Capital Reporting Company

In Re: Colgan Air, Inc. 10-14-2010

(866) 448 - DEPO

www.CapitalReportingCompany.com © 2010

1

 U.S. DEPARTMENT OF TRANSPORTATION

 OFFICE OF HEARINGS

----------------------------x

 : FAA Docket No.

In Re: COLGAN AIR, INC. : CP09EA0017 (Civil

 : Penalty Action)

 Respondent. : DMS No. FAA-2009-0581

----------------------------x

 Washington, D.C.

 Thursday, October 14, 2010

 The following pages constitute the proceedings

held in the above-captioned matter before the

HONORABLE RONNIE A. YODER, appearing telephonically,

before Natalia Kornilova of Capital Reporting

Company, beginning at approximately 2:03 p.m.
Capital Reporting Company

In Re: Colgan Air, Inc. 10-14-2010

(866) 448 - DEPO

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2

1 A P P E A R A N C E S

2 On behalf of the Petitioner:

 CHRISTIAN L. LEWERENZ, ESQUIRE

3 Office of the Regional Counsel, EAL-7

 1 Aviation Plaza

4 Jamaica, New York 11434

 (718) 553-3273

5

On behalf of the Respondent:

6 CHARLES RYAN, ESQUIRE

 Dombroff Gilmore Jaques & French, PC

7 1676 International Drive - Penthouse

 McLean, Virginia 22102

8 (703) 336-8728 / (703) 336-8750

9 Also Present:

 Daniel Morgan, Colgan Air, Inc.

10

 * * * * *

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12

13

14

15

16

17

18

19

20

21

22
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In Re: Colgan Air, Inc. 10-14-2010

(866) 448 - DEPO

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3

1 P R O C E E D I N G S

2 THE COURT: -- need to discuss before we go

3 on the record?

4 MR. LEWERENZ: Not that I know of, Judge.

5 This is Chris Lewerenz.

6 THE COURT: Okay.

7 MR. RYAN: Not that I'm aware of, Your Honor.

8 No, sir.

9 THE COURT: Okay. And reporter?

10 THE COURT REPORTER: Yes, sir.

11 THE COURT: Have you done these for me

12 before?

13 THE COURT REPORTER: I have a couple weeks

14 ago, that's the one that didn't go through.

15 THE COURT: Okay. But you understand, do you

16 not, that -- if you don't understand anything you need

17 to stop us and get it clarified so the transcript will

18 be correct.

19 THE COURT REPORTER: Okay. Thank you, sir.

20 The only thing is I don't know the names at this point.

21 THE COURT: Oh, you don't have the names?

22 THE COURT REPORTER: No, I do not.
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In Re: Colgan Air, Inc. 10-14-2010

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1 THE COURT: Well, you need to get those now

2 then.

3 THE COURT REPORTER: If I may.

4 THE COURT: Did you not get a notice of the

5 prehearing conference?

6 THE COURT REPORTER: I did, it was just a

7 name reference, but no names.

8 THE COURT: Oh, it had a service list on the

9 back. You didn't see the service list?

10 THE COURT REPORTER: I do not have it, sir.

11 THE COURT: You don't have it with you?

12 THE COURT REPORTER: I don't have it at all.

13 I wasn't provided one.

14 THE COURT: Well, I thought you said you got

15 a notice of the prehearing conference.

16 THE COURT REPORTER: I have a worksheet that

17 has the name of the case. That's all I have.

18 THE COURT: Okay, so you didn't get a copy of

19 the notice.

20 Do you have a number there, a fax number

21 where we can send it?

22 THE COURT REPORTER: Yes, sure. It's 202-857-
Capital Reporting Company

In Re: Colgan Air, Inc. 10-14-2010

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5

1 8577.

2 THE COURT: Okay. Ask Joanne to fax the

3 notice to there.

4 THE COURT REPORTER: Thank you so much.

5 THE COURT: And your name again?

6 THE COURT REPORTER: Natasha, N-a-t-a-s-h-a.

7 THE COURT: Natasha. Thank you.

8 But you can go ahead and get whatever

9 information you need.

10 For the FAA it's Christian L. Lewerenz, L-e11 w- e-r-e-n-z.

12 THE COURT REPORTER: Okay.

13 THE COURT: And for Colgan Air, Mr. Ryan? Is

14 that what -- who's appearing for Colgan Air?

15 MR. RYAN: Yes, sir, that's correct. Charles

16 Ryan.

17 THE COURT: Charles Ryan, okay. You didn't

18 make it on to the service list, that's why I was

19 searching for you.

20 MR. RYAN: Oh, okay.

21 THE COURT: And you have with you Mr. Dan

22 Morgan?
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In Re: Colgan Air, Inc. 10-14-2010

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1 MR. RYAN: Right, Dan Morgan.

2 MR. MORGAN: Yes, sir.

3 MR. RYAN: Representing Colgan Air.

4 THE COURT: Is that Dan or Daniel?

5 MR. MORGAN: The formal name is Daniel.

6 THE COURT: Do you need anything else?

7 THE COURT REPORTER: I'm okay. Thank you.

8 THE COURT: Is that enough?

9 THE COURT REPORTER: Yes. I guess three

10 parties --

11 THE COURT: You have my name?

12 THE COURT REPORTER: Yes, sir.

13 THE COURT: Y-o-d-e-r, Ronnie A., R-o-n-n-i14 e.

15 THE COURT REPORTER: Thank you.

16 THE COURT: Yeah. Okay, we'll get started in

17 just a second.

18 (Pause in proceedings.)

19 THE COURT: Okay, let's go on the record.

20 This is a prehearing conference in Colgan Air, Inc. FAA

21 docket CP09EA0017.

22 And on the phone we have, for the FAA,
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In Re: Colgan Air, Inc. 10-14-2010

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1 Christian Lewerenz. And for respondent, Colgan Air, we

2 have Charles Ryan. And Mr. Ryan you have someone with

3 you. Do you want to introduce him to the record.

4 MR. RYAN: Yes, sir. Also on the line is

5 Daniel Morgan, Vice President for Safety and Compliance

6 with Colgan Air, Inc.

7 THE COURT: Okay. And we have a reporter who

8 will transcribe the proceeding. A copy of the

9 transcript automatically goes to the FAA and to the

10 judge. The FAA pays for the transcript, so they get

11 one. Mr. Ryan, if you need a copy you'll need to raise

12 that with the court reporter.

13 MR. RYAN: Very well, sir. Thank you.

14 THE COURT: Okay. I wanted to see if we

15 could clarify just what is at issue here. I gather we

16 have two regulations involved and two flights. Is that

17 correct, Mr. Lewerenz?

18 MR. LEWERENZ: Yes.

19 THE COURT: And so how many violations are

20 you alleging?

21 MR. LEWERENZ: Well, using the flight

22 attendant who was not trained on two flights is two
Capital Reporting Company

In Re: Colgan Air, Inc. 10-14-2010

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1 violations by way of conduct, although the two

2 regulations alleged the conduct is a very close nexus.

3 THE COURT: Yeah, my question is how many

4 violations are you alleging?

5 MR. LEWERENZ: Two.

6 THE COURT: Not four?

7 MR. LEWERENZ: No.

8 THE COURT: Okay. All right. Well, let's

9 look at the first one, the first regulation.

10 Now that has to do with establishing and

11 implementing a training program. Is that right?

12 MR. LEWERENZ: Establishing, obtaining and

13 providing a training program, yes.

14 THE COURT: Establishing and implementing a

15 training program. Is that right?

16 MR. LEWERENZ: Yes.

17 THE COURT: Now, I notice that the complaint

18 talks about failure to establish and implement. Is

19 that right?

