SERVED: July 22,2014 

U.S. DEPARTMENT OF TRANSPORTATION 

OFFICE OF HEARINGS 

WASHINGTON, DC 

In The Matter Of: ) 

) 

) 

) 

) 

) 

) 

FRIENDSHIP AIRWAYS, INC. 

dba YELLOW AIR TAXI, and 

CHRISTOPHER BEHNAM 

Respondents 

Docket No. OST-2013-0066 

(Enforcement Proceeding) 

ORDER DEEMING WELL-PLEADED FACTS ADMITTED, 

RESERVING ENTRY OF DEFAULT JUDGMENT, AND 

SETTING DEADLINE FOR FILING SUPPLEMENTAL PROOF 

On June 19,2014, an Order Finding Respondents in Default was filed. Among other 

things, this June 19, 2014 noted that a separate ruling would issue shortly on the Office of 

Aviation Enforcement and Proceedings' ("OAEP") Motion for Default Judgment ("Motion"). 

I. Entry of a Default Judgment - Legal Standard 

It has long been established that upon entry of a default finding, all "well-pleaded 

allegations ofthe complaint" are deemed to be admitted. Steven Baicker-McKee et al., Federal 

Civil Rules Handbook 1101 (2013); Rabin v. McClain, 881 F. Supp. 2d 758, 768-69 (W.D. Tex. 

2012) (a respondent's default is considered an admission of well-pleaded factual allegations). 

The rules of practice in aviation enforcement proceedings mirror this long-standing practice. 

Rule 409 provides in part: 

Failure of a respondent to file and serve an answer within the time and in the 

manner prescribed by§ 302.408 shall be deemed to authorize the DOT 

decisionmaker or administrative law judge, as a matter of discretion, to find the 

facts alleged in the complaint incorporated in or accompanying the notice ... to be 

true and to enter such order as may be appropriate without notice or hearing. 

14 C.F.R. § 302.409 (emphasis added). 
I, 

However, factual allegations in the complaint that are not well-pleaded should not be 

deemed admitted. Baicker-McKee et al., supra, 1101; 27 Fed. Proc., L. Ed.§ 62:37 (Effect of 

complaint on default judgment); Rabin, 881 F. Supp. 2d at 768-69 (absent a sufficient basis in 

the pleadings, a default finding does not, in itself, warrant the court to enter a default judgment). 

Federal caselaw provides further guidance for viewing alleged facts through the lens of 

default. "Necessary facts not contained in the complaint, and claims which are legally 

insufficient, are not established by default." Cripps v. Life Ins. Co. of N. Am., 980 F .2d 1261, 

1267 (9th Cir. 1992) (citing Danning v. Lavine, 572 F.2d 1386, 1388 (9th Cir. 1978). 

Additionally, a respondent is "not held to admit facts that are not well-pleaded or [held] to admit 

conclusions oflaw. "DIRECTV, Inc. v. Huynh, 503 F.3d 847, 854 (9th Cir. 2007). 

Nevertheless, a lack of perfect pleading does not prohibit entry of a default judgment. 

Rule 409 further provides in part: 

[O]r, as a matter of discretion, [the DOT decision maker or judge may] ... proceed to take 

proof, without notice, of the allegations or charges set forth in the complaint or order[.] 

14 C.P.R. § 302.409 (emphasis added). 

Thus, at the discretion of the court, additional proof and argument may be filed regarding 

any request for relief that has not been well-pleaded. 

II. Well-Pleaded Facts in the OAEP's Complaint Deemed Admitted 

In its Motion, the OAEP seeks a default judgment based on the factual pleadings 

contained in its April 13, 2013 Complaint. In reviewing the alleged facts, the court accepts as 

true all well-pleaded, plausible allegations in the complaint, and draws all reasonable inferences 

in the plaintiffs favor. 35 C.J.S. Federal Civil Procedure §466 (2014). 

The.following facts pleaded in the OAEP's April3, 2013 Complaint (Complaint, 1-2) are 

deemed well-pleaded, and are admitted: 

1. 49 U.S. C. § 41712 confers authority on the DOT to prohibit unfair and deceptive 

trade practices and unfair methods of competition. 

Page 2 of 14 
2. During all times relevant to the Complaint, Respondent Friendship Airways, Inc. 

d/b/a Yell ow Air Taxi ("Friendship") was an air taxi operator as defined by 14 C.F .R. 

