### UNITED STATES DEPARTMENT OF TRANSPORTATION FEDERAL AVIATION ADMINISTRATION WASHINGTON, DC In the Matter of: ENDLESS MOUNTAINS AIR, INC. FAA OrderNo. 2017-1 FDMS No. FAA-2013-0848 1 

### Served: March 3, 2017 

### DECISION AND ORDER Complainant Federal Aviation Administration ("Complainant" or "FAA") and Respondent Endless Mountains Air, Inc. ("Respondent" or "EMA") have filed cross-appeals from the Initial Decision ofAdministrative Law Judge J.E. Sullivan ("ALJ") 2 

### EMA had admitted that its pilot, who had not completed recurrent knowledge and flight check testing, operated six flights in violation of 14 C.F.R. Part 135.3 

### TheALJ determined thatthe FAA Inspector's alleged failure to answer the pilot's questions about the deadlines for obtaining recurrent testing constituted a mitigating factor, and, consequently, the ALJ imposed a civil penalty that was lower than that proposedbyComplainant.4 

### Oncross-appeal, Complainant argues thatthe civil penalty shouldbe increased from $16,200, the amount the ALJ assessed, to $46,200, the amount Complainant originally sought. Forits part, EMA argues oncross-appeal that the $16,200 civil penalty should be further reduced due to its inability to pay. 5 

### For the reasons discussed below, I grant Complainant's cross-appeal inpart, deny EMA's cross-appeal, and assess EMA a civil penalty of $ 26,400.
1 

### Generally, materials filed withthe FAA

### Hearing Docket (except for materials filed in security cases) are also available for viewing at http://www.regulations.gov. 

### 14 C.F.R. § 

### 13.210(e)(l). 2

### The ALI's Initial Decision is attached. 3 

### 14 C.F.R. Part 135 regulations involve oversight ofon-demand and airtaxi operators. Tr. 29. 4 

### Initial Decision at 8-9. 5

### Respondent's Appeal Briefat 1. See also RushmoreHelicopters, FAA

### OrderNo. 2012-8 at 14 (Oct. 11, 2012), citingFolsom'sAirService, FAA

### OrderNo. 2008-11 at 11 (Nov. 6, 2008) (theAdministratorwill consider arespondent's abilityto pay in establishing apenalty).

### I. Burden ofProofand Standard ofReview It 

### is Complainant's burden to prove that the sanction is appropriate. 

### See, e.g., National Power Corp., FAA Order No. 2016-3 at 2 (Sept 30, 2016); 

### Schuman Aviation Company, Ltd., FAA OrderNo. 2016-2 at 2 (Aug. 24, 2016); 

### Seven's Paint & 

### Wallpaper, FAA OrderNo. 2001-6 at 4- 5 (May 16, 2001). However, the respondent bears the burden to prove any affirmative defenses such as aninabilityto pay. 

### ld. Seep. 9 

### infra. On appeal, the FAA decisionmaker considers whether: (1) each finding offact is supported by a preponderance of the evidence, which must be reliable, probative, and substantial; (2) each conclusion oflaw is in accordance with applicable precedent and public policy; and (3) the ALJ committed anyprejudicial errors. 6 

### II. FactualBackground EMAis a charter air carrier7 

### and operates under 14 C.F.R. Part 1358 

### The company employs one pilot, Mr. Randy Palmer, and owns one aircraft, a single-engine Cirrus SR20 with registration numberN624CP9 

### The president and owneris Mr. William J. Dobitsch, Jr. 10 Mr. 

### Palmer, at the time ofthis case, had been a certificated pilot for 19 years.ll He alleged that he was uncertain about the deadlines for completing his next required knowledge test and flight

6 

### 14 C.F.R. § 13.233(b). 7

### Tr. 72, 

### 90, and 173. 8

### Tr. 29, 42, and 60. 9 

### Tr. 33-35. 10 

### Tr. 2, 7; 3/18/2014 Telecon. at 3; 10/27/2014 Telecon. at 5. 11 

### Tr. 99.
2

### cheekY The knowledge test is a written or oral test required by 14 C.F.R. § 

### 135.293(a). The check is a flight check required by 14 C.F.R. § 

### 135.299(a). Mr. 

### Palmer affirmatively sought confinnationofthe applicable deadlinesbycalling EMA's former Principal Operations Inspector ("POI"), Inspector Robert Ference, on August 29, 2011Y Mr. Palmer stated that he did not call EMA's then current POI, Inspector Harry Soudas, because Inspector Soudas had given Mr. Palmer failing grades onthree previous flight checks. 14 

### Inspector Ferencetestified that he responded to Mr. Pahnerbyasking him to submit copies ofhis records (FAA Forms 8410-3) to compare with the files at the FAA Flight Standards District Office. 15 

### Inspector Ference further testified that he wanted to see Mr. 

### Palmer's records because he did not want to give Mr. Palmer anymisinformation, which he said could occur ifhefailed to review the records, or failed to discuss them with EMA's then current POI, Inspector Soudas. 16 