20 MR. LEWERENZ: Yes.

21 THE COURT: And it alleges that they failed

22 to implement. Is that correct?
Capital Reporting Company

In Re: Colgan Air, Inc. 10-14-2010

(866) 448 - DEPO

www.CapitalReportingCompany.com © 2010

9

1 MR. LEWERENZ: Yes.

2 THE COURT: But the quotation of the section

3 in the complaint doesn't refer to implementing, did you

4 notice that?

5 MR. LEWERENZ: Yes.

6 THE COURT: Do you know why that is?

7 MR. LEWERENZ: I cannot recall why we used

8 that word in the allegation. However, what we are

9 saying is that they used her and she had not completed

10 her training and they did not implement the training

11 program meaning they did not --

12 THE COURT: I know, but you quoted --

13 MR. LEWERENZ: -- use the training program --

14 THE COURT: -- a section which doesn't

15 require that they implement it.

16 MR. LEWERENZ: Yes.

17 THE COURT: Well, let me help you, Mr.

18 Lewerenz. The fact is that the regulation, as you

19 quoted it, is from a previous version which was not in

20 force at the time of this violation.

21 MR. LEWERENZ: Okay.

22 THE COURT: And in point of fact 121401(a)1
Capital Reporting Company

In Re: Colgan Air, Inc. 10-14-2010

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1 says establish and implement.

2 MR. LEWERENZ: Okay.

3 THE COURT: That's not what the complaint

4 says. That's what the regulation says.

5 MR. LEWERENZ: Okay. I understand. I wasn't

6 prepared to make that point. I just --

7 THE COURT: Did you have any problem with

8 that, Mr. Ryan?

9 MR. RYAN: Not --

10 THE COURT: Do you understand what we're

11 talking about?

12 MR. RYAN: Yeah, no I do, I follow what

13 you're saying, sir.

14 THE COURT: I just wanted to make sure we

15 were clear on what we were working with.

16 Now, the complaint says that there were two

17 flights between Newark and Burlington on May 19. Do

18 you know what the equipment was, Mr. Ryan?

19 MR. RYAN: I believe it would have been a

20 Saab 340. I have to ask Mr. Morgan.

21 MR. MORGAN: No, it was a Q400. Q400.

22 THE COURT: That's a Saab 2400?
Capital Reporting Company

In Re: Colgan Air, Inc. 10-14-2010

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1 MR. MORGAN: No, sir, a Bombardier Q400.

2 THE COURT: You want to -- Lombardi?

3 MR. MORGAN: Bombardier is the manufacturer.

4 THE COURT: Bombard --

5 MR. MORGAN: Bombardier, B-o-m-b-a-r-d-i-e-r.

6 THE COURT: Okay. Q400.

7 MR. MORGAN: Q400 is the model.

8 THE COURT: Do you know how many passengers

9 that has?

10 MR. MORGAN: It holds 74. I don't know how

11 many were in that particular flight or flights, though.

12 THE COURT: Okay. So do you know what the

13 required compliment of flight attendants is for that

14 flight?

15 MR. MORGAN: Yes, sir, it's two.

16 THE COURT: Two. Do you know how many flight

17 attendants there were on the plane on these flights?

18 MR. MORGAN: Two.

19 THE COURT: Including Miss Simms?

20 MR. MORGAN: Yes, sir, that's correct.

21 THE COURT: Okay. Now, the complaint also

22 refers to flight attendants required, as a required
Capital Reporting Company

In Re: Colgan Air, Inc. 10-14-2010

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1 crew member.

2 Mr. Lewerenz, is it your position that Miss

3 Simms was a required crew member?

4 MR. LEWERENZ: Yes, because being used as a

5 flight attendant on a part 121 flight and she had to

6 have been adequately turned to serve as a flight

7 attendant.

8 THE COURT: And you don't allege that she was

9 a required crew member.

10 MR. LEWERENZ: That is not alleged here, no.

11 THE COURT: What?

12 MR. LEWERENZ: That is not alleged that she

13 is a required crew member.

14 THE COURT: Well, if she wasn't a required

15 crew member then she doesn't have to comply with the

16 regulations, does she?

17 MR. LEWERENZ: It's not pled, but that would

18 be part of the proof.

19 THE COURT: Well, the regulation relates to

20 someone who's a required crew member, right?

21 MR. LEWERENZ: Yes.

22 THE COURT: And you didn't allege that she
Capital Reporting Company

In Re: Colgan Air, Inc. 10-14-2010

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1 was a required crew member.

2 MR. LEWERENZ: No, but it is alleged that she

3 was used on those flights by this holder of an air

4 carrier certificate and the flight attendant --

5 THE COURT: If she were used and were a

6 required crew member, would that be a violation?

7 MR. LEWERENZ: If she were used as a flight

8 attendant, she would -- she's a required crew member

9 who requires training.

10 THE COURT: What if she'd been the third?

11 MR. LEWERENZ: I'm not certain. If she's

12 used as a flight attendant, even if she's the third

13 flight attendant, I just don't know the answer to that

14 right now.

15 THE COURT: Well, let --

16 MR. LEWERENZ: But if she's used as a flight

17 attendant she is required to have the training.

18 THE COURT: Let me see --

19 MR. LEWERENZ: And whether --

20 THE COURT: -- if Mr. Ryan can help us here.

21 Mr. Ryan, I'm having some difficulty dancing

22 through your answer to try to figure out what your
Capital Reporting Company

In Re: Colgan Air, Inc. 10-14-2010

(866) 448 - DEPO

www.CapitalReportingCompany.com © 2010

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1 position is. You admit in your answer that she was

2 acting as a flight attendant on this flight. Is that

3 right?

4 MR. RYAN: Yes, sir.

5 THE COURT: So what then is your defense?

6 MR. RYAN: It's two parts, actually. It's

7 not that this person had no training, Your Honor. This

8 person had been through IOE, initial operating

9 experience training, but she had been recommended for

10 additional training. The minimum required numbers of

11 training hours are five, Miss Simms has documented 20

12 hours of training.

13 The reason she got scheduled was a clerical

14 error, admitted by Colgan Air, that she wound up on

15 these two flights. A voluntary disclosure was made in

16 accordance with the FARs. And the comprehensive fix

17 was submitted outside of the suggested ten day time

18 period for the comprehensive fix. And that's the

19 genesis of the violation.

20 The voluntary disclosure reporting program

21 was complied with, from our point of view, and then

22 because the comprehensive fix was submitted a few days
Capital Reporting Company

In Re: Colgan Air, Inc. 10-14-2010

(866) 448 - DEPO

www.CapitalReportingCompany.com © 2010

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1 beyond the ten day suggested response period, the

2 penalty has thus been brought forward and a compliant.

3 THE COURT: You didn't allege that as an

4 affirmative defense?

5 MR. RYAN: I'm sorry, sir?

6 THE COURT: You didn't allege that as an

7 affirmative defense. Did you?

8 MR. RYAN: Let me go back and look at my

9 answer.

10 THE COURT: Looking at these pleadings,

11 there's no way in the world I can pick that up.

12 MR. RYAN: I see what you're saying, Your

13 Honor.

14 THE COURT: I mean the purpose of pleadings

15 is to focus the issues. And these pleadings don't

16 focus any issues at all. They allege you used the

17 flight attendant, you said, yeah, we did. And they say

18 she wasn't trained and you say, yeah, she wasn't. Is

19 that right?

20 MR. RYAN: I don't know that we would say

21 she's not trained, Your Honor.

