OG/24/201 0 14:3 1 FA X 202493514 2 FAf t * DMS ElOOI/00 7

UNITE D STATE S DEPARTMEN T O F TRANSPORTATIO N FEDERA L AVIATIO N ADMINISTRATIO N

WASHINGTON , D C I n th e Matte r

of : GREE N AVIATIO N MANAGEMEN T CO. . LL C KA A Order No . 2010- 4 Docke t No . CP07EA000 3 (BAJA ) FDM S No . FAA-2007-26989 ' Served : Jun e 14,201 0 ORDE RFO RFURTHE RBRIEFING ^ Fo r th e reason s set

fort h more full

y below , th e partie s ar

e directe dto submi t additional brief

s o n th e issue s describe di n thi s order . Thes e brief s shal l b e submitte di

n accordanc e wit

h thi s orde r

an dlimiie dto th e specifi c issue s se t fort h herein . On Octobe r

1 , 2007 , th e F

A A withdre w it s complain t allegin g tha

t Gree n Aviatio n Managemen t

Company , LLC , d/b/aGree n Ai r (Gree n Air) , ha

dviolate d 1 4 C.F.R . § § 119,5(1) , 135,343 , an d91.13(a) . Subsequently , Adminisiraiiv e La w Judg e (ALJ ) Isaac D . Benki n grante dGreen Air' s motio n t o dismis s th e proceeding s wit h prejudice . Gree n Ai r applie dfo

r attorne y fee s under

th e Equa l Acces s t o Justic e Ac t (EAJA) , 5 U.S.C . § 504 , whic h permit s award s o f attorney s fee s an dexpense s t o aprevailin g part

y

' Material s tile di

n th e h'A A Hearin g Docke t

(excep t fo r material s filedi

n sccuni > cases ) arc als o availabl e for

viewin g a

i ih c followin g Internet

address : www.resulalions,gov . ^ Jh e Administrator' s civi l penalt y decisions , alon g wit

h indexe s o f

the dcci.sions , th e rule s o f practice , an dother

information , ar

e availabl e o

n th e Interne t

a t th e followin g address : wyvyv.faa.gov/aboul/office_org/headquarier s offices/agc/polqdjvdicaHon/AGCJOO / Civi l Penalty . I

n addition , Thomjio

n Rcuters/Wcs t

Publishin g publishe s Federa l Aviatio n Decisions . Finally , th e decision s ar e availabl e throug h LHXT

S (TRAN S library ) andWcslLa v (FTRAN-FA A database) . Fo r additional information , se e th e We b site .06/24/201 0 14:3 1 FA X 202493514 2 FA A + DM S 0002/00 7

i n an adversary adjudicatio n imles s th e government' s positio n wa s substantiall y justified . Th e ALJ hel dtha t

Gree n Air

wa s aprevailin g pany , but denie dGree n Air' s apphcatio n on th e groun dthat

th e agenc y -wa-

s substantiall y justifie di n goin g forwar dwith th e ciise . Gree n Ai r appeale dth e ALJ' s finding tha t the FAA wa s substantiall y justified . Th e threshol dissu e i n thi s matter i s whethe r

Gree n Ai r

i s aprevailin g party . I

n 2001 , i n Biickharmo n Board& Care Home . Inc . v . Wes t Virgini aDepartmen t

of HeeJt h & Huma n Resources . 53 2 U.S . 59 8 (2001) , th e Suprem e Cour t clarifie dth e standardtha

t shoul db e applie di n determinin g whethe r a n applican t

i s a"prevailin g party. " I n Buckhatmon , th e Cour

t hel dthat th e ter m"prevailin g party " doe s no t includ e apart^

^ tha t ha s faile dt

o secure ajudiciall y sanctione dchang e i n th e legal relationshi p of th e paj-tie s eve n if th e litigatio n brought

abou t th e desire dalteratio n i n th e defendant' s conduct . Th e ALJ , i n th e instan t

case , di dno t

consider whethe r th e FAA' s withdrawa l o f th e complain t mad e Gree n Ai r

aprevailin g part

y under th e tes t se t fort h b y th e Suprem e Cour

t i n Buckhannon .