### In conflictingtestimony, Mr. Palmer stated that Inspector Ference did not ask him to produce his records. 17 

### Instead, Mr. 

### Palmer asserted that Inspector Ference merely told him to review his paperwork to determine the date by which he needed to complete recurrent testing to remain certificated under 14 C.F.R. Part 135 18 

### The ALJ did not make a credibility determination onthe conflictingtestimony. It 

### is undisputed, however, that Mr. Palmer never produced the documentation in question to Inspector Ference. 19 

### Rather, according to Mr. Palmer, he reviewed the regulations and

12 

### Tr. 122. 13 

### Tr. 121. 14 Tr.112, 117-118. 15 Tr. 86, 89. 16 Tr. 87-88. 17 Tr. 

### 104. 18Id. 19Id.


### 3

### paperwork with Mr. Dobitsch, and together they concluded, erroneously, that Mr. Palmer would remain current on testing for 3 more months.20 

### After meeting with the FAA Inspector, Mr. Dobitsch admitted that he and Mr. Palmer did, in fact, "make a mistake."21 

### Mr. Palmer called Inspector Ference for guidance onAugust 29, 2011. 22 

### Bythen there were only 2 days remaining for Mr. Palmer to complete the recurrent testing by the August 31, 2011 deadline. 14 C.F.R. 

### §§ 135.293(a) and 135.299(a).23 

### FAA Inspector Soudas testified that based on his review of Forms 8410-3 dated July 7, 2010 and July22, 2010, he determined that Mr. Palmer's knowledge test under 14 C.F.R. § 135.293(a) and flight check under 14 C.F.R. § 135.299(a) were due in July, 2011 24 

### Under 14 C.F.R. § 135.301, there is a !-month grace period. The grace period allowed Mr. Palmer until the last day of August, 2011 to complete his recurrent testing. 14 C.F.R. §§ 135.293(a) and 135.299(a).25


### Mr. Palmer continued to operate flights for EMA past the August 31, 2011 expiration date. EMA admitted that from September 23, 2011 through October 9, 2011, Mr. 

### Palmer operated six Part 135 flights despite Mr. Palmernot completing the required recurrent testing26 

### Accordingly, EMA violated two regulations: 

### (l) EMAused Mr. 

### Palmer as a pilot when he had not completed the 14 C.F.R. § 135.293(a)knowledge test; and (2) EMAused Mr. Palmer as a pilot whenhehad

20

### Tr. 107, 121-122, and 124. Mr. Palmer and Mr. Dobitsch believed that the instrument proficiency test could substitute for the testing required under 14 C.F.R. §§ 

### 135.293 and 135.299 (Tr. 107-108, 118, and 121), and therefore, that Mr. Palmer did not have to repeat those tests until the end ofNovember, 2011. They based their beliefon a misreading of 14 C.F.R. § 

### 135.293(c), which provides that "[t]he instrument proficiency check required by Section 135.297 may be substituted for the competency checkrequired by this section for the type ofaircraft used in the check." However, 14 C.F.R. § 

### 135.293(c) does not permit the instrument proficiency check to substitute for the 14 C.F.R. § 

### 135.293(a) knowledge test or the 14 C.F.R. § 

### 135.299(a) line flight check. Tr. 29-31; see also 

### Tr. 185-186.
21 

### Tr. 131.
22 

### Tr. 121. 23 

### Tr. 45. '"Tr. 42-45; Exhs. C-2 and C-3. 25 

### Tr. 37-38, 45. 26 

### Complaint IL2-4; Tr. 17, 35, and 62.


### 4

### not completedthe 14 C.F.R. 

### § 135.299(a) flight check. 27 

### III. Complainant's Cross-Appeal Air carriers, including their pilots, have a duty to perform their services with the highest degree ofsafetyinthe public interest. 49 U.S.C. 

### §§ 44701(d) and 44702(b). Air carriers must onlyuse as pilots in command those who have passed and continue to pass, in a timely manner, the necessary checks and tests in accordance with the regulations. 14 C.F.R. 

### §§ 135.293(a) and 135.299(a). FAA Order 2150.3B, Compliance and Enforcement Program, contains the FAA's Sanction Guidance Policies28 

### and a Table ofSanctions setting forth a range ofpenalties that may beimposed for violations ofthese duties andregulations. 29


### FAA Order 2150.3B's Table of Sanctions (see below) indicates that the civil penalty for use of anunqualified crewmember shouldbethe Maximumrange. 30

27Jd. 

### Thetwo regulations violated are: (I) 14 C.F.R. § 

### 135.293(a), which provides: "No certificate holder may use a pilot ... unless, since the beginning ofthe 121 h 

### calendar month before that service, that pilot has passed a written or oral test, given by the Administrator or an authorized check pilot, on that pilot's knowledge ...;" and (2) 14 C.F.R. § 

### 135.299(a), which provides: "No certificate holdermayuse a pilot ... as a pilot in command of a flight unless, since the beginning ofthe 12th calendar month before that service, that pilot has passed a flight check in one ofthe types ofaircraft which that pilot is to fly." 