Part 298. 1 

3. Friendship was a "small business concern" as defined in section 3 of the Small 

Business Act, 15 U.S.C. § 632. 

4. In order to engage in air transportation as a direct or indirect air carrier, Friendship 

was required to hold economic authority at all times from the DOT, either in the 

form of the certificate of public convenience and necessity issued pursuant to 49 

U.S.C. § 41101, or in the form of an exemption from the certificate requirement, 

such as the classification of air taxi operators in 14 C.F.R. Part 298. 

5. As an air carrier, Friendship was subject to the credit risk refund requirements of 

Regulation Z ofthe Board of Governors of the Federal Reserve System, 15 U.S.C. 

§§ 1601-1693r. 

6. With respect to refund requests irtvolving airline tickets purchased with a credit card, 

12 C.P.R. Part 226 and 14 C.P.R. Part 374 (which implement Regulation Z), 

establish that a creditor must transmit a credit statement for passenger refund to the 

credit card issuer within seven (7) business days of receipt of full documentation for 

the refund requested. 

7. During all times relevant to the Complaint, Respondent Christopher Behnam ("Mr. 

Behnam") was the owner and president of Friendship. 

8. Friendship's principal place of business was 2680 N.E. 24 Street, Pompano Beach, 

Florida, 33064. 

9. On May 16, 2011, Friendship ceased operations. 

10. On August 15, 2011, Friendship surrendered its air carrier certificate to the Federal 

Aviation Administration ("FAA"). 

1 The Complaint cites to Part 382 for the classification of air taxi operators (Complaint, 1 ~~ 1, 3). This is likely a 

typographical error, because Part 382 does not involve air taxi operators. Instead, Part 382 involves prohibiting 

discrimination against passengers on the basis of disability. See 14 C.F.R. §3 82.1. The proper reference for the facts 

in this case appears to be Part 298, which addresses aviation economic regulations, and establishes classifications for 

air taxi operators. See 14 C.F.R. §298.1. When the OAEP issued its April 3, 2013 Notice of Enforcement Proceeding 

and Proposed Assessment of Civil Penalties in this case, the OAEP specifically cited to "14 CFR Part 298" as 

authority. (4/3/13 Notice, 1.) Thus, Part 298 has been utilized in the review and evaluation ofthe facts and law 

pleaded in the Complaint in this case. 

Page 3 of 14 
11. After Friendship ceased operations, Friendship failed in ten (1 0) instances between 

August 2010 and August 2011 to process credit refund requests within seven (7) 

business days of receipt of full documentation for the refund requested. Some of 

these instances included purchases of multiple tickets. 

12. After Friendship ceased operations, Friendship failed entirely in seventeen (17) 

instances between August 2010 and October 2011, to process credit refund requests 

upon receipt of full documentation for the refund requested. Some of these instances 

included purchases of multiple tickets. 

13. In at least one (1) of the seventeen (17) instances between August 2010 and October 

2011 when Friendship entirely failed to process credit refunds, the refund was due on 

tickets that Friendship sold to passengers after May 16, 2011, the date it ceased 

operations. 

14. On October 18, 2011, the Department ofTransportation ("DOT") canceled 

Friendship's air taxi registration because Friendship had ceased operations. 

III. Allegations Against Respondent Friendship 

The OAEP's Complaint requests that the court make findings of multiple violations 

against both Friendship and Mr. Behnam based on the pleaded facts. (Complaint, 1-3.) The 

allegations against each Respondent will be addressed separately. This section addresses the 

allegations against Friendship. 

A. Alleged Violations of 14 C.P.R. Part 374 

14 C.P.R. § 374.3 requires each air carrier to comply with the credit refund requirements 

of Regulation Z, 12 C.P.R. Part 226, ofthe Board of Governors ofthe Federal Reserve System. 

An air carrier's violation of Regulation Z is enforceable by the Department. 14 C.P.R. § 374.4. 

Regulation Z requires that "[ w ]hen a creditor ... forgives a debt for services that is to be 

reflected as a credit to the consumer's credit card account, that creditor shall, within 7 business 

days from accepting the return or forgiving the debt, transmit a credit statement to the card 

issuer[.]" 12 C.P.R. § 226.12. 