^ Th e EAJ A provide s a s follows : An agenc y tha t

conduct s a

n adversar y adjudicatio n shal l award , t o aprevaiUn g party other

tha n th e Unite dStates , fee s an dothe r expense s incurre db y tha t part y i n connectio n wit

h that proceeding , unles s th e adjudicativ e office r o f th e agenc y finds tha t th e positio n o f

th e agenc y wa s substantiall y justifie do r tha t special circumstance s make a

n awardunjust . 5 U.S.C . § 504(a)(1) , Similarly , th e FAA' s implementin g regulationi j provid e that : A prevailin g applican t

ma y receiv e a

n awar dfor

attorne y fee s an dother expense s incurre di n cormectio n wit h aproceeding , o r

i n asignifican t

an d discret e substantiv e portio n o f th e proceeding , unles s th e positio n o f th e agenc y over

whic h th e applican t

ha. s prevaile dwa s substantiall y justified . 1 4 C.F.R . § 14.04(a) .OG/24/201 0 14:3 1 FA X 202493514 2 FA A* DM S 11003/00 7

Unde r 1 4 C.F.R . § 13.233(j)(l) , th e Administrato r may , o n hi s ovia

i initiative , rais e any issu e tha

t i s require dfo

r th e prope r

dispositio n o f

th e proceedings . Th e Administrato r

finds that th e issu e o f

whethe r Gree n Ai r

i s th e prevailin g party unde r rhs . Buckhomio n standardi s apreliminary issu e tha t mus t b e resolve dfo

r th e prope r dispositio n o f

th e proceedings . A s explaine dbelow , thi s orde r provide s th e partie s with a n opportunity to brie f

thi s threshol dissu e a s require dunder 1 4 C.F.R . § 13.233(j)(l).' ' In addition , i n th e event

tha t Green Ai r

i s aprevailin g part

y unde r th e Buckhatmo n standard , thi s order provide s th e partie s wit

h a n opportunity t o addres s certai n issue s relate dto th e questio n o f whether th e FAA' s positio n i n th e tmderlyin g litigatio n wa s ."jubstantiall

y justified . A . Prevailin g Party . I n Buckliannon . th e Suprem e Cour t hel dtha t t o b e aprevailin g parly , apart y mus t sho w tha t it ha s bee n awarde dsom e relie f by th e court , suc h as a

n enforceabl e judgmen t o n th e merit s or

acourt-ordere dconsen t

decree , bringin g abou t

amateria l chang e i n th e lega l relationshi p o f

th e parties . Buckhannon . 53 2 U.S . a t 604-605 , Court s hav e hel d tha t th e Duckhanno n standardbroadl y applie s t o other federa l fe e shiflin g statute s usin g prevailin g party terminology , suc h a s th e EAJA . Aronono v v . Napolitano . 56 2 F.3 d84 , 88-8 9 (1' ' Cir . 2009) ; M av . Chertoff . 54 7 F-3 d342 , 34 4 (2 dCir . 2008) . Further , th e Bucklianno n .standar

dha s bee n applie db y court s t o administrativ e case s involvin g prevailin g defendants . Mr . L . v . Sloan . 44 9 F.3 d40 5 (2 dCir . 2006) . ^ Th e Nationa l

^ Thi s i s apurel y lega

l question , and , consequently , the Administrato r i s no t obligate dunder

th e Rule s of Practic e t o reman dthe cas e t o th e AL J fo r furthe r consideration , 1 4 C.F.R . § 13.2330)(1) . ^ Mr . L wa s acas e arisin g ou t o f adisput e betwee n aparent o f astuden t an dth e loca l schoo l boardregardin g th e student' s schoo l placemen t unde r th e Individual s wit

h Disabilitie s Educatio nOS/24/201 0 14:3 2 FA X 202493514 2 FA A 4 DM S 0004/00 7

Transportatio n Safet y Boar dha s hel dtha t th e Buckhanno n standar dapplie s t o NTS B case s arisin g fro msuspension s o f certificate s b y th e FAA . Application s o f Turne r an d Coonan . NTS B Orde r

No . EA-546 7 a t

5 (2009) . Th e Administrato r

ha s no t rule do n th e issu e o f

whethe r aresponden t

i s a prevailin g part y afte r

th e voluntar y withdrawa l o f th e complain t

b y th e FA A sinc e 1991 . I n KD S Aviatio n Corp. . FA A Orde r No . 1991-5 2 (Octobe r

