## 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 CHRISTOPHERBEHNAM Respondents DocketNo. OST-2013-0066 (EnforcementProceeding)

ORDERDEEMINGWELL-PLEADEDFACTS ADMITTED,

RESERVING ENTRY OF DEFAULTJUDGMENT, AND SETTING DEADLINE FORFILING 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 onthe Office of Aviation Enforcement and Proceedings' ("OAEP") Motion for Default Judgment ("Motion").

I. 

### Entry ofa DefaultJudgment

- Legal Standard
It has long been established that upon entry ofa 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 ofwell-pleaded factual allegations). The rules ofpractice in aviation enforcementproceedings mirror this long-standing practice.
Rule 409 provides in part: Failure ofarespondent to file and serve an answer within the time and inthe manner prescribed by§ 302.408 shall be deemed to authorize the DOT decisionmaker or administrative lawjudge, 

### 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 complaintthat are not well-pleaded should notbe deemed admitted. Baicker-McKee et al., supra, 1101; 27 Fed. Proc., L. Ed.§ 62:37 (Effect of complaint on defaultjudgment); Rabin, 881 F. Supp. 2dat768-69 (absent a sufficient basis in the pleadings, a default finding does not, in itself, warrantthe courtto enter a defaultjudgment). Federal caselawprovides 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 Danningv. Lavine, 572 F.2d 1386, 1388 (9th Cir. 1978). Additionally, a respondent is "notheld 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 ofperfectpleading does not prohibit entry ofa defaultjudgment. Rule 409 further provides inpart: [O]r, as a matter of discretion, [the DOT decision maker orjudgemay]

... proceed to take proof, without notice, ofthe allegations or charges set forth in the complaint or order[.] 14 C.P.R. § 302.409 (emphasis added). Thus, at the discretion ofthe court, additional proofand argument may be filed regarding any request for reliefthat has not been well-pleaded.



### II. Well-Pleaded Facts in the OAEP's Complaint Deemed Admitted In its Motion, the OAEP seeks a defaultjudgmentbased onthe 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 CivilProcedure §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 onthe DOTto prohibit unfair and deceptive trade practices and unfair methods ofcompetition.

Page 2 of 142. During all times relevant to the Complaint, Respondent Friendship Airways, Inc. d/b/a Yellow 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 ofthe 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 ofthe certificate ofpublic convenience and necessity issued pursuantto 49 U.S.C. § 41101, or in the form ofan exemption from the certificate requirement, such as the classification ofair taxi operators in 14 C.F.R. Part 298.
5. As an air carrier, Friendship was subjectto the creditrisk refund requirements of Regulation Z ofthe Board ofGovernors ofthe 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 ofreceipt offull documentation for the refund requested.
7. During all times relevant to the Complaint, Respondent Christopher Behnam ("Mr. Behnam") was the owner and president ofFriendship.
8. Friendship's principal place ofbusiness was 2680 N.E. 24 Street, Pompano Beach, Florida, 33064.
9. On May 16, 2011, Friendship ceased operations.
10. OnAugust 15, 2011, Friendship surrendered its air carrier certificate to the Federal Aviation Administration ("FAA").

1The Complaint cites to Part 382 for the classification ofair 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 ofdisability. See 14 C.F.R. §382.1. 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 ofEnforcement Proceeding and Proposed Assessment ofCivil 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 (10) instances between August 2010 and August 2011 to process creditrefund requests within seven (7) business days ofreceipt offull documentationfor the refund requested. Some of these instances includedpurchases ofmultipletickets.
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 offull documentation for the refund requested. Some ofthese instances included purchases ofmultiple tickets.
13. In at least one (1) ofthe 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 Complaintrequests that the court make findings ofmultiple violations against bothFriendship and Mr. Behnambased 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 carrierto comply with the credit refund requirements ofRegulation Z, 12 C.P.R. Part 226, oftheBoard ofGovernors ofthe Federal Reserve System. An air carrier's violation ofRegulation 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 7business days from accepting the return or forgiving the debt, transmit a credit statementto the card issuer[.]" 12 C.P.R. § 