### Complainant explains that ifit has been more than 12 months since a pilot has passed a knowledge test under 14 C.F.R. § 

### 135.293(a), then the pilot must take and pass one before operating a Part 135 flight. Appeal Briefat 8. Similarly, Complainant explains, ifit has been more than 12 months since a pilot has passed a flight check under 14 C.F.R. § 

### 135.299(a), the pilot must take and pass one before operating a Part 135 flight. In 

### addition, as stated above, there is a !-month grace period under 14 C.F.R. § 

### 135.301. !d. 28 

### Chapter 7. 29 

### Appendix B -non-hazardous materials cases. 30 

### Exh. C-7 at 6; Fig. B-l-n(3); Tr. 61-62.



### 5

### Fig. B-1-n. Provisions specific to flight deck Civil Penalty crew (I) 

### Use of crewmember with expired medical Minimumto moderate certificate (2) Failure to make flight deck seat available to Maximum authorized enroute inspector (3) Use ofunqualified crewmember Maximum ( 4) Flight and duty time violation Moderate The FAA sanction guidance provided by FAA Order 2150.3B contains civil penaltyranges that depend on a carrier's or operator's size. 31 

### The guidance establishes four groups. The largest entities arein Group I and the smallest entities are in Group IV.32


### EMA is categorized as a Group IV air carrier33 

### because it operates under 14 C.F.R. Part 13534 

### with only one pilot and one aircraft35 

### EMA did not contest that, under 49 U.S.C. § 4630l(a)(5), EMA was subject to a Maximum civil penalty of$11,000 for each violation, as described in the Complaint.36 

### The Table ofSanctions indicates that for Group IV air carriers like EMA, where the violations are covered by 49 U.S.C. § 46301(a)(5)(A) and occurred after June 15, 2006, the appropriate sanctionranges are: Maximum Moderate Minimum $ 4,400- $ 11,000 $ 2,200- $ 4,399 $ 550- $ 2,19937 

### According to Complainant, there were no aggravating or mitigating circumstances, and,
31 Air Charter, 

### FAA OrderNo. 2013-1 at 5 (May 14, 2013), citingFAAOrder 2150.3B, Appx. B, B-3- B-5. ''Id. 33 

### FAAOrder 2150.3B, Appx. B, B-4; Exh. C-7 at I; see also 

### Tr. 60-61. 34

### Tr. 33. 35 

### Tr. 61. 36 

### Complaint IV.! at 3; see also 

### Answer at 1-4. 37 

### FAA Order 2150.3B, Appx. B, B-6; Exh. C-7 at 3; see also 

### Tr. 63.
6

### therefore, under the Table ofSanctions, a civil penalty in the middle ofthe Maximum range was appropriate. 38 

### The middle of the Maximum range- $4,400 plus $11,000 divided by 2- is $7,700 per flight. Multiplying that number by six flights results in a total civil penalty of $46,200, i.e., the amount Complainant originally sought. Complainant notes that it could have proposed a total civil penalty of double that amount, $92,400, by multiplying $7,700 x 6 violations of 14 C.F.R. §135.293(a), plus $7,700 x 6 violations of 14 C.F.R. § 135.299(c), but Complainant decided that "compounding the sanction in this way would be disproportionate!y harsh."39 

### TheALI, however, found a mitigating factor, i.e., that the FAA Inspector did not answer EMA's question concerning the deadlines for Mr. Palmer's recurrent testing. According to the ALJ, the FAA's Maximum penalty range did not reflect the "unique circumstances" ofthis case.40 

### The ALI stated that the FAA should have answered EMA's (Mr. 

### Palmer's) question, but, instead, it "erected roadblocks" and "then waited to see what would happen.',4 1 

### The ALJ found that the Moderate range, which is between $2,200 and $4,399, was "more fitting.'A2 

### Indeed, the ALI further ruled that the lower end ofthe Moderate civil penalty range should be used.43 

### The ALI then selected a civil penalty of$2,700 per flight multiplied by six flights, totaling $16,200, i.e., the amount assessed inthe Initial Decision. The ALI's analysis, however, is not supported by the record. It 

### is undisputed that the Inspector did not ignore Mr. 

### Palmer's question. Rather, based on conflicting testimony, the Inspector
38 

### "When determining a specific sanction amount within arange, FAA enforcement personnel begin with an amount in the middle ofthe range and increase that amount toward the higher end ofthe range for aggravating circumstances or decrease that amount toward the lower end of the range for mitigating factors." FAA Order2150.3B at 7-9. 39 

### Complainant's Appeal Briefat 12 n.3. 40

### Initial Decisionat 8. 41 Id. 42 Id.
43 Id.



### 7

### eitherresponded to 

### Mr. Palmer's question by asking him to submit copies ofhis check records, or advised 

### Mr. Palmer to review his paperwork.44 

### Regardless of whether one accepts the Inspector's or Mr. Palmer's version, it is established that Mr. Palmer did not submit documentation to the Inspector, and failed to discern that his records indicated the expiration date for theknowledge test andthe flight check.45


### In addition, EMA46 

### and Mr. Palmer47 

### were not novices. The ALI found that they were "seasoned" and "experienced."48 

### Theyhadbeen subjectto the regulations at issue for years, and never found to be in violation ofthese or any other Federal Aviation Regulations49 

### Mr. Palmer deliberately sought help from an inspector who was not his current POI, rather than seeking out his POI, thepersonwho was inthe bestpositionto advisehim.

