In the matter of: 

# ·-**~~** U.S. DEPARTMENT OF

## TRANSPORTATIO~ l

FEDERAL AVIATION ADMINISTRATION WASHINGTON, DC 

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## I AUG 29 2016

INI d

ENDLESS MOUNTAINS AIR, INC., DocketNo. FAA-2013-0848 Respondent.

COMPLAINANT'S REPLY BRIEF Pursuantto section 13.233(e) ofthe Rules ofPractice, 14 C.F.R. 

### § 13.233(e), and the Office ofAdjudication's letter1dated July 27,2016, Complainant files this briefin reply to Respondent Endless Mountains Air, Inc.'s (EMA) appeal ofthe Initial Decision issued by Administrative Law Judge J. E. Sullivan (ALJ) on May 20,2016, inthe above-captioned matter. STATEMENT OF THE CASE AND FACTS The statement ofthe case andthe statement offacts in Complainant's appeal brief, filed on July 14,2016, are incorporated by reference. STATEMENT OF THE ISSUE Whether the ALJ appropriately found that EMA failed to prove its affirmative defense of inability to paythe civil penalty. STANDARD OF REVIEW Under the Rules ofPractice, the Administrator considers on appeal whetherthe ALJ's conclusions oflaw are in accordance with applicable law, precedent, and public policy. 14 C.F.R. § 13.233(b)(2). Complainant bears the burden ofproving the appropriateness ofthe civil penalty, but Respondent bears the burden ofproofofan affirmative defense, such as inability to pay the proposed

1 Inthat letter, the Office ofAdjudication construed Respondent's notice ofappeal as its appeal briefand directed Complainantto file a reply briefno later than August 31, 2016. 

# 'D Lcivil penalty. See 14 C.F.R. 

### § 13.224(a) and (c); Rushmore Helicopters, Inc., FAA OrderNo. 2012-8 at 14 (October 11, 2012). ARGUMENT TheALJ properly found that EMA failed to prove that itwas financially unable to pay a civil penalty. EMA appears to argue that the ALJ erred by rejecting its affirmative defense ofinability to paythe civil penalty. R. Brief. EMA notes that it was unable to present its tax returns as evidence at the hearing because ofa "large overdue balance with [its] accountants." EMA suggests that "with review ofrecent federal tax returns, the Administrator will find that [it] is clearly unable to pay such
a large civil penalty." EMA states, however, that it is "only now beginning to work toward completion" ofits tax returns, which it has not filed since 2012. Id. "[F]inancial hardship is an affirmative defense that a respondent has the burden ofproving, because its financial records are within its sole control." Rushmore Helicopters, Inc., FAA Order No. 2012-8 at 14 (citingAtlasFrontiers, LLC, FAA OrderNo. 2010-10 (June 16, 2010)). At the hearing, the only evidence that EMApresented in support ofits inability to pay defense was three W-2s showing the wages paid to Mr. Dobitsch as EMA's president. Tr. 158-162; Exh. R-E, R-F, R-G. EMA claimed at the hearing on March I0, 2015, as it does now, that it had no other financial records available for review. 2 "Arespondent attempting to prove inabilityto pay must substantiate his or her claims atthe hearing withthe types ofrecords that a reasonable person would accept as reliable andprobative on the issues ofincomes and expenses." Villamor Tabula, FAA Order No. 2010-6 at 13 (June 15, 2010) (citing Gil{ffrida, FAA OrderNo. 1992-72 (Dec. 21, 1992)). In this

2 See Tr. 11 (stating thatEMA had "not completed [its] 2012, '13, or '14 taxreturns" and that it owed its accountant "in excess of 15,000 dollars[,]" butthat it was "squared away, and [EMA was] going to work on [its] 2012 tax returns"); R. Brief(stating thatEMA was "unable to pay for tax return preparation since 2012" but had "satisfied [its] outstandingbalance
... and [was] only nowbeginning to work toward completion of[its] overdue returns.").
2case, EMA did notpresent any evidence ofits income or expenses, except for the wages it paid to Mr. Dobitsch. Accordingly, the ALJ properly found that the three W-2s were insufficient to prove EMA's inability to pay eitherthe proposed $46,200 civil penalty or the $16,200 civil penalty she ultimately assessed. Tr. 205-206; Decision at

## 5? EMA's position on appeal is no different than it was at the hearing. Although EMA asserts thatreview ofadditional evidence-tax returns-will showthat it is unable to pay eitherthe proposed civil penalty of$46,200 orthe $16,200 civil penalty assessed bythe ALJ, it failed to produce that evidence at the hearing before the ALJ in March 2015. The fact that EMA asserts that its accountant had not (and apparently still has not) prepared its taxes does not explain why EMA had
no other available financial records to present atthe hearing on March 10, 2015. Indeed, tax returns
are merely a presentation ofinformation contained in the underlying financial records concerning the business' income, expenses, assets, and liabilities for the purpose ofcalculating the amount oftax owed orthe amount overpaid. EMA gave no explanation for why it did notpresentthis supporting information, which it would have had to provide to its accountant, at the hearing. And, even ifEMA had submitted its tax returns with its appeal, "it is too late to submitthese documents on appeal when their significance cannot be clarified through cross-examination." Tabula, FAA OrderNo. 2010-6 at 13. See Rushmore Helicopters, FAA OrderNo. 2012-8 at 15 (quoting Tabula).

3 The ALJ reducedthe sanction for EMA's violation of 14 C.P.R.§§ 135.293(a) and 135.299(a) on other grounds, which Complainanthas challenged inits cross-appeal. 

### 3For all these reasons, the Administrator should deny EMA's appeal.

Dated: August 29, 2016 Respectfully submitted, Patricia A. McNall Acting Assistant ChiefCounsel for Enforcement
B '-,-P-IIA'Lfl.l' Amanda Bruchs eridan, Attorney Enforcement Division, AGC-300 Federal Aviation Administration Office ofthe ChiefCounsel 800 Independence Ave., S.W. Washington, D.C. 20591 Telephone: (202) 267-4761 (direct) (202) 267-5106 (fax)

4CERTIFICATE OF SERVICE I certify that on this date I sent the foregoing Complainant's Reply Briefby certified mail return-receipt requested, first-class mail, and fax to: William Dobitsch, Jr. Endless Mountains Air, Inc. Seamans Airport 727 Windsock Lane Factoryville, PA 18419 Fax: (570) 945-5953 I also certify that on this date I personally delivered the original and one copy ofthe foregoing to: Federal Aviation Administration ATTN: Hearing Docket Clerk, AGC-430 600 Independence Avenue, SW Wilbur WrightBldg., Ste. 2W1000 Washington, DC 20591

Dated: August 29,2016



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