22 THE COURT: Well you said she had three hours
Capital Reporting Company

In Re: Colgan Air, Inc. 10-14-2010

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1 and -- she needed five hours and she needed 20. Is

2 that right?

3 MR. RYAN: No, no, no, sir. No, sir, if I

4 misspoke then I misspoke. I believe you may have it

5 backwards. The minimum -- it's five hours of minimum

6 training required --

7 THE COURT: Okay.

8 MR. RYAN: -- and Miss Simms had 20.

9 THE COURT: I see. Okay.

10 MR. RYAN: And her supervisor had recommended

11 additional training.

12 THE COURT: All right, we'll let's stick with

13 the five hours minimum required. And that's required

14 in 121434(e)?

15 MR. RYAN: I will -- I don't have the FARs

16 right in front of me, sir. I'm sorry for that.

17 THE COURT: Well, Mr. Lewerenz can help us,

18 I'm sure. Is that where it's required? Do you know

19 where it's required, Mr. Lewerenz?

20 MR. LEWERENZ: I'm sorry, did you say 121343?

21 THE COURT: 434(e).

22 MR. LEWERENZ: Oh, I'm sorry. I just have a
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1 copy of the regulations in front of me.

2 THE COURT: "Flight attendant must, for at

3 least five hours, perform the assigned duties of a

4 flight attendant." That's 434(e) as in Edward.

5 MR. LEWERENZ: That's -- yes, that's what it

6 says.

7 THE COURT: That's the requirement that

8 applies in this case?

9 MR. LEWERENZ: This is operating experience.

10 I know the complaint alleged she did not -- it was not

11 recorded that she had completed initial operating

12 experience training before serving as a crew member.

13 THE COURT: Yeah, I need to let you tell me

14 what that means. If it means something other than --

15 well, I need you to tell me what it means. You're

16 making the allegation, what are you alleging was

17 required?

18 MR. LEWERENZ: The -- I'm not certain -- I'm

19 not prepared to answer if the initial operating

20 experience is the same as the regulatory requirement

21 for operating experience that you have cited.

22 THE COURT: Well, it's your complaint, Mr.
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1 Lewerenz, it's not my complaint.

2 MR. LEWERENZ: Yes.

3 THE COURT: What are you alleging? I mean

4 this is the time to tell me, not later. That's why we

5 had the prehearing conference.

6 MR. LEWERENZ: Well, it's --

7 THE COURT: If you don't know what your

8 complaint alleges --

9 MR. LEWERENZ: It's --

10 THE COURT: -- we're in trouble.

11 MR. LEWERENZ: -- yeah. It's -- there was no

12 record that she completed the initial operating

13 experience training. And that was part of initial

14 disclosure from the carrier to the FAA. And --

15 THE COURT: You didn't allege that, did you?

16 MR. LEWERENZ: That she had not completed

17 initial operating experience?

18 THE COURT: That there was no record.

19 MR. LEWERENZ: Well, I'm just looking at the

20 evidence. You're asking me how it happened and it --

21 THE COURT: No, what I'm asking is --

22 MR. LEWERENZ: I mean I never heard the story
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In Re: Colgan Air, Inc. 10-14-2010

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1 before that, you know, that she had so many hours. It

2 just was told to us on the telephone now. That is news

3 to me. I don't know.

4 THE COURT: What was told to you on the

5 phone?

6 MR. LEWERENZ: That she had had so many hours

7 and that it was supposed to be completed and it was in

8 excess of the hours required, if I understood what Mr.

9 Ryan was saying. I had not heard that before.

10 THE COURT: Yeah, but where did you get the

11 initial information that she had not completed the

12 required hours?

13 MR. LEWERENZ: They called and told the FAA,

14 as part of what it submitted as what it wanted to do

15 under a voluntary disclosure reporting program. And as

16 Mr. Ryan said, it was submitted outside of a ten day

17 window and eventually this turned into an enforcement

18 action.

19 Now what was reported is that flight

20 attendant flew revenue trip prior to completion/sigh21 off of IOE, which is initial operating experience.

22 THE COURT: Who reported that?
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1 MR. LEWERENZ: Colgan.

2 THE COURT: Does that have a name on it?

3 MR. LEWERENZ: The person?

4 THE COURT: Yeah.

5 MR. LEWERENZ: Information of the person

6 preparing comprehensive fix, but that's not -- oh,

7 submitted by David Vance, initial notification. David

8 Vance.

9 THE COURT: Do you know him, Mr. Ryan?

10 MR. RYAN: Do I know Mr. Vance?

11 THE COURT: Yeah.

12 MR. RYAN: Yes, sir, I do.

13 Is he still with the company, Dan?

14 MR. MORGAN: No, he was my predecessor in

15 this position. He's no longer with the company for the

16 last two years.

17 THE COURT: Well do you agree with the

18 submission that was just quoted to you?

19 MR. RYAN: I've been listening and reading at

20 the same time, Your Honor, because I was trying to find

21 a reference for you to the hours.

22 THE COURT: Do you not have that submission
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1 to the FAA?

2 MR. RYAN: Oh no, I do. I do. I was looking

3 through the documents because Your Honor asked where

4 the 21 hours or the 20 hours came from.

5 THE COURT: Yeah, I got it. Okay, so you

6 said something to the FAA which said -- you want to

7 read that to me?

8 MR. LEWERENZ: Yes. Description of alleged

9 violation. "Flight attendant flew revenue trip prior

10 to completion/sign-off of IOE." And the -- and --

11 THE COURT: So -- and you're saying that's

12 wrong?

13 MR. RYAN: What -- no, no I'm not saying

14 that's wrong.

15 THE COURT: Oh. So she flew it prior to

16 completion of IOE?

17 MR. RYAN: Yes. She had not been formally

18 checked off, that is correct. And we acknowledge that,

19 sir.

20 THE COURT: Well, does -- is that what this

21 regulation requires? Does this regulation require that

22 she be formally checked off?
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1 MR. RYAN: Are you asking me or Mr. Lewerenz?

2 THE COURT: Yes, sir. You're the one who

3 reported your violation.

4 MR. RYAN: It -- yeah, I believe the company

5 - - yes, the company's of the belief that the IOE

6 training has to be completed.

7 THE COURT: And checked off?

8 MR. RYAN: Yes, sir.

9 THE COURT: Is that in your flight manual or

10 operating manual or something?

11 MR. RYAN: Dan, can you help?

12 MR. MORGAN: It's in the training manual, it

13 wasn't in the training at the time, but it was quoting

14 directly from the 121434.

15 THE COURT: Well, show me something in 434

16 that requires that this not only need to be completed

17 but also checked off.

18 MR. RYAN: 434(a) says the crew member who

19 has not completed the required operating experience,

20 operating cycles and line operating flight time for

21 consolidation of knowledge and skills.

22 THE COURT: Yeah. Okay.
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1 MR. RYAN: This flight attendant had, in

2 fact, completed the required operating experience, the

3 five hours.

4 THE COURT: Well, that's what I was asking

5 you. Where does it say in here that she has to -- in

6 addition to competing it, it has to be checked off?

7 So you reported your own violation, you

8 reported it outside the ten day window. Is that right?

9 MR. RYAN: No, sir. The reporting was within

10 the three days. It was within 24 hours.

11 THE COURT: It's a three day window? What

12 was outside the window?

13 MR. RYAN: What was outside the window was

14 the report back afterwards that was a comprehensive fix

15 of how we make sure this doesn't happen again.

16 THE COURT: You reported to the FAA a

17 comprehensive fix?

18 MR. RYAN: We did.

19 THE COURT: Okay. Mr. Lewerenz, this case is

20 totally different from what the complaint says. Are

21 you following me?