## 5° Thereafter, instead offollowing up with either inspector, Mr. Palmer chose to rely on his own incorrect determination of his status, notwithstandingthathis paperwork expressly stated thepertinent expiration date.51 

### Given all the circumstances, the ALI was notjustified inreducing the proposed civil penalty to a level belowtherange specified intheTable ofSanctions.52

44

### Tr. 86, 89, and 104. 45 

### Tr. 104, Exhs. C-2 and C-3. 46 

### EMAhadbeen an air carrier since 2003. Tr. 58. 47

### Mr. Palmer had flown since 1996, for about 19 years, as ofthe date ofthe hearing. Tr. 99. He had been flying as a charterpilot for 14 years. Tr. I00. He had flown more than 15,000 hours. Id. 48 

### !nitial Decision at 5. 49 

### Tr. 137. 50 

### Tr. 112-113, and 116. 51 

### Tr. 80; 202. 52 

### The sanction guidanceprovides that it maybe appropriate to select a civilpenaltybelow the ranges, but only ifthe degree ofculpability is rninintal, the degree ofpotential hazard is extremely low, andthere are no aggravating circumstances. FAA Order2150.3B at 7-13.

8

### Nonetheless, under the unique circumstances ofthis case, including that EMA and Mr. 

### Palmer had not ignored the recurrent testing requirements, butrather sought and received guidance; and mistakenly miscalculated the applicable due date, a lower penalty within the Maximum range will be assessed. As discussed above, the lowest applicable amount within the Maximum range for each violation is $4,400. Based on the entire record, I impose a civil penalty of $26,400 ($4,400 x 6 violations).

IV. EMA's Cross-Appeal 

### On cross-appeal, EMA argues that it is unable to pay the $16,200 sanction assessed bythe ALL In determining an appropriate civil penalty, the respondent's ability to pay can be considered. Rushmore Helicopters, 

### FAA Order No. 2012-8 at 14 (Oct. 11, 2012), citing Folsom's Air Service, 

### FAA OrderNo. 2008-11 at 11 (Nov. 6, 2008). Inability to payis an affirmative defense. Frostad Atelier, 

### FAA Order No. 2013-5 at 15 (Sept. 5, 2013); Rushmore Helicopters, 

### FAA Order No. 2012-8 at 14, citing Atlas Frontiers, 

### FAA Order No. 2010-10 (June 16, 2010). However, the burden of proving an affirmative defense such as inability to pay is on the respondent. National Power Corp., 

### FAA Order No. 2016-3 at 2 (Sept. 30, 2016); Schuman Aviation Company, Ltd., 

### FAA Order No. 2016-2 at 2 (Aug. 24, 2016); Frostad Atelier, 

### FAA OrderNo. 2013-5 at 15 (Sept. 5, 2013); Seven'sPaint & 

### Wallpaper, 

### FAA OrderNo. 2001-6 at 5 (May 16, 2001). The respondent must prove this affirmative defense, by a preponderance ofthe evidence in the record, which must be reliable, probative, and substantial, because the respondent has control over its financial information. Frostad Atelier, 

### FAA Order No. 2013-5 at 15 (Sept. 5, 2013); Rushmore Helicopters, 

### FAA Order No. 2012-8 at 14, citing Atlas Frontiers, 

### FAA Order No. 2010-10 at 11-12 (June 16, 2010). As Complainant has pointed out,53 

### theAdministrator stated in a previous case: "A respondent attempting to prove inability to paymust substantiate his or her claims at the hearing with the types ofrecords that a reasonable person would accept as reliable 53 Complainant'sReplyBriefat 2.



### 9

### and probative onthe issues ofincomes and expenses." Vi!lamar Tabula. 

### FAA OrderNo. 2010-6 at 13 (June 15, 2010). EMA failed to introduce sufficient proofofinability to paybefore the ALI. 

### EMA states that it did not submit its tax returns at the hearing because it had a large overdue balance that it was unable to satisfY prior to the hearing.54 

### EMA further states that it strongly believes that ifthe Administratorreviews its Federal taxreturns when completed, hewill find that EMA is unable to pay a $16,200 civil penalty.55 

### EMA, however, was not required to introduce the tax returns if they were not yet prepared. Instead, as Complainant points out, EMA could have introduced the financial records on which the tax returns were based. EMA only introduced three W-2 forms (Wage and Tax Statements), indicatingthe wages that EMA paid Mr. 

