';"!fl



### ...... ...' 

# u.s. DEPARTMENT OF TRANSPORTATION

OFFICE OF HEARINGS WASHINGTON, DC 

## SERVED: October 25, 2013

In The Matter Of: FRIENDSHIP AIRWAYS, INC. d/b/a YELLOW AIR TAXI, and CHRISTOPHER BEHNAM Respondents ) ) ) ) ) ) ) Docket No. OST-2013-0066 (Enforcement Proceeding)



### ORDER DIRECTING RESPONDENTS TO SHOW CAUSE REGARDING OAEP'S MOTION FOR DEFAULT FINDING On July 9, 2013 an Order Directing Supplemental Proof of Service in Support ofMotion for Default Judgment was filed.
On August 1, 2013 the Office ofAviation Enforcement and Proceedings ("OAEP") filed OAEP Response to Order Directing Supplemental Proof of Service in Support ofMotion for Default Judgment ("Supplemental Proof').
As oftoday's date, October 25,2013, neither thepro se Friendship Airways, Inc., d/b/a Yellow Air Taxi ("Friendship") or the individually-named pro se Respondent, Christopher Behnam ("Mr. Behnam "), have filed an Answer to OAEP's Enforcement Complaint, a Response to the OAEP's June 6, 2013 Motion for Default Judgment, or aResponse to the OAEP's August I, 2013 Response to Order Directing Supplemental Proof of Service in Support of Motion for Default Judgment. 

### DISCUSSION There are two stages to any default request: (I) the establishment ofthe default, and (2) the potential entry of a default judgment. See, Steven Baicker-McKee, et.al, Federal Civil Rules Handbook, West Publishing (2012)(Rule 55(a)-[Default] Distinguished from Default Judgment). This Order addresses only the first stage ofdefault, the establishment of default.A motion for default is usually filed when an opposing party fails to plead or defend

against an action. Before the court makes a finding of default, the party against whom the default is sought must be properly served with process. 14 C.F.R. 

## !i 302.409; See, e.g., Williams v. Geico Corp., 792 F. Supp. 2d 5, 11-12 (U.S. D.C. Court, 2011)(due process requires that defendants receive adequate notice ofproceedings against them). Itis well-established that the party attempting service (i.e., OAEP herein) generally bears the burden of establishing that service is proper. Steven Baicker-McKee, et.al, Federal Civil Rules Handbook, West Publishing (2012)(Rules 4 and 55). The question raised by the OAEP's Motion and Supplemental Proof documentation, which lists multiple attempts to serve both OAEP's Enforcement Complaint ("Complaint"), and OAEP's Motion for Default Judgment ("Motion"), is whether or not Friendship orthe individually-named Mr. Behnam, have been properly served. A. Brief Review ofApplicable Statute and Regulation 49 U.S.C. 

### !i46103 and 14 C.F.R. 

### !i302.7(c) provide the standard for reviewing proof of service in U.S. Department ofTransportation ("DOT") administrative litigation. Air carriers are required, by statute, to designate an agent for service ofDOT transportation actions. 49 U.S.C. 

## !i 46103(a)(I) provides inpart: Each air carrier and foreign air carrier shall designate an agent on whom service ofnotice and process in aproceeding before, and an action of, the Secretary ofTransportation

... may be made. (emphasis added) 49 U.S.C. 

## !i 46l03(a)(2) (A) requires that an air carrier designate its named agent in writing. 49 U.S.C. 

## !i 46103(a)(2) (B) further provides that an air carrier may change the agent designation in the "same way as originally made." In addition, 49 U.S.C. 

## !i 46103(b)(l) provides: (l) Service may be made

- (A) by personal service; (B) on a designated agent; 

### or (C) by certified or registered mail to the person to be served 

### orthe designated agent ofthe person. (emphasis added)

In addition, it is well established that an administrative agency may enact regulations and rules to effectuate congressional intent, and to carry out the agency's delegated authority. Page2 of 1014 C.F.R. S302.7(b) provides in part:

(b) How service is made. Service may be made by first class mail, express mail, priority mail, registered or certified mail, facsimile transmission, personal delivery, or by electronic means ... The means ofservice selected must be done in such manner so as to have the same attributes as section 46103 ofthe Statute, which provides for service of notices and processes in aproceeding bypersonal service or registered or certified mail. (emphasis added)
14 C.F.R. S302.7(c) provides the following: (c) Who may be served. Service upon aparty or person may be made upon an individual, or upon amember of apartnership, or firm to be served, or upon thepresident or other officer ofthe corporation, company, firm, or association to be served, orupon the assignee or legal successor of any ofthe foregoing, or upon any attorney ofrecord for the party, or upon the agent designated by an air carrier under section 46103 ofthe Statute, but it shall be served upon aperson designated by aparty to receive service of documents in aparticular proceeding in accordance with

