SERVED: September 30, 2013 

U.S. DEPARTMENT OF TRANSPORTATION 

OFFICE OF HEARINGS 

WASHINGTON, DC 

) 

FEDERAL AVIATION ADMINISTRATION, ) 

) 

Complainant, ) FAA DOCKET No. [TO BE ASSIGNED] 

) 

v. ) (Civil Penalty Action) 

) 

CORNERSTONE AVIATION, INC. ) 

) 

Respondent. ) FDMS No. FAA-2011-1293 

) 

INITIAL DECISION 

OF ADMINISTRATIVE LAW JUDGE RICHARD C. GOODWIN 

Found: Respondent is hereby assessed a civil penalty of $2,000. 

I. Background 

Respondent Cornerstone Aviation, Inc. ("Respondent" or "Cornerstone") is an Air 

Agency certificated to operate a Part 141 pilot school. The Complaint of Complainant Federal 

Aviation Administration ("Complainant," "FAA," or "the agency") charged Cornerstone with 

two violations of the Federal Aviation Regulations ("F ARs"): 1) 14 C.F .R § 141.101 (c), failure 

to certify a student's record upon termination ofthat student's training; and 2) 14 C.P.R. 

§141.95(b)(7), issuing a graduation certificate that did not contain a statement ofthe crosscountry training the student received. Following cross-motions by the parties, I found each 

violation. The determination of civil penalty remains the only issue in the case. See Order 

Granting in Part Order to Show Cause, Granting Complainant's Motions, and Limiting Hearing 

to Sanction, served January 9, 2013. 

Under the provisions of 49 U.S.C. §46301(a) and (d), as adjusted by 14 C.P.R. §13.305 

(reflecting periodic cost-of-living adjustments), the agency's Complaint asked for a civil penalty 

of$5,000. 

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2 

I granted the parties' subsequent request to decide the issue on the briefs. See Order 

Cancelling Hearing and Requiring Parties to File Briefs, served July 11, 2013. A schedule of 

briefs was created. The parties now have filed their briefs and the matter is ready for decision. 1 

Because the ensuing discussion disposes of the penalty issue, it constitutes an Initial Decision 

("I.D."). See 14 C.P.R. §13.232; Florence L. Barnhill, FAA Order No. 92-32 (May 9, 1992), 

1992 WL 753161, pp. 3-4. 

II. Framework 

Complainant bears the burden of proving that the penalty it seeks is appropriate. 14 

C.P.R. §13.224(a); American Air Network, FAA Order No. 2006-5 (February 10, 2006), 2006 

WL 265369, p. 9 n. 19; see also Compl. Br., p. 2. Financial hardship may constitute grounds for 

a reduction of an assessment which is otherwise fitting. Conquest Helicopters, FAA Order No. 

1994-20 (June 22, 1994), p. 3. The plea of inability to pay, however, is an affirmative defense. 

In an affirmative defense, Respondent assumes the burden of proof. 14 C.P.R. §13.224(c). That 

is, it becomes Respondent's burden to prove mitigation of all or part of an otherwise appropriate 

civil penalty. As the Administrator has explained, this assignment of the burden is "reasonable 

and necessary" because the Respondent has control of its financial information. Salvatore 

Giuffrida, FAA Order No. 1992-72 (December 21, 1992), p. 2. Claims of this nature must be 

substantiated to be credited. See, e.g., Michael John Costello, FAA Order No. 93-10 (March 24, 

1993), 1993 WL 833110, p. 4. 

In determining the appropriate civil penalty amount, the decisionmaker is obligated to 

consider several factors. These include the nature, circumstances, extent, and gravity of the 

violation, and, with respect to the violator, the degree of culpability, any history of prior 

violations, the ability to pay, any effect on the ability to continue to do business, and "other 

matters that justice may require." The civil penalty also should provide sufficient incentive to 

deter the respondent and similarly-situated entities from future violations. Overall, a proper 

assessment should reflect the nature of the respondent's conduct and the totality of the 

circumstances. Folsom's Air Service, Inc., FAA Order No. 2008-11 (November 6, 2008), 2008 

WL 4948488, pp. 11, 20. 

The Administrator has provided policy guidance for agency employees to follow in the 

determination of sanction. The FAA has issued to its staff a policy statement and detailed 

guidelines ("the guidelines") for arriving at a fitting civil penalty amount. The guidelines assess 

all relevant statutory criteria. Mitigating and/or aggravating factors also are part of the calculus. 

The guidelines are designed to best reflect the nature and circumstances of the violation under 

consideration. They also are intended to advise the public of the sanction policy that the 

Administrator intends to follow through the adjudication of individual cases. Folsom's Air 

Service, Inc., FAA Order No. 2008-11, p. 13. The guidelines are known as Order 2150.3B. 