### Dobitsch as its President in 2012, 2013, and 2014. This information was inadequate to demonstrate the financial condition ofEMA as awhole. Inasmuch as EMA failed to meet its burden to introduce sufficient documentation ofinability to pay before the ALI, 

### any such evidence cannot be considered on appeal. It 

### is well established that "it is too late to submit ... documents on appeal when their significance cannot be clarified through cross-examination." Villamor Tabula, 

### FAA Order No. 2010-6 at 13 (June 15, 2010). In this case the ALI

### correctlydeclined to find that EMAwas unable to paythe civilpenalty.

54 

### Respondent's Appeal Briefat 1.
55 !d.



### 10

### V. Conclusion 

### Based on the foregoing, I grant Complainant's cross-appeal in part, deny EMA's cross-appeal, and impose a civilpenaltyof$26,400.56



### Federal AviationAdministration

56 This order shall be considered an order assessing civil penalty nnless Respondent files a petition for review within 60 days of service of this decision with the U.S. Court of Appeals for the District of Columbia Circuit or the U.S. court of appeals for the circuit in which the respondent resides or has its principal place ofbusiness. 14 C.F.R. §§ 13.16(d)(4), 13.2336)(2), 13.235 (2016). See 71 Fed. Reg. 70460 (December 5, 2006) (regarding petitions for review of final agency decisions in civil penalty cases).
11In The Matter Of: 

### SERVED: May 20, 2016 U.S. DEPARTMENT OF TRANSPORTATION OFFICE OF HEARINGS

WASHINGTON, D.C. 

## MAY 23 2015 ENDLESS MOUNTAINS AIR, INC. ) ) ) ) ) ) DocketNo. FAA-2013-0848 

## HEARING DOCKET Case No. 2012EA50008 Respondent
INITIAL DECISION OF U.S. ADMINISTRATIVE LAW JUDGE Pro SeRespondent's Admissions Regarding the Alleged Violations: I. In the Respondent's April3, 2014 Answer, it generally admitted to the violations alleged in the FAA's Complaint, specifically violations of14 C.F.R. § 135.293(a) and 14 C.F.R. § l35.299(a) 1 2. Approximately one (1) year later, at the beginning ofthe March 10, 2015 Hearing, the Respondent clarified that it was admitting to all twelve (12) violations alleged in the FAA's Complainthad occurred. Undisputed based on Admission: 1. Count No. 1: The Respondent committed six (6) violations of 14 C.F.R. § 135.293(a) between September 23,2011 and October 9, 2011, as identified in the FAA's Complaint; and 2. CountNo.2: Tbe Respondent committed six (6) violations of 14 C.F.R. § 135.299(a) between September 23, 2011 and October 9, 2011, as identified in the FAA's Complaint.

1 It should be noted, however, that during the May 28,2014 Litigatlon Scheduling Conference, the Respondent omlly admitted to the FAA's allegations in Paragraphs l, 2, and 3 in Section ll ofthe FAA's Complaint (rc: 14 C.F.R. § !35.293(a)), but denied the allegation in Paragraph 4 in Section II ofthe FAA's Complaint (re: 14 C.F.R. § 135.299(a)). The parties discussedthese oral admissions, and agreedto proceed with discovery onthe dlsputed allegations.Held afterFullEvidentiary Hearing: 1. The Respondent did not meet its burden ofproofto showthatitwas fmancially unable to pay a civil penalty. 2. Total Civil Penalty Assessed- $16,200: The Respondent is assessed a total civil penalty of$16,200 for the twelve(12) admitted violations that occurred during six (6) flights. I. CASE BACKGROUND On December 17,2013,2



### th~ Federal Aviation Administration ("FAA") issued a Complaint charging the Responde11t, Endless Mountains Air, Inc., ("Respondent") with an unspecified number oftwo different violations ofFederal Aviation Regulations: 14 C.F.R. 

### §§ 135.293(a) and 135.299(a). The Complaint asserted these violations occurred whenthe Respondent operated six (6) flights between September 23,2011 and October 9, 2011, utilizing a CiiTus SR20 aircraft, identification number N624CP. Comp. 1-3, §§II and Ill. The FAA proposed a total civil penalty of$46,200 for the violations. Comp. 1-3, §IV. After the December 17, 2013 Complaint was served and filed, the parties participated in various discussions, motions, and discovery exchange. This is fully documented inthe case record, and will not be repeated here. It shouldbe noted, however, that on March 18, 20I4, the FAA orally clarified, during a Litigation Scheduling Conference, that in its Complaintit was charging the Respondent with two (2) different regulatory violations for each ofthe six (6) flights the Respondent had allegedly operated between September23, 2011 and October 9, 2011, for a total oftwelve (12) alleged violations. (3/18/14 Tr. 15.) Pursuantto the FAA's Complaint, and its oral clarifications regarding the Complaint, the FAA was alleging that for each ofthe six (6) flights the Respondent had allegedly operated between the dates ofSeptember23,2011 and October 9, 2011, the Respondent's aircraft pilot,

