### SERVED: March 30, 2015 U.S. DEPARTMENT OF TRANSPORTATION OFFICE OF HEARINGS

WASHINGTON, DC Application of TGI FREIGHT, INC. FDMS No. FAA-2013- 0720 Successor to DMS No. FAA-2010-1079 (Equal Access to Justice Action)
INITIAL DECISION '··.-·-:-

DENYING APPLICATION FOR ATTORNEY'S FEES AND OTHER EXPENSES
I. Key terms Alaska EAJA FAA Hazmat I.

### D. Lockheed MSDS Parsons Pro Poxy TGI

II. Background Alaska Airlines Equal Access to Justice Act, 5 US. C. §504 Federal Aviation Administration Hazardous Materials Initial Decision Lockheed Martin Material Safety Data Sheet1 Parsons Corporation Pro-Poxy 400 TGI Freight and/or Applicant ;" t
_ _.

This application under the Equal Access to Justice Act (hereinafter "EAJA"), 5 U.S. 

### C. §504, originated from a proceeding in which the Federal Aviation Administration (hereinafter "FAA'') charged TGI Freight (hereinafter "TGI" or "Applicant") with violations ofDepartment ofTransportation Hazardous Materials Regulations.

1MSDS is an Occupational Safety and Health Administration ("OSHA") document whose primary purpose is to convey safety information to individuals working with that material. 1The parties were in general agreement on the facts. The FAAhired LockheedMartin ("Lockheed") and the Parsons Corporation ("Parsons") to install, under a Parsons technicalservices contract, a weather camera at the Misty Fjords National Monument.·The location was onNewEddystone Island, near Ketchikan, AK. As a result, certain materials had to be shipped by air from Anchorage to Ketchikan. Typically the contractor's shipping at the origination point was handled by the FAA at its logistics complex at the Anchorage airport. Parsons normally consolidated the materials, segregating known or suspected hazardous materials ("hazmats") on separate pallets or containers. Itthen turned.the load over to the FAA's logistics manager, identifying the possible hazmats. FAA policy was to bring the hazmats to the TGI for manifesting and shipping. TGI moved freight and performed hazardous materials packaging and certification. Theproduct central to the dispute was Pro-Poxy 400 ("Pro-Poxy"). Pro-Poxy was manufacturedby a company called Unitex. Itwas tendered for shipment in four fiberboard boxes as part ofa six-box shipment. Each ofthe four boxes containedtwelve (12) 9.3-ounce (275 ml) tubes ofthe material. The writing on the boxes' exteriors described Pro-Poxy as an epoxy acrylate anchoring gel used in concrete stone masonry. Itwas to be used to cement the base ofthe camera onto the rock. The word "adhesive" was written on the boxes' exteriors. Parsons, in consolidatingthe items, determinedthat Pro-Poxy was a hazardous material and duly segregated itfrom the rest ofthe shipment. On February 19, 2010;TGI offered the four (4) boxes ofPro-Poxyto AlaskaAirlines ("Alaska") for shipment from Anchorage, AK, to Ketchikan, AK. The air waybill, which included two (2) otherboxes in the shipment, described the shipment as a whole as "miscellaneous non-hazardous tools & construction,material". The shipper initialed the box stating "This shipment does not contain dangerous goods" (underlining in original). Alaska decided that further investigation was warranted. Examination ofthe MSDS led Alaska to conclude thatPro-Poxy was a hazardous material. Alaskaheld the four (4) suspect boxes at its Anchorage Airport facility. Alaska notified a FAA hazardous materials specialist of the situationthe same day. Allegations were the shipment, was undeclared. 2 The FAA brought action against TGI. The FAA cited TGI for the following sixteen HMRviolations ofHazardous Materials Transportation Act, 49 US.C. §§5101-5127 ("the Act"), 49 C.F.R.: §171.2(e), in offering a hazardous material for transportation in commerce when the material was improperly classed, described, packaged, marked, and labeled for shipment; §172.200(a), in offering hazardous material without properly describing the material on shipping papers; §172.201(d), offering hazardous material without including an emergency response telephone number; 

### §172.202(a)(1), offering a hazardous material without including its proper identification number; §172.202(a)(2), offering ahazardous material without including the proper shipping name; §172.202(a)(3), offering a hazardous material without including the hazard class or division numberprescribed for the material; §172.202(a)(4), offering a hazardous material when the description did not include the assigned packing group; §173.204(a) or (c)(l), in offering hazardous material without printing the proper certification on the shipping papers;

2 "Undeclared" means that it lacked any notice ofthe hazardous nature ofthe product within. Midtown Neon Sign Corporation, FAA OrderNo. 96-26 (August 13, 1996), p. 2. 2§172.204( c)(2), failing to provide two copies ofthe shipper's certification; §172.204(c)(3), offeringhazardous material without adding to the shipper's certification a statement declaring that all airtransportrequirements were met; §§ 172.300 and 172.301(a), offering hazardous material in a package not marked withthe proper shipping names and identification numbers for its contents; §172.400(a), offering an improperly labeled hazardous materials package; and §§172.600(c)(l) and (c)(2), offering hazardous material when emergency response information was not immediately available. The FAA asked for a civil penalty under 49 U.S.C. §5123(a) and 14 C.P.R. §13.305(d) of $15,000. Respondent denied the charges. We held an evidentiary hearing in Anchorage, AK, on September 20 and 21, 2012.

