SERVED: JUNE 3, 2013 U.S. DEPARTMENT OF TRANSPORTATION OFFICE OF HEARINGS

WASHINGTON, DC

IN THE MATTER OF COLGAN AIR, INC. FAA DOCKET NO. CP09EA0018 (Civil Penalty Action) FDMS NO. FAA-2009-0582 

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# HEARING DOCKET

ORDER OF CHIEF ADMINISTRATIVE LAW JUDGE DEEMING ALLEGATIONS ADMITTED AND ASSESSING CIVIL PENALTV

This proceeding arises from a Complaint served June 26, 2009, by the Regional Counsel, Eastern Region, Federal Aviation Administration ("Complainant"),1and a Request for Hearingby Colgan Air, Inc. ("Respondent"), dated June 15, 20092 The undersigned was assigned to this proceeding by Notice served July 15,2009 3 OnJuly 13,2011, a Prehearing Conference was held, during which Respondent was ordered to produce the following: (1) proposed factual contentions and submissions differing from those made inSturgell v. Angstadt; 4 (2) a Motionto Amendthe Answer to conform to admissions and positions during the Prehearing Conference;5 (3) the report or other documents relating to the internal investigation about the flight manifest;6 (4) the load manifest allegedly preparedby First Officer Coats;7 (5) the identity ofRespondent's ChiefPilot at the time at issue;8 (6) information about Mr. Schmidt's employment with Respondene (7) information concerning

1 Compl. (June 26, 2009). 2 Request for Hearing at 2 (June 15. 2009). 3 Notice ofAssignment ofProceeding at 1 (July 15, 2009). 4 Tr. ofrrehearing Conference at 26-27 (July 13, 2011) [hereinafter "PHC Tr."]. 5 !d. at22-23. 6 !d. at 21-22. 7 !d. at 35-36. 8 !d. at47. 9 !d.First Officer Coats; 10 (8) a briefon the responsibility ofRespondent for the acts ofits officers and pilots; 11 and (9) a statement as to whether Respondent asserts the applicability ofthe small business provisions in 49 U.S.C. 

### §4630l(a)(5) for computing the proposed penalty 12 and, ifso, a briefexplaining howthe provisions apply to Respondent and its affiliates. 13 Complainant agreed to provide the record ofSturgell v. Angstadt14 and to replyto Respondent's briefs ordered at the Prehearing Conference by August 29, 2011. 15 Respondent failed to file any ofthe documents ordered. OnJune 22,2012, Pinnacle Airlines, Corp., filed a Notice ofAutomatic Stay, stating that

on April 1, 2012, Pinnacle Airlines, Inc., along with its affiliate companies (including Respondent), had filed a voluntary petition for reliefunder Chapter 11 ofTitle 11 ofthe United States Code withthe United States Bankruptcy Court for the Southern District ofNew York. 16 OnJune 29, 2012, thejudge issued a Show Cause Order directing Respondent to show

cause whyjudgment should not be entered against Respondent for failure to comply with previous orders and why Respondent should be permitted to file late the required documents. 17 On July 27, 2012, Respondent filed a Response to the Show Cause Order requesting an additional30 days to either reach a settlement agreement or produce the documents listed in the Show Cause Order. On April 8, 2013, we issued an order directing Respondent to, on or before April29, 2013, "file and serve a response (a) indicating (1) why the case should not be dismissed for failure to comply with the Orders ofthe ChiefAdministrative Law Judge and (2) why Respondent should be

10 !d. at 59. 11 Jd at 84-85. 12 Id. at 83. 13 !d. at 71. 14 !d. at 83; see NTSB Docket No. SE-18404 (2008), Pet. for Review ofan Administrative Agency Action, D.C. Cir. DocketNo. 09-1005 (2008), pet. denied, 348 Fed.App'x 589 (D.C. Cir. 2009). 15 PHC Tr. at 86. Complainant and Respondent later agreedto change the reply date to September 29, 2011. Respondent's Consent Motion to Modify Briefing Schedule (Aug. 8, 2011). 16 PinnacleAirlines, Inc., FDMS No. FAA-2009-0180, Respondent's Suggestion ofBankruptcy and Notice of Automatic Stay at 1 (June 22, 2012), available at**http://www.regu1ations.gov/#!documentDetail;D~FAA-2009-0** 180- 0041; see also In re PinnacleAirlines Corp., Case No. 12-11343-reg (Bankr. S.D.N.Y.). 17 Order ofChiefAdministtative Law Judge to Show Cause Why Default Should Not Be Entered for Failure to Comply with Orders at 3 (June 29, 2012). 