2 TheFAA's Complaint was not dated. Based on the totality ofthe record, the Court made a pre-hearing finding that the Complaint was served on December 17, 2013. See, e.g., May 15, 2014 Order Denying the FAA's Motion-for Decision. The patties did not dispute this finding. See, e.g., 5!28114 Tr. 12, lines 17-20. Page 2 of9Mr. Randy Palmer, had operatedthe aircraft withouthavingpassed his annual (i.e., 12th calendar month) test pursuantto 14 C.F.R. § 135.293(a). Mr. Palmerhad also not passed his annual (i.e., 12'h calendarmonth) flight check in a Cirrus SR-20 aircraft, pursuantto 14 C.F.R. § 135.299(a). OnMarch 10,2015, theparties convened in Allentown, Pennsylvania for Hearing. The FAA orally moved to amend the Complaintby deleting the period and addingto the end of SectionII, paragraph 4 the following: ", as required by Section 135.299(a) ofthe FARs." (3110115 Tr. 14:18
- 15:18). The Respondent did not objectto the amendment, the motionwas granted, and the Respondent admittedto the allegations containedinthe amended Complaint (Id. at 15:21 · 16:4, 16:14- 17:1.) With all factual allegations andviolations admitted bythe Respondent, the Hearing proceededonthe issue ofthe proposed civilpenalty. The FAA presented two (2) witnesses: FAA Inspector Harry Soudas and FAA Inspector Robert Ference. Duringthe Hearing, the FAA moved to admit seven (7) exhibits into evidence (i.e., Exs. C-2 through C-5, and C-7 through C-9). The motion was granted and all seven (7) exhibits were admitted. After the FAA rested its case-inchief, the Respondentpresentedtwo (2) witnesses: PilotRandy Palmer and the Respondent's owner William L Dobitsch, Jr. Duringthe Hearing, the Respondent moved to admit five (5) exhibits into evidence (i.e., Exs. B, D, E, F, and G). Themotion wa' granted and all five (5) exhibits were admitted. II. CIVIL PENALTY EVIDENCE DISCUSSION All admitted testimony and exhibits were considered. The discussion herein provides only a briefsummary and analysis ofthe evidence as needed. A. BriefSummary ofParties' Evidence In its Complaint, the FAA alleged that pursuantto 49 U.S.C. §46301(a)(5), the Respondent was subject to a maximum $11,000 civil penalty for each violation. (Comp. 3, 

### § IV. 1 ). The Respondent did not disagree withthis allegation orthe legal support cited. The Respondent did, however, disagree withthe FAA"s proposed $46,200 civil penalty. Utilizing the FAA's sanctionguidelines inFAAOrder 2150.3B, Appendix B, Inspector Soudastestified that the Respondent was in Group IV (3!!0!!5 Tr. 60:11- 61:4; Ex. C-7, 1). Page 3 of9Both ofthe Respondent's violations fell underFig. B-1-n (3) (use ofunqualified crewmember), for which the FAA guidelines recommended utilizing the maximumpenalty range (3110/15 Tr. 61:14- 62:7; Ex. C-7, 6). Theviolationshad occurred after June 15, 2006, so the maximum range was between $4400 and $11,000 (3110/15 Tr. 63:1
- 8; Ex. C-7, 3). Instead ofcharging fines for each violation, the FAA asserted that it was charging a penaltyfor each flight where the two violations had occurred3 Itthentookthe mid-range ofthe maximumpenalty by adding $4,400 and $11,000, which equaled $15,400. The FAA then divided $15,400 in halfto reach the median amount of$7,700 (i.e., $15,400/2

**~** $7700). Since there were 6 flights, there were 6 violations. As a result, $7,700 x 6

**~** $46,400. (3110115 Tr. 64:4 -19.) As part ofits case-in-chief, the FAA asserted that its calculations were accurate and appropriate, and that there were no mitigating circumstances to supportreducingthe proposed $46,400 fine.

**Dlli~ng** testimony, FAAInspector Harry Soudas stated thatthe Respondent should have had a clearunderstanding ofthe FARs and how to applythem to its operation, particularly since it had been a certificated operator since 2003. Inspector Soudas opined thatneitherthe Respondent's confusion regarding the recertification time requirements, nor any other circumstance, should be considered as a mitigating factor incalculating the civil penalty. (3110115 Tr. 79:4-80:16). In closing argument, the FAA also asserted that the Respondent should not have had to rely uponthe FAA to give it guidance regarding FAA regulations. (3110115 Tr. 186:16-18.)No matter whatthe circumstances, theRespondentwas "ultimately responsible" to know the FAA regulations, and to be safety compliant. (3/10115 Tr. 188:1-2.) Thus, calculating a civil penalty based onthe "midpoint" ofthe maximum range was appropriate. (3/10/J5 Tr. 189:17-21.) Inits defensive case, the Respondent asserted I) an inability to pay the $46,200 proposed civii penalty; and, 2)the proposedpenalty was not appropriate or fair, given all the

3 This evidence diffe.red from the FAA's March 18, 2014 oral explanation ofthe civil penalty calculation during a

**pre~hearihg** Conference. While the FAA's Conference explanation was not presented as evidence, nor is it considered by this Court in any way a<; evidence, it was the information provided to the Respondent and the Couti prior to the March I 0, 2015 Hearing. Thus, during this Conference, the FAA explained that it had calculated the proposed amount of the $46,200 by assigning afine of$3,850 for each ofthe2 regulatory violations, Vl'hich then totaled $7,700 for each flight (e.g., $3,850 x 2

**~** $7,700). Six (6) flights x $7,700

**~** $46,200. Page 4 of9circumstances involved. BothMr. 

### William J. Dobitsch, Jr. and Mr. Randy Palmer testified about howthe violations had occurred, after they had attempted to obtain assistance from theFAA Field Office regarding whatregulatory time period was applicable. Among other things, the Respondent asserted that the violations were inadvertent, particularly given the advice received from FAA Inspector Ference. TheRespondent was dedicated to flight safety, had a history of safety compliance, and had never intentionally acted to compromise flight safety.

