In The Matter Of: 

## SERVED: February 22, 2016
U.S. DEPARTMENT OF TRANSPORTATION OFFICE OF HEARINGS WASHINGTON, DC

DocketNo. FAA-2014-0867 BIRMINGHAM FLIGHT CENTER, INC. ) ) ) ) ) ) Case No. 2012S0090053 Respondent

ORDERDENYING RESPONDENT'S MOTION TO DISMISS AND RESERVING RULING ON OTHER SANCTIONS OnNovember 18, 2015, the Respondent, Birmingham Flight Center, Inc., filed the Respondent's Motion for Sanctions ("Motion"). OnDecember 10, 2015, the FAA filed a Response in Oppositionto Motionfor Sanctions ("Response"). OnDecember 16, 2015, the Respondent filed the Respondent's Motion for Protective Order and Request to Delay the Filing ofa Reply to the Administrator's Response [sic] Respondent's Motionfor Sanctions. OnDecember 17, 2015, an Order Granting the Respondent's Request to File a Reply, but Denying Motions for Protective Order and Leave to Take Depositions Before Filing a Reply was filed. On January 15, 2016, the Respondent filed the Respondent's Reply to the Strikingthe FAA's Response in Oppositionto Motion for Sanctions ("Reply"). 

### A. Short Summary ofDispute Only certain matters will be highlighted inthis discussion, which addresses onlythe Respondent's Motion for Dismissal as a sanction. Otherrequested sanctions are reserved, and will be addressed in a separate Order.The Respondent generally alleges that "[f]romthe inception" oftheFAA's investigation inthis case, the FAAhas engaged in "improper, sanctionable conduct." (Motion, 1,**~I.)** The Respondent more specifically asserts that the FAA has violated the following: a) the FAA's own internal guidelines in investigating a civil penalty case; b) the Court's April 7, 2015 Order Setting Litigation Dates and Procedures; and c) the discovery procedures identified in Federal Rule ofCivil Procedure ("Rule") 26 (Motion, 18,**~II** (b); Reply, 1-3.) The Respondentrequests dismissal withprejudice as a sanction, or inthe alternative, other "sanctions as the Court deems proper andjust." (Motion, 20.) In response, the FAA asserts that it did not engage in most ofthe behaviorthatthe Respondenthas alleged. Further, the FAA argues that evenifit were provedthat it failed to follow some ofits own internal guidelines for investigation ofa civil penalty case, such error would notbe grounds for either dismissal or alternately plead sanctions. (Response, 1.)



### B. Authority for Dismissal and Sanctions In FAA civil penaltyproceedings, aparty may file a motion to dismiss, specifyingthe grounds for dismissal, at any time during the litigation. 14 C.P.R.§ 13.218(£)(2). The proponent ofsuch a motionhas the burden ofproof. 14 C.F

### .R. § 1**~**.224 (b). In addition, the FAA's Rules ofPractice ("ROP"), 14 C.P.R. Part 13, Subpart G, specificallyprovide, in four (4) separate sections, directions regarding the imposition of sanctions as follows: 1) sanctions involving filed documents, 14 C.F.R. § 13.207; 2) limitations regarding sanctions, 14 C.P.R.§ 13.205(b); 3) sanctions involving agreedjoint schedules, 14 C.P.R.§ 13.217(£); and, 4) sanctions for failures to comply with general discovery, 14 C.P.R.§ 13.220(n).



### C. Arguments Regarding Dismissal as a Sanction In its request for dismissal, the Respondent acknowledges that none ofthe four (4) separate sections inthe ROP specifically include dismissal as an allowable sanction. (Reply 11.) The Respondent argues, however, that dismissal is a sanction allowed by a) the Federal Rules, specifically Rules 26 and 37, (Motion, 1); b) the Court's inherent authority to manage litigation

Page 2 of 6(Reply, 9); and, c) by using as guidance decisions issued by the National Transportation Safety Board ("NTSB") (Reply, 11). Inresponse, the FAA argues, in part, that dismissal as a sanction is not warranted, because it did not violate Rule 26 (Resp. 7). The FAA further argued that dismissal under Rule 37(b)(2) and (c) wouldbe inapplicable, because the Respondenthas made unfounded allegations not supported by its materials. (Resp. 16.) D. Discussion All pleading andarguments submittedby bothparties onthe dismissal issue were fully considered. However, only certain matters will be highlighted in this discussion. 1. General Federal Litigation SanctionAuthority and Purpose Itis well established in general federal litigationpractice that a court has broad discretion to impose discovery sanctions, either for violation ofdiscovery rules or orders, orunderthe court's inherentpower to prevent abuse ofthejudicial process. 33 Am. Jur. Proof of Facts 3d 459 (Dec. 2015); Phelps v. Wyeth, Inc., 280 F.R.D. 572 (D. Or. 2012); Rule 26(a) and Rule 37(c). This may include sanctioning a party who violates court orders designedto enablejudges to control their dockets and manage the flow oflitigation. 33 Am. Jur. Proof of Facts 3d459 