22 MR. LEWERENZ: Well, again, the complaint
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1 said that she had not completed the initial operating

2 experience training before serving as a crew member.

3 And that's what the carrier reported and they reported

4 immediate action and then they did report a

5 comprehensive fix later on.

6 THE COURT: Then -- and so what's your

7 complaint?

8 MR. LEWERENZ: The complaint is that they

9 used a flight attendant that had not completed --

10 THE COURT: The comprehensive fix wasn't --

11 your complaint is that the comprehensive fix wasn't

12 within the ten day limit?

13 MR. LEWERENZ: No, no. The complaint is that

14 they used a flight attendant, crew member that had not

15 completed the initial operating experience before

16 serving as a crew member.

17 THE COURT: Well, but she had completed it.

18 MR. LEWERENZ: I do not have that information

19 that she did. What was reported to us --

20 THE COURT: They just -- he's saying that she

21 had done --

22 MR. LEWERENZ: -- and the evidence I have is
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1 that she did not complete it. Now whether -- what --

2 how many hours she had and all that is something I had

3 not heard before and I don't have in my (inaudible)

4 package.

5 MR. RYAN: If I may interject?

6 THE COURT: Yes, Mr. -- yes, sir. Who is

7 this? Mr. Ryan?

8 MR. RYAN: Mr. Ryan. Yes, sir.

9 THE COURT: Yeah.

10 MR. RYAN: If you will look at the

11 investigative package, Exhibit 5 put together by --

12 THE COURT: I don't have the investigative

13 package.

14 MR. LEWERENZ: Oh, okay. I understand what

15 you're talking about, Chuck.

16 THE COURT: You didn't send it to me, did

17 you?

18 MR. RYAN: Did I send it to you, sir?

19 THE COURT: Did anybody send it to me?

20 MR. RYAN: I can email it within seconds, if

21 you'd like.

22 THE COURT: Well that would be nice. You did
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1 read my prehearing conference order?

2 MR. RYAN: Yes, sir.

3 THE COURT: And it says, "All documents that

4 have been exchanged and have not already been provided

5 to the judge should be furnished by October 7." I take

6 it what you've just described is a package of material

7 that was exchanged between you that has not been

8 provided to the judge. Is that correct?

9 MR. RYAN: It is -- it's the -- I requested -

10 -

11 MR. LEWERENZ: I'm not certain because -- I'm

12 not certain whether Mr. Ryan and I -- we have not done

13 a discovery exchange in this case. So --

14 THE COURT: I'm not talking about discovery.

15 Does my order say anything about discovery?

16 MR. LEWERENZ: No. It's just I did not see

17 that this was part of any documents I exchanged with

18 Mr. Ryan and therefore --

19 THE COURT: You may he didn't --

20 MR. LEWERENZ: -- that's why I didn't

21 provided it to you.

22 THE COURT: -- send it to you folks? It says
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1 "between the parties" it doesn't say between you and

2 Mr. Ryan.

3 MR. LEWERENZ: Yes. (inaudible) --

4 THE COURT: All right. Make sure we're clear

5 on this for the future, gentlemen.

6 MR. LEWERENZ: Okay.

7 THE COURT: When I say, "all documents

8 exchanged between the parties should be provided to me

9 in advance of the prehearing conference," that's

10 exactly what it means.

11 MR. LEWERENZ: Okay, Judge. Understood.

12 MR. RYAN: Yes, sir.

13 THE COURT: So, we're now sitting here

14 talking about violations that we don't know anything

15 about because we don't know what you folks are arguing

16 about. And what you're really arguing about is the fact

17 that they didn't make a comprehensive proposal for

18 correction within ten days.

19 MR. LEWERENZ: No, that's not the issue. The

20 issue is that she had not completed the initial

21 operating experience.

22 THE COURT: Okay, what didn't she --
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1 MR. LEWERENZ: And I guess it's the --

2 THE COURT: -- what didn't she complete, Mr.

3 Lewerenz? You tell me.

4 MR. LEWERENZ: Well, the -- I guess it

5 pertains to what Mr. Ryan was talking about, checking

6 her off in their system as --

7 THE COURT: It's your complaint, Mr.

8 Lewerenz. What didn't she complete? I mean the fact

9 that they self-report doesn't make it a violation.

10 MR. LEWERENZ: Um hmm.

11 THE COURT: Does it?

12 MR. LEWERENZ: Well, the record that we --

13 well, what we have is that --

14 THE COURT: Oh, excuse me.

15 MR. LEWERENZ: -- she didn't complete it.

16 THE COURT: Excuse me.

17 MR. LEWERENZ: I'm sorry.

18 THE COURT: The fact that they self-report

19 does not make it a violation, does it?

20 MR. LEWERENZ: Right. No.

21 THE COURT: Is that correct? It does not.

22 Is that right?
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1 MR. LEWERENZ: That's right.

2 THE COURT: You have to look at the report

3 and decide whether it's a violation. Right?

4 MR. LEWERENZ: Yes.

5 THE COURT: Okay. So you looked at this

6 report and you said, that's a violation, right?

7 MR. LEWERENZ: The --

8 THE COURT: Is that right?

9 MR. LEWERENZ: -- inspectors looked at the

10 report.

11 THE COURT: No, is that right?

12 MR. LEWERENZ: That's what happened, yes.

13 THE COURT: Okay. So now tell me what the

14 violation was.

15 MR. LEWERENZ: That she had not completed --

16 that they had allowed a flight attendant to fly on a

17 revenue trip, prior to completion and sign-off of

18 initial operating experience.

19 THE COURT: You didn't say anything about

20 sign-off.

21 MR. LEWERENZ: Well, I understand from the

22 evidence that the sign-off is the act --
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1 THE COURT: We don't have any evidence --

2 MR. LEWERENZ: -- of completion of training.

3 THE COURT: -- Mr. Ryan -- Mr. Lewerenz.

4 What we have is a complaint.

5 MR. LEWERENZ: Yes.

6 THE COURT: The complaint says she didn't

7 complete her training. And what I'm asking you is what

8 didn't she complete. Now you're saying she didn't

9 complete it because there was not sign-off. Is that

10 what you're saying?

11 MR. LEWERENZ: There was no sign-off

12 evidencing that she completed her training.

13 THE COURT: Okay. And where is that made a

14 violation? Now it's a complaint about failure to have

15 a sign-off.

16 MR. LEWERENZ: No, the complaint is that she

17 had not completed her initial operating experience and

18 the completion of the initial operating experience

19 training is evidenced by the sign-off.

20 THE COURT: Well that means they're two

21 different things.

22 MR. LEWERENZ: No, I interpret it to mean
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1 that that is the last act --

2 THE COURT: You interpret what?

3 MR. LEWERENZ: -- documenting the completion.

4 THE COURT: What are you interpreting now,

5 Mr. Lewerenz?

6 MR. LEWERENZ: Well, I'm just saying that

7 it's like she went to class and she took a test or she

8 got a certificate and -- documenting that she had

9 completed it. Now whether she had gone to class, she

10 may never have finished the class, she may never have

11 gotten that certificate (inaudible).

12 THE COURT: Well, this is all very

13 interesting, Mr. Lewerenz, but unfortunately here we

14 have to deal with regulations. What you have to do is

15 tell me what regulation it violated by not having a

16 sign-off.

17 MR. LEWERENZ: Well, the regulation that's

18 violated is that she had not completed her training.