The OAEP proved that Friendship violated 14 C.F.R. Part 374 

The admitted facts establish that Friendship, an air carrier acting as a creditor, had to 

transmit a credit statement for any passenger refund to the credit card issuer within seven (7) 

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business days of receipt of full documentation for the refund. Between August 2010 and October 

2011, Friendship failed in ten (1 0) instances to transmit a credit statement within seven (7) days 

as required by Regulation Z. In an additional seventeen ( 17) instances, Friendship failed to 

transmit a credit statement at all. 

Pursuant to 14 C.F.R. Part 374, Friendship's violations of Regulation Z are enforceable 

by the Department as violations of 14 C.F.R. Part 374. Thus, the OEAP has proved by the 

admitted facts that between August 2010 and October 2011 Friendship committed twenty-seven 

(27) violations of 14 C.F.R. § 374.3. 

B. Alleged Violations of 49 U.S.C. § 41712 

Under 49 U.S.C. § 41712 air carriers are prohibited from engaging in an unfair or 

deceptive practice or an unfair method of competition in air transportation or the sale of air 

transportation. The Department has determined that a failure to comply with the refund 

requirements of 14 C.F.R. Part 374 constitutes an unfair or deceptive practice. See, e.g., 

Northwest Airlines, Inc., Violations ofConsumer Protection Regulations, Order 87-11-33 

(November 16, 1987); Eastern Airlines, Inc., Violations of Consumer Protection Regulations, 

Order 89-8-50 (August 31, 1989); Boston-Maine Airways Corp., Violations of 49 U.S. C. § 41712 

and 14 CFR Part 374, Order 2006-7-7 (July 7, 2006). 

The OAEP proved that Friendship violated 49 U.S. C. § 41712 

The OEAP has proved by the admitted facts that Friendship committed twenty-seven (27) 

violations of 14 C.F .R. Part 3 7 4 between August 2010 and October 2011. Each of these 

violations also constitutes an unfair or deceptive trade practice, and thus are violations of 49 

U.S.C. § 41712. As a result, Friendship committed twenty-seven (27) violations of 49 U.S.C. § 

41712-i.e., 27 acts of unfair or deceptive trade practice-between August 2010 and October 

2011 when it failed to process credit refund requests within seven (7) business days of receipt of 

full documentation for the refund requested. 

C. Alleged Violation of 49 U.S.C. § 41101 

The OAEP asserts that Friendship sold tickets after the date it ceased operations, and 

therefore violated 49 U.S.C. § 41101 by engaging "in air transportation without the proper 

economic authority." (Complaint, 3 ~C.) 

Page 5 of 14 
49 U.S.C. § 41101(a)(l) provides in part: 

"(a) GeneraL-Except as provided in this chapter or another law-(1) an air carrier may 

provide air transportation only if the air carrier holds a certificate issued under this 

chapter authorizing the air transportation[.]" (emphasis added). 

A "certificate issued under this chapter" refers to a certificate of public convenience and 

necessity. 49 U.S.C. § 41102. See also, 8A Am. Jut. 2d Aviation §64 (May 2014). Before the 

Department issues an air carrier a certificate of public convenience and necessity, the 

Department must make a finding that the air carrier is "fit, willing, and able to provide the 

transportation". 49 U.S.C. § 41102. To maintain a certificate of public convenience and 

necessity, the air carrier must continue to be "fit, willing, and able to provide the transportation." 

49 U.S. C. § 41110 (e)(l). "From the standpoint of the requirements of section 41101, the holding 

out of service, as well as the actual operation of air service, constitutes 'providing' air 

transportation." Western Pacific Airlines, Inc. Mountain Air Express, Inc., Consent Order 96-12-

40, 1996 WL 739220 (D.O.T.) (Dec. 30, 1996). An air carrier's sale of tickets clearly falls within 

the activities of a Section 41101 air carrier holding itself out to the public as providing air 

transportation. 

