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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

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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 of Motion

for Default Judgment was filed.

On August 1, 2013 the Office of Aviation Enforcement and Proceedings ("OAEP") filed

OAEP Response to Order Directing Supplemental Proof of Service in Support of Motion for

Default Judgment ("Supplemental Proof').

As of today's date, October 25,2013, neither the pro 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 a Response 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 of the 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 of default, 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 of proceedings against them). It is 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 or the

individually-named Mr. Behnam, have been properly served.

A. Brief Review of Applicable Statute and Regulation

49 U.S.C. !i 46103 and 14 C.F.R. !i302.7(c) provide the standard for reviewing proof of

service in U.S. Department of Transportation ("DOT") administrative litigation. Air carriers are

required, by statute, to designate an agent for service of DOT transportation actions.

49 U.S.C. !i 461 03(a)(I) provides in part:

Each air carrier and foreign air carrier shall designate an agent on whom service of notice

and process in a proceeding before, and an action of, the Secretary of Transportation ...

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 or the designated agent of the

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.

Page 2 of 10
14 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 of service selected must be done in such manner so as to

have the same attributes as section 46103 of the Statute, which provides for service of

notices and processes in a proceeding by personal 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 a party or person may be made upon an individual,

or upon a member of a partnership, or firm to be served, or upon the president or other

officer of the corporation, company, firm, or association to be served, or upon the

assignee or legal successor of any of the foregoing, or upon any attorney of record for the

party, or upon the agent designated by an air carrier under section 46103 of the Statute,

but it shall be served upon a person designated by a party to receive service of

documents in a particular proceeding in accordance with S 302.4(a)(2)(iv)) once a

proceeding has been commenced.

(emphasis added)

B. Friendship's Designated Agent

In its Supplemental Proof, the OAEP presented evidence that in 2005, Friendship was an

incorporated company with a principal office located at 1150 Lee Wagener Blvd., #203, Fort

Lauderdale, FL 33315. (Supplemental Proof, Att. A). The President of Friendship was

Respondent Mr. Behnam. (Supplemental Proof, Att. A).

Pursuant to 49 U.S.C. S 46103, Friendship's president, Mr. Behnam, filed with the DOT

a Designation of Agent Form ("Agent Designation") on behalf of Friendship. Mr. Behnam

utilized a DOT/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 1200 New 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 of Title 49 of the U.S. Code ... the person

named below as its Agent upon whom service of all notices and process, and all orders,

decisions, and requirements of the Department of Transportation may be made for and on

.behalf of said carrier, hereby canceling all previous designations of agents made by it to

the DOT.

Page3 of 10
(emphasis added)

C. Brief Discussion of Applicable 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 or motion 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 or registered 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, a managing or general agent, or

some agent authorized by appointment or by 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, 14 C.F.R. 9302.7(c) also authorizes service of DOT 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 of the 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 a business.

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, in his 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

Page 4 of 10
section 46103 of the Statute, which provides for service of notices and processes in a proceeding

by personal 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 of Friendship, 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 a person designated by a party to receive service of documents

in a particular 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 a DOT Complaint, all further documents in the

litigation proceeding - such as a Motion for Default -- must be served on a person designated by

a responding 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 a problem with the regulatory authority. The cited regulation of 14

C.F.R. s302.4(a)(2)(iv) does not exist. As a result, the meaning ofthe regulation is unclear on its

face. Thus, the underlying meaning of the regulation must be addressed.

F. Brief Review and Discussion of DOT Regulatory Revisions

The citation error to the non-existent 14 C.F.R. s302.4(a)(2)(iv) is not one of crossreference to an archaic section: In fact, 14 C.F.R. S 302.4(a)(2)(iv) has never existed in the

Code of Federal Regulations. Careful review of regulatory 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 of Practice during 1997-2000.

1S 302.7 Service of documents. * * *

(d) Where service may be made. Service shall be made at the principal place of business of the

party to be served, or at his or her usual residence ifhe or she is an individual, or at the office of

the party's attorney of record, or at the office or usual residence of the agent designated by an air

carrier under section 46103 of the Statute, or at the post office or electronic address or facsimile

number stated for a person designated to receive servicepursuant to 9302.4(a)(2)(iv).

[emphasis added}.

Page 5 of 10
In 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 of the 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 a prior 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 the proposed 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.s65 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. S 302.4(c) (1999).