19 THE COURT: Does it say anything --

20 MR. LEWERENZ: Initial operating experience.

21 THE COURT: -- about a sign-off, Mr.

22 Lewerenz?
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1 MR. LEWERENZ: The sign-off is evidence of

2 completion of the training. The violation is not that

3 she --

4 THE COURT: Oh, then you're talking about not

5 completion. We're back to not completion --

6 MR. LEWERENZ: Yes.

7 THE COURT: -- not the sign-off.

8 MR. LEWERENZ: Yes.

9 THE COURT: Okay. So what didn't she

10 complete?

11 MR. LEWERENZ: She didn't complete the

12 training. And as --

13 THE COURT: What didn't she --

14 MR. LEWERENZ: -- the evidence is the

15 training phase includes, at the conclusion of training

16 some sort of sign-off documenting the training was

17 satisfactorily completed.

18 THE COURT: How are you going to prove that,

19 Mr. Lewerenz?

20 MR. LEWERENZ: Well, as part of the report

21 from the carrier to the FAA and what the inspector

22 found. I believe the inspector spoke with someone from
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1 Colgan about the report to confirm what had happened.

2 THE COURT: Okay. Well, it's very clear to

3 me that nobody knows what this case is about.

4 MR. RYAN: Your Honor?

5 THE COURT: Yes.

6 MR. RYAN: If you would like I'm prepared to

7 email you this file. It's about --

8 THE COURT: I asked you to.

9 MR. RYAN: All right. I just want to make

10 sure before I send it and --

11 THE COURT: Yeah.

12 MR. RYAN: -- Mr. Lewerenz.

13 The other thing --

14 THE COURT: You have my email address?

15 MR. RYAN: I do, sir.

16 THE COURT: Okay.

17 MR. RYAN: I do. And you'll see, Your Honor,

18 when you look through it, the reason given for

19 rescinding the case, being the voluntary disclosure

20 case, is a matter of dispute over the timing of the

21 comprehensive fix being submitted.

22 It wasn't that the self disclosure was
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1 rescinded because of the, you know, the heinous nature

2 of the violation, it was rescinded because of a

3 dispute, I'll say, over the timing of when the

4 comprehensive fix has to be submitted under the

5 regulation.

6 That being said, there's -- if a carrier

7 makes a voluntary disclosure and then turns around and

8 takes a $25,000 penalty for its honesty, it sort of

9 defeats the purpose of the voluntary disclosure

10 program. But that's a matter of --

11 THE COURT: Well you talk about rescission.

12 Who rescinded the voluntary compliance notice?

13 MR. RYAN: It was rescinded by Kathleen --

14 Miss Kathleen Ritchey, R-i-t-c-h-e-y.

15 THE COURT: She's an FAA employee?

16 MR. RYAN: I presume so, Your Honor. I'm

17 looking at an FAA (inaudible).

18 THE COURT: Well, is it FAA that rescinds it

19 or is to Colgan that rescinds it?

20 MR. MORGAN: It's the FAA, Your Honor.

21 Kathleen Ritchey is one of the inspectors in the Dulles

22 office.
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1 THE COURT: Okay. So what we're coming down

2 to is a dispute over the timing of the submission of

3 the comprehensive correction and we have a complaint

4 that relates to the failure to complete training,

5 citing no regulation for the constituent parts of that

6 alleged violation. Is that where I am, Mr. Lewerenz?

7 MR. LEWERENZ: I'm sorry, I do not

8 understand. The FAA has alleged that this flight

9 attendant was used when she had not completed her

10 training, initial operating experience. That is what

11 was reported to the FAA. The FAA has some (inaudible)

12 --

13 THE COURT: Well let me tell you what --

14 MR. LEWERENZ: -- the carrier about a

15 comprehensive fix --

16 THE COURT: Yeah, but --

17 MR. LEWERENZ: -- but it did not accept it,

18 so the --

19 THE COURT: -- you're going to have to do a

20 better job than that or you aren't going to get to

21 first base on this complaint. Do you understand what

22 I'm saying?
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1 MR. LEWERENZ: Well, maybe what I don't

2 understand is what is it that's not clear about this,

3 she did not complete --

4 THE COURT: Is the basis for the alleged

5 violation --

6 MR. LEWERENZ: Yes, that she did not complete

7 her training.

8 THE COURT: -- where is that in the

9 regulation?

10 MR. LEWERENZ: It's -- well the --

11 THE COURT: We don't just have violations

12 drifting down from the ceiling somewhere, violations

13 have to be founded in a specific regulation.

14 MR. LEWERENZ: Yes (inaudible) --

15 THE COURT: If you don't know the regulation

16 you're proceeding under there's no way you can proceed.

17 MR. LEWERENZ: Pardon me, Judge. I took a

18 moment to turn to the part of the complaint that has

19 the regulation so that I don't misspeak.

20 THE COURT: Okay. Good.

21 MR. LEWERENZ: And I have that in front of me

22 now.
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1 THE COURT: Good.

2 MR. LEWERENZ: And that section is 121434(a)

3 stating that, "No certificate holder may use a person,

4 nor may any person serve as the required crew member of

5 an airplane unless the person has satisfactorily

6 completed, on that type of airplane and that crew

7 member position, the operating experience," and so

8 forth.

9 THE COURT: I'm familiar with that. Where

10 does it say that they had to complete something they

11 didn't complete?

12 MR. LEWERENZ: She had not -- the regulation

13 said that they could not use her unless she had

14 satisfactorily completed the operating experience.

15 THE COURT: And what operating experience did

16 she not complete?

17 MR. LEWERENZ: It is a course of training

18 that I understand --

19 THE COURT: Regulation. Regulation. What

20 regulation says --

21 MR. LEWERENZ: 121434(a) --

22 THE COURT: Yeah?
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1 MR. LEWERENZ: -- talks about operating

2 experience training.

3 THE COURT: Right. What operating experience

4 did she not complete?

5 MR. LEWERENZ: She did not complete that

6 phase of the training that's, like I said before, the

7 evidence in front of me is that she did not --

8 THE COURT: I'm talking about the --

9 MR. LEWERENZ: -- was not signed-off as

10 having completed.

11 THE COURT: Mr. Lewerenz, I'm asking you

12 about a regulation. You don't know a regulation that

13 says she didn't do what she had to. I suggest that you

14 better find such a regulation or this complaint may get

15 dismissed before we even get further.

16 MR. LEWERENZ: Well, I don't understand,

17 Judge, where I'm --

18 THE COURT: If you don't --

19 MR. LEWERENZ: -- falling short in explaining

20 to you.

21 THE COURT: -- understand, you better go back

22 and read the prehearing conference transcript when you
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1 get it, because a complaint has to be founded in a

2 regulation that specifies the nature of the violation

3 or it can't proceed.

4 MR. LEWERENZ: The allegation is that she had

5 not completed initial operating experience training --

6 THE COURT: Okay. I hope you heard what I

7 said --

8 MR. LEWERENZ: -- before serving as crew

9 member --

10 THE COURT: -- Mr. Lewerenz. I've heard what

11 you've said.

12 Let's move on to the second part of this.

13 Now, Colgan Air says it's a small business. Are you

14 agreed with that?

15 MR. LEWERENZ: I am not agreed with that.

16 THE COURT: Oh, okay. So what are the

17 criteria that we apply in determining whether Colgan

18 Air is a small business and why do you conclude that it

19 is not?

20 MR. LEWERENZ: Although at the time of the

21 violation, I'm not sure if it's still true today, they

22 had had a number of employees, I think less than 1,500
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1 employees, and I'm looking at the 21503(b) on page B-2,

2 when I had looked up --

3 THE COURT: 2150 -- you're talking about the

4 FAA penalty guidelines?

5 MR. LEWERENZ: Yes.

6 THE COURT: 53(a). Okay, at the time of the

7 violation they had less than what, a thousand you said?