1. Section 41101 Certificate Operative Date ofSuspensionfor Dormant Air Carrier 

Pursuant to 49 U.S.C. § 41110, a certificate of public convenience and necessity remains 

in effect until the Department suspends or revokes the certificate. However, for a dormant (i.e., 

non-operating) air carrier with a certificate of public convenience and necessity, 14 C.F.R. § 

204.7 provides that the operative suspension date for a carrier providing transportation "for 

which it was found fit" is the date the air carrier ceases operation. See, Oceanair of Florida Inc., 

v. US. Department of Transportation, 876 F.2d 1560, 1563-64 (C.A. 11, 1989)(Air carriers with 

a certificate of public convenience and necessity are presumptively unfit when they are dormant, 

and the Department has the authority to "revoke automatically" their certificates); Air North 

America v. Department ofTransportation, 937 F. 2d 1427, 1430-31 (C.A. 9, 1991)(Automatic 

"dormancy" rule allows the Department greater ability to monitor "fitness" of air carriers). 

The "dormancy suspension" rule of 14 C.F.R. § 204.7 is also applicable to commuter air 

carriers, because a commuter air carrier is required to demonstrate "fitness" in order to obtain 

authority to operate. 14 C.F.R. § 298.53(c) (referring to 14 C.F.R. § 204.7). Thus, the operative 

suspension date for a dormant commuter air carrier - even when authorized under Part 298 - is 

Page 6 of 14 
the date the commuter air carrier ceases to operates.Jd. See also, 14 C.F.R. § 298.21(a)(l)(iv) at 

fn. 7. 

2. Part 298 Air Taxi Registration and Exemption from Section 41101 

An air carrier providing limited air taxi transportation service2 need not apply for a 

Section 41101 certificate ofpublic convenience and necessity. 14 C.F.R. § 298.21. Instead, 

under 14 C.F.R., Part 298, an air carrier may register under Part 298 as an air taxi carrier, and 

obtain an exemption from the Section 41101 requirement that its economic authority be obtained 

from the Department by a certificate of public convenience and necessity. However, if an air 

carrier's Part 298 air taxi registration is cancelled, then it is no longer exempt from the Section 

41101 requirement that it must hold a certificate of public convenience and necessity. 14 C.F.R. 

§ 298.12. If such an air carrier then provided air transportation without a Section 41101 

certificate, it would commit a violation of 49 U.S.C. § 41101. 

In addition, it is important to note that a Part 298 air taxi registration does not require a 

showing of"fitness" before the Department grants the registration. 3 14 C.F.R. § 298.21. Thus, an 

air carrier who is providing air transportation as a Part 298 registered air taxi operator does not . 

hold a Section 41101 certificate of public convenience and necessity, and is not subject to the 

Department's automatic "dormancy" cancellation authorized by 14 C.F.R. § 204.7. 

3. Part 298 Air Taxi Registration Cancellation Process 

For an air taxi operator who registers to provide air transportation only under Part 298, 14 

C.F.R. § 298.21(b) provides that its registration "shall remain in effect until it is amended by the 

carrier or canceled by the Department." 

a) 14 C.F.R. § 204.7 Does Not Apply 

Clearly, as discussed supra, 14 C.F.R. § 204.7 provides for an automatic cancellation 

date for a dormant air carrier who had been found "fit" to hold a certificate of public 

convenience and necessity. However, 14 C.F.R. § 204.7 applies only to an "air carrier found 

fit[.]" 14 C.F.R. § 204.7(b); Cf. 14 C.F.R. § 298.53(c). By its clear language, 14 C.F.R. § 204.7 

is inapplicable to air taxi registrations, because a Part 298 air taxi operator is not required to be 

2 An air carrier providing limited air taxi service may provide the following: limited scheduled passenger, scheduled 

cargo, mail under a U.S. Postal Service contract, on-demand passenger, on-demand cargo, or other service such as 

air ambulance operations, fire fighting or seasonal operations. 14 C.F.R. § 298.21 (a)(l )(iv). 

3 The "fitness data" that an air carrier must submit when applying for a certificate of public convenience and 

necessity is contained in 14 C.F.R. Ch. II, Part 204. 

Page 7 of 14 
found fit, willing, and able to perform air taxi operations before the Department issues it an air 

taxi registration. See 14 C.P.R.§§ 298.21-22. Indeed, the absence of any reference to 14 C.P.R.§ 

204.7 (which references the fitness standard) for Part 298 air taxi operators presumptively 

indicates that a different standard of registration cancellation, suspension or revocation applies. 

14 C.P.R. § 298.24. 

b) 14 C.P.R.§ 298.24 Is Applicable 

The applicable regulation governing cancellation of air taxi registrations is 14 C.P.R. 