III. Underlying Initial Decision In the underlying case we found and concluded the FAA failed to prove the allegations of the Complaint. The Complaint was dismissed.3 The FAA appealed but subsequently withdrew it appeal whereupon the FAA's Appeal was dismissed.4

IV. EAJA Petition TGI filed a timely "Motionfor Fees and Costs"5 (hereinafter "Motion for Fees") which we treated as an EAJA application. TGI averred it was the prevailing party and recited facts from the underlying case. TGI attached an Affidavitto its motion averring"
...the FAA's Complaint inthis matter was not substantiallyjustified
...," quoted portions ofour underlying Initial Decision and set forth its claim for attorney and paralegal fees and additional costs. TGI cited GreenAviation6 as authority for award offees and costs. The FAA, in its Opposition,7 averred"
...the EAJA does not apply to hazardous materials cases..." citing Dominion Concepts. 8

.

3 In the Matter ofTGIFreight, FAA 2010- 1079, served October 29,2013. 4 In the Matter ofTGIFreight, FAA Order no. 2013-7, served December 20,2013.
. 5 "Motion for Fees and Costs", dated 11 November 2013. 5 U.S. C. §504(a)(2): "
...A party seeking an award offees and other expenses shall, within thirty days ofa final disposition in the adversary adjudication
..." (hereinafter "TGI's Motion for Fees"). 6 GreenAviation Management Co. vs. FederalAviationAdministration, 676 F. 3D 200,202 (April 17, 2012). 7 "Administrator's Opposition to TGI Freight's Application for Attorney's Fees and Expenses", dated November 20, 2013. 8 FAA Order No. 2005-4, 2005 WL 916050, at #3 (March 8, 2005). 3TGI rebutted9 that Dominion "
...is an opinion based solely on the findings ofthe FAA
...it is not legal precedent
... Rather, it is the agency's interpretation ofCongress' intent withrespectto 49 US.C.§ 123 and the Equal Access to Justice Act..." 10 TGI cited Lane v. U.S. Dept. of Agriculture 11andAageson Grain and Cattle v. U.S. Dept. of Agriculture. 12 The FAAresponded 13 averring "
...TGI does not cite 14 C.F.R., part 14, which contains the Agency's regulations implementing the Equal Access to Justice Act, and no net worth exhibit, which is required by 14 C.FR. §14.10 was included." 14 The FAA further stated:

...there are a number ofrequirements that must be met in order for an entity to be eligible for an award under EAJA. One ofthese is that the entity have a net worth that is less thanthe maximum specified for it in the statute. As an eligibility criterion, it is a matterthat the application must establish, and ofwhichthe Agency'sregulations (14 C.F.R. §19(b)) require proofas part ofthe application. Because TGI Freighthas failed to submit such proof, it has failed to establish its eligibility. The FAA also alleged TGI's application should be denied because"
...the Agency was substantiallyjustifiedin proceeding as it did inthis matter..." 15 citing In the Matter of Richard W Kuhling. 16

V. Law and Standards EAJA is set forth in 5 U.S. C. §504 which provides in pertinent part: (a)(l) An agency that conducts an adversary adjudication shall award, to a prevailing party other than the United States, fees and other expenses incurred by thatparty in connection with thatproceeding, unless the adjudicative officer of the agency finds that the position ofthe agency was substantiallyjustified orthat special circumstances make an award unjust. Whether ornot the position ofthe agency was substantiallyjustified shall be determined on the basis ofthe administrative record, as a whole, which is made in the adversary adjudication for which fees and other expenses are sought. (2) A party seeking.an award offees and other expenses shall, within thirty days ofa final disposition inthe adversary adjudication, submitto the agency an application which shows thatthe party is a prevailing party and is eligible to