## S 302.4(a)(2)(iv)) once a proceeding has been commenced. (emphasis added) B. Friendship's Designated Agent 

### Inits Supplemental Proof, the OAEP presented evidence that in 2005, Friendship was an incorporated company with aprincipal office located at 1150 Lee Wagener Blvd., #203, Fort Lauderdale, FL 33315. (Supplemental Proof, Att. A). The President ofFriendship was Respondent Mr. Behnam. (Supplemental Proof, Att. A). Pursuant to 49 U.S.C. S46103, Friendship's president, Mr. Behnam, filed with the DOT
aDesignation ofAgent Form ("Agent Designation") on behalf ofFriendship. Mr. Behnam utilized aDOT/Office of Secretary boilerplate form to file Friendship's Agent Designation. The filing with the U.S. Transportation Docket occurred on March 25,2005 (Supplemental Proof, Att. A). Mr. Behnam identified Pierre Murphy, located at 1200New Hampshire Ave. NW, Washington, D.C., 20036, as Friendship's Designated Agent. (Supplemental Proof, Att. A). The Agent Designation Friendship filed states that it:

...hereby designates, pursuant to section 46103 ofTitle 49 ofthe U.S. Code

...the person named below as its Agent upon whom service ofall notices and process, and all orders, decisions, and requirements ofthe Department ofTransportation may be madefor and on .behalf ofsaid carrier, hereby canceling all previous designations of agents made by itto the DOT.
Page3 of 10(emphasis added)

C. Brief Discussion ofApplicable Statute and Regulation re: Designated Agent Based on the foregoing, it is clear that Friendship designated a specific agent

- Pierre Murphy

- to receive service of any DOT process. Based on the language contained in the boilerplate Agent Designation form filed by Friendship in 2005, a lay person might conclude that the OAEP was required to serve Pierre Murphy with any complaint ormotion involving Friendship, before service was effective. However, this conclusion would be inaccurate. As noted above, 49 U.S.C. 946103(b)(l)(C) provides for certified orregistered mail service, in lieu of

personal service, on either "the person to be served or the designated agent of the person." This reflects general legal practice, which allows for service on various individuals acknowledged by law to be acceptable corporate representatives. See, e.g., Fed. R. Civ. P. 4; Whiteheadv. CBS/Viacom, Inc. 221 F.R.D. 1,4 (D.D.C., February 11, 2004) (Service upon a corporate defendant must be effected by delivery to an officer, amanaging or general agent, or
some agent authorized by appointment orby law to receive service). As noted above, 14 C.F.R. 9302.7(c) recognizes that service may be effectuated upon the designated agent identified by an air carrier pursuant to 49 U.S.C. 946103

... However, following long-established legal practice, 14C.F.R. 9302.7(c) also authorizes service ofDOT proceedings upon a corporation by delivery to multiple other individuals, including the president or other officer ofthe corporation. See, e.g., Steven Baicker-McKee, et.al, Federal Civil Rules Handbook, West Publishing (2012)(Rule 4-Service on Domestic Company's Officer, Manager, or General Agent). The use ofthe permissive "may" in 14 C.F.R. 9302.7(c) indicates that the designated agent identified by an air carrier's Agent Designation form is not intended to be the only option for DOT service upon abusiness. D. The OAEP's Service of Complaints on Respondents: The fact that Friendship had filed an Agent Designation form with the DOT did not limit the OAEP to serving Friendship with a Complaint only through Pierre Murphy, the company's designated agent. Indeed, the DOT specifically allows for service ofthe Complaint by mail to be made on Friendship through Mr. Behnam, inhis capacity as President of Friendship, under the provisions of 14 C.F.R. 9302.7(c). Themail service must, however, have the same attributes as
Page4 of 10section 46103 of the Statute, which provides for service ofnotices and processes in aproceeding

bypersonal service or registered or certified mail. 14 C.F.R. S302.7(b). E. Service Requirement after Proceeding Commences As discussed above, the OAEP's action against both Friendship and Mr. Behnam may be initiated by serving Mr. Behnam, the President ofFriendship, with both Complaints. The next question is whether OAEP may continue to serve Mr. Behnam with motions against Friendship,
or whether OAEP must serve Friendship's designated agent Pierre Murphy

