### Locair, Inc., and BEFORE THE DEPARTMENT OF TRANSPORTATION OFFICE OF HEARINGS WASHINGTON, D.C. 

## -:':?,;RiMi:NT OF "',~A:<SPORTATiON -:'Y/EI

## OPERATIONS 15~)"'J62I P 12:53

Brian L, Hall, Rory C. Crews, and Pedro E. Baez, Individually, Violations of49 U.S.c. ~41712 and 14CFR Part 374 EnforcementP roceeding Served August 21,2013

Docket OST 2013-0065

JOINT MOTION FOR APPROVAL OFPROPOSED

SETTLEM.ENT AGREEMENT
Pursuant to 14 CFR 302.417(a), the Office of Aviation Enforcement and Proceedings (Enforcement Office), and Respondents Locair, Inc., Brian L. Hall, Rory C. Crews, andPedro E. Baez hereby submit forapproval byYourHonortheattachedproposed consent order negotiated in settlement ofthis proceeding. The Enforcement Office confirms that ithas received documents anddeclarations from Respondents, signed underpenalty ofperjury, stating thatRespondents have refunded all monies owed to all consumers, known to Respondents as ofAugust 15,2013, who purchased tickets with credit cards orcash, whose flights were not operated, and who have filed properly documented refund requests on or before August 15, 2013, with Locair, Inc. The proposed consent order and'settlement requires Respondent Locair, Inc., to cease and desist from further violations of 14CFR Part 374 and 49 U.S.C. 941712. Approval ofthis agreement will conclude the Enforcement Office's investigation into Respondents' compliance with the abovecaptioned provisions andsettles allmatters atissue.inthepending litigation.2 Without admitting or denying the alkgcd violations, Respondents Locaif. Inc.. Brian L. Hall, Rory C. Crews, and Pedro E. Baez, agree ro the term" of the proposed order. The Assistant General Counsel for Aviation Enforcement and Proceedings agrees to the tenus and conditions stipulated in the consent order and recommends that the settlement be approved in the public interest. Both parties jointly move that the settlement embodied in the attached proposed order be approved under 14CFR 302.417( c).

Respectfully submitted,



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Asslsr.ancGeneral CmIDscl Aviation Enforcement and Proceedings

Brian L. HaU 1740 Hudson Bridge Road. Suite 1012 Stockbridge, GA 30281 FOR LOCAffi, TNC.,

Brian L. Hal! 1740 Hudson Bridge Road, Suile 1012 

### Stockbridge, G/, 30281 

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# -b/ '.L------.. ~@(.crews ROrYcrewsl@gmai1:com

Pedro E. Bacz 27700 SW ]64 Ave., Homestead, fL 33031

### Order2013-X-XX

UNITED STATES OFAMERICA DEPARTMENT OF TRANSPORTATION OFFICE OF THE SECRETARY WASHINGTON, D.C. IssuedbytheDepartment ofTransportation ontheXXdayofXX, 2013

.' 

### Locair, Inc., Docket OST 2013-0004 Violations of49 V.S.c. 

## S41712 and 14CFR Part 374
CONSENT ORDER Served XXXX,2013

This order constitutes a settlement of the above-captioned matter between the Office of Aviation Enforcement and Proceedings (Enforcement Office) and Respondents Locair, Inc., (Locair). This order directs Locair to cease and desist from future violations of49 U.S.C. 941712 and 14CFRPart374. Applicable Law Locairissubject tothecreditcardrefund requirements ofRegulation Zand 14CFRPart 374, which implements Regulation Z. Part 374 establishes that, with respect to refund requests involving airline tickets purchased with acredit card, acreditor-here Locair-must transmit acredit statement forapassenger refund tothe credit card issuer within seven business days ofreceipt offull documentation forthe refund requested. Afailure to comply with the rule andprovide suchrefunds within the stipulatedtime periods isconsidered tobe an unfair and deceptive practice inviolation of49 U.S.c. 941712.1 Facts and Conclusion During the time period relevant tothis order, Locair was anair taxi operator registered with the Department under 14CFRPart298andheldanaircarriercertificate issued bythe Federal

1 See, e.g., Eastern Airlines, Inc., Violations qlConsumer Protection Regulations. Order 89-8-50 (August 31, 1989); 8oston-Maine Ainvays CO/p., Violations of~9

## usc ;' 41712 and 14 CFR Part 374. Order 2006-7-7 (July 7,2006); Paragon Air, Inc
.. Violations qf49 USC 

### !i41712 and 14CFRPart 374. Order 2009-7-17 (July 17,2009).2

Aviation Administration (FAA) pursuant to 14 CFR Part 135.2 Locair provided air transportation between points in Florida and the Bahamas. In January 20II, Locair's sole operating aircraft experienced severe mechanical problems, which forced the carrier to cancel all future flights. On March 15,201 I, Locair was sold by Mr. Michael H. Lochmueller to Mr. Brian L. Hall and Mr. Rory C. Crews. As a result of consumer complaints tiled with the Department's Aviation Consumer Protection Division, the Office of Aviation Enforcement and Proceedings (Enforcement Office) conducted an investigation into whether Locair was failing to provide prompt refunds, as required by Regulation Z and Part 374, to all consumers who purchased air transportation on the cancelled flights. That investigation confirmed that the caJTier failed to process numerous credit card refunds within seven business days of the receipt of appropriate documentation for the requested refunds. Locair represented to the Enforcement Office that it had contacted the consumers known to be entitled to a refund and promised to issue refunds. However, Locair failed to issue the refunds as promised. Procedural Posture On April 3, 2013, the Enforcement Office served a formal complaint and notice of enforcement proceeding on Locair and its officers (Respondents). The complaint alleged that Respondents failed in at least ten instances to process refund requests from consumers who purchased air transportation but did not receive the service paid for due to Locair's unilateral cancellation of its operations. These failures violate Regulation Z and 14 CFR Part 374 and constitute unfair and deceptive practices and unfair methods of competition in violation of 49 