B. Affirmative Defense ofInability to Pay- Not Proven Atthe beginning ofthe March 10, 201 SHearing, the Respondent was re-advisedthat ifit made any argument regarding financial inability to paythe proposed civil penalty, such argument hadto be supportedby financial -documentation. Ifno financial documentation or insufficient documentation was introduced into evidence, such an affirmative defense would fail. (3/10/1 S Tr. 11:22 -12:8.) Mr. Dobitschtestified that the Respondent was unable to pay the proposed $46,200 penalty. (3/10/15 Tr. 134 -140.) However, as supporting documentation ofthe company finances and inability to pay, the,Respondent introduced onlythree (3) W-2 forms showing what Mr. Dobitsch, as the owner ofthe company, had paid himselfas an employee. (Exs. E, F, G.) At the conclusion ofthe Hearing, the Court made an oral ruling that the Respondent had failed to meet its burden ofproof'Cm the affirmative defense ofinability to pay the proposed penalty. (3/lOilS Tr. 205:20- 206:9.) This oral ruling is codified in this Decision. C. Discussion ofOtherEvidence Itwas undisputed that Mr. Palmer was a seasoned and experiencedpilot. Hehad flown various aircraft since 1996 (i.e., for approximately 19 years as ofthe date ofthe Hearing). He had flown over 15,000 hours. Historically, he had never had problems obtaining re-certi.tication. He did, however, have problems obtainingrecertification when Inspector Soudas was assigned to replace InspectorFerence as the Respondent's principal operations inspector ("POI")_ Itwas undisputed that as of.luly 22,2010, Mr. Palmer was "current" on all his certification tests. According to Inspector Soudas, this meant that Mr. Palmer's one (1) year recertification underboth 14 C.F.R. 

### § l35.293(a) (i.e., pilottest- oral or written) and 14 C.F.R. Page 5 of9§ 135.299(a) (i.e., pilotflight check) were due in July 2011. (3/10/15 Tr. 45:3 -6.) However, because ofa one (1) month "graceperiod,"Mr. Palmer's certificationremained current until the last day ofAugust 2011. (Id. at 45:7 -18.) In contrast, Mr. Palmer's six (6) month recertification under 14 C.F.R. §§ 135.297 wouldhave beendue in approximately October 201 I. (!d. at 49:9-20.) OnAugust 29, 2011 (i.e., two (2) days prim· to the last day ofthe month on August 31, 2011 ), both Mr. Dobitsch and Mr. Palmercontactedthe FAA Field Office by telephone to get clarification about the time obligations for obtainingMr. Palmer's annual pilot certifications. It was undisputed that they asked forFAA Inspector Ference, who had previously been the Respondent's POI, and that Inspe;;tor Ference took the call. Boththe Respondent and the FAA agreed that Inspector Ference did not specifically answer Mr. Dobitsch's and Mr. Palmer's questions about the pilot certification time issue. They disagreed, however, about the substance ofthe telephone calL Both Mr. Dobitsch and Mr. Palmertestified that FAAInspectorFerencetoldthem to simply check their paperwork for the answer. In contrast, InspectorFerence recalled telling Mr. Dob.itsch and Mr. Palmer that they neededto "present" their paperwork to him so that itcould be checked. (3/1 0115 Tr. 89:12 -22.) During cross-examination; Inspector Ferancetestified that he could not give Mr. Dobitsch and Mr. Palmerguidance about Mr. Palmer's recertification time without seeing the Respondent's documents or discussing itwiththe Respondent's current POI, Inspector Soudas. InspectorFerence agreed thatthe FAA Field Office had accessible copies ofall the Respondent's records, buthe chosenot to look at them. He explainedhe did not look atthe FAA's copies, because he didn'tknow iftheywouldmatchthe Respondent's records. Thus, he asked Mr. Dobitsch and Mr. Palmer to physically come to the Field Office and "present" him with their records. (!d.) InspectorFerence did not, however, provide any reason(s) why he thought the records would not be exactlythe- same. Upon inquiry from the Court, Inspector Ference admitted thathe had not offered the Respondent an opportunity to e-mail or fax the documents to him so that he could review and compare them. (3/10115 Tr. 94:12 -18.) Inspector Ference agreed he had not made any notes of the phone call or aboutthe conversation. (3110/15 Tr. 96:1-2.) He also testified couldnot recall Page 6 of9whether ornothe had "mention[ed]"the Respondent's call and questions to Inspector Soudas (the Respondent's POI). (3110/15 Tr. 93:20 ·94:1.) The Respondent presented additional testimony. After speaking with Inspector Ference, Mr. Dobitsch and Mr. Palmertestified thatthey looked attheir paperwork and the regulations, as InspectorFerencehad instructedthemto do. They interpreted thematerial together, and, [in retrospect] came up with the wrong answer regarding whenMr. Palmer was due for recertification, in part because Mr. Palmer's certification under 14 C.P.R.§ 135.297 was not yet due. Mr. Palmerthen flew six((/) different flights, between September 23, 2011 and October 9, i : ; <,_.'l