- who Friendship listed in its Agent Designation pursuant to U.S.C. S46103 (Supplemental Proof, Att. A.) As previously noted, 14 C.F.R. S302.7(c) provides that service of all notices and other documents: "shall be made upon aperson designated by aparty to receive service ofdocuments in aparticular proceeding in accordance with S 302.4(a)(2)(iv» once a [DOT] proceeding has been commenced." (emphasis added). Thus, after the filing and service of aDOT Complaint, all further documents in the litigation proceeding

- such as aMotion for Default

-- must be served on aperson designated by
aresponding party to receive service, pursuant to 14 C.F.R. S302.7(a)(2)(iv). This reference to 14 C.F.R. S302.7(a)(2)(iv) for service compliance is also repeated in 14 C.F.R. S302.7 (d), which identifies where service must be made, I Unfortunately, there is aproblem with the regulatory authority. The cited regulation of 14 C.F.R. s302.4(a)(2)(iv) does not exist. As aresult, the meaning ofthe regulation is unclear on its face. Thus, the underlying meaning ofthe regulation must be addressed. F. Brief Review and Discussion ofDOT Regulatory Revisions The citation error to the non-existent 14 C.F.R. s302.4(a)(2)(iv) is not one ofcrossreference to an archaic section: In fact, 14 C.F.R. S 302.4(a)(2)(iv) has never existed in the Code ofFederal Regulations. Careful review ofregulatory history shows that the citation to 14 C.F.R. S 302.4(a)(2)(iv) is a drafting error, which dates back to the comprehensive revision of the Rules ofPractice during 1997-2000.

1

## S 302.7 Serviceofdocuments. 

## * * * (d)Where servicemaybemade. Service shallbemadeattheprincipalplaceofbusiness ofthe partyto be served, orathisorherusualresidenceifhe orsheisanindividual,oratthe officeof theparty's attorneyofrecord, orat the office or usual residence ofthe agent designated by an air carrier under section 46103 ofthe Statute, oratthepostofficeorelectronicaddress orfacsimile number statedforapersondesignatedtoreceive servicepursuant to 9302.4(a)(2)(iv). [emphasis added}. Page5 of 10In 1997 the DOT proposed a comprehensive revision of 14 C.F.R. part 302 "in order to

eliminate unnecessary verbiage and obsolete provisions and to make technical changes to make the rules current." 62 Fed. Reg. 5094 (Feb. 3, 1997). The regulatory revision process took three years. During the revision process, the drafters ofthe revised DOT regulations apparently made multiple proposed revisions to section 302,4.2 Ultimately, the DOT adopted 14 C.F.R. 9 302,4(a)(2)(i) (A-E) and (ii) as part of its final rules, but failed to notice that it erroneously retained cross-references to aprior rejected proposed draft version of 9 302,4

- i.e., 9 302,4 (a)(2)(iv)

- in the newly adopted 14 C.F.R. 9 302.7(c) and (d). Prior to the finalized revisions, the relevant language of 14 C.F.R. 9 302.7(c) and (d) appeared in 14 C.F.R. 9 302.8(c) and (d). 3 Both former 9 302.8(c) and (d) referenced former 9 302,4(c),4 while theproposed revised 9302.7 (c) and (d) referenced 9 302,4(a)(2)(iv). The DOT revisions were completed on February 9, 2000, with the final rules adopted with few changes.s 65 Fed. Reg. 6446 (Feb. 92000). Unless noted in the proposed or final rule, no changes in the wording or organization that occurred in the DOT's regulation revisions in 2000 have a substantive effect on the rules. 65 Fed. Reg. 6446 (Feb. 9, 2000). No such notations were made by the DOT before final adoption in 2000. Therefore, the erroneous references to the non-existent 14 C.F.R. 9302,4(a)(2)(iv) in 14 C.F.R. 9 302.7(c) and (d) should be understood to direct the reader to language that is the
same or substantively similar to that contained in the pre-2000 14 C.F.R. 9 302,4(c)

- which is the language that currently appears in 14 C.F.R. 9302,4(a)(2)(i)(D).