### U.S.c. 

## S41712. Following the Enforcement Office's filing of the formal complaint, Locair submitted documentary evidence along with declarations from its officers signed under penalty of perjury, confirming that Respondents have refunded all monies owed to all consumers known to Locair and its officers, who purchased tickets with credit cards or cash, who did not receive the service paid for because the flights were not operated, and who have filed properly documented refund requests on or before August 15,20I3, with Locair. Mitigation In mitigation, Locair states that all of the tickets subject to refunds were sold to passengers while Locairwas under the direction and control of its previous owner, Michael Lochmueller, and that the sales occurred at least six months prior to the new owners, Brian L. Hall, Rory C. Crews, and Pedro E Baez, taking ownership ofthe company. Locair further states that for six months prior to the ownership change, Locair had no operable aircraft capable of passenger service. Locair states that following the purchase of Locair, Brian L. Hall, Rory C. Crews, and Pedro E. Baez paid $20,702.77 in passenger refunds and arranged for other flights for some passengers before exhausting all of their available resources. Locair asserts that the previous owner left Locair heavily in debt and unable to operate flights to and from the
2 Locair isno longer operating andhas surrendered itsaircarriercertificate to theFAA.3

previous owner left Locair heavily in debt and unable to operate flights to and from the Bahamas on Locair aircraft. Messrs. Hall, Crews, and Baez state that while they made efforts to refund passengers, the previous owner made no such attempt and solely benefited from the sale ofthe tickets. Decision Locair's failure to process credit card refund requests within the period required by Regulation Z has harmed consumers and constitutes a violation of 14 CFR Part 374 and an unfair and deceptive practice in violation of 49 U.S.C. 9 41712 that subjects Locair to enforcement action by the Department. In this connection and in order to avoid further litigation, the Enforcement Office and Locair have reached a settlement of this matter. Without admitting or "denying the violations described above, Locair and the Enforcement Office agree to the issuance of this order to cease and desist from future violations of 49 U.S.c. 941712 and 14 CFR Part 374. This settlement is appropriate in view of the nature and extent of the violations in question, serves the public interest, and establishes a deterrent to future similarunlawful practices by Locair and other carriers. This order is issued under the authority contained in 49 CFR Part I and 14CFR 385.11 (d). ACCORDINGLY, I. Based on the above discussion, we approve this settlement and the provisions ofthis order as being inthe public interest. 2. We find that Locair, Inc., violated 14 CFR Part 374 by failing to process in a timely manner refunds for air transportation purchased by credit card on cancelled flights, as required by the Consumer Credit Protection Act and Regulation Z ofthe Board of Governors
"ofthe Federal Reserve System, 15 U.S.C. 99 1601-1693r and 12CFR Part 226; 3. We find that, by engaging inthe conduct and violations described in paragraph 2, above, Locair, Inc., also engaged in an unfair and deceptive practice in violation of 49 U.S.C. 941712; and 4. We order Locair, Inc., and all other entities owned and controlled by, or under common ownership and control with Locair, Inc., and their successors and assignees, to cease and desist from future violations ofRegulation Z, 14 CFR Part 374, and 49 U.S.c. 941712. This order will become a final order of the Department thirty days after its service unless a timely petition for review isfiled orthe Department takes review on its own initiative.


### BY: J.E. Sullivan Administrative Law Judge

An electronic version ofthis document is available at

www.regulations.gov

## SERVICE LIST

ORIGINAL & ONE COPY U.S. Department ofTransportation Dockets Operations, M-30 West Building, Ground Floor Room W12-10 1200New Jersey Avenue, S.E. Washinf,,>ton,

DC 20590 ONE COPY Judge J. E. Sullivan U.S.Administrative Law Judge U.S. Department ofTransportation Office ofHearings, M-20 1200New Jersey Ave., S.E. (E11-310) Washington, DC 20590 Loeair, [ne., Respondent 1100 Lee Wagner Blvd., Suite 307 Fort Lauderdale, FL 33315 Brian L. Hall, Respondent brian@bulldogmarine.biz Rory C. Crew, Respondent roryerews 1@gmaiJ.eom Pedro E. Baez, Responden! pedro@bulldogmarine.biz Clereeee Kroha, Esq. Complainant's Counsel Office ofAviation Enforcement andProceedings, C-70 U.S. Department ofTransportation 1200New Jersey Avenue, S.E. Washington, DC 20590 TEL: 202-366-9041 Samuel Podberesky, Esq., Complainant's Counsel Assistan! General Counsel for Aviation andEnforcement Proceedings U.S. Department ofTransportation 1200New Jersey Avenue, S.E. Washington, DC 20590 Docket No. OST-20 13-0065