BEFORE THE 

DEPARTMENT OF TRANSPORTATION 

OFFICE OF THE SECRETARY 

WASHINGTON, D.C. 

In the matter of the cancellation of the 

Air Taxi authority issued to: Docket DOT -OST -2012-0022 

VIH COUGAR HELICOPTERS, INC. 

VIH COUGAR HELICOPTERS, INC.'S MOTION TO STAY 

THE DEPARTMENT OF TRANSPORTATION'S 

MARCH 12,2012 SHOW CAUSE ORDER 

Communications with respect to this document should be sent to: 

David M. Nadler 

David Y. Yang 

Andrew E. Smith 

DICKSTEIN SHAPIRO LLP 

1825 Eye Street, NW 

Washington, DC 20006 

Telephone: (202) 420-2200 

Facsimile: (202) 420-2201 

nadlerd@dicksteinshapiro.com 

yangd@dicksteinshapiro.com 

smitha@dicksteinshapiro.com 

Counsel to VJH Cougar Helicopters, Inc. 

Dated: April 2, 2012 

DSMDB-3045610vl 
BEFORE THE 

DEPARTMENT OF TRANSPORTATION 

OFFICE OF THE SECRETARY 

WASHINGTON, D.C. 

In the matter of the canceJJation of the 

Air Taxi authority issued to: Docket DOT -OST -2012-0022 

VIH COUGAR HELICOPTERS, INC. 

VIH COUGAR HELICOPTERS, INC.'S MOTION TO STAY 

THE DEPARTMENT OF TRANSPORTATION'S 

MARCH 12, 2012 SHOW CAUSE ORDER 

Pursuant to Rules II and 208 of the Rules of Practice ( 14 C.F .R. §§ 302.11 , 302.208) of 

the Department of Transportation ("Department"), VIH Cougar Helicopters, Inc. ("VIH 

Cougar"), by and through the undersigned counsel, respectfully submits this motion to stay these 

proceedings in connection with the Department's March I2, 20I2 Order to Show Cause 

("Order") for 90 days, with interim progress updates subject to confidential treatment provided to 

the Department every 30 days, pending 

being undertaken by VIH Cougar which, once implemented, will render moot all of the issues 

asserted in the Order. For four years, VIH Cougar has fully cooperated with the Department's 

intermittent requests. After months and months of silence, on October 6, 20 II, the Department 

advised VIH Cougar of its tentative conclusion that it is not a U.S. air can-ier. Although the 

Department agreed to hold any show cause proceedings in abeyance 

the Department reversed course and issued a formal show cause notice on 

March 12, 2012. A provisional 90-day stay of these proceedings is an appropriate and 

DSMDB-304561 Ov I 
reasonable allowance that VIH Cougar believes will allow it to pursue measures that will fully 

resolve all of the Department's concerns in this matter and render these proceedings moot. 

I. INTRODUCTION 

The Department should stay the instant proceedings for the simple reason that regardless 

of whether VIH Cougar, in the Department's view, is or is not presently subject to foreign 

control, VIH Cougar is pursuin will put to rest any 

doubt that it is a bonafide U.S. air carrier, thus rendering these proceedings moot. Accordingly, 

because the steps that VIH Cougar currently is pursuing will resolve all of the Department's 

concerns, in accordance with its usual practice and past precedent in such circumstances, the 

Department should stay the proceedings and afford VIH Cougar a reasonable opportunity to 

pursue and implement these measures. 

II. FACTUALBACKGROUND 

A. THE DEPARTMENT'S OCTOBER 6, 2011 LETTER 

On October 6, 2011, the Department issued a fourth letter to VIH Cougar. For the first 

time, the Department made known its tentative conclusion that despite clear satisfaction of the 

U.S. citizenship requirements set forth in 49 U.S.C. § 401 02(a)(l5) and a plethora of evidence 

provided by VIH Cougar showing actual control by Mr. Steeper, a U.S. Citizen, VIH Cougar was 

allegedly under the actual control of foreign entities and, therefore, was not a U.S. citizen 

eligible for an air taxi exemption under the Federal Aviation Act. This letter outlined specific 

areas of interest that the Department alleged must be addressed in order for VIH Cougar to be in 

compliance with the citizenship requirements needed for its air taxi exemption under 14 C.F.R. 

§ 298. 