8 MR. LEWERENZ: Less -- I believe they had

9 less than 1,500 employees.

10 THE COURT: Less than -- okay.

11 MR. LEWERENZ: However, looking at the SBA

12 website and other information that they publish, there

13 is information about when a company is affiliated with

14 another company and we had information that they were

15 affiliated with a parent corporation called Pinnacle.

16 And that parent corporation also owns another company

17 that has its own air carrier certificate, also called

18 Pinnacle. And because of these affiliations I was

19 unable to resolve that they are a small business, but

20 that they are perhaps a large business because then

21 when taking the affiliations into account they have

22 significantly over 1,500 employees.
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1 THE COURT: Yeah. Mr. Ryan?

2 MR. RYAN: Yes, sir.

3 THE COURT: Do you have such an affiliation

4 at the time of this alleged violation?

5 MR. RYAN: No, sir.

6 THE COURT: When did that come about?

7 MR. RYAN: Our position --

8 THE COURT: No, excuse me.

9 MR. RYAN: -- at the time of the alleged

10 violation --

11 THE COURT: When did that come about? Did it

12 come about? Do you have such an affiliation now?

13 MR. RYAN: Our position is that we do not.

14 Pinnacle -- Colgan Air is a wholly owned subsidiary of

15 a holding company known Pinnacle Airlines Corporation.

16 Pinnacle Airlines Corporation also owns another

17 separately certificated carrier, Pinnacle Airlines,

18 Inc. There are no shared directors, there is no shared

19 funding, there's no shared operations. It -- they were

20 two separate airlines owned by a common holding

21 company.

22 And our position is, whether you look at
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1 21503(b) or whether you look at the SBA guidelines,

2 that they are not affiliated as defined by SBA and thus

3 Colgan Air is entitled to be considered a small

4 business enterprise, because there is no power to

5 control whether it's exercised or not. They're two

6 separate certificate holders with a common holding

7 company, none of the three share common directorate.

8 THE COURT: Well how is affiliated defined in

9 21503(b) Mr. --

10 MR. LEWERENZ: It is not.

11 THE COURT: -- Lewerenz?

12 MR. LEWERENZ: It is not.

13 THE COURT: Oh, it's not?

14 MR. LEWERENZ: No.

15 THE COURT: How do you decide then whether

16 someone is affiliated or not?

17 MR. LEWERENZ: Again, I looked -- I don't

18 have all that information in front of me right now, but

19 I recall looking at the SBA.gov website and the

20 regulations cited in 2150(b).

21 THE COURT: And?

22 MR. LEWERENZ: For further guidance on small
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1 business and --

2 THE COURT: And what did you conclude, with

3 respect to affiliated?

4 MR. LEWERENZ: That it appeared that at the

5 time of the violation that Pinnacle -- an entity called

6 Pinnacle, I don't have the exact title in front of me,

7 wholly owns Colgan and that they also wholly own

8 another certificate holder, also called Pinnacle. And

9 that even today they share officers, they share one or

10 more management personnel and so forth. So these seem

11 to me, to me to be indicia that they -- since they are

12 so closely affiliated and between companies there are -

13 - and it's business the same business, that it's really

14 part of one large business concern.

15 THE COURT: I see. And your complaint speaks

16 in the alternative as to the level of penalty,

17 depending on whether the respondent is a small business

18 or not. Is that right?

19 MR. LEWERENZ: That's correct, sir.

20 THE COURT: But this penalty was calculated

21 on the business of not being a small business?

22 MR. LEWERENZ: That is correct.
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1 THE COURT: I see. And so -- okay. Well

2 that might make a substantial difference in the penalty

3 level in this and whatever other cases are pending, I

4 gather. Is that right, Mr. Ryan?

5 MR. RYAN: That would be our position, sir,

6 yes.

7 THE COURT: Yeah. Okay. I think what I'm

8 going to need from your gentlemen is a prehearing

9 brief. And it's going to address two subjects. It's

10 going to address the alleged violation and the

11 regulatory basis for the allegation. Because that's

12 not in the complaint and it hasn't been in anything

13 that has been said here in this prehearing conference.

14 And Mr. Ryan, Colgan is not without fault in

15 this regard since you self-reported.

16 MR. RYAN: Yeah, I -- yeah.

17 THE COURT: You said there was a violation.

18 MR. RYAN: The company made a good faith,

19 voluntary disclosure.

20 THE COURT: I understand that, but you've got

21 to tell me what the violation was and you haven't been

22 able to do that today. Or, can you do it now?
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1 MR. RYAN: I'd have to consult with my client

2 a little further before --

3 THE COURT: Yeah.

4 MR. RYAN: -- I didn't want to go out on a

5 limb like that without consultation. But I can do that

6 in our brief, certainly.

7 THE COURT: Yeah, okay. Well, what you've

8 got to do is put together a brief that tells me what

9 the regulation is that resulted in your making a self10 report of a violation. If you hadn't made that report

11 we wouldn't be sitting here today, I gather. Is that

12 right?

13 MR. RYAN: I would tend to agree.

14 THE COURT: Yeah. And so you reported, yep,

15 we violated something, we aren't sure what. And we

16 don't want to be punished for it because we're taking

17 corrective action. And then you reported that within

18 three days of your malfeasance and then you didn't

19 correct it within ten days, didn't propose a overall

20 correction and that's the period required by the FAA

21 regulation. Is that right?

22 MR. RYAN: I would say suggested by it, but
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1 yes. Because the regulations say --

2 THE COURT: What regulation are you referring

3 to?

4 MR. RYAN: Under the voluntary disclosure

5 reporting program requires -- or suggests, I'm sorry,

6 Advisory Circular 00-58(a) states, "The written report

7 of the comprehensive fix should be provided by the

8 regulated entity within ten working days after the

9 initial notification."

10 THE COURT: And when did you provide it?

11 MR. RYAN: It was provided five days after

12 the ten day period. It was provided -- the

13 comprehensive fix, if you went with the ten days as

14 being a deadline, would have been June 5th and the

15 comprehensive fix was submitted on June 8th -- I'm

16 sorry, on June 10th, so five days.

17 THE COURT: Yeah. Mr. Lewerenz?

18 MR. LEWERENZ: Yes.

19 THE COURT: If he had provided (tape skips)

20 instead of the 10th, would we be here today?

21 MR. LEWERENZ: I don't know the answer. I

22 would have to consult with the flight standards
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1 inspectors and the certificate holding district office.

2 THE COURT: Well, you mean that the operation

3 of the self-reporting program is not automatic?

4 MR. LEWERENZ: I think another criteria is

5 whether the comprehensive fix was satisfactory and I

6 just do not have the information to speculate that had

7 it only been timely received we would not be here

8 today.

9 THE COURT: Yeah.

10 MR. LEWERENZ: I'm not equipped to answer

11 that.

12 THE COURT: Right. Are you equipped to

13 answer whether the comprehensive fix was satisfactory?

14 MR. LEWERENZ: No, I'm not.

15 THE COURT: Okay. Well, you'll do that in

16 your brief. Okay? And so --

17 MR. LEWERENZ: I mean I just want to be fair,

18 I don't want to suggest that this is an ongoing problem

19 or that there are other cases, because there are not --

20 THE COURT: I understand that.

21 MR. LEWERENZ: -- to my knowledge. Yeah.

22 THE COURT: Yeah. And that's what I want, I
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1 just want to be fair. And in order to be fair I have

2 to know what you folks are referring to as the

3 application regulations, and I don't. I mean I have

4 the regulations here in front of me and I don't have

5 anything in them that says what you're saying, that

6 you've shown to me. It may be there, but you have --

7 if it's there you haven't shown me. So you've got to

8 show me, both of you have to show me what this case is

9 about.