§ 298.24, which states in part: "The registration of an air taxi operator may be canceled by the 

Department" if, among other reasons, "the operator ceases its operations." (emphasis added). 

The use of the permissive "may be canceled" indicates that a Part 298 air taxi operator's 

registration is not automatically canceled as an operation of law when the carrier ceases 

operations. See, Air North America v. Department ofTransportation, 937 F. 2d 1427, 1432 (C.A. 

9, 1991)(Agency's delegated authority is limited, and the agency may not go beyond the range of 

options authorized by statute). 

c) Department Must Take Action 

Thus, the Department's cancellation of an air taxi operator's Part 298 registration is 

treated differently from an air carrier operating as a commuter air carrier. For taxi operators 

registered solely under Part 298, there is no reference to 14 C.P.R. § 204.7, and there is no 

automatic cancellation of a dormant air taxi operator's registration. Instead, pursuant to 14 

C.P.R. § 298.24(a)-(e), the registration of an air taxi operator is cancelled only when the 

Department takes affirmative action based on a variety of factors provided, including cessation 

of operations. See, e.g., Civil Aeronautics Board v. Delta Airlines, Inc., 81 S. Ct. 1611, 1618, 367 

U.S. 316, 6 L.Ed. 2d 869 (1961 )(to the extent that there are uncertainties in the Board's power to 

alter an effective certificate of transportation, the uncertainty should be resolved in favor of the 

air carrier). 

While no Department orders directly address this issue, the Department has treated the 

cancellation of Part 298 air taxi registrations differently than the suspension of either a certificate 

of public convenience and necessity or a commuter air carrier authorization. For example, in In 

re Revocation of the Commuter Air Carrier Authority Issued to Casino Airlines, Inc., Order 

2001-4-31 (Apr. 27, 2001), Casino was found fit to conduct scheduled passenger operations as a 

Page 8 of 14 
commuter air carrier. It was also registered under Part 298 as an air taxi operator. When Casino's 

insurance was cancelled and it ceased all operations, the Department informed Casino that, in 

accordance with section 204.7, its commuter authority was suspended. In addition, due to the 

cancellation of its insurance, the Department found that "the suspension also applied to Casino's 

Part 298 air taxi authority." !d. at 1; See also, 14 C.F.R. § 298.24(a) and (b). Thus, if section 

204.7 was applicable to Part 298 air taxi operations, and the cessation of operations 

automatically resulted in the cancellation of a carrier's Part 298 air taxi registration, the 

Department would not have needed to separately state t~at Casino's Part 298 air taxi authority 

was suspended because ofthe cancellation of insurance. 

4. The OAEP did not prove that Respondent Friendship violated 49 US. C.§ 41101 

The admitted facts establish that Friendship was an air taxi operator as defined by 14 

C.F.R. Part 298. Friendship ceased operations on May 16,2011. Friendship sold tickets on an 

unknown date after May 16, 2011-the date it ceased operations-but not after the date of 

October 18, 2011. It did not provide a refund on those tickets in a timely manner. On August 15, 

2011, Friendship surrendered its air carrier certificate to the FAA. On October 18,2011, 

approximately two (2) months after Friendship surrendered its air carrier certificate, the 

Department cancelled Friendship's Part 298 air taxi registration. 

The OAEP does not assert, nor do the admitted facts establish, that Friendship filed any 

amendment4 to its registration prior to October 18,2011. 14 C.F.R. § 298.23. The OAEP also 

does not assert that prior to October 18, 2011, it exercised any of the alternate Part 298 air taxi 

carrier cancellation options identified in 14 C.F.R. § 298.24. Thus, pursuant to 14 C.F.R. Part 

298 and the admitted facts, Friendship's air taxi registration remained in effect until the 

Department cancelled it on October 18, 2011. 

As noted earlier, Friendship was exempt from Section 411 01 as long as it held an 

effective air taxi registration. In order to prove that Friendship violated section 41101, the OAEP 

must prove that the Respondents provided air transportation-in this case by selling ticketsafter October 18, 2011, the date its registration was cancelled. The admitted well-pleaded facts 

do not establish that Friendship sold tickets or otherwise provided air transportation after 

4 If an air taxi operator files an amendment, it must be made on an OST Form 4507 and filed within thirty (30) days 

after the change occurs. 14 C.F.R. § 298.23(b). 