The Department asse11ed four arguments as to why it thought VIH Cougar, under the 

totality of the circumstances test applied by the Department, was not under the actual control of 

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Americans. First, the Department took issue with the business relationship between Mr. Steeper 

and Mr. Norie and the business relationships of other "key personnel'' ofVIH Cougar and the 

VIHAG. Second, the Department stated that it was concerned about VIH Cougar's reliance on 

the VIHAG for the provision of assets and personnel. Third, the Department expressed concern 

over certain "contractual relationships" between VIH Cougar and VIHAG, arguing that these 

agreements, despite the commercially-standard terms and conditions therein, were not the 

product of arms-length negotiations. Finally, the Department took issue with a handful of errors 

in two out of the approximately two dozen corporate filings that VIH Cougar has made over 

nearly the past ten years, which the Department contended somehow impugned VIH Cougar's 

credibility. VIH Cougar acknowledged the errors and remedied them. Indeed, while it had 

previously implied as much, the Department now affirmatively stated that it found the 

"credibility ofVIH Cougar" in this matter to be "diminish[ed]." Oct. 6, 2011 DOT Ltr. at 5. 

The Department further asserted that it would issue a formal show cause order to this effect if 

VIH Cougar did not fall into compliance with the applicable requirements within a 30-day 

period. 

B. VIH COUGAR'S NOVEMBER 8, 2011 MEETING WITH THE 

DEPARTMENT 

Upon receiving the Department's October 6, 2011 letter, VIH Cougar requested a 

meeting with the Department to better understand the Department's position (given that VIH 

Cougar had demonstrated that it is under the actual control of U.S. citizens and the Department 

has never provided any evidence to the contrary) and determine how best to mitigate those 

concerns. On November 8, 2011,VIH Cougar met with the Department, and during the meeting, 

the Department reiterated its concerns that the relationship between Mr. Steeper and Mr. Norie 

evidenced that Mr. Steeper was not in actual control ofVIH Cougar. Accordingly, the 

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DSMDB-3045610vl 
Department proposed that to all eviate these and the other concerns raised in its October 6 letter, 

VIH Cougar should sever the relationship with Mr. Norie and VIHAG either through Mr. Norie 

eliminating his role in the ownership and leasing of aircraft with VIH Cougar, or eliminating Mr. 

Steeper's role with respect to VIH Cougar and replacing him with an independent U.S. Citizen 

owner. In addition, the Department suggested that at least more than half of the aircraft leased 

by VIH Cougar should be leased from an entity other than VIHAG or Mr. Norie. VIH Cougar 

inquired of the Department about the source of the complaints against it. The Department was 

vague and did not present to VIH Cougar any of the letters or information that had been provided 

to it by third parties. The Department did acknowledge, however, that they had received 

inquiries by a senator from Louisiana on behalf of one of its constituents who was a competitor 

of VIH Cougar in Louisiana. See Declaration of William T. Steeper ("Steeper Decl. II") ~ 12, 

dated April2, 2012, attached as Exhibit 1 to VIH Cougar's April 2, 2012 Response and 

Objections to the Department's March 12, 2012 Show Cause Order. 

VIH Cougar informed the Department that notwithstanding the fact that its ownership 

and operations were proper, 

and believed that one or more ofthese efforts would resolve many, if not all, ofthe Department's 

concerns. 

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DSMDB-3045610vl 
Accordingly, the Department agreed to refrain from issuing 

any show cause orders to provide VIH Cougar sufficient opportunity to pursue these potential 

avenues that, if successfully implemented, would render such an order moot. 

C. VIH COUGAR'S COMPETITORS' EFFORTS TO DISCREDIT AND 

DISRUPT VIH COUGAR'S LAWFUL BUSINESS OPERATIONS 

Despite its earlier agreement to hold any further show cause proceedings in abeyance 

on March 12, 2012, the 

Department issued a Show Cause Order to VIH Cougar. On March 20, 2012, the Department 

filed on the public docket for this case correspondence between the Department and Jonathan 

Blank of K&L Gates LLP, on behalf of a VIH Cougar competitor, Petroleum Helicopters, Inc. 

Mr. Blank's letter referenced a number of other letters as attachments, and what are believed to 

be these referenced letters, along with a standard form response by the Department to each letter, 

were subsequently placed on the docket on March 26, 2012. The attached letters were sent on 

behalf of the Alaska Air Carriers Association, Temsco Helicopters, Inc., Maritime Helicopters, 

Security Aviation, and Northern Pioneer Helicopters. All of these entities are VIH Cougar 

competitors in the highly-competitive Alaska and Gulf of Mexico air taxi markets. Although Mr. 

Blank's letter appears to have been addressed solely to Assistant Secretary for Aviation and 

International Affairs, Susan L. Kurland (the presently designated fact finder in this case), the 

other letters were also copied to U.S. Secretary of Transportation Ray LaHood, U.S. 

Representative Don Young- AK, U.S. Senators Lisa Murkowski and Mark Begich - AK, and 

Alaska Governor Sean Parnell. 