5 In the final rule, , the "ii" was inserted in section 302.4(a)(ii) to read "ii Department of Transportation

Dockets has an expedited .... " 65 Fed. Reg. 6446, 6460 (Feb. 9, 2000).

Page 6 of 10
Section 302.4(a)(2)(i) provides in part:

Each document [filed in the proceeding] must include with or provide on

its first page:

* * *

(C) The identity of the filer and its filing agent, if applicable;

(D) The name and mailing address of the designated agent for service of

any documents filed in the proceeding, along with the telephone and facsimile

numbers and, if available, electronic mail address of that person:

* * *

14 C.F.R. S 302.4(a)(2)(i).

Thus, despite the citation error to a non-existent regulation in 14 C.F.R. S302. 7(c), it

appears that once a corporation is served with a DOT complaint, the corporation is responsible

for identifying, in its response; the name and mailing address of the designated agent who will be

acting on behalf of the corporation in that specific litigation. The corporation may choose to

utilize the same individual identified in its Agent Designation on file with the DOT, or the

corporation may designate someone else.

G. The OAEP's Service of Motion 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, a lay person might conclude that all further

documents in the litigation proceeding against air carrier Friendship - such as a Motion 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 of the

Agent Designation provided by an air carrier under 49 U.S.C. S 46103 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.

Page 7 of 10
Section 46103(a) provides in part: "Each air carrier and foreign air carrier shall designate

an agent on whom service of notice and process in a proceeding before, and an action of, the

Secretary of Transportation ... 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 of litigation, in the event the air carrier fails to update its Agent

Designation form with the DOT, or because 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 of its

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 a November 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 of record, 2680 N.E. 24 St., Pompano Beach,

FL 33064.

As noted above, Section 302.4(a)(2)(i)(D) requires a respondent charged in a proceeding

to provide in its response to the litigation (and in any subsequent documents filed) the contact

information of its designated agent, if one exists, for service of future 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 or response, 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 if different from the person identified in the air carrier's Agent

Designation on file.

6 This assertion was a hearsay allegation imbedded in argument, since the OAEP did not provide any

declarative statement or affidavit testimony regarding when Mr. Murphy made such a statement, how

such statement had been proffered, or to whom Mr. Murphy may have made the statement.

Page 8 of 10
H. Burden of Proof re: Service May Shift

A party attempting service generally bears the burden of establishing 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 (20 I 2)(Rule 4: Burden of Proving Service of Process) ..

The OAEP has asserted that it properly served litigation documents on Mr. Behnam, both

individually and in his capacity as President of Friendship, at his address of record. This

includes multiple attempts 7 to serve Friendship with the Motion for Default Judgment, mailed to

Mr. Behnam at his address of record, 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 of the Motions for Default Judgment, either in his individual

capacity, or in his capacity as president of Friendship. 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 of default, fundamental fairness requires that the pro 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 case law and decisions, and being fully advised;

7 For example, the OAEP had tried to re-serve the Motion on both Respondents on June 6, 2013 by one

certified mailing addressed to 2680 N.E. 24th Street, Pompano Beach, Florida, 33064. The OAEP then

received U.S. Postal Service confirmation that on July 29,2013 an "Alex Behnam" signed as recipient

(Supplemental Proof, Atts. G and H). It appeared undisputed that "Alex Behnam" was not listed as an

owner or officer of Friendship, but did share the last name and address as Christopher Behnam, the

president of Friendship.

Page 9 of 10
IT 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 of the Motions for Default Judgment on Mr. Behnam (Friendship's

president and co-owner), should not be deemed adequate proof of service of the Motions

for Default on both Mr. Behnam and on Friendship pursuant to 14 C.F.R. g302.7(c).

3. If neither Friendship nor Mr. Behnam file a written Show Cause Statement on or before

November 20,2013 challenging the proof of service of the 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 of default should not be entered against

either Friendship or individually named Mr. Behnam, given the lack of their response to

either the OAEP's Complaints or the 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 of Hearings and all parties with a Certificate of Service.

6. If neither Friendship nor Mr. Behnam file a written Show Cause Statement on or before

November 20,2013 challenging the OAEP's Motion for Default Judgment, then a

finding of default 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 of Hearings (202-366-6941).

Attachment: Service List

Page 10 of 10
SERVICE LIST

ORIGINAL & ONE COPY

U.S. Department of Transportation

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 of Aviation Enforcement and Proceedings, C-70

U.S. Department of Transportation

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 of Hearings, 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