9 "Reply to Complainant's Opposition to Motion for Fees and Costs", dated I0 December 2013. 10 Id at pages 1 and 2. 11 120F.3d 106(8111 Cir.l997). 12 500 F. 3d I038 (91 h Cir. 2007). 13 "Agency's Response to Applicant's Reply toComplainant's Opposition to TGI Freight's Application for Attorney's Fees and Expenses" dated January 16,2014: 14 Id. page 1. 15 Id at page 3. 16 FAA Order No. 2005-13 (August 15, 2005) at 4-5. 4receive an award underthis section, and the amount sought, including an itemized statement from any attorney, agent, or expertwitness representing or appearing in behalfofthe party stating the actual time expended and the rate at which fees and other expenses were computed. The party shall also allege that the position ofthe agency was not substantiallyjustified. When the United States appeals the underlying merits ofan adversary adjudication, no decision on an application for fees and other expenses in connection with that adversary adjudication shall be made underthis section until a final and umeviewable decision is rendered by the court on the appeal or until the underlying merits ofthe case have been finally determined pursuant to the appeal. (3) The adjudicative officer ofthe agency may reduce the amount to be awarded, or deny an award, to the extentthat the party during the course ofthe proceedings engaged in conduct which unduly and umeasonably protracted the final resolution ofthe matter in controversy. The decision ofthe adjudicative officer ofthe agency under this section shall be made a part ofthe record containing the final decision ofthe agency and shall include written findings and conclusions and the reason orbasis therefor. The decision ofthe agency on the application for fees and other expenses shall be the final administrative decision under this section. (4) If, in an adversary adjudication arising from an agency action to enforce a party's compliance with a statutory orregulatory requirement, the demand by the agency is substantially in excess ofthe decision ofthe adjudicative officer and is umeasonable when compared with such decision, under the facts and circumstances ofthe case, the adjudicative officer shall award to the party the fees and other expenses related to defending against the excessive demand, unless the party has committed a willful violation oflaw or otherwise acted in bad faith, or special circumstances make an award unjust. Fees and expenses awarded under this paragraph shall be paid only as a consequence ofappropriations provided in advance. (b)(1) For the purposes ofthis section-- (A) "fees and other expenses" includes the reasonable expenses ofexpert witnesses, the reasonable cost ofany study, analysis, engineering report, test, or project which is found by the agency to be necessary for the preparation ofthe party's case, and reasonable attorney or agent fees (The amount offees awarded under this section shall be based upon prevailing market rates for the kind and quality ofthe services furnished, exceptthat (i) no expert witness shall be compensated at a rate in excess ofthe highest rate ofcompensation for expert witnesses paidbythe agency involved, and (ii) attorney or agent fees shall not be awarded in excess of$125 per hour unless the agency determines byregulation that an increase inthe cost ofliving or a special factor, such as the limited availability ofqualified attorneys or agents for the proceedings involved,justifies a higher fee.);

5(B) "party" means a party, as defined in section 551(3) ofthis title, who is (i) an individual whose net worth did not exceed $2,000,000 at the time the adversary adjudication was initiated, or (ii) any owner ofan unincorporated business, or any partnership, corporation, association, unit oflocal government, or organization, the net worth ofwhich did not exceed $7,00b,OOO at the time the adversary adjudication was initiated, and which had not more than 500 employees at the time the adversary adjudication was initiated; except that an organization described in section 501(c)(3) ofthe Internal Revenue Code of 1986 (26 U.S.C. 501(c)(3)) exemptfrom taxation under section 501(a) ofsuch Code, or a cooperative association as defined in section 15(a) ofthe Agricultural Marketing Act (12 U.S.C. 1141j(a)), may be aparty regardless ofthe net worth ofsuch organization or cooperative association or for purposes ofsubsection (a)(4), a small entity as defined in section 601; (C) "adversary adjudication" means (i) an adjudication under section 554 ofthis title in which the position ofthe United States is represented by counsel or otherwise, but excludes an adjudication for the purpose ofestablishing or fixing a rate or for the purpose ofgranting orrenewing a license, (ii) any appeal ofa decision made pursuant to section 7103 oftitle 41 before an agency board of contract appeals as provided in section 7105 oftitle 41, (iii) any hearing conducted under chapter 38 oftitle 31, and (iv) the Religious Freedom Restoration Act of 1993; (D) "adjudicative officer" mean,s the**·d~cidin;g** official, without regard to whether the official is designated as an**administ~ative** lawjudge, a hearing officer or examiner, or otherwise, who presided at the adversary adjudication; (E) "positionofthe agency" means, in addition to the position taken by the agency inthe adversary adjudication, the action or failure to act bythe agency upon which the adversary adjudication is based; except that fees and other expenses maynot be awarded to a party for any portion ofthe adversary adjudication in which the party has unreasonably protractedthe proceedings; and (F) "demand" means the express demand ofthe agency which led to the adversary adjudication, but does not include a recitation by the agency ofthe maximum statutory penalty (i) in the administrative complaint, or (ii) elsewhere when accompanied by an express demand for a lesser amount. The EAJArequires an agency conducting an "adversary adjudication" to award fees and other expenses to a prevailing party (other than the United States) unless the position ofthe agency was "substantiallyjustified" or special circumstances make an award unjust (5 U.S. 