The guidelines further aid Complainant's penalty determination through a Sanction 

Guidance Matrix ("Matrix"). The Matrix, found in Appendix B to Order 2150.3B, sets out ) . 

1 Complainant, as the party with the ultimate burden ofproof, was permitted to file an opening brief and a brief in 

response to Respondent's answering brief. See Order of July 12, 2013. Complainant filed an opening brief 

("Compl. Br.") and Respondent filed an answering Brief("Resp. Br."). Complainant declined to file a further brief. 
3 

specific penalty ranges for each of several inputs, cross-referencing such factors as the 

respondent's size, the type of business it conducts, and the nature and extent of the harm the 

violations produced. Complainant's ultimate determination nevertheless does not merely reflect 

a fixed mathematical computation. Nor is the number ofF AR violations in itself an important 

consideration. The Administrator has cautioned that deriving an assessment simply by 

multiplying the number of violations times the penalty recommended per sanction could result in 

a fine disproportionately severe. Warbelow 's Air Ventures, Inc., FAA Order No. 2000-3 

(February 3, 2000), pp. 20-21,pet.for reconsid. den., Order No. 2000-14 (June 8, 2000). Rather, 

the Matrix is intended to indicate the Administrator's "general views" about the civil penalty 

ranges appropriate for different types of violations. Folsom's Air Service, Inc., p. 13. Each 

situation, being dependent on so many variables, is unique. "Evaluation of the case," the FAA 

has emphasized, "is based on the totality of the facts and circumstances." See 72 Fed.Reg. 55853 

(October 1, 2007). 

An administrative law judge ("ALJ") is not required to follow the guidelines or the 

Matrix., They are intended for agency personnel, and ALJs are not agency personnel. ALJs 

make decisions independently, and the ALJ determines (subject to agency review) whether a 

civil penalty is to be assessed, and if so, in what amount. The guidelines nonetheless must be 

respected as an expression of agency sanction policy. They represent an effort to produce 

consistent results in similar cases. The Administrator has asserted the power to impose the 

agency's sanction policy on appeal if an ALJ assesses a civil penalty that is found to be 

inconsistent with the policy. Warbelow 's Air Ventures, Inc., FAA Order No. 2000-3 (February 3, 

2000), p. 20; Northwest Airlines, FAA Order No. 1990-37(November 7, 1990), pp. 8-10. 

III. The Parties' Positions 

A. Complainant 

In formulating its civil penalty recommendation the agency weighed several factors. The 

violations, the FAA concluded, were non-operational and inadvertent. The agency also noted 

Respondent's attitude of cooperation. The Matrix considers these to be mitigating factors. 

Respondent's level of experience at the time the violations occurred, a little less than eight years, 

was counted as an aggravating factor. The Matrix also accounts for Respondent's status as a 

small business. Complainant's calculus additionally reflected the "purely recordkeeping" nature 

of the violations; the agency never was concerned that Respondent's incorrect training records 

reflected on the qualifications or competence of the pilots who lately had earned their certificates 

(Compl. Br., p. 2). On the other hand, Complainant weighed the fact that these violations were 

not reported voluntarily, but were discovered upon inspection. Finally, while Respondent 

subsequently sent notices to its instructors that no graduation certificates were to be signed by 

anyone other than chief instructors, "that is the type of action that should be expected of a flight 

school," the agency maintains. It is not grounds for significant mitigation of the sanction. 

Finally, Complainant states that Respondent presented no other evidence warranting sanction 

reduction (Compl. Br., p. 4). 

In evaluating the factors described above Complainant determined that under the Matrix 

the violations each warrant a fine in the moderate-to-maximum range. The maximum civil 
4 

penalty per violation is $11,000, so the maximum sanction would be $22,000. The moderate 

range for each violation is $7,700; therefore, Complainant argues, its proposed sanction of 

$5,000 is less than the moderate range for one violation, let alone two (Compl. Br., pp. 3-4). 

B. Respondent 

Respondent was represented by its founder, president and co-owner, Susan Horstman. 

Ms. Horstman is also a pilot. 

Cornerstone asks that no sanction be levied. It followed the regulations, it argues, but the 

timeline as described therein for Part 141 operators to generate required records is imprecise and 

confusing. FAA inspectors have been unhelpful in clearing it up. Cornerstone also states that it 

has since implemented a software program ensuring that these types of violations could not 

recur. Respondent additionally contends that the civil penalty proposed would unduly penalize 

Cornerstone as a small business, and would fail to promote safety by diverting money needed for 

the business to paying the fine. 

Respondent also recited certain financial difficulties which, it claims, would be 

exacerbated by the imposition of a civil penalty (Resp. Br., pp. 2-4). It provided no documentary 

evidence in support, however. As such, this affirmative defense fails for lack of proof. 