Page 9 of 14 
October 18, 2011. Thus, the OEAP has not proved that either of the Respondents violated 49 

U.S.C. § 41101 as alleged. 

IV. Allegations Against Respondent Mr. Behnam 

The OAEP alleged in its pleadings that Friendship operated under "the direction and 

control" of Respondent Christopher Behnam, the President and owner of Friendship. (Complaint, 

1 ~ 2.) It appears that this pleading was intended to support findings of fact and conclusions of 

law that Mr. Behnam had individually violated the regulations alleged herein, and to support the 

OAEP's requests to hold Mr. Behnam individually liable. 

As part of the OAEP's Complaint, the OAEP's April 3, 2013 Notice of Enforcement 

Proceeding and Proposed Assessment of Civil Penalties ("4/3/13 Notice") asserted that there 

were "reasonable grounds" (unspecified) to believe that violations of"14 CFR Part 374, [and] 49 

U.S.C. §§ 41101 and 41712" occurred under the "direction and control of Christopher Behnam." 

(4/3/13 Notice, 2.) According to the 4/3113 Notice, the OAEP was instituting a formal 

proceeding to "investigate the allegations." (Id.) No other information about Mr. Behnam's 

alleged personal involvement in Friendship's air taxi carrier business activities has been 

proffered. 

The OAEP did not prove that Respondent Mr. Behnam committed violations 

The Department has found that individuals who make "day-by-day decisions" on behalf 

of corporate entities may be held personally liable for the unlawful conduct of those entities. 

Rani Herskovitz, Individually, and Ultimate Fares, Inc. Violations of 49 US. C. § 41712 and 14 

CF.R. 257.5(D), 399.80(F) and 399.84, Consent Order 2009-11-8, Page 3 (Nov. 9, 2009) 

(Single owner of air carrier was "heavily involved" in day-to-day operations, and made all 

significant decisions). Such "day to day" individual decision-making may result in personal 

liability if it is established that an "individual's conduct amounts to an 'animating force' that 

causes the violation." Tropical Airways, Inc., Larry Singh, Consent Order 87-12-43, Page 1 

(Dec. 17, 1987) (President of air carrier controlled the business finances through a personal 

savings account). See also, Citronelle-Mabile Gathering, Inc., v. Herrington, 826 F.2d 16 

(Temp. Emer. Ct. App. 1987) (personal liability premised upon the "central figure" theory 

"depends upon the individual's acts") (citing US. v. Sutton, 795 F.2d 1040, 1060 (Temp. Emer. 

Ct. App. 1986), cert. denied, 479 U.S. 1030 (1987)), cert. denied, 484 U.S. 943 (1987)). 

Page 10 of 14 
However, in the case herein, neither the OAEP's 4/3113 Notice nor the OAEP's 

Complaint included any facts that supported a finding that Mr. Behnam personally directed and 

controlled the operations of Friendship, or that such direction and control occurred on a "day-today" basis that could reasonably be perceived as an "animating force" or central figure" behind 

the violations. At best, the OAEP's submissions in this case noted that Mr. Behnam's 

involvement was a possibility, and that the matter was under investigation. Thus, the OAEP's 

factual assertion that the violations in the Complaint occurred under the "direction and control" 

of Mr. Behnam was not well-pleaded and was not admitted. (Complaint, 1 ~ 2.) As a result, Mr. 

Behnam's individual liability as a Respondent has not been proven. 

V. Requested Penalties and Other Relief 

The OAEP requests a total civil penalty of $67,500 against both Friendship and Mr. 

Behnam, jointly and severally, for the violations alleged under Part 374 and 49 U.S.C. § 41712. 

(Complaint, 3 ~A, B, and E.) The OAEP also requests an additional $2,500 for "each similar 

violation revealed in the course of this investigation." (Complaint, 3 ~E.) No penalty was 

requested for any found violation of 49 U.S.C. § 41101. (!d.) 

The OAEP did not provide any basis for how it calculated the proposed $67,500 

requested civil penalty for violations alleged under Part 374 and 49 U.S.C. § 41712. Nor did it 

provide any explanation of the factors (if any) it utilized in requesting that amount. 