262 Fed. Reg. 5094, 5101 (Feb. 3,1997).

314 C.F.R.

## S 302.8(c), (d) (1999). 414 C.F.R. S302.4(c) (1999).

5Inthe finalrule, ,the "ii" was insertedinsection302.4(a)(ii)toread "iiDepartmentofTransportation Dockets hasanexpedited

.... " 65 Fed. Reg. 6446, 6460(Feb. 9, 2000). Page 6 of 10Section 302.4(a)(2)(i) provides in part: Each document [filed in the proceeding] must include with orprovide on its first page: 

## * * * (C) The identity ofthe filer and its filing agent, ifapplicable; (D) The name and mailing address ofthe designated agent for service of any documents filed inthe proceeding, along with the telephone and facsimile numbers and, ifavailable, electronic mail address ofthat person:



## * * * 14 C.F.R. S302.4(a)(2)(i). Thus, despite the citation error to anon-existent regulation in 14 C.F.R. S302.7(c), it appears that once a corporation is served with aDOT complaint, the corporation is responsible for identifying, in its response; the name and mailing address ofthe designated agent who will be acting on behalf ofthe corporation in that specific litigation. The corporation may choose to utilize the same individual identified in its Agent Designation on file with the DOT, orthe corporation may designate someone else. G. The OAEP's Service ofMotion for Default Judgment on Respondents As noted herein, according to 14 C.F.R. S302.7(c), once the OAEP's action has been commenced by service and filing of a Complaint, all further documents in the litigation proceeding against Mr. Behnam may continue to be served upon him individually. Given the language and error in 14 C.F.R. S302.7(c), and the Agent Designation previously filed on March 25, 2005 by Friendship, alay person might conclude that all further documents in the litigation proceeding against air carrier Friendship

- such as aMotion for Default

- must be served on Friendship's designated agent for service, Pierre Murphy, particularly in a default situation, where the corporation has failed to affirmatively respond after purported service of a complaint. This conclusion would be inaccurate. In general, service upon the corporation's designated agent is typically preferred by parties in litigation, to establish fast, efficient, and effective service. But the purpose ofthe Agent Designation provided by an air carrier under 49 U.S.C. S46103 is to allow the DOT the option of service on an air carrier's designated agent, not to restrict the DOT to service solely upon the designated agent.

Page7 of 10Section 46103(a) provides in part: "Each air carrier and foreign air carrier shall designate

an agent on whom service ofnotice and process in aproceeding before, and an action of, the Secretary ofTransportation

... may be made." 49 U.S.C. 

## S 46103(a)(l) (emphasis added). This option of service allows the DOT to serve documentation on the person(s) most likely to be able to legally act on an air carrier's behalf. This option also prevents an air carrier from escaping the responsibility oflitigation, in the event the air carrier fails to update its Agent Designation form with the DOT, orbecause the designated agent is suddenly unavailable (e.g., sickness, travel, family emergency, personal incapacity, death, etc.). In its Supplemental Proof, the OAEP agreed that it had not attempted service ofits Motion on Pierre Murphy, the designated agent for Friendship (Supplemental Proof, Att. A). The OAEP explained that service on Mr. Murphy would have been ineffectual because "according to Mr. Murphy" he had stopped acting as Friendship's agent in the year 2007. (Supplemental Proof, 3-4.) 6 The OAEP also pointed out that Friendship had surrendered its certificate to do business in August 2011 and was no longer an active business. (Supplemental Proof, Att. B). The OAEP also presented documentation that aNovember 2,2011 Final Order issued by the DOT, revoking

.Friendship's Commuter Air Carrier Authorization, was served on Friendship by mailing the Order to Respondent Mr. Behnam at his address ofrecord, 2680 N.E. 24 St., Pompano Beach, FL 33064. As noted above, Section 302.4(a)(2)(i)(D) requires arespondent charged in aproceeding to provide in its response to the litigation (and in any subsequent documents filed) the contact information ofits designated agent, ifone exists, for service offuture documents in the proceeding. This means that even though Friendship had an Agent Designation on file with the DOT, upon service of a Complaint, Friendship still is required, in any answer orresponse, to affirmatively identify either Mr. Murphy, or some other person, as its authorized representative in the litigation. Once Friendship makes that affirmative designation, the "but" clause in 14 C.F.R. 

## S 302.7(c) requires the OAEP to honor that designation and serve documents on the agent designated in the litigation, even ifdifferent from the person identified in the air carrier's Agent Designation on file.