### § 6 (Dec. 2015); Goldstein v. Co/borneAcquision Co

.. LLC, 873 F. Supp.2d 932 (N.D. Ill. 2012); Mya Saray, LLCv. Al-Amir, 831 F. Supp. 2d 922 (E.D. Va. 2011). The purpose for imposing sanctions is multifold: 1) to punish a party for improper discovery or other conduct and assure that it will notprofit from it; 2) to compensate the other party(s) for the expense and/or difficulties caused by any impropriety; 3)to specifically deterthe offending party from future misconduct, and secure its compliance with a particular court order and/or other litigation duties; and, 4) to generally deter others from engaging in litigation abuses. 33 Am. Jur. Proof of Facts 3d 459 § 1 (Dec. 2015). 2. Authority ofAdministrative Court inFAA Civil Penalty Cases The authority ofthis Courtto regulate proceedings in FAA civil penalty cases originates from Section 556 ofthe Administrative Procedure Act ("APA"), 5 U.S.C. § 556. The APA Page 3 of 6provides in partthat a U.S. Administrative Law Judge presides over administrative adjudication "[s]ubjectto publishedrules ofthe agency and within its powers." The "publishedrules ofthe agency" governing this and all FAA civil penalty proceedings are the FAA's Rules ofPractice ("ROP") found in 14 C.P.R. Part 13, Subpart G. These rules are binding in FAA civil penalty proceedings. 3. Federal Rules "Instructive" inFAA Civil Penalty Cases Whenthe FAA promulgated its ROP in 1990, the FAA wantedto maintain a "less formal" administrative process. 55 Fed. Reg. 27563 (Jul. 3, 1990) (Discussion ofFinal Rule). As a result, it declined to adopt as controlling the Federal Rules ofCivil Procedure. 

### !d. at 27563. However, the FAA Administrator explainedthat its own rules regarding discovery, although not as detailed as the Federal Rules, were "alreadyroughly parallel

... [to] the Federal Rules." !d. Thus, adding additional discovery safeguards, as urged by commentators, was unnecessary. The FAA Administrator also assured the public thatthe Federal Rules-and case law construingthem-wouldbe "instructive" in administrative civil penalty cases, for any discovery disputes or alleged abuses that might arise. !d. In short, the Federal Rules and case law are instructive, but "do not supercede [sic]" the FAA's ROP. See, e.g., Tokyo Air Cargo USA, FAA Order No. 2004-7, at 5 (Sept. 22, 2004); KDSAviationInc., FAA OrderNo. 91-17 (May 30, 1991) (Complainant's reference to Federal Rules "does not change the fact that it is the order itself-issuedpursuant to the authority to "[r]egulate the course ofthe hearing in accordance withthe rules of [14 C.P.R. Part 13, Subpart G]" contained in 14 C.P.R. § 13.205(a)(6)-thatis binding on the parties). 4. Dismissal as a Sanction- Not Authorized by the ROP As noted briefly above, bothparties agreed that under the Federal Rules, dismissal may be utilized as a sanction for discovery violations. Generally, in imposing sanctions, the "court need not find that the party or its counsel acted willfully or inbad faith

...unless the sanction is dismissal ofthe complaint or entry ofdefaultjudgment." 33 Am. Jur. Proof of Facts 3d459, §§ 2 and 9 (Dec. 2015); Bray & Gillespie Management LLCv. Lexington Ins. Co., 259 F.R.D. 568 (M.D. Fla. 2009); Ulyanenko v. Metropolitan Life Ins. Co., 275 F.R.D. 179 (S.D. N.Y. 2011); Page 4 of6Rule 37; and 

### Wallace v. McGlothan, 606 F. 3d 410 (ih Cir. 2010). It is also well-established in general federal practice that dismissal ofa complaint is a "severe sanction" that should be granted only "sparingly" upon a finding that a serious violation orviolations have occurred. 33 Am. Jur. 