### 226.12. The OAEPprovedthatFriendship violated 14 C.F.R. Part 374 

### The admitted facts establishthat 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)

Page 4 of 14business days ofreceipt offull documentation for the refund. Between August 2010 and October 2011, Friendship failed inten (10) instances to transmit a credit statement within seven (7) days

as required by RegulationZ. In an additional seventeen (17) instances, Friendship failed to transmit a credit statement at all. Pursuantto 14 C.F.R. Part 374, Friendship's violations ofRegulation Z are enforceable bythe Department as violations of 14 C.F.R. Part 374. Thus, the OEAP has proved bythe admitted facts that betweenAugust 2010 and October 2011 Friendship committed twenty-seven (27) violations of 14 C.F.R. § 374.3.

B. Alleged Violations of49 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 ofcompetition in air transportation or the sale ofair transportation. The Departmenthas determined that a failure to comply with the refund requirements of 14 C.F.R. Part 374 constitutes anunfair or deceptive practice. See, e.g., NorthwestAirlines, Inc., Violations ofConsumerProtection Regulations, Order 87-11-33 (November 16, 1987); EasternAirlines, Inc., Violations of ConsumerProtection Regulations, Order 89-8-50 (August 31, 1989); Boston-MaineAirways Corp., Violations of 49 U.S. 

### C. § 41712 and 14 CFR Part374, Order 2006-7-7 (July 7, 2006). The OAEPprovedthatFriendship violated49 U.S. 

### C. § 41712 The OEAP has provedbythe 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 ofthese violations also constitutes an unfair or deceptive trade practice, and thus are violations of49 U.S.C. § 41712. As a result, Friendship committed twenty-seven (27) violations of49 U.S.C. § 41712-i.e., 27 acts ofunfair or deceptive trade practice-betweenAugust 2010 and October 2011 when it failed to process creditrefund requests within seven (7) business days ofreceipt of full documentation for the refund requested.

C. Alleged Violation of49 U.S.C. § 41101 The OAEP asserts that Friendship soldtickets afterthe date it ceased operations, and therefore violated 49 U.S.C. § 41101 by engaging "in airtransportation withoutthe proper economic authority." (Complaint, 3**~C.)** Page 5 of 1449 U.S.C. §41101(a)(l) provides inpart: "(a) GeneraL-Except

### asprovided in this chapter or another law-(1) an air carrier may provide air transportation only ifthe air carrierholds a certificate issued under this chapter authorizingthe airtransportation[.]" (emphasis added).
A "certificate issued underthis chapter" refers to a certificate ofpublic 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 ofpublic 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 ofpublic 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). "Fromthe standpoint ofthe requirements ofsection 41101, the holding out ofservice, as well as the actual operation ofair service, constitutes 'providing' air transportation." 

### Western PacificAirlines, Inc. MountainAirExpress, Inc., Consent Order 96-12- 40, 1996 WL 739220 (D.O.T.) (Dec. 30, 1996). An air carrier's sale oftickets clearly falls within the activities ofa Section 41101 air carrierholding itselfoutto the public as providing air transportation. 1. 

### Section 41101 Certificate Operative Date ofSuspensionforDormantAir Carrier Pursuantto 49 U.S.C. § 41110, a certificate ofpublic convenience and necessity remains in effect until the Department suspends orrevokes the certificate. However, for a dormant (i.e., non-operating) air carrier with a certificate ofpublic convenience and necessity, 14 C.F.R. § 204.7 provides thatthe 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)(Aircarriers with

a certificate ofpublic convenience and necessity are presumptivelyunfit whenthey are dormant, and the Department has the authority to "revoke automatically" their certificates);

### AirNorth Americav. Department ofTransportation, 937 F. 2d 1427, 1430-31 (C.A. 9, 1991)(Automatic "dormancy" rule allows the Department greater ability to monitor "fitness" ofair 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 orderto 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. Part298Air Taxi Registration andExemption from Section 41101 