6Thisassertionwasahearsayallegation imbeddedinargument, sincethe OAEPdidnotprovideany declarative statementoraffidavittestimonyregardingwhenMr. Murphymade suchastatement,how suchstatementhadbeenproffered, ortowhomMr. Murphymayhavemadethe statement. Page8 of 10H. Burden ofProof re: Service May Shift

A party attempting service generally bears the burden ofestablishing that service is proper. However, this burden may shift ifthe opposing party does not promptly move to challenge the purported service. See. Steven Baicker-McKee, et.al, Federal Civil Rules Handbook, West Publishing (20I2)(Rule 4: Burden ofProving Service ofProcess)

.. The OAEP has asserted that itproperly served litigation documents on Mr. Behnam, both individually and in his capacity as President ofFriendship, at his address ofrecord. This includes multiple attempts 7to serve Friendship with the Motion for Default Judgment, mailed to Mr. Behnam at his address ofrecord, 2680 N.E. 24th Street, Pompano Beach, Florida, 33064. As oftoday's date, October 25, 2013,pro se Respondent Mr. Behnam has not filed any objection or challenge to the service ofthe Motions for Default Judgment, either in his individual capacity, or in his capacity as president ofFriendship. Given Mr. Behnam's pro se status, the multiplicity ofOAEP's service attempts, the lack of service on Mr. Murphy, Friendship's designated agent, the errors in the regulations governing service, and the dispositive nature of a finding ofdefault, fundamental fairness requires that thepro se Respondents be offered a final opportunity to address the service issue. Having reviewed all the records and pleadings, the statutes, rules and regulations, all applicable caselaw and decisions, and being fully advised;

7Forexample,the OAEPhadtriedtore-servetheMotiononbothRespondentsonJune 6,2013 byone certifiedmailing addressedto 2680N.E. 24th Street,PompanoBeach, Florida, 33064.TheOAEPthen receivedU.S. Postal ServiceconfirmationthatonJuly29,2013 an "AlexBehnam" signedasrecipient (SupplementalProof,Atts. GandH). Itappearedundisputedthat "AlexBehnam" was notlistedasan ownerorofficerofFriendship, butdidsharethelastnameandaddressas ChristopherBehnam,the presidentofFriendship. Page9 of 10IT IS HEREBY ORDERED:

1. The OAEP's Motions for Default Judgments against Friendship and the individuallynamed Respondent, Mr. Christopher Behnam, are reserved. 2. On or ~efore November 20, 2013, Respondent Friendship Airways, Inc., d/b/a Yellow Air Taxi, and/or Respondent Mr. Christopher Behnam (Friendship's president and coowner), are directed to show cause in writing why the OAEP's documented proof of multiple service ofthe Motions for Default Judgment on Mr. Behnam (Friendship's president and co-owner), should not be deemed adequate proof of service ofthe Motions for Default on both Mr. Behnam and on Friendship pursuant to 14 C.F.R. g302.7(c). 3. Ifneither Friendship nor Mr. Behnam file awritten Show Cause Statement on orbefore November 20,2013 challenging the proof of service ofthe Motions for Default Judgment, then Friendship and/or Mr. Behnam may be deemed to have been properly served with the Motions for Default Judgment pursuant to 14 C.F.R. g302.7(c). 4. On or before November 20, 2013, Friendship and/or Mr. Behnam, are directed to show cause in writing any reasons why a rmding ofdefault should not be entered against either Friendship or individually named Mr. Behnam, given the lack oftheir response to either the OAEP's Complaints orthe OAEP's Motions for Default Judgment. 5. Any written Show Cause Statement by either Friendship and/or Mr. Behnam must be filed with the Office ofHearings and all parties with a Certificate of Service. 6. Ifneither Friendship nor Mr. Behnam file a written Show Cause Statement on orbefore November 20,2013 challenging the OAEP's Motion for Default Judgment, then a finding ofdefault may enter against Friendship and/or Mr. Behnam. 7. Further orders shall issue after November 20,2013.
8. For any questions about the procedures to be followed in this Order, please contact the Office ofHearings (202-366-6941).

Attachment: Service List

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

### ONE COPY Mr. Samuel Podberesky Ms. Laura Jennings Complainant's Counsel Office ofAviation Enforcement and Proceedings, C-70 U.S. Department ofTransportation 1200 New Jersey Avenue, S.E. (W96-43I) Washington, DC 20590 TEL: 202-366-0966 Friendship Airways, Inc. dba Yellow Air Taxi Respondent c/o Mr. Christopher Behnam, President and Owner, Friendship Airways 2680 N.E. 24 Street Pompano, FL 33064
Mr. Christopher Behnam Respondent 2680 N.E. 24 Street Pompano, FL 33064
Judge lE. Sullivan Us.Administrative Law Judge U.S. Department of Transportation Office ofHearings, M-20 1200 New Jersey Avenue, S.E. (Ell-31O) Washington, DC 20590 TEL: 202-366-2132 FAX: 202-366-7536 Docket No. OST-2013-0066