### C. §504(a)(l)). The FAA's rules implementing the EAJA essentially track its language (see 14 C.F.R. §14.04):**·~.** (a) An application for an award offees and expenses under the Act shall identify the applicant and the proceeding for which an award is sought. The application
6shall showthat the applicant has prevailed and identify the position ofthe agency inthe proceedingthat the applicant alleges was not substantiallyjustified. Unless the applicant is an individual, the application shall also state the number of employees ofthe applicant and describe briefly the type and purpose ofits organization orbusiness. (b) The application shall also include a statement thatthe applicant's net worth does not exceed $2 million (ifan individual) or $7 million (for all other applicants, including their affiliates) at the time the adversary adjudication was initiated. However, an applicant may omitthis statement if: (1) Itattaches a copy ofa ruling by the Internal Revenue Service that it qualifies as an organization described in section 501 (c)(3) ofthe Internal Revenue Code (26 U.S.C. 50l(c)(3)), or in the case ofa tax-exempt organization not required to obtain a ruling from the Internal Revenue Service on its exempt status, a statementthat describes the basis for the applicant's beliefthat it qualifies under such section; or (2) 

### It states that it is a cooperative association as defined in section 15(a) ofthe Agricultural Marketing Act (12 U.S.C. 114lj(a)). (c) The application shall state the amount offees and expenses for which an award is sought. (d) The application may also include any other matters that the applicant wishes this agency to consider in determining whether and in what amount an award shouldbe made. (e) The application shall be signed bythe applicant or an authorized officer or attorney for the applicant. It shall also contain or be accompanied by a written verification under oath or under penalty ofperjury that the information provided in the application is true and correct. The burden ofproofthat an award should not be made rests with the agency (14 C. F. R. §14. 04(a)). "Substantialjustification" connotes an active, searching inquiry into the quality of evidence advanced andthe overall reasonableness ofthe agency's position. UnitedBrotherhood of Carpenters andJoiners v. NLRB, 891 F.2d 1160, 1163 (5 1h Cir. 1990). The inquiry examines thetotality ofthe circumstances surroundingthe government's adoption ofits position. Smith v. Principi, 343 F.3d 1358, 1362 (Fed.Cir. 2003). The FAA's position consists ofmore than the quality ofthe allegations ofits complaint. 

### It also comprises the agency's posture in supporting the allegations during the pendency ofthe proceeding. Krecioch v. UnitedStates, 316 F.3d 684, 689 (ih Cir. 2002).

7An allegation is considered to be substantiallyjustified when it has a reasonable basis in law and fact. Pierce v. Underwood, 487 U.S. 552, 565 (1988); 14 CFR 14. 04(a),· Michael Edward Wendt, FAA Order 93-9 (March 25,.1993), p. 3. The charge must bejustified to the degree that could satisfy a reasonable person. The standard is met ifthere is a "genuine dispute," or ifreasonable people could differ as to the appropriateness ofthe contested matter. Pierce 

### v. Underwood, p. 565. The agency must show (a) a reasonable basis in truth for the facts alleged; (b) a reasonable basis in lawfor the legal theory propounded; and (3) a reasonable connection between facts andtheory. ValleyAirServices, Inc., FAA OrderNo. 95-27 (December 19, 1995), p. 6,pet.for reconsid. denied, FAA OrderNo. 96-15 (May 3, 1996); Smith v. National Transportation SafetyBoard, 992 F.2d 849, 852 (8th Cir. 1993). Failure to prevail does not raise a presumption oflack ofsubstantialjustification. An agency's defeat in the underlying action on the merits does not raise a presumption that its position was not substantiallyjustified under EAJA (emphasis in original). Nancy Rene Floyd, FAA OrderNo. 2006-4,2006 WL 465372 (February 10, 2006), p. 5; S & HRiggers & Erectors 

### v. OSHA, 672 F.2d 426, 430 (5th Cir. 1982). Normustthe agency demonstrate that it had a substantial likelihood ofprevailing to prove that its litigation position was substantiallyjustified. Kiareldeen v. Ashcroft, 273 F.3d 542, 554 (3rd Cir. 2001); Michael Edward Wendt, FAA Order 93-9, 1993 WL 833111 (March 25, 1993). Turner v. N TS.B., held: 17 "
...Because the EAJA is a statute ofgeneral application, we do not defer to the NTSB's or to any one agency's interpretation ofit. See, e.g., Contractor's Sand & Gravel, Inc. v. Fed. Mine Safety & Health Review Comm'n, 199 F.3d 1335, 1339 (D.C.Cir.2000) (court not "bound to defer to the agency's construction" ofthe EAJAbecause "[it] is a statute ofgeneral application and not one committed to administrationbythe Commission orthe Secretary"). This courthas distilled from Buckhannon 18 a three-part test for determining whether a party has "prevailed": (1) there mustbe a "court-ordered change in the legal relationship" ofthe parties; (2) the judgmentmustbe in favor ofthe party seekingthe fees; and (3) thejudicial pronouncementmustbe accompanied byjudicial relief.