28 , 1991) . th e Administrato r hel dtha t th e EAJ A applican t

wa s aprevailin g part y whe n th e FA A withdre w th e notic e o f propose dcivi l penalt y actio n (NPCP ) an dth e complaint , an dth e AL J dismisse dth e case . Th e Administrato r note dtha t

th e FAA' s rule s implementin g th e EAJA , "obviousl y contemplat e Voluntar y dismissal ' a s abasi s fo r a n EAJ A claim." * KD S Aviatio n Corp . FA A Orde r

1991-5 2 a t

5 . I n ligh t

o f Buckhannon' s requiremen t fo r ajudiciall y sanctione dorde r

causin g amateria l alteratio n i n th e lega l relationshi p o f th e parties , suc h a s adecisio n o n th e merit s o r aconsen t

decree , i t

appear s tha t

th e principle s announce di n KD S Aviatio n Corp . shoul db e reconsidered .

(IDEA) . Th e schoo l boar drequeste dtli e du e proces s hearin g before th e hearin g officer . After th e partie s agree dt o aplacemen t sough t by th e parent , th e hearin g office r dismisse dth e cas e withou t prejudice . Th e partie s coul dno t agre e upo n settlemen t

language , an dconsequently , th e AL J di d no t incorporat e th e settlemen t detail s i n th e orde r

o f dismissal . Subsequently , th e paren t sough t attorne y fee s unde r

th e IDEA . Th e Secon dCircui t Court hel dtha t "th e rul e o f

Buckhanno n applie s a t th e firs t ste p o f th e analysis , regardles s o f whethe r th e part y seekin g fee s i s aplaintif f or defendant. " Id , a

t 407 . Nonetheless , th e court hel dthat th e defendan t

paren t wa s no t aprevailin g party becaus e th e settlemen t 'Sva s purel y privat e an dtherefor e doe s no t constitut e a

n administrativel y sanctione dchang e i n th e lega l relationshi p o f

th e partie s tha t

i s judiciall y enforceable. " Id. , at

408 . ^ Th e Administrato r

referre dt o 1 4 C.F.R . § 14.2b(c)(4 ) fcurrentl y 1 4 C.F.R . § 14,20(c)(5) ] whic h include s th e "isauanc c o f

afinal order

o r an y othe r final resolutio n o f

aproceeding , suc h a s a settlemen t o r voluntary dismissal , whic h i s no t subjec t t o apetitio n for

reconsideration " a s triggerin g th e 30-da

y tim e frame for

filing a n EAJ A application .OG/24/201 0 14:3 2 FA X 202493514 2 FA A •> • DM S l2|005/00 7

Th e ALJ di dno t

consider whethe r Gree n Ai r

wa s aprevailin g party unde r a Buckhatmo n analysis , bu t instea dapparentl y relie dupo n th e reasonin g i n KD S Aviatio n Corp. , an dth e partie s hav e no t addresse dthi s issu e on appeal . I n ligh t o f th e foregoing , th e Administrato r request s brief

s fro mth e partie s tha t addres s th e following :

• Di dth e ALJ' s dismissa l o f th e proceeding s wit

h prejudic e i n thi s cas e afte r th e FA A withdre w it s complain t resul t i n amaterial alteratio n o f th e lega l relationshi p olih c partie s a s require dunde r Buckhannon ?

• I f ther e wa s amaterial alteration , di dth e dismissa l with prejudic e hav e th e "judicia l imprimatur " require dunde r Buckhannon ? Th e partie s shoul ddiscus s whethe r adismissal o f

th e complain t

wit h prejudic e constitute s th e judicial sanctio n require db y Buckhannon , o r whethe r th e judg e (o r

AL J i n administrativ e cases ) mus t

hav e mor e involvemen t

i n th e outcome , suc h a s i n aconsen t decree .

• I n answerin g thi s question , th e partie s shoul dconside r vvhcthc r it make s an y differenc e i

n thi s cas e tha t

th e AL J wa.< ! require dt o dismis s th e cas e wit h prejudic e unde r

1 4 C.F.R . § 13.215? ' B . Substantia l JustificatiO D Th e Suprem e Cour

t ha s hel dtha

t the phras e "substantiall y justified " i n EAJ A mean s "justifie di n substanc e or i n th e main, " "justifie dt o adegre e tha t coul dsatisf> ' a reasonabl e person, " or

havin g a"reasonabl e basi s both i n la w an dfact. " Pierc e j^ . Underwood . 48 7 U.S . 552 , 56 5 (1988) .

