suc h proof

, I a m require dt o conclud e tha

t th e .ifVpplic.ant.doe

s no t qualif y a s aprevailin g party . Third . Th e bul k

o f th e fund s Weste mha s requeste drelat e t o th e time expende db y it s majorit

y shareholder

and.sol e employee , Jame s Nyerges . S o fa r a s th e recordshows , n o on e excep t Mr , Nyerge s spok

e fo r Weste mi n th e underlyin g proceeding . Mr . Nyerge s say s i n hi s application , tha t Weste m ha s ane t wort h o f zer o andonly on e employee : himself ; al l o f th e asset s use db y Weste mbelon g t o hi mpersona.lly . I n thes e circumstances , Mr . Nyerge s is , i n substance , seekin g reimbursement fo r th e tim e an deffor

t h e expende da s a

n employe e o f

th e Applicant . I t

i s well-establishe dthat

apr o s e litigan t i s no t permitte dt o recover

attorney' s fee s under

th e EAJ A fo

r hi s effort s o n behal f

o f himself ; Se e Sfe C v . Pric e Waterhouse . 4 1 F.3 d805 , 80 8 (2 dCir . 1994) ; Matter

of Whittle . 5 N.T.S.B . 727,72 8 (1985) . h i substance , Mr . Nyerge s wa s conductin g apros e defens e o n behal f o f acorporatio n o f whic h h e i s th e alte r

ego . Th e amount s fo

r whic h h e no w seek s "reimbursement " are largel y ,!ii s qv^ n valuatio n o f

tim e h e spen t

a s a corporate employee . The y ar e no t th e typ e o f

fee s t o attorney s an dagent s an dsimila r litigatio n expe^nses fo

r whic h Congres s authorize d reimbursemen t

unde r th e EAJA . Fo r th e foregoin g rieasons , subjec t t o revie w b y th e Administrator , a s provide di n 1 4 C.F.R . § 14.28 , th e Applicatio n i s denied .& ^



### m S S O ORDERED .

Isaa c D . Benki n Admioistrativ e La w Judg e \ [Note ; Eithe r

part y ma y see k

revie w o f thi s decisio n withi n 3 0 day s afte r i t i s issued . 1 4 C.F.R . § 14.28(a) . Th e Notic e of Appea l mus t

b e file dno t

late r tha n 1 ^ day s afte r servic e of

thi s decisio n (plu s five additiona l days , i f th u decisio n i s serve d b y mail) . 1 4 C.F.R . § § 13.233(a) , 13.211(e) . Th e appea l mus t b e perfecte dwit h a writte n brie f

o r memorandu mno t

late r tha n 3 0 day s afte r

servic e o f thi s decisio n (plu s five additiona l days , i f thi s decisio n i s serve db y mail) . Se e 1 4 C.F.R . § § 13.233(c) , 13.211(e) , 14.28(a) . Th e Notic e o f Appea l an dbriefe r

memorandut n mus t b e eithe r (a ) maile dt o th e Federa l Aviatio n Administration , 80 0 Independenc e Avenue , S.W. , Washington , D.C . 20591 ; Attention : Hearin g Docke t Clerk , AGC 4 430 , Wilbu r

Wrigh t BuOding—Suit e 2W1000 ; o r (b ) delivere dpersonall y o r via ' expedite dcourie r

servic e t o th e Federa l Aviatio n Administration , 60 0 Independenc e Ave. , S.W. , Wabu r

Wrigh t BuUding—Suit e 2W1000 , Washington , D.C . 20591 , \ Attention : Hearin g Docke t Clerk , AGC-430 . 1 4 C.F.R . § § 13.233(a) , 13.210(a)(2) , (1) . A cop y o f

th e Notic e o f

Appea l an dbrie f

shoul dals o b e serve do n eac h partj^ . 1 4 C.F.R . § 1 3 J233(a) . However , if neithe r part y timel y submit s a n applicatio n f<^ r revie w an dth e Administrato r doe s no t decid e t o revie w i t

o n hi s o r he r ow n motion , thi s decisio n shal l becom e final 3 0 day s afte r i t i s issued. ]