VI. Analysis Inthe United States, parties are ordinarily required to bear their own attorney's fees-the prevailingparty is notentitledto collect from the loser. Under this "AmericanRule," we follow

17 608 F.3d 12, 391 U.S.App.D.C. 90 (June 8, 2010) 18 Buckhannon BdandCare Home, Inc. v. West Virginia Department of Health andHuman Services, 532 U.S. 598, 121 S.Ct. 1835 (May 29, 2001). See also Scarbrough v. Principi, 541 U.S. 401, 124 S.Ct. 1856 (May 3, 2004). 8"ageneral practice ofnot awarding fees to a prevailing party absent explicit statutory authority."19 A. 

### (5 US.C. §504(a)(l)): An agency that conducts an adversary adjudication shall award, to a prevailingparty other than the United States, fees and other expenses incurred by that party in connection with that proceeding, unless the adjudicative officer ofthe agency finds that the position ofthe agency was substantially justified or that special circumstances make an award unjust. Whether or not the position ofthe agency was substantiallyjustified shall be determined on the basis ofthe administrative record, as a whole, which is made in the adversary adjudication for which fees and other expenses are sought. After an evidentiary hearing and consideration ofall the testimony and evidence we found and concluded that FAA failed to prove the allegations ofthe Complaint. The Complaint was dismissed. We found it was undisputedthat TGI had actual knowledge ofthe facts giving rise to the violations alleged. We further opined it was neither alleged nor shown that TGI had actual knowledge that it had offered hazardous materials. We reasoned "
...In this situation the law defaults to the Act's subparagraph B: it charges Respondent with the knowledge that reasonable inquiry would have produced
..."20 We noted the FAA read the statute differently. Itcontended that because a substance's nature, i.e. whether a hazmat or not, was a question oflaw and not offact, it was not necessary to showthat the entity offering a shipment was aware that the shipment contained hazmats. If Respondent knewthat it tendered four (4) fiberboard boxes ofPro-Poxy, then it inexorably followed, the FAA contended, that TGI was liable for the HMRviolations with which it is charged. The law's duty ofinquiry, the FAA asserted, referred only to the shipper's duty to know what it is shipping. We found:· This argument is rejected. Itis not the law. The question ofa substance's nature is separate from the issue ofa shipper's responsibility. Moreover, Complainant's (FAA's) formulation effectively eliminates the duty ofinquiry plainly contained in the statute. The FAA would foreclose, and render meaningless, the statute's subsection creating the shipper's duty ofreasonable care in the circumstances. See 

### §5123(a)(l)(B), at I.D., p. 4. The agency's (FAA) analysis violates one of the fundamental interpretive canons ofstatutory construction

-- that "astatute should be construed so that effect is given to all its provisions, so that no part will be inoperative or superfluous, void or insignificant." 

### Corley v. US., 556 U.S. 303, 314 (2009).

19 Buckhannon Bdand Care Home, Inc. v. West Virginia Department of Health andHuman Services, 532 U.S. 598, 121 S.Ct. 1835. at page 6. 20 In the Matter ofTGIFreight, OMS FAA 2010- 1079, 1.0., page 6. 9This leads us to the next question: whether Respondent's (TGI's) inquiry into the nature ofthe shipment was reasonable under the circumstances. I find that it was. Prompted by the trigger terms "adhesive" and "epoxy," TGI opened the exterior packaging and inspected the unit tendered, which was the tubes. It found no marking or labeling, no language or symbols, suggesting a risk offire, toxicity, corrosiveness, or similar perils ofthe kind and quality customarily associated with hazmats. To endthe inquiry at that point was a reasonable response, I find
...21 Complainant (FAA) would have had Respondent (TGI) continue its investigation further, either bypulling the MSDS or by contacting Pro-Poxy's manufacturer. 

### It argues that because some epoxy materials and some adhesives are in fact hazardous, Respondent (TGI) did not carry its investigation far enough. Had TGI appropriately persevered, it would have discovered that Pro-Poxy was a regulated material. 

### It mustbe held responsible for the consequences, the agency (FAA) concludes. This argument also may not stand. The fact that some substances in a certain classification prove to be hazardous does notwarrant that all within that grouping compel the kind ofscrutiny necessary to uncover their underlying nature. The law does not place such a broad, far-reaching obligation on shippers. The agency (FAA) unjustifiably enlarges the meaning of"reasonable." The evidence in this case highlights the FAA's overreach?2 Finally, I cannot subscribe to Complainant's (FAA's) assertion that because Respondent (TGI) held itselfout as having particular expertise in the transport of hazardous materials, a greater duty ofcare devolved upon it. There is no authority for such a proposition. The statute commands that every shipper be held to the same standard ofcare - what is reasonable under the circumstances.23 B. (5 US.C. §504(a)(2)) reads: A party seeking an award offees and other expenses 