10 Mr. Ryan, you started it so you're going to

11 have to tell me what violation you're referring to. And

12 I'd rather not have self-serving submissions saying,

13 well we really didn't have anything in mind. You

14 understand what I'm saying?

15 MR. RYAN: Yes, sir.

16 THE COURT: I mean you submitted this, you

17 must have had something in mind. I want to know why

18 this was submitted and what violation you think you

19 committed. Then I want to know what you did with

20 respect to reporting and what you did with respect to

21 comprehensive reporting.

22 Did you ever get a sign-off from the FAA that
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1 the comprehensive reporting was -- comprehensive fix

2 was okay?

3 MR. RYAN: No, sir, to -- not that I've seen.

4 The only thing we have in that regard was the

5 rescission of the case by Ms. Ritchey and --

6 THE COURT: Yeah. Okay, but do you -- when

7 you submit a comprehensive fix do you normally get a

8 sign-off as being acceptable?

9 MR. MORGAN: If I may, Your Honor, it's Dan

10 Morgan. Yes, sir, we normally do -- we always do.

11 We'll get a response back as to whether that fix was

12 acceptable. In this case, since it rescinded, it was

13 never even considered.

14 THE COURT: It was rescinded because it

15 wasn't submitted within the five days?

16 MR. RYAN: Correct.

17 MR. MORGAN: That's correct, sir. So they

18 never did evaluate our response.

19 THE COURT: Submitted within ten days.

20 MR. MORGAN: Correct.

21 THE COURT: Yeah. So, is that comprehensive

22 fix still in place?
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1 MR. MORGAN: Yes, sir, it is. Actually other

2 changes have been made since that period of time in our

3 recordkeeping and some system changes but --

4 THE COURT: You mean that FAA doesn't care

5 whether you make a comprehensive fix, it only cares

6 whether you self-report within a ten day time period?

7 MR. MORGAN: That would appear to be

8 reasonable suggestion.

9 THE COURT: Well that was a question, that's

10 not a suggestion.

11 MR. MORGAN: That would be a reasonable

12 question.

13 THE COURT: Well anyway, you understand what

14 you need to do on this subject, Mr. Ryan. You've got

15 to explain to me why you reported a violation and what

16 regulation -- and maybe -- it may be that there's a

17 regulation says you have to comply with your manuals.

18 It may be that your manual says that they have to get a

19 sign-off on the completion of their training and that

20 may be the violation. But there's nothing before me

21 that shows that.

22 MR. RYAN: Right. I will dive into it --
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1 THE COURT: And trust me, if we go to a

2 hearing someone is going to explain this in very clear

3 detail or we're all going to be very unhappy. You

4 understand?

5 MR. RYAN: Yes, sir.

6 THE COURT: Yeah. Okay. And so you're going

7 to explain that. And then you're going to explain this

8 relationship that you have with another company.

9 MR. RYAN: Yes, sir.

10 THE COURT: And I should hasten to add that

11 Mr. Morgan has said a few things here today and I want

12 to make sure that he understands and you understand

13 that we haven't required him to say anything. And that

14 when he says things, he in essence, is making

15 statements for the record on behalf of the company.

16 You, of course, are you just making

17 arguments, although I don't know what your official

18 connection is with Colgan, I'm assuming for the time

19 being, that you're just an attorney.

20 MR. RYAN: I am just an attorney.

21 THE COURT: Okay. And that you're acting for

22 Colgan in that capacity. But Mr. Morgan needs to know
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1 that when he speaks up it's like he's testifying,

2 because a false statement to a federal officer in the

3 performance of his duties is a no-no, which we

4 sometimes call felonies. And so he needs to make sure

5 that when he says things that he says what he knows to

6 be true.

7 Okay, I just throw that out there so that

8 you'll understand the playing field on which we are

9 engaged.

10 Okay. So you're going to spell out the

11 relationship of these companies and then you're going

12 to tell me, under the SBA regulations and under

13 21253(a) why you are a small business.

14 MR. RYAN: Sure.

15 THE COURT: Okay? And Mr. Lewerenz is going

16 to do the same with respect to each of those insofar as

17 he knows. I assume that he should know as much about

18 the first one as you do.

19 As to the second one, he may not know as much

20 about your corporate structure as you do. So he may

21 have some limitations on how much he can say there.

22 In my very early years with the Civil
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1 Aeronautics Board I had a case involving the question

2 of U.S. citizenship of an air carrier. And we wound up

3 tracking back -- Cathay Pacific was the name of the

4 case, and the question was whether it was U.S.

5 controlled or foreign controlled. And we

6 wound up with about 150 different interlocking

7 corporations. And we wound up concluding that it was

8 controlled and consequently was not a U.S. citizen,

9 that is my recollection. We're going back 30, 35 years

10 here now.

11 So I'm not unfamiliar with the interlacing of

12 corporate structures. So what you will need to do is

13 look at 21503(a) and the SBA and sort out what the

14 relevant criteria are and then explain how your

15 structure fits in those criteria. Okay?

16 MR. RYAN: Yes, sir.

17 THE COURT: Now of course if you settle this

18 then we don't need to do any of this, although it

19 strikes me that the likelihood is we're going to wind

20 up doing the second part of this in one of these cases

21 unless you settle them all. So, you know, you can keep

22 that in mind.
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1 Now, Mr. Lewerenz, what you need to do is the

2 second half of that and the first half, to the extent

3 that you know it. I don't know what's been exchanged

4 between you folks with respect to information.

5 I see here I got an email and it has the

6 investigative file. And -- well it doesn't seem to be

7 horribly long. What do you got about ten pages in

8 that, Mr. Ryan?

9 MR. RYAN: No, sir, I believe it's like 24,

10 25 all together, total.

11 THE COURT: Yeah, the pages aren't numbered.

12 MR. RYAN: No.

13 THE COURT: Yeah, it's hard just scanning

14 down here. But we'll take a look at this before we get

15 your briefs. And you folks should take a look at it

16 and whatever else you need to look at.

17 Now, Mr. Ryan are you alleging ability to pay

18 as a problem here?

19 MR. RYAN: No, sir.

20 THE COURT: Okay. All right. That's off the

21 boards then.

22 But if you're alleging small business and it
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1 - - the question of affiliation comes up under 21503(a)

2 or the SBA, then you're going to have to disclose

3 whatever is necessary in order to make that

4 determination.

5 MR. RYAN: Okay.

6 THE COURT: And you may find that I think

7 things are necessary which you don't think are

8 necessary. But if that's going to be an issue here we

9 will explore it. Okay?

10 MR. RYAN: Okay.

11 THE COURT: Okay. Now, I need a date for you

12 gentlemen to submit briefs.

13 First of all, I give you an opportunity to

14 try to get this settled and presumably the -- getting

15 it settled would fall before the brief date is due. So

16 I don't guess we need two dates, okay?

17 So you tell me how much time you need to do

18 the briefs that we've been talking about. I would

19 normally give people a couple of weeks, but this -- I

20 would listen to suggestions beyond that if you want to

21 make them.

22 Let me ask, Mr. Lewerenz?
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1 MR. LEWERENZ: Yes, sir.

2 THE COURT: Do you think you need additional

3 information on the structure of Colgan and its related

4 companies? Or do you think you know enough already to

5 deal with that issue? If it's going to be -- if

6 they're going to be contending small business, I would

7 guess that the burden of going forward is going to be

8 on Colgan with respect to that.

9 Would you agree with that, Mr. Ryan?

10 MR. RYAN: On the small business issue?

11 THE COURT: Yeah, in terms of the factual

12 presentation. I would guess that the burden of going

13 forward with the evidence is going to be on you folks.