### Proof of Facts 3d 459 § 21 (Dec. 2015); 

### Montblanc-Simplo GmbHv. Colibri Corp., 692 F. Supp. 2d 245 (E.D. N.Y. 2010.) 

### a) FAA's ROPLimitation RegardingSanctions However, pursuantto 14 C.F.R. 

### § 13.205(b), the FAA's ROP limitthe types ofsanctions U.S. Administrative Law Judges may impose when presiding over FAA civil penalty cases. 14 C.F.R. § 13.205(b) provides in part: The administrative lawjudge shall not issue an order ofcontempt, award costto any party, orimpose any sanction not specified in this subpart. Ifthe administrative lawjudge imposes any sanction not specified inthis subpart, a party may file an interlocutory appeal ofright withthe FAA decisionmakerpursuant to §13.219(c)(4) ofthis subpart. 14 C.F.R. § 13.205(b). As noted earlier, sanctions are specified inthe ROP in four (4) separate sections. The Respondent has identified all four (4) sections inpleading for relief. (Reply, 9.) However, the ROP has expressly limited the use ofsanctions, and dismissal as a sanction is not specifically allowed. Thus, even ifa movant files a general motion for dismissal under 14 C.F.R. 

### § 13.218(£)(2), and the grounds alleged is improper conduct that shouldbe sanctionedby dismissal (or defaultjudgement), the specific limitation language under 14 C.F.R. § 13.205(b) prohibits dismissal or dispositive reliefas relief. 

### b) RecentFAA AdministratorDecision -DismissalnotAllowedas Sanction The issue ofdismissal as a discovery sanction was recently addressedbythe FAA Administrator inthe case of

### Gamache-Wortman, FAA OrderNo. 2012-4 (May 22, 2012). Inthis case, the Judge "incongruously" dismissed the respondent's request for hearing as a discovery violation sanction, and simultaneously entered a civil penalty finding andjudgmentfor $2,500 based onthe allegations inthe FAA's complaint. The FAA Administrator reversed both decisions, holding in part:

Page 5 of 6The Rules ofPractice in Civil Penalty Proceedings do not specify that an ALJ [sic] may dismiss a respondent's request for hearing as a sanction for a respondent's failure to respond to a discovery order or orderto compel. 

### Id. at 6.The FAA Administrator also noted that other sanctions, as specified under 14 C.F.R. § 13.220(n), should have been considered and utilized for the respondent's discovery violations. 

### !d. at 6-7. 5. NTSB Decision- Not Controlling or Instructive The Respondent's alternate argument for dismissal based on decisions issuedbythe National Transportation Safety Board ("NTSB") must also be rejected. (Mot. 17.) Therules governingproceedings at the NTSB, or other administrative forums, do not supersede the FAA's ROP. Itis also noteworthy that, unlike the NTSB rules (e.g., 49 C.F.R. § 821.19), the FAA's ROP do not place an affirmative duty onthe FAA to provide the releasable portion ofthe Enforcement Investigative Report to a respondent by the time the FAA serves a complaint. 

### E. Conclusion Although the FAA's ROP are "roughly parallel" to the Federal Rules, there are some exceptions and differences. Pursuantto 14 C.F.R. 

### § 13.205(b), the FAAAdministratorhas found that dismissal maynot be utilized as a discovery sanction in FAA civil penalty proceedings. Pursuantto 14 C.F.R. § 13.205, and after reviewing all relevant caselaw, regulation, statutory authority, and being fully advised; 

### ITIS HEREBY ORDERED: 1. The Respondent's Motion for dismissal as a sanction is denied. 2. The Respondent's Motion for alternate sanctions is reserved, and a further Order will issue shortly.

Attachment: Service List Page 6 of6DocketNo. FAA-2014-0867 (Civil Penalty Action) 

### SERVICE LIST- BY U.S. MAIL 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 Mr. Christopher R. Stevenson Complainant's Counsel Federal Aviation Administration Office ofthe Regional Counsel, AS0-7 Southern Region 1701 ColumbiaAvenue College Park, GA 30337 TEL: 404-305-5200 FAX: 404-305-5223 Mr. Paul R. Borth Respondent's Counsel Barnett & Borth, LLC 800 Waukegan Road, Suite 200 Glenview, IL 60025-4387 TEL: 847-724-5520 FAX: 815-356-7042 Judge J.E. Sullivan US. Administrative LawJudge Office ofHearings, M:..2o U.S. Department ofTransportation 1200 NewJersey Avenue, S.E. (Ell-310) Washington, DC 20590 TEL: 202-366-6941 FAX: 202-366-7536 Birmingham Flight Center, Inc. Respondent 4243 East Lake Blvd. Birmingham, AL 35217

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 2W1000, Washington, DC 20591; Attention: Hearing Docket Clerk, AGC-430.