### shall, [emphasis added] within thirty days ofa final disposition inthe adversary adjudication, submit to the agency an application which shows that the party is a prevailing party and is eligible to receive an award under this section, and the amount sought, including an itemized statement from any attorney, agent, or expert witness representing or appearing in behalfofthe party stating the actual time expended and the rate at which fees and other expenses were computed. The party shall also allege that the position ofthe agency was not substantiallyjustified. When the United States appeals the underlying merits ofan adversary adjudication, no decision on an application for fees and other ex,penses in cop.nection with that adversary adjudication shall be madeunder this section until a final and unreviewable

21 Id., page 7. 22 Id. 23 Id. 10decision is rendered by the court on the appeal or until the underlying merits of the case have been finally determined pursuant to the appeal. The FAA'srules implementing the statute track 5 US.

### C. §504 and are set forth hereinabove. (14 C.FR. §14.04). TGI's "Motion for Fees" was servedNovember 11,2013, well within the thirty day period required bythe statute and (14 C.FR. §14.04). In its "Motion for Fees" TGI asserted"
...there is no dispute that TGI prevailed on all allegations asserted against it inthe Complaint
..."24 thereby asserting it was the prevailing party. TGI's "Motion for Fees" included an itemized statement from TGI's attorney, agent, or expert witness representing or appearing in behalfofthe party stating the actual time expended and the rate at which fees and other expenses were computed. TGI's "Motionfor Fees" alleged thatthe position ofthe FAA was not substantially justified citing language in our I.D?5 Itis also a requirement of5 US. 

### C. §504 and (14 

### C.FR. §14.04) that the"
...application which shows
... that the party is
... is eligible to receive an award underthis section
..." 5 US.

### C. §504 provides (b)(l) (B) 

### "party" means a party, as defined in section 551(3) ofthis title, 

### who is (i) an individualwhose networth did not exceed $2,000,000 atthe time the adversary adjudicationwas initiated, or (ii) any owner ofan unincorporated business, or any partnership, corporation, association, unit oflocal government, or organization, the networth ofwhich.did not exceed $7,000,000 atthe time the adversary adjudication was initiated, and which had not more than 500 employees at the

**tj,~e** 

### the adversary adjudication was initiated; except that an organization described in section 501(c)(3) ofthe Internal Revenue Code of 1986 (26 U.S.C. 501(c)(3)) exempt from taxation under section 501(a) ofsuch Code, or a cooperative association as defined in section 15(a) ofthe Agricultural Marketing Act (12 U.S.C. 1141j(a)), may be a party regardless ofthe net worth ofsuch organization or cooperative association or for purposes ofsubsection (a)(4), a small entity as defined in section 601
...(emphasis added) The FAA's implementing regulation (14 C.FR. §14.04 (b)) states: The application shall also include a statement that the applicant's net worth does not exceed $2 million (ifan individual) or $7 million (for all other applicants, includingtheir affiliates) at the time the adversary adjudication was initiated.

24 TGI's Motion for Fees, page 2. 25 !d., page 3. 11In its "Replyto Complainant's Opposition to Motion for Fees and Costs" TGI asserted "
...TGI Freight is not a large company but a business that, in large part, deals with theshipment ofhazardous materials inthe highlyunique U.S. market... TGI Freight is a small company..." 26 TGI made no other assertions as to its net worth, ownership and/or number ofemployees as required by5 US.C. §504, et al and 14 C.FR. §14.04 (b)) andprovided no documentation to supportthe assertions in its application for fees. C. (1) there mustbe a "court-ordered change in the legal relationship" ofthe parties; With ourdismissal ofthe FAA's Complaint, there was a change inthe legal relationship ofthe parties. D. (2) thejudgmentmustbe infavor ofthe party seekingthe fees; and TGI was the prevailing party and is the party seeking the fees.Z7 E. (3) thejudicialpronouncementmustbe accompaniedbyjudicial relief. Thejudicial reliefwas dismissal ofthe FAA's complaint.

VII. Findings A. Adversarial We find the FAA'sproceeding against TGAwas an adversary adjudication to enforce TGI's compliance with a statutory orregulatory requirement as set forth in the statute. B. Prevailing Party We find TGI was the prevailingparty, there was a "court-ordered change in the legal relationship" ofthe parties; (2) thejudgmentwas in favor ofthe party (TGI) seekingthe fees; and (3) thejudicial pronouncementwas accompanied byjudicial relief(dismissal ofthe complaint). (See Thomas v. Nat'! Sci. Found., 330 F.3d 486, 491 (D.C.Cir.2003). Turner v. N. TS.B., supra.) C. Application We find TGI's applicationidentified the apphcant and the proceeding for which an award was sought. The application asserted that TGI was the prevailing party, contained an itemization offees and other expenses incurredbythat party in connectionwiththatproceeding, and alleged the FAA's positionwas not substantiallyjustified.