IV. Decision 

I find and conclude that a total civil penalty of $2,000 is appropriate. I find that this 

amount fairly reflects all the facts and circumstances. It properly accounts for all mitigating and 

aggravating circumstances. The penalty will also, I conclude, appropriately promote compliance 

with the F ARs and deter Cornerstone and comparable entities from similar violations. 

I do not view the recordkeeping violations found in this case as particularly grave. The 

penalty amounts the guidelines suggest, I find, do not fairly reflect the nature of the 

transgressions. 

It also is a mitigating circumstance that the violations were non-operational and 

inadvertent. Yet these offenses are not trifling. As the Administrator has noted, recordkeeping is 

the linchpin of the regulatory scheme by which safety in flight is maintained. The most feasible 

way for the FAA to fulfill its mandate is through records inspection. Complete and accurate 

recordkeeping is essential to this purpose. Watts Agricultural Aviation, Inc. d/b/a Growers Air 

Service, FAA Order No. 91-8 (April11, 1991), review den. sub. nom. Watts Agricultural 

Aviation v. Busey, 977 F.2d 594, 1992 U.S. App. Lexis 25020 (9 Cir. 1992). Additionally, a 

violation's unintentional character does not abate an otherwise reasonable sanction. Evidence 

that a violation was intentional would, in fact, constitute an aggravating factor and would make a 

higher sanction appropriate. American Air Network, Inc., FAA Order No. 2006-5 (February 10, 

2006), p. 8 .. 
5 

Respondent's reference to a new and presumably more meticulous and complete software 

program as a mitigating circumstance is not persuasive. These mistakes should have been 

detected. Nor do I credit Respondent's assertion that the regulations are vague or otherwise 

difficult to understand. The requirements are straightforward and uncomplicated, I find. 

The fads underlying the charges justify a civil penalty greater than a token amount. 

Against this background, I conclude that a civil penalty of $2,000 for the two violations found is 

commensurate with the totality of the circumstances. 

All arguments the parties have made which are not specifically addressed herein are 

rejected. I find that they do not merit. discussion. 

IV. Conclusion 

In view ofthe discussion above, Respondent is hereby assessed a civil penalty of$2,000 

for violations ofF ederal Aviation Regulations 14 C.F .R. § 141.95(b )(7) and § 141.101 (c). 2 

U.S. Administrative Law Judge 

Attachment - Service List 

2 This decision may be appealed to the Administrator ofthe FAA. The notice of appeal must conform to sections 

13.210, 13.2ll(e) and 13.233 of the Rules of Practice, which require that a notice ofappeall) be filed not later than 

10 days (plus an additional five days if mailed) from the service date of this decision, and 2) be perfected with a 

written brief or memorandum not later than 50 days (plus an additional five, if mailed) from the service date of this 

decision. The notice of appeal and brief or memorandum must either be a) mailed to the Federal A \riation 

Administration, 800 Independence Avenue, S.W., Washington, DC 20591, Attn: Hearing Docket Clerk, AGC-430, 

Wilbur Wright Building-Suite 2WIOOO, or b) delivered personally or via expedited courier service to the Federal 

Aviation Administration, 600 Independence Avenue, S.W., Wilbur Wright Building-Suite 2W1000, Washington, 

D.C. 20591, Attn: Hearing Docket Clerk, AGC-430. A copy ofthe notice of appeal and brief or memorandum also 

must be sent to agency counsel. Service upon the presiding judge is optional. 
6 

SERVICE LIST 

ORIGINAL & ONE COPY 

Federal Aviation Administration 

800 Independence A venue, S. W. 

Washington, DC 20591 

Attention: Hearing Docket Clerk, AGC-430 

Wilbur Wright Building-Suite 2W10001 

ONE COPY 

Susan J. Horstman, Chief Executive Officer 

Cornerstone Aviation, Inc., Respondent 

337 North 2370 West #130 

Salt Lake City, UT 84116 

TEL: 801-355-2244 

FAX: 801-355-2754 

Kyle Lomazow, Complainant's Counsel 

Attorney, Office of the Regional Counsel 

Northwest Mountain Region, ANM-7 

Federal Aviation Administration 

1601 Lind Avenue, S.W. 

Renton, WA 98057 

TEL: 425-227-1847 

FAX: 425-227-1007 

The Honorable Richard C. Goodwin, 

Administrative Law Judge 

Office ofHearings, M-20 

U.S. Department of Transportation 

1200 New Jersey Avenue, S.E. (E11-310) 

Washington, DC 20590 

TEL: 202-366-2139 Attorney-Advisor 

202-366-5121 Staff Assistant 

FAX: 202-366-7536 

FDMS No. FAA-2011-1293 

(Civil Penalty Action) 

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 

2Wl 000, Washington, DC 20591; Attention: Hearing Docket Clerk, AGC-430.