' Sectio n 13.21 5 provides , "[i] f a n agenc y attorne y withdraw s th e complaint... , th e administrativ e la

w judg e shal l di.smis s th e proceeding. s unde r thi s subpart

wit h prejudice. "OG/24/201 0 14:3 2 FA X 202493514 2 FA A * DM S @100G/00 7

I n thi s case , th e FA A allege dtha t o n flights tha t

occurre do n Decembe r

30 , 2005 , an dJanuary 2 , 2006 , Gree n Ai r carrie d1 0 passenger s i n violatio n o f it s operation s specifications , unde r

whic h it wa s onl y permitte dt o fl

y nin e passenger s i n it s Challenge r CL-eOO. " Further , th e FA A allege dtha t Gree n Ai r

use dth e 10 * passenger , th e pilot' s daughter , Eri n Daly , a s aflight attendan t althoug h Gree n Ai r

di dno t hav e a n approve d flight attendan t trainin g program , an dMs . Dal y wa s no t traine dadequately . Gree n Ai r denie dtha t

i t carrie d1 0 passenger s o n thes e flighti s andtha t i t use dMs . Dal y a s aflight attendant , arguin g instea dtha t Ms . Dal y wa s anon-required * crewmembe r (i.e. , cabi n aide ) wh o wa s authorize dto si t i n th e jum p seat . Accordin g t o Gree n Air , Ms , Dal y wa s no t aflight attendan t becaus e sh e wa. s no t

assigne dto perfor

many safet

y duties , but instea dwas onl y respon.sibl e for servin g foo dan ddrink s t o th e passenger s an dpilots . Gree n Air' s defens e wa s base dupo n 1 4 C.F.R . § 135,85(a) , whic h provide s tha t a carrie r operatin g unde r

Par t 13 5 may carr

y " acrewmembe r

o r othe r employe e o f

th e certificat e holder " "withou t complyin g wit

h th e passenger-carryin g requirement s o f thi s part. " "Crewmember " i s defmedin th e regulation s a s " aperso n assigne dt o perfor mdut y in an aircraf

t durin g fligh t

time. " 1 4 C.F.R . § 1. 1 ("crewmember") . Th e partie s ar e aske dt o brie f th e followin g issue :

• Mus t a"crewmember " under

Sectio n 135.8 5 b e a

n "employee " o f

th e certificat e holder ? I

f .so , ho w i s "employee " define di n thi s context ? D o th e

* Th e Decembe

r 30 , 2005 , charte

r flight wa s fro mMorrLstown

, Ne w Jersey , t o Nassau , Bahamas . Th e retur n trip wen t fro mNassau , Bahamas , to Wilmington , Nort h Carolina , t

o Morristown , Ne

w Jersey . * Sectio n 135,10 7 provide s tha

t "[n] o certificat

e holde r ma y operat e a n aircraf t tha t ha s a passenge r seating configuration , excludin g an y pilot seat , o f mor e tha n 1 9 unles s ther

e i s aflight attendan t crewmembe

r o n boar dthe aircraft. " 14 C.F.R . § 135.107 .OG/24/201 0 14:3 2 FA X 202493514 2 FA A+ DM S 12007/00 7

regulation s permi t

acertificate holde r

t o transport

crewmember s wh o are independen t

contractor s o r

employe db y independen t contractors ? C . Briefin g Schedul e Th e partie s ar e directe dt o file' ° thei r brief s o n th e abov e issue s n o late r tha n 3 0 day s after tli e issuanc e o f

thi s order . Th e partie s ma y file repl y brief s n o late r than 2 0 day s afte r th e servic e o f

th e openin g briefs , 'l"h

e partie s are require dt o serv e eac h otlier with th e openin g an dan y repl y briefs . W . RANDOLP H BABBIT T ADMINISTRATO R Federal Aviatio n Administratio n

Whe n filing thei

r briefs , the panic s shoul

dus e the appropriat

e addres s fo

r the Hearin

g Docke t se t fort h i n 1 4 C.F.R . § 13.210(a) .