26 TGI's "Reply to Complainant's Opposition to Motion for Fees and Costs", page 5 and 6. 27 See Thomas v. N.S.F., 330 F.3d 486, 356 U.S.App.D.C. 222 (June 3, 2003). 12The application failed to identify whether the applicant was an individual, failed to state the number ofemployees ofthe applicant and failed to describe briefly the type and purpose ofits organization orbusiness. The application also failed to include a statementthatthe applicant's net worth did not exceed $2 million (ifan individual) or $7 million (for all other applicants, including their affiliates) at the time the adversary adjudication was initiated. TGI failed to establish it was a party entitled to reliefunder 5 US. C. §504, etseq, and/or 14 C.F.R. 14.10. D. Applicability to Hazardous materials cases ' The FAA, relying onDominion Concepts, argued that the FAA Administrator found "
...the EAJA does not apply to hazardous materials cases..." The court held in Turner 

### vN T.S.B. 28 Because the EAJA is a statute ofgeneral application, we do not defer to the NTSB's or to any one agency's interpretation ofit. See, e.g., Contractor's Sand & Gravel, Inc. v. Fed. Mine Safety & Health Review Comm'n, 199 F.3d 1335, 1339 (D.C.Cir.2000) (court not "boundto defer to the agency's construction" ofthe EAJA because "[it] is a statute ofgeneral application and not one committed to administration by the Commission orthe Secretary"). We need not decide this issue as the EAJA application can be decided on other grounds. E. Substantial Justification As set forth hereinabove, "Substantialjustification" connotes an active, searching inquiry into the quality ofevidence advanced and the overall reasonableness ofthe agency's position. The inquiry examines the totality ofthe circumstances surrounding the government's adoption of its position. An allegation is consideredto be substantiallyjustified when ithas a reasonable basis in law and fact. The charge mustbejustifiedto the degree that could satisfy a reasonable person. The standard is met ifthere is a "genuine dispute," or ifreasonable people could differ as to the appropriateness ofthe contested matter. The agency must show (a) a reasonable basis in truth for the facts alleged; (b) a reasonable basis in law for the legal theory propounded; and (3) a reasonable connection between facts and theory. Failure to prevail does notraise a presumption oflack ofsubstantial' justification. An agency's defeat in the underlying action on the merits does notraise a presumptionthat its position was not substantiallyjustifiedunder EAJA (emphasis in original). Nor mustthe agency

28 608 F.3d 12, C.A.D.C. (2010). 13

# . demonstrate that it had a substantial likelihood ofprevailing to prove that its litigation position was substantiallyjustified. We need not decide this issue as the EAJA application can be decided on other grounds.
VIII. Conclusions TGI has failed to allege and/orprove it is a party entitled to reliefunder 5 US.C. §504, et seq, and/or 14 C.FR. 14.10. by failing to file a complete application. The application failed to identify whetherthe applicant was an individual, failed to state the number ofemployees ofthe applicant and failed to describe briefly the type and purpose ofits organization or business. The application also failed to include a statementthat the applicant's net worth did not exceed $2 million (ifan individual) or $7 million (for all other applicants, including their affiliates) at the time the adversary adjudication was initiated. 5 US.C. §504 states: (a)
...(2) A party seeking an award offees and other expenses shall, within thirty days ofa final disposition inthe adversary adjudication, submit to the agency an application which shows thatthe party is a prevailing party and is eligible to receive an award under this section, andthe amount sought, including an itemized statementfrom any attorney, agent, or expert witness representing or appearing in behalfofthe party stating the actual time expended and the rate at which fees and other expenses were computed. The party shall also allege that the position ofthe agency was not substantiallyjustified. When the United States appeals the underlying merits ofanadversary adjudication, no decision on an application for fees and other expenses in connection with that adversary adjudication shall be made under this section until a final and unreviewable decision is rendered bythe court onthe appeal or until the underlying merits of the case have beenfinally determined pursuantto the appeal
... (emphasis added) (b)(l) For the purposes ofthis section-- (B) "party" means a party, as defined in section 551(3) ofthis title, who is (i) an individual whose net worth did not exceed $2,000,000 at the time the adversary adjudication was initiated, or (ii) any, owner ofan unincorporated business, or any partnership, corporation, association, unit oflocal government, or organization, the networth ofwhich did not exceed $7,000,000 at the time the adversary adjudication was initiated, and which had not more than 500 employees at the time the adversary adjudication was initiated...(emphasis added)