### An air carrierproviding 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 ofpublic convenience and necessity. However, ifan air carrier's Part 298 air taxi registration is cancelled, then itis no longer exemptfrom the Section 41101 requirement that it must hold a certificate ofpublic convenience and necessity. 14 C.F.R. § 

### 298.12. Ifsuch an air carrierthenprovided air transportation without a Section 41101 certificate, it would commit a violation of49 U.S.C. § 

### 41101. In addition, it is importantto 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 ofpublic convenience and necessity, and is not subjectto the Department's automatic "dormancy" cancellation authorized by 14 C.F.R. § 

### 204.7. 3. Part298Air 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 NotApply 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 ofpublic 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, firefighting 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 ofpublic convenience and necessity is contained in 14 C.F.R. Ch. II, Part 204. Page 7 of 14found 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 ofany 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 ofregistration 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 ofair taxi registrations is 14 C.P.R. § 298.24, which states in part: "The registration ofan air taxi operator may be canceledby the Department" if, among other reasons, "the operator ceases its operations." (emphasis added). The use ofthe permissive "maybe canceled" indicates that a Part 298 air taxi operator's registration is not automatically canceled as an operation oflaw whenthe carrier ceases operations. See,AirNorthAmerica 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 ofan 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 ofa dormant air taxi operator's registration. Instead, pursuantto 14 C.P.R. § 298.24(a)-(e), the registration ofan air taxi operator is cancelled only when the Department takes affirmative action based on a variety offactors provided, including cessation ofoperations. See, e.g., CivilAeronautics Boardv. DeltaAirlines, Inc., 81 S. Ct. 1611, 1618, 367 U.S. 316, 6 L.Ed. 2d 869 (1961)(to the extentthat there are uncertainties in the Board'spowerto alter an effective certificate oftransportation, the uncertainty should be resolved in favor ofthe air carrier). While no Departmentorders directly address this issue, the Departmenthas treated the cancellation ofPart 298 air taxi registrations differently thanthe suspension ofeither a certificate ofpublic convenience and necessity or a commuter air carrier authorization. For example, in In

re Revocation of the CommuterAir CarrierAuthorityIssued to CasinoAirlines, Inc., Order 2001-4-31 (Apr. 27, 2001), Casino was found fit to conduct scheduled passenger operations as a

Page 8 of 14commuter air carrier. Itwas 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 ofits 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, ifsection 204.7 was applicable to Part 298 air taxi operations, and the cessation ofoperations automatically resulted in the cancellation ofa carrier's Part 298 air taxi registration, the Departmentwould not have neededto separately state**t~at** Casino's Part 298 air taxi authority
was suspended because ofthe cancellation ofinsurance. 4. The OAEP didnotprove thatRespondentFriendship violated49 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. Itdid not provide arefund 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 cancelledFriendship'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 ofthe 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 airtaxi registrationremained in effectuntil the Department cancelled it on October 18, 2011. As noted earlier, Friendship was exempt from Section41101 as long as it held an effective air taxi registration. In orderto prove that Friendship violated section 41101, the OAEP must prove that the Respondents provided air transportation-inthis 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 Ifan air taxi operator files an amendment, it mustbe 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 14October 18, 2011. Thus, the OEAP has not proved that either ofthe 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" ofRespondent Christopher Behnam, the President and owner ofFriendship. (Complaint, 1**~** 2.) Itappears thatthis pleading was intended to support findings offact and conclusions of lawthat Mr. Behnamhad individually violated the regulations alleged herein, and to support the OAEP'srequests to hold Mr. Behnamindividually liable. As part ofthe OAEP's Complaint, the OAEP's April 3, 2013 Notice ofEnforcement Proceeding and Proposed Assessment ofCivil Penalties ("4/3/13 Notice") asserted thatthere
were "reasonable grounds" (unspecified) to believe that violations of"14 CFRPart 374, [and] 49 U.S.C. §§ 41101 and 41712" occurred under the "direction and control ofChristopher 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 carrierbusiness activities has been proffered. The OAEP didnotprove thatRespondentMr. Behnam committedviolations The Departmenthas found that individuals who make "day-by-day decisions" on behalf ofcorporate entities may be held personally liable for the unlawful conduct ofthose entities. RaniHerskovitz, Individually, and Ultimate Fares, Inc. Violations of 49 US. C. § 41712 and 14 CF.R. 257.5(D), 399.80(F) and399.84, Consent Order 2009-11-8, Page 3 (Nov. 9, 2009) (Single owner ofair carrierwas "heavily involved" in day-to-day operations, and made all significant decisions). Such "dayto day" individual decision-making mayresult inpersonal liability ifit is established that an "individual's conduct amounts to an 'animating force' that
causes the violation." TropicalAirways, Inc., Larry Singh, Consent Order 87-12-43, Page 1 (Dec. 17, 1987) (President ofair 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 uponthe "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 14However, in the case herein, neitherthe OAEP's 4/3113 Notice nor the OAEP's Complaint included any facts that supported a finding that Mr. Behnampersonally directed and controlledthe operations ofFriendship, orthat such direction and control occurred on a "day-today" basis that couldreasonably 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 apossibility, and that the matter was under investigation. Thus, the OAEP's factual assertionthatthe violations in the Complaint occurred under the "direction and control" ofMr. Behnam was not well-pleaded and was not admitted. (Complaint, 1**~** 2.) As aresult, Mr. Behnam's individual liability as a Respondenthas notbeenproven.