14 You're the ones who knows what the relationships are.

15 MR. RYAN: Right, right. Yeah, --

16 THE COURT: I mean the ultimate burden of

17 persuasion is going to be on the FAA, but if you're

18 going to contend small business you're going to have to

19 prove small business.

20 MR. RYAN: Absolutely, sir.

21 THE COURT: Okay?

22 MR. RYAN: Yes, sir.
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1 THE COURT: So, Mr. Lewerenz, if you -- in

2 the course of preparing your brief conclude that you

3 need additional information, it would be good if you

4 could try to get clarification from Mr. Ryan before

5 your brief is due so you won't be tilting at windmills,

6 so to speak. You understand?

7 MR. LEWERENZ: Yes.

8 THE COURT: Okay. And if I can assist, in

9 terms of adjusting the due dates because of that need

10 to exchange information, you folks let me know. Okay?

11 MR. RYAN: Okay.

12 THE COURT: So I need to know when you think

13 you can get the briefs on those two subjects, in my

14 hands.

15 MR. RYAN: Well, we're at the 14th here, from

16 my perspective, Your Honor, I don't see any reason I --

17 we could not have that to you by November 5th at the

18 very latest.

19 THE COURT: November 5.

20 MR. RYAN: That's --

21 THE COURT: What day is -- what sort of a day

22 is that?
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1 MR. RYAN: That's a Friday.

2 THE COURT: Friday. And Mr. Lewerenz, does

3 that sound acceptable to you?

4 MR. LEWERENZ: Well, except that I'm not sure

5 that we could accomplish the exchange of the

6 information about the corporations within that time

7 frame, as you suggested, and still get the issue

8 resolved. Unless --

9 THE COURT: Well, what date --

10 MR. LEWERENZ: -- we file briefs based on

11 what we have and then file --

12 THE COURT: Well, what --

13 MR. LEWERENZ: -- reply briefs, I guess if

14 you will, based upon their submission.

15 THE COURT: Yeah, what date would you

16 suggest, Mr. Lewerenz?

17 MR. LEWERENZ: I was going to ask for at

18 least 30 days out from today.

19 THE COURT: That would be November 14, right?

20 MR. LEWERENZ: Yes.

21 THE COURT: And 14 is going to be a Sunday.

22 MR. LEWERENZ: November 14th is Sunday, so
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1 15th is Monday, due the 19th, Friday.

2 THE COURT: I'm sorry?

3 MR. LEWERENZ: You said November 14th, that's

4 a Sunday.

5 THE COURT: Yes, understand. So which date

6 did you wind up with?

7 MR. LEWERENZ: November 19th?

8 THE COURT: Well, I don't want to fix the

9 19th and then have you come in on the 19th and say you

10 need to get more information from Mr. Ryan.

11 MR. LEWERENZ: No, I --

12 THE COURT: Do you understand what I'm

13 saying?

14 MR. LEWERENZ: Right.

15 THE COURT: So --

16 MR. LEWERENZ: I think we could exchange --

17 THE COURT: -- I think we probably better

18 have a date by which you're going to tell Mr. Ryan and

19 me what additional information you need, if you need

20 additional information.

21 MR. LEWERENZ: Okay.

22 THE COURT: Okay? So you tell me what date
Capital Reporting Company

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1 that's going to be.

2 MR. LEWERENZ: All right. I think certainly

3 two weeks from today.

4 THE COURT: Two weeks from today. That'll be

5 the --

6 MR. LEWERENZ: 28th?

7 THE COURT: 28th. Okay. So, by the 28th Mr.

8 Lewerenz will tell Mr. Ryan what, if any, additional

9 information he needs with respect to the relationship

10 of the companies.

11 And then by the -- November 19 he will file

12 his brief, and as will you, Mr. Ryan.

13 MR. RYAN: Yes, sir, November 19th.

14 THE COURT: Does that sound good?

15 MR. RYAN: That's very fair.

16 THE COURT: Okay. Well, that's -- that will

17 be very helpful and then we will know what this case is

18 about. Nobody has a clue as to what it's about now.

19 And I don't try cases that way. When I try cases we

20 know what it is we're trying before we go to the

21 hearing, we don't try to figure it out once we get

22 there. Okay?
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1 All right. So those are the due dates and

2 you folks will get back to me, presumably before --

3 well, we could say before the 28th, if this case is

4 going to settle. But, you know, if you get out to

5 November 19 and you tell me it's going to settle,

6 that's okay too. But I'd like to have some kind of

7 status report on your settlement efforts, by the 28th.

8 Okay?

9 MR. LEWERENZ: Okay.

10 MR. RYAN: Yes, sir.

11 THE COURT: That means you folks talk between

12 now and then and somebody gets back to me and say, at

13 this point it's not settling. All right?

14 MR. LEWERENZ: Okay.

15 THE COURT: And then if this case settles and

16 we get to the next one down the line, and we have the

17 same questions you'll have this in the transcript, so

18 you'll know what we're going to have deal with. All

19 right?

20 MR. LEWERENZ: Yes.

21 MR. RYAN: Yes, sir.

22 THE COURT: All right. Anything further,
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1 gentlemen?

2 MR. RYAN: Not us, Your Honor.

3 MR. MORGAN: Your Honor, Dan Morgan, if I

4 may. I'd just like to acknowledge I am aware of your

5 advice about your statement as an officer. Thank you.

6 THE COURT: Yeah, good. Okay.

7 Well thank you all. That's -- it's been

8 helpful to me, I now have some idea of what this case

9 is about, whereas before, based on the pleadings no one

10 could tell.

11 And if there's nothing further that concludes

12 the prehearing conference. Thank you very much.

13 MR. RYAN: Thank you, Your Honor.

14 MR. LEWERENZ: Thank you, Judge.

15 THE COURT: All right. Bye-bye.

16 (Whereupon, at 3:01 p.m., the

17 prehearing conference was adjourned.)

18 * * * * *

19

20

21

22
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1 CERTIFICATE OF NOTARY PUBLIC

2 I, NATASHA KORNILOVA, the officer before whom

3 the foregoing hearing was taken, do hereby certify

4 that the testimony that appears in the foregoing pages

5 was recorded by me and thereafter reduced to

6 typewriting under my direction; that said deposition is

7 a true record of the proceedings; that I am neither

8 counsel for, related to, nor employed by and of the

9 parties to the action in which this testimony was

10 taken; and further, that I am not a relative or

11 employee of any counsel or attorney employed by the

12 parties hereto, nor financially or otherwise interested

13 in the outcome of this action.

14

15

16 ____________________________

 NATASHA KORNILOVA

17 Notary Public in and for the

 District of Columbia

18

19

20 My commission expires: April 14, 2012

21

22
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citizen 53:8

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Capital Reporting Company

In Re: Colgan Air, Inc. 10-14-2010

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employed 63:8,11

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Capital Reporting Company

In Re: Colgan Air, Inc. 10-14-2010

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future 27:5

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Capital Reporting Company

In Re: Colgan Air, Inc. 10-14-2010

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26:9,16 28:1,7

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Capital Reporting Company

In Re: Colgan Air, Inc. 10-14-2010

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Capital Reporting Company

In Re: Colgan Air, Inc. 10-14-2010

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presentation 56:12

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Capital Reporting Company

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Capital Reporting Company

In Re: Colgan Air, Inc. 10-14-2010

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www.CapitalReportingCompany.com

 © 2010

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Capital Reporting Company

In Re: Colgan Air, Inc. 10-14-2010

Page 12

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 © 2010

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