) The FAA's implementing regulation 

### (see 14 C.F.R. §14.04) states:

14(b) The application shall also include a statement that the applicant's net worth does not exceed $2 million (ifan individual) or $7 million (for all other applicants, including their affiliates) atthe time the adversary adjudication was initiated... (emphasis added) "
...No EAJ A application can be considered and fees awarded until all ofthe jurisdictional requirements are met... (apfellant may not be awarded attorney's fees under the EAJA unless all requirements are met)". 2 "Since the EAJA is a waiver ofthe sovereign immunity ofthe United States, its provisions are to be strictly construed in the government's favor". 30 "Underthe EAJA, the appellant is also required to showthat he or she is a party eligible for an EAJA award". 31 "AnEAJA applicant must meet a net worth requirement by indicating a networth not exceeding $2,000,000

... Although a Court retains "substantial discretion" in fixing the amount ofan EAJA award, eligibility for such an award must be established by meetingthe conditions of
... The eligibility provision pertains to eligibility at the time the appeal was filed. A showing ofeligibility may be made by stating in the application that the appellant's net worth at the time the appeal was filed did not exceed $2 million"?2 To date no informationhas been submitted which would showthat TGI was an eligible party nor had its application been amended
.

. . .Althoughthe above cited cases all deal with late filed applications rather than an application which is timely filed but defective, the rationale requiring strict construction which bars an action on the former also applies to and bars an action on the latter. The statutory language and legislative history ofthe EAJA, although not couched in the language of jurisdiction, indicate that Congress intended the filing deadlines to be strictly enforced and considered the showing ofeligible status to be an integral part offiling. The statute states in plain language that a party seeking fees "shall, within thirty days offinaljudg-ment in the action, submit to the court an applicatiqn
...**w~ich ~nows**  that the party ... is eligible to receive and award under this subsection
... Nothing in the language ofthe statute or its leg-islative history suggests that a defective application which is not completed until after the 30 day limithas run is any less fatal to a court's jurisdictionthan a late filed application. Indeed, the requirement ofshowing eligible status is contained in the same sentence as the 30 day filing

. 33 reqmrement... We find that satisfying eligibility for an EAJA award isjurisdictional. Failure to allege eligibility is ajurisdictional defect.

29 Bazalo v. Brown, 9 Vet.App. 304,65 USLW 2192 (Aug 16, 1996) at page 7. 3o Id. 31 Id, at page 8
.. 32 Id. 33 U.S v. Hopkins Dodge Sales, Inc., 707 F.Supp. 1078 (Feb 2, 1989), at page 3. See also Scarbrough v. Principi, 541 U.S. 401, 124 S.Ct. 1856 (May 3, 2004); Soriano v. U.S., 352 U.S. 270, 77 S.Ct. 269, 1 L.Ed.2d 306 (Jan 14, 1957). 15 ·' t····In view ofthe foregoing, we deny TGI's Motion for Fees 

### and Costs inits ehtirety. 34

Richard C. Goodwin U.S. Administrative Law Judge Attachment

- Service List

34 This decision becomes final 30 days after its issuance unless a party appeals orthe FAA Decisionmaker takes review under his/her own initiative. 14 C.F.R. §14.28(a). The appeal must be either (a) mailed to the Federal Aviation Administration, 800 Independence Avenue, S.W
.., Washington, D.C. 20591, Attention: Hearing Docket Clerk, AGC-430, Wilbur Wright Building- Suite 2Wl000; or (b) delivered personally or via expedited courier service to the Federal Aviation Administration, 600 Independence Avenue, S.W., Wilbur Wright Building- Suite 2WIOOO, Washington, D.C. 20591, Attention: Hearing Docket Clerk, AGC-430. 16

## j 

# l j SERVICE LIST ORIGINAL & ONE COPY Federal Aviation Administration 800 Independence Avenue, S.W. Washington, DC 20591 Attention: Hearing Docket Clerk, AGC-430, Wilbur Wright Building-Suite 2W1000 1 ONE COPY

Law Offices ofHozubin & Moberly, Respondent's.Counsel 711 M Street, Suite 2 Anchorage, AK 99501 TEL: 907-276-5297 FAX: 907-276-5291 Howard 

### L. Martin, Jr., Complainant's Counsel Regional Counsel, Office ofRegional Counsel, AAL-7 Alaskan Region Federal Aviation Administration 222 W. 

### i 11 Avenue #14 Anchorage, AK 99513-7587 TEL: 907-271-5273 FAX: 907-271-2800 The Honorable Richard C. Goodwin,Administrative LawJudge U.S. Department ofTransportation Ot1ice ofHearings, M-20, 1200 NewJersey Avenue, S.E.(E11-310) Washington, DC 20590 TEL: StaffAssistant 202-366-5121 FAX: 202-366-7536 FDMS No. FAA-20 13-720 Successor to FAA-20I0-1079 (EA.TA)

1 Service was by U.S. Mail. For service in person or by expedited courier, use the following address: Federal Aviation Administration, 600 Independence Avenue, S.W., Wilbur Wright Building-Suite 2Wl000, Washington, DC 20591; Attention: Hearing Docket Clerk, AGC-430. 17