### V. Requested Penalties and Other Relief The OAEP requests atotal 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 ofthis investigation." (Complaint, 3**~E.)** No penalty was requested for any found violation of49 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 allegedunder Part 374 and 49 U.S.C. § 41712. Nor did it provide any explanation ofthe factors (ifany) it utilized in requesting that amount. Pursuantto 49 C.F.R. §46301(a)(l)(A), the penalty range (no minimum listed) for general violations ofchapters 411 and 417 for either a small business or an individual is $0.00 to $1,100. Pursuantto 49 C.F.R. §46301(a)(5)(D), the penalty range (no minimum listed) for a violation ofSection 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 intendedto afford consumerprotectionto commercial air transportation passengers." 49 C.F.R. §46301(a)(5)(D). Itis clear that ifthe $2,500 amount (identified inthe OAEP Complaint) is multipliedby 27 violations, it results in a total sum of$67,500. Butbased on the OAEP's pleadings, the admitted facts, and this court's findings, Friendship has committed a total of54 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 11of 14accepted as a reasonable fine, and it is divided by 54, then it appears each violation mightbe mathematically assigned a $1,250 fine. However, it is unknownwhetherthat is howthe OAEP calculated its proposed $67,500 fine, or whether the OAEP hadconsidered 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 otherreliefdeemed 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 clearthat 49 U.S.C. §41712(a) authorizes the Department to order an air carrierto "stop" an unfair or deceptive practice, it does not appear to provide for the future reliefspecifically plead inthis 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 Departmentto

issue an order compelling compliance with the law, it does not appearto grantthe Department authority to require an individual to engage in future "probationary" acts (e.g., annually reporting compliance to the Departmentfor a five yearperiod afterthe issuance ofa cease and desist order). As discussed

### supra,judgmentsby default are not granted as a matter ofright. 

### See, Baicker-McKee et al., 

### supra, at 1106-07. A party seeking a defaultjudgmentbears the burden of proving an entitlementto it. 

### !d. at 1105 ("the moving party mustprove 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 forjudgment

... a defendant who is considering default can look at the damages clause, satisfy himselfthat he is willing to sufferjudgmentin that amount, and then default

...'·'). In its Motionfor Default ("Motion"), the OAEP requested thatthe proposed civil penalty be ordered paid "withinfifteen days" ofany defaultjudgment order. (Motion, 3.) The OAEP also offered to provide an "offer ofproof' regarding its allegations, ifneeded. (!d.) As noted earlier herein, pursuantto 14 C.P.R. § 302.409, the court may take additional proofin support ofa defaultjudgmentrequest, 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 mustbe given an opportunityto contestthe amount soughtto be proved). 14 C.P.R. §
Page 12of 14i '. 302.409 also grants the court the discretion to acceptproofin either documentary form (e.g., affidavits, declarations, ordocumentary evidence, etc.) or in an evidentiary hearing. Cf. 46 Am. Jur. 2dJudgments §298 (when the amount claimed is a sum based on mathematical calculation, a hearing is notrequired).