Pursuant to 49 C.F.R. § 46301(a)(l)(A), the penalty range (no minimum listed) for 

general violations of chapters 411 and 417 for either a small business or an individual is $0.00 to 

$1,100. Pursuant to 49 C.F.R. § 46301(a)(5)(D), the penalty range (no minimum listed) for a 

violation of Section 41712 for either a small business or an individual is $0.00 to $2,500. The 

penalty range of $0.00 to $2,500 may also be assessed for a violation involving "any other 

regulation ... that is intended to afford consumer protection to commercial air transportation 

passengers." 49 C.F.R. § 46301(a)(5)(D). 

It is clear that if the $2,500 amount (identified in the OAEP Complaint) is multiplied by 

27 violations, it results in a total sum of$67,500. But based on the OAEP's pleadings, the 

admitted facts, and this court's findings, Friendship has committed a total of 54 violations, i.e., 

27 violations under Part 374, and an additional27 violations under 49 U.S.C. § 41712. Based on 

the pleadings, the OAEP appears to be seeking a fine on each ofthe 54 violations. If$67,500 is 

Page 11 of 14 
accepted as a reasonable fine, and it is divided by 54, then it appears each violation might be 

mathematically assigned a $1,250 fine. However, it is unknown whether that is how the OAEP 

calculated its proposed $67,500 fine, or whether the OAEP had considered a different 

mathematical method (or considered other factors) in proposing the $67,500 fine. 

The OAEP also requested the following: a) a "cease and desist" order entered against Mr. 

Behnam individually, for a period offive (5) years (Complaint, 3 ~F); b) that Mr. Behnam be 

directed to annually affirm in writing, for the next five (5) years, his compliance with the cease 

and desist order (Id. at~ G); and, c) for any other relief deemed appropriate (Id. at 4 ~H). 

The OAEP asserted that 49 U.S.C. § 41712 provided authority for the cease and desist 

relief. (Complaint, 2 ~ 15.) While it is clear that 49 U.S.C. § 41712(a) authorizes the Department 

to order an air carrier to "stop" an unfair or deceptive practice, it does not appear to provide for 

the future relief specifically plead in this case. The OAEP also cited to 49 U.S.C. § 46101(a)(4) 

-as authority. While there is no doubt that 49 U.S.C. § 46101(a)(4) authorizes the Department to 

issue an order compelling compliance with the law, it does not appear to grant the Department 

authority to require an individual to engage in future "probationary" acts (e.g., annually reporting 

compliance to the Department for a five year period after the issuance of a cease and desist 

order). 

As discussed supra, judgments by default are not granted as a matter of right. See, 

Baicker-McKee et al., supra, at 1106-07. A party seeking a default judgment bears the burden of 

proving an entitlement to it. !d. at 1105 ("the moving party must prove damages"). The proof 

must be limited to the amounts pleaded in the Complaint. See, e.g., Silge v. Merz, 510 F.3d 157, 

160 (2d Cir. 2007) ("By limiting damages to what is specified in the demand for judgment ... a 

defendant who is considering default can look at the damages clause, satisfy himself that he is 

willing to suffer judgment in that amount, and then default ... '·'). 

In its Motion for Default ("Motion"), the OAEP requested that the proposed civil penalty 

be ordered paid "within fifteen days" of any default judgment order. (Motion, 3.) The OAEP also 

offered to provide an "offer of proof' regarding its allegations, if needed. (!d.) 

As noted earlier herein, pursuant to 14 C.P.R. § 302.409, the court may take additional 

proof in support of a default judgment request, with or without notice to the defaulting party. Cf. 

Gesauldi v. Dan Yan Inc., _F. Supp. 2d _, 2014 WL 1057307 (E.D.N.Y. 2014) (defaulting 

party must be given an opportunity to contest the amount sought to be proved). 14 C.P.R. § 

Page 12 of 14 
i '. 

302.409 also grants the court the discretion to accept proof in either documentary form (e.g., 

affidavits, declarations, or documentary evidence, etc.) or in an evidentiary hearing. Cf. 46 Am. 

Jur. 2d Judgments §298 (when the amount claimed is a sum based on mathematical calculation, a 

hearing is not required). 