**~** : 2011, before getting recertified;as

**f~quired** by 14 C.F.R. §§ 135.293(a) arid 135.299(a). D. Assessment ofCivil Penalty- Total $16,200 :·j,"!i "1;' One ofthe underlying pt6blems in this case is thatMr. Palmer had developed a negative perception ofInspector Soudas;

## 'in"partbecause Inspector Soudas had earlierratedhim as "failing" pilottests. Mr. Palmet'testified about his years as a pilot, and how he had never had an FAA Inspectorrate him as a failirre'before. He also testified thathe had been given these failed ratings without any specific exJ''/f!J.J.ation ofwhat he had done wrong. Itis clear that on



# Augus\-2~, 2011 there was an attemptbyMr_ Dobitsch and Mr. Palmer to avoidtalking to Inspector

**S~tl~a;f** However, it is also clear that InspectorFerance wanted to support his colleague, Inspector §PJt,das, in his role 

### as the assigned POI for Respondent. So when

**~-·-** ..,,,·' Mr. Dobitsch and Mr. Palmer calledInspector Ferance instead oflnspector Soudas on August 29, 2011, Inspector Ferance

**wa~.not** helpful. Inspector Sondas testifiedlliathe thought Inspector Ference had referred Mr. Dobitsch's and Mr. Palmer'sphone call

# and'iilquiry to him. Assuming this did occur, then it is also clear that Inspector Soudas did notretiil:itthe Respondent's call or provide any information about the recertification time requirementIl).stead, Inspector Soudas waited for the Respondent to call or email himdirectly ("myselfbcing the principal") or alternatively, to contact management at the FAAField Office_ (3/10/15



### Tr.·'so:6~12). Thus, Inspector Soudas chose not to respond 

### or offer immediate help.

Page 7 of9Given all the evidence in this case, it is obvious the Respondent feared that time was rum1ing out, when it called two days before Mr. Palmer's grace period expired. While this Court agrees withInspector Soudas thattheRespondent couldhave called earlierthan August 29, 2011, or, after having spoken to anunhelpful InspectorFerence on August 29, 2011, tried to call and spealc with eitherInspector Soudas or someone else inthe Field Office (3/1 0/15 Tr. 80:6-12), that did nothappen. Nevertheless, the Respondent did contactthe FAA during Mr. Palmer's grace period and askfor advice. The FAAknewthe Respondent was in danger ofsafety noncompliance, and chose not to help. 

### ,,. The FAA's argumentthap,''nq mitigating circumstances" exist in this case is not persuasive. When the Respondent,called the FAA onAugust 29, 2011, the FAA should have 'lc':' been responsive and answeredthe question. TheFAA'sprimaryconcern on August 29,2011

**.-~** '; i \ :: ; shouldhave been to help ensureJhatthe Respondentremained safety compliant. Instead, the >:1'. FAA erectedroadblocks forthe.Re,spondent to overcome, and then the FAA waited to see what would happen. Thus, whether or not the FAll. 

### thinks that Respondent shouldhave known about the certification timerequirements doesn'teliminate its responsibility to have answered the Respondent's safety compliance question fully, fairly, and promptlywhen it was asked. Hadthe FAA done so, tl1e Respondent.wpllld likelyhave complied (given its history ofcompliance) and therefore not committedthe

**vi9.l~tions.** Giventhe evidence inthis.'i::ase, theFAA's recommendedmaximum penalty range (Ex
. . ''•'" C-7, 6) tails to reflect the unique}:ircumstances ofthis case. Therefore, the maximum penalty range will not be utilized. Instead, the moderate range oftl1e penalty guidance is more fitting to
,. 'I·_ the facts. The moderate range forany violations occurring afterJune 15, 2006 is between $2,200 and $4,399 (Ex. C-7, 3). This Courtagrees withthe FAA that a penalty should be charged for ,_i. each flight wherethe two violatio11s occurred. In addition, given all the evidence, the lower end ofthe moderate penalty range

**s~?;tld** be utilized. Thus, the amount of$2,700 is appropriate as the penalty charged perflight in

### fuis case. Since there were six (6) flights, there are six (6) chargedpenalty amounts. Based on theforegoing theRespondent is assessed a total civil penalty of$16,200 (i.e., $2,700 x 6 = $16,200) for the six f!{ghts and twelve admitted violations. This $16,200 civil penalty has sufficient "bite"to pr9mote compliance; and deterfuture violations by the Page 8of9Respondent and others. It also reflects the goals ofthe sanction guidance and the totality ofthe circumstances. Pursuantto 14 C.F.R. § 13.232(d), this Initial Decision shall be considered a final order assessing civil penalty unless either partyfiles a notice ofappeal within lO days ofservice ofthis Initial Decision pursuantto 14 C.P.R.§ 13.233. 

## I Judg\!_.E. Sulli n U.S. A · · ative Law Judge Attachment: Service List

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