### VI. Conclusion Pursuantto 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 ofthis Order are deemed admitted.
2. Respondent Friendship Airways, Inc. d/b/a YellowAir 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 refundrequests within seven (7) business days ofreceipt offull documentation for the refund requested, pursuantto Regulation Z, 12 C.F.R. part 226.
3. Friendship committedtwenty-seven (27) violations of49 U.S.C. § 41712-i.e., 27 acts of unfair or deceptive trade practice-betweenAugust 2010 and October 2011 when it failed to process credit refund requests pursuantto 14 C.F.R. 

### § 374.3.
4. The Office ofAviation Enforcement and Proceedings' ("OAEP") failed to prove that Friendship, an airtaxi carrierregistered under Part 298, and/or Mr. Behnam, the President and owner ofFriendship, committed a violation of49 U.S.C. § 41101 on or before October 18, 2011, whenFriendship's air taxi operations registration was cancelled bythe Department.
5. The OAEP's Motion for Default Judgment againstbothFriendship and Mr. Behnam, jointly and severally, is reserved.
6. The OAEP maypresent supplemental proofin support ofits allegationthat Mr. Behnam, as the President and owner ofFriendship, was a "central figure" in Friendship's activities priorto 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:' 7. The OAEP may also present supplemental proofin support ofits requests for the proposed civil penalty of$67,500 against Friendship and Mr. Behnam,jointly and severally, as well as proofin support ofthe prospective affirmative reliefsought against Mr. Behnam individually.
8. The OAEP may choose to present supplemental proofsolelyby documentary submission (e.g., declaration, affidavit, etc.). Ifthe OAEP chooses to present documentary proof only, it shall file all supplemental material on or before September26, 2014. A copy of the supplemental proofshouldbe served uponbothRespondents.
8. In the alternative, ifthe OAEP seeks an evidentiary hearing in this matter, it should notify the undersigned bywritten request on or before August 8, 2014. This request should include a statement ot'howmuch time the OAEP seeks to reserve on the court's hearing calendar, and the number ofwitnesses the OAEP intends to present. Upon receipt ofsuchrequest, the court will schedule a brieftelephone conference to discuss a hearing date/time that is mutually convenient for the parties and the witnesses.
9. Anyrequests for modification ofthe deadlines set forth in this Order, or other relief, should be made by written Motion.
10. For clarifications ofthis order or questions with regard to the procedures to be followed inthis case, please contact Mr. Cody L. Smith, Attorney-Advisor, atthe Office of Hearings (202-366-6941).

Attachment: Service List

Page 14 of 14SERVICE LIST ORIGINAL & ONE COPY U.S. Department ofTransportation Dockets Operations, M:-30 West Building, Ground Floor Room W12-10 1200 NewJersey Avenue, S.E. Washington, DC 20590

Ms. LauraJennings Mr. Samuel Podberesky 

### Complainant's Counsel ONE COPY

Office ofAviation Enforcement and Proceedings, C-70 U.S. Department ofTransportation 1200 NewJersey Avenue, S.E. (W96-431) Washington, DC 20590 TEL: 202-366-0966 Friendship Airways, Inc. d/b/a YellowAir 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 LawJudge U.S. Department ofTransportation Office ofHearings, M-20 1200 NewJersey Avenue, S.E. (E11-310) Washington, DC 20590 TEL: 202-366-2142 FAX: 202-366-7536 DocketNo. OST-2013-0066