VI. Conclusion 

Pursuant to 49 C.F.R. § 302.11, 49 C.F.R. § 302.17, 49 C.F.R. § 302.24, and after 

reviewing and considering all documents, relevant caselaw, regulations, statutes, and being fully 

advised: 

IT IS HEREBY ORDERED AND HELD: 

1. The well-pleaded facts identified in Section II of this Order are deemed admitted. 

2. Respondent Friendship Airways, Inc. d/b/a Yellow Air Taxi ("Friendship")committed 

twenty-seven (27) violations of 14 C.F.R. § 374.3 between August 2010 and August 2011 

when it failed to process credit refund requests within seven (7) business days of receipt 

of full documentation for the refund requested, pursuant to Regulation Z, 12 C.F.R. part 

226. 

3. Friendship committed twenty-seven (27) violations of 49 U.S.C. § 41712-i.e., 27 acts of 

unfair or deceptive trade practice-between August 2010 and October 2011 when it 

failed to process credit refund requests pursuant to 14 C.F.R. § 374.3. 

4. The Office of Aviation Enforcement and Proceedings' ("OAEP") failed to prove that 

Friendship, an air taxi carrier registered under Part 298, and/or Mr. Behnam, the 

President and owner of Friendship, committed a violation of 49 U.S.C. § 41101 on or 

before October 18, 2011, when Friendship's air taxi operations registration was cancelled 

by the Department. 

5. The OAEP's Motion for Default Judgment against both Friendship and Mr. Behnam, 

jointly and severally, is reserved. 

6. The OAEP may present supplemental proof in support of its allegation that Mr. Behnam, 

as the President and owner of Friendship, was a "central figure" in Friendship's activities 

prior to October 18, 2011, and may be held personally liable for Friendship's committed 

violations of 14 C.F.R. § 374.3 and 49 U.S.C. § 41712. 

Page 13 of 14 
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7. The OAEP may also present supplemental proof in support of its requests for the 

proposed civil penalty of $67,500 against Friendship and Mr. Behnam, jointly and 

severally, as well as proof in support of the prospective affirmative relief sought against 

Mr. Behnam individually. 

8. The OAEP may choose to present supplemental proof solely by documentary submission 

(e.g., declaration, affidavit, etc.). Ifthe OAEP chooses to present documentary proof 

only, it shall file all supplemental material on or before September 26, 2014. A copy of 

the supplemental proof should be served upon both Respondents. 

8. In the alternative, ifthe OAEP seeks an evidentiary hearing in this matter, it should 

notify the undersigned by written request on or before August 8, 2014. This request 

should include a statement ot'how much time the OAEP seeks to reserve on the court's 

hearing calendar, and the number of witnesses the OAEP intends to present. Upon receipt 

of such request, the court will schedule a brief telephone conference to discuss a hearing 

date/time that is mutually convenient for the parties and the witnesses. 

9. Any requests for modification of the deadlines set forth in this Order, or other relief, 

should be made by written Motion. 

10. For clarifications of this order or questions with regard to the procedures to be followed 

in this case, please contact Mr. Cody L. Smith, Attorney-Advisor, at the Office of 

Hearings (202-366-6941). 

Attachment: Service List 

Page 14 of 14 
SERVICE LIST 

ORIGINAL & ONE COPY 

U.S. Department of Transportation 

Dockets Operations, M:-30 

West Building, Ground Floor 

Room W12-10 

1200 New Jersey Avenue, S.E. 

Washington, DC 20590 

Ms. Laura Jennings 

Mr. Samuel Podberesky 

Complainant's Counsel 

ONE COPY 

Office of Aviation Enforcement and Proceedings, C-70 

U.S. Department of Transportation 

1200 New Jersey Avenue, S.E. (W96-431) 

Washington, DC 20590 

TEL: 202-366-0966 

Friendship Airways, Inc. 

d/b/a Yell ow Air Taxi 

Respondent 

2680 N .E. 24 Street 

Pompano Beach, FL 33064 

Mr. Christopher Behnam 

Respondent 

President and Owner, Yellow Air Taxi 

2680 N.E. 24 Street 

Pompano Beach, FL 33064 

Judge J.E. Sullivan 

US. Administrative Law Judge 

U.S. Department of Transportation 

Office of Hearings, M-20 

1200 New Jersey Avenue, S.E. (E11-310) 

Washington, DC 20590 

TEL: 202-366-2142 

FAX: 202-366-7536 

Docket No. OST-2013-0066