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DSMDB-3045610vl 
These ex parte communications with the Department indicate that these competitors 

came into possession of the Depattment's October 6, 20 II letter to VIH Cougar, which 

contained conclusions based on, and references to, confidential business-sensitive infonnation 

that VIH Cougar had provided and requested not be disclosed without its prior written consent 

(which was not obtained), and in which the Department tentatively determined that VIH Cougar 

was under the actual control of Canadian citizens. The letters went on to state that all the air 

carries have "long maintained" the same tentative conclusion reached by the Department and that 

VIH Cougar has been "competing unfairly" for many years. 

Finally, the 

letters assert that it is imperative that VIH Cougar be brought under formal proceedings by the 

Department to revoke its air taxi exemption. 

At best, these letters are the obvious product of a concerted effort by VIH Cougar's 

competitors to disrupt VIH Cougar's lawful U.S. air operations. At worst, they seek to destroy 

VIH Cougar's business altogether, 

The timing of these most recent letters is also noteworthy, 

as they were issued mere weeks before the Order to Show Cause was issued in this matter and 

call into question the reliability ofthe Depatiment's credibility determinations concerning VIH 

Cougar. Further, the letters state that the caniers have " long maintained" the conclusion that 

VIH Cougar is not under the actual controlof U.S. citizens, which demonstrates that there have 

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DSMDB-304561 Ov I 
been previous other ex parte communications between VIH Cougar's competitors and the 

Department regarding this matter. 

This years-long campaign waged against VIH Cougar by its competitors has colored the 

Department's investigation and steered it to the incorrect and unsupported conclusions that it has 

asserted, yet lacks any actual evidence to support, in the Show Cause Order. Further, this most 

recent letter writing campaign was obviously intended to place political pressure on the 

Department to escalate the matter to fom1al proceedings (and apparently succeeded), as the 

Secretary himself, the Alaska governor, both U.S. Senators from Alaska, and the U.S. 

Representative from Alaska were all copied on the exchanges. 

III. ARGUMENT 

A. THOUGH COMPLIANT WITH FEDERAL AVIATION CITIZENSHIP 

VIREMENT 

THE SHOW CAUSE ORDER MOOT 

1. The Department's Prior Suggested Corrective Actions 

As noted, upon receiving the October 6, 2011 letter, VIH Cougar requested a meeting 

with the Department to better understand the Government's position. On November 8, 

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DSMDB-304561 Ov I 
2011 ,VIH Cougar met with the Department, and during that meeting, the Depa1iment reiterated 

its concerns that the relationship between Messrs. Steeper Norie suggested that Mr. Steeper was 

not in actual control of VIH Cougar. Accordingly, the Department proposed that to alleviate 

these and the other concerns raised in its October 6 letter, VIH Cougar should sever its 

relationship with Mr. Norie and VIHAG either through Mr. Norie eliminating his role in the 

ownership and leasing of aircraft to VIH Cougar, or eliminating Mr. Steeper's role with respect 

to VIH Cougar and replacing him with an independent U.S. citizen owner. In addition, the 

Department suggested that at least more than half of the aircraft leased by VIH Cougar should be 

leased from an entity other than VIHAG or Mr. Norie. 

2. 

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DSMDB-304561 Ov I 
1 See Exhibit 2 to VIH Cougar's Response and Objections to the Depm1ment's March 12,2012 

Show Cause Order. 

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DSMDB-3045610vl 
These 

proposed measures exceed the far more limited course of action that was suggested by the 

Department during the November 8, 2011 meeting. 

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DSMDB-304 56 10v l 
B. THE DEPARTMENT SHOULD STAY ITS ORDER TO SHOW CAUSE 

BECAUSE IT IS UNNECESSARY, DISRUPTIVE, AND HAS THE 

POTENTIAL TO DELAY AND INTERFERE 

As the Department stated during 

the November 8 meeting, the Department's review and the purpose of these proceedings are 

meant to be remedial, not punitive, in that they seek only to have VIH Cougar undertake 

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DSMDB-3045610vl 
corrective actions that, in the Government's view, will be sufficient to satisfy the Government 

that the company is under the control of U.S. citizens. The process is not intended to punish or 

put VIi-I Cougar out of business, or to jeopardize the jobs of the 80 Americans that it employs. 

In light ofVIH Cougar's good-faith efforts to resolve the Department's concerns, the only 

parties that stand to gain from pursuing the instant proceedings (in an obvious effort to finalize 

the Department's tentative findings) are VTH Cougar's competitors who would like nothing more 

than to eliminate VIH Cougar altogether, 

The Department should not allow 

VIH Cougar's competitors to subvert the show cause process to further their own ends and gain. 

