Order 20 12

- 8

- 1

Served: August 9, 2012

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY WASHINGTON, D.C.

Issued by the Department of Transportation

on the 9 th day of August , 20 1 2

In the matter of the cancellation of the Air Taxi authority

issued to

VIH COUGAR HELICOPTE RS, INC.

p ursuant to the provisions of 14 CFR 298.24 Docket DOT

- OST

- 20 1 2

- 0022

ORDER

On May 7, 2012, VIH Cougar Helicopters, Inc. (“VIH Cougar”), filed a letter in Docket DOT

OST

- 2012

- 0022 indicating that it had closed on the sale of its VFR operations. On that same day, VIH Cougar filed a m otion under Rule 12 of our Rules of Practice (14 CFR §302.12) seeking to

w ithhold f

rom p ublic d isclosure the identi ty of the purchasers of its VFR operations , which w ere redacted in the letter it provided

.

On July 6, 2012

, VIH Cougar Helicopters, Inc. (“ VIH Cougar ”) filed a motion in Docket DOT

OST

- 2012

- 0022 requesting that the Department dismiss the proceeding initiated by the Department’s Order to Show Cause of March 12, 2012 (Order 2012

- 3

- 7), claiming that its restructuring obviated the Department’s ownership and operational concerns expressed in that

Order

. In a separate Motion to Withhold From Public Disclo sure filed on the same date

, VIH Cougar further moved under Rule 12 to treat as confidential the iden tity of the party acquiring

Mr. William Steeper’s interest in VIH Cougar

. VIH Cougar filed a redacted Motion to Dismiss in the docket, and served it upon the interested parties. On July 9, 2012, Petroleum Helicopters, Inc. answered VIH Cougar’s Motion to Withhold, urging the Department to publicly reveal the identity of the acquiring party.

Under Rule 12, information may be accorded confidential treatment if it falls within one or more of the exemptions under the Freedom of Information Act, 5 U.S.C. § 552(b) (1)

- (9)

. VIH Cougar claims that the identity of the acquiring parties is information that falls under 5 U.S.C. § (b)(4) (“Exemption 4”). Under Exemption 4, information may be withheld if it is (1) commercial or financial, (2) obtained from a person outside the government, and (3) privileged or confidential.

Information that the government requires a party to disclose to the government is confide ntial if disclosure would “cause substantial harm to the competitive position of the person from whom

the information was obtained.” 1 Voluntarily submitted information is confidential “if it is of a

1 Critical Mass Energy Project v. NRC , 975 F.2d 871, 878 (D.C. Cir. 1992).2

kind that would customarily not be released to the publi c by the person from whom it was

obtained.” 2

Prior to the commencement of this docketed proceeding, the Department requested that VIH Cougar provide information concerning the citizenship and identity of its owners , consistent with its statutory obligati on under chapter 411 of Title 49 and its regulatory obligation under 14 C.F.R.

Part 298 . Furthermore, in the Order to Show Cause, the Department expressed its intention to revoke VIH Cougar’s air

- taxi exemption because it was under the actual control of a Canadian citizen, Mr. Kenneth Norie, in part because of the substantial employment and business relationship s between Mr. Norie a nd Mr. Steeper. If VIH Cougar were under the actual control of a Canadian citizen, it would fail to satisfy the U.S. citizen ship prerequisite for its air taxi exemption

. Because VIH Cougar now reports that Mr. Steeper has sold his equity interest in VIH Cougar, we must examine the employment and business relat i onships, if any, between Mr. Norie and VIH Cougar’s new owners to d etermine if they are U.S. citizens and if

, under any

circumstance

, VIH Cougar’s foreign investor retains the ability to substantially influence or control VIH Cougar. Therefore, the disclos ur e of the identity of the purchaser s of VIH Cougar’s VFR operatio ns and Mr Steeper’s equity interest in VIH Cougar’s i s necessary in order for VIH Cougar to demonstrate its compliance with the citizenship requirements and retain its air

- taxi exemption

.

In its Motion s to Withhold, VIH Cougar makes a bare assertion that release of the purchasers ’ identity “is likely to result in substantial competitive harm . . . given the highly competitive industry with in which VIH Cougar operates.” VIH Cougar has provided no support for this claim, which strains credulity. In the context of Exemption 4, competitive harm is “limited to harm flowing from the affirmative use of proprietary information by competitors,” and does not mean “simply any injury to competitive position,” such as injury caused by customer “disgruntlement” or negative publicity

. 3 VIH Cougar’s general concern that it might experience a competitive harm from the release of the information is not a sufficient basis to withhold the information under Exemption 4

.

VIH Cougar’s claim flies in the face of the public nature of U.S. air carrier and aircraft ownership. At the very heart of the United States aviation system is the requirement that in order to be

licensed , a U.S. carrier must be owned and controlled by U.S. citizens. That system does not operate on the basis of “secret” claims of U.S. citizenship in which the owners seek to shield their very identity from the general public. To the contrary, such information is public. VIH Cougar is subject to the sam e requirements as other air carriers holding similar operating authority. This is evidenced by the fact that the Department has never, particularly in cases where a company’s citizenship is called into question, withheld the identity of the majority U.S. owner . Therefore, we deny VIH Cougar’s May 7 and July 6 Motion s

.

Under Rule 12, a Department ruling on motions for confidential treatment will not take effect if, within five (5) business days after issuance, the person requesting confidential treatment files a petition for reconsideration of that decision, or files a s tatement that he or she in good faith

2 Id. at 879.

3 Pub. Citizen Health Research Group v. FDA , 704 F.2d 1280, 1291 n.30 (D.C. Cir 1983) (citation omitted).3

intends to seek judicial review of the decision. If VIH Cougar elects to petition the Department as to this confidentiality determination, we expect that it will provide a statement explaining how and why the informat ion falls within one or more of the exceptions under the Freedom of Information Act and is not otherwise required to be filed publicly. Responses shall be due within five calendar days of the filing of such a petition.

If VIH Cougar elects not to file a petition or seek judicial review , we direct it to submit the information for which confidential treatment was denied in the public docket in this proceeding within (5) business days of the service date of this order.

ACCORDINGLY,

1. We deny VIH Couga r’s Motion s to Withhold of May 7 and July 6, 2012.

2

. We will serve a copy of this order on the persons listed in Attachment A.

By:

SUSAN L . KURLAND Assistant Secretary

for Aviation and International Affairs

An electronic version of this document is available on the World Wide Web at: http://www.regulations.govAttachment A

SERVICE LIST FOR

VIH COUGAR HELICOPTERS , INC.

DAVID M NADLER

DAVID Y YANG

ANDREW A SMITH

COUNSEL TO VIH COUGAR

HELICOPTERS INC

DICKSTEIN SHAPIRO LLP

1825 EYE STREET NW

WASHINGTON DC 20006

- 5403 PETER LYNCH AGC

- 300

ASST CHIEF COUNSEL FOR ENFORCEMENT

FEDERAL AVIATION ADMINISTRATION

800 INDEPENDENCE AVE SW

WASHINGTON DC 20591

WILLIAM J WEBER

CERTIFICATION SECTION MANAGER

FAA AFS

- 900

45005 AVIATION DRIVE SUITE 131

DULLES VA 20166 PRESIDENT

VIH COUGAR HELICOPTERS INC

PO BOX 872

BELLINGHAM WASHINGTON 98227

ROY HARDIE

AVIATION SAFETY INSPECTOR

FEDERAL AVIATION ADMINISTRATION JONATHAN BLANK

JOHN LONGSTRETH

TIM HOBBS

K & L GATES LLP

1601 K STREET NW

WASHINGTON DC 2006