As such, VIH Cougar requests that the Department stay these proceedings 

The Department previously has recognized such efforts as more than sufficient to 

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DSMDB-304561 Ov I 
dispense with the need for any further show cause proceedings, or the revocation of a caiTier's 

operating authority, because all of the underlying concerns will have been addressed by those 

actions. In fact, the Department encourages such proactive measures.

2 For example, in deciding 

whether Virgin America was a U.S. citizen in approving its application for a certificate of public 

convenience, the Department allowed Virgin America to restructure its business and operations 

to satisfy the Department's concerns that Virgin America was under the actual control of nonU.S. citizens. See Application of Virgin America, Inc., Final Order, Docket No. OST-2005-

23307, at 3 (noting that the Department's tentative findings of control by non-U.S. citizens 

"changed as a result of the material changes Virgin America proposed to implement to its 

financial arrangements, its management, and corporate governance ... "). Even in its final order 

in that case, the Department compromised with Virgin America by granting the certificate with 

conditions. Id. 

Given that this investigation has been ongoing for four years, since April 2008, but the 

Department's tentative conclusions regarding VIH Cougar's citizenship were only 

2 See Application of Virgin America, Inc., Final Order, Docket No. OST-2005-23307, at 1 (May 

18, 2007) (allowing the air carrier Virgin America to substantially revise its operations pursuant 

to requests by the Department, and finding that the company now complied with the U.S. Citizen 

requirements and thus its application for a certificate would be approved); Air-Evac Air 

Ambulance Inc. Concerning US Citizenship, Order 96-6-13, at 1-2 (June 7, 1996) (allowing 

"various" responses to the show cause order evidencing restructuring and withdrawing show 

cause order proposing revocation of air taxi authority where company 'finally provided 

subsequent information showing that restructuring brought it into compliance with the applicable 

citizenship regulations). 

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communicated in October 2011 and the Department had agreed to hold any show cause 

proceedings in abeyance, a 90-day stay of the instant proceed in 

· appropriate. 3 Moreover, there are 

no urgent public interest concerns that would require these proceedings to continue or be 

expedited, since VIH Cougar always has, and continues to maintain, an exemplary safety, 

performance, and regulatory record. Indeed, neither the FAA nor the Department has ever raised 

any concerns regarding VIH Cougar's safety record or fitness. The arguments by VIH Cougar's 

competitors (the apparent instigators of these proceedings) should be accorded no weight, as they 

are acting with obvious self interest and have significant financial incentives to do all that they 

can to put VIH Cougar out of business. 

IV. CONCLUSION 

For the foregoing reasons, and because VIH Cougar already is voluntarily undertaking 

measures that, once implemented, will fully resolve and render moot all of the concerns raised in 

the Show Cause Order, the Department should stay these proceedings for a provisional period of 

90 days 

3 Moreover, we note that since the Department would allow 91 days for the wind up in the event 

it issues a final order · VIH C 's air taxi authority, see Order at 9 n.44, a provisional 

90-day stay that would obviate the need for such 

an order is entirely reasonable and no prejudice would result from the deferment. 

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Dated: April 2, 2012 Respectfully submitted, 

By: 1tJ ~/c~ 

15 

David M. Nadler 

David Y. Yang 

Andrew E. Smith 

DICKSTEIN SHAPIRO LLP 

1825 Eye Street, NW 

Washington, DC 20006 

Telephone: (202) 420-2200 

Facsimile: (202) 420-2201 

nadlerd@dicksteinshapiro.com 

yangd@di cksteinshapiro .com 

smi tha@di cksteinshapiro. com 

Counsel to VIH Cougar Helicopters, Inc. 

DSMDB-304561 Ov I 
CERTIFICATE OF SERVICE 

I certify that I have on this 2nd day of April 2012 served the foregoing response of VIH Cougar 

Helicopters, Inc. upon the persons listed below: 

Susan L. Kurland 

Office of the Assistant Secretary for 

Aviation and International Affairs 

U.S. Department of Transportation 

1200 New Jersey A venue, SE 

Room W96-495 

Washington, DC 20590 

Lauralyn Remo 

Office of the Assistant Secretary for 

Aviation and International Affairs 

U.S. Department of Transportation 

1200 New Jersey Avenue, SE 

Room W96-495 

Washington, DC 20590 

Docket DOT-OST-2012-0022 

Department of Transportation Dockets 

1200 New Jersey Avenue, SE 

Room W12-140 

Washington, D.C. 20590 

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 

Roy Hardie 

Aviation Safety Inspector 

Federal Aviation Administration 

1601 Lind Avenue SW, Suite 260 

Renton, WA 98057 

Andrew E. Smith 

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