### -2-permitted to late file the requested documents, and (b) attaching all documents ordered at the Prehearing Conference on July 13, 2011." 18 On May 1, 2013, two days after the specified date, "Respondent Colgan Air, Inc. and Pinnacle Airlines Corp. (collectively 'Pinnacle')" served a response, 19 statingthat settlement discussions with Complainant were nearly completed and requesting a 30-day extension ofthe specified date to respond to our order20 The request was granted byorder dated May 8, 2013, which stated that absent receipt ofthe required response on

or before May 29,2013, an order would issue, deeming the allegations ofthe Complaint admitted, and the Complaint would become an order assessing a civil penalty in the amount of$22,000.21 No response to that order has been received. FAA's rules governing investigative and enforcement procedures provide a Respondent withthe opportunity to request a formal hearing to contest an enforcement action bythe Complainant.22 Such ahearing is provided for the benefit, and at the option, ofthe Respondent. To preserve this opportunity, a Respondent must comply with the Rules ofPractice and the Judge's Orders.23 Respondent has not complied with the Judge's Orders atthe Prehearing Conference or with either ofthe Judge's Show Cause Orders. Although a bankruptcy filing creates an automatic stay ofadministrative actions against a debtor/4 the automatic-stay provision

18 Order ofChiefAdministrative Law Judge to Show Cause Why Default Should Not Be Entered for Failure to Comply with Orders at 4 (Apr. 8, 20 13). 19 Response ofRespondent and Pinnacle Airlines Corp. to Show Cause Order and Request for 30-Day Extension ("Pinnacle Response"). Sent via personal courier on April30, 2013, id. at 3 (Certificate ofService), the Pinnacle Response was served on the date personallydelivered, May 1, 2013, id at 1 (Date Stamp). See 14 C.F.R. § 13.2ll(d) (2013). 20 Pinnacle Response at 1. 21 Order ofChiefAdministrative Law Judge Granting Pinnacle's Request for Extension ofTime to Reply to Show Cause Order (May 8, 2013). 22 14 C.F.R. § 13.16(!)(3). 23 See RedfordForwarding Co., FDMS No. FAA-2001-8997, Order to Show Cause ofChiefAdministrative Law Judge at 6 (Oct. 3, 2002), available at**http://www.regulations.gov/#!documentDetail;D~FAA-2001-8997-0015.** 24 II U.S.C.§ 362(a)(l) ("[Bankruptcy filing stays] the commencement or continuation, including the issuance or employment ofprocess, ofajudicial, administrative, or other action or proceeding against the debtor that was or could have been commenced before the commencement ofthe case under this title, or to recover a claim against the debtor that arose before the commencement ofthe case under this title[.]"). 

### -3-does not apply to a proceeding, such as this,25 concerning enforcement by a federal regulatory agency ofsafety and regulatory laws 26 Accordingly, the allegations inthe Complaint are deemed admitted, a civil penalty inthe amount of$22,000 is assessed against the Respondent, and this proceeding is dismissed with prejudice. Respondent may appeal this decisionpursuant to 14 C.F.R. § 13.233(a) by filing a Notice ofAppeal with the Hearing Docket Clerk, at the address shown on the attached service list, not later than 10 days after service ofthis Order, and serving a copy thereofon each party. SO ORDERED.

Attachment

- Service List · 

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.. · Hon. Ronnie 

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### Yo~r ChiefAdministrative LawJudge

25 See ContinentalAirlines, Inc., FAA OrderNo. 1991-2, Order Denying Motion for Stay at 8 (Jan. 4, 1991), available at http://www.faa.gov/about/office_erg/headquarters_ offices/agc/po1_ adjudication! AGC400/Civil_ Penalty/CaseFile/view/1991/1991-2.pdf("These proceedings do not adjudicate private rights, but

... serve to enforce public policy

.... Therefore, under either the pecuniary purpose or the public policy test, the [11 U.S.C. § 362](b)(4) exception applies."); see also Rocky MountainAirways, Inc., FDMS No. FAA-1990-18405, Order ofAdministrative LawJudge at 1 (Feb. 28, 1991), available at**http://www.regulations.gov/#!documentDetail;D~F**AA-1990-18405- 0005; ContinentalAirlines, FDMS No. FAA-1989-18357, Order ofAdministrative Law Judge at 3 (Jan. 9, 1991), available at**http://www.regulations.gov/#!documentDetail;D~FAA-1989-18357-0002** ("This proceeding seeks to fix a civil penalty and determine issues offact and law related to the FAA's regulatory functions and Respondent's regulated conduct. This proceeding does not seek to enforce or collect amoneyjudgment and there is no reason to stay these proceedings."); ContinentalAirlines, Order ofAdministrative Law Judge at 1(Dec. 18, 1990), available at**http://www.regulations.gov/#!documentDetail;D~FAA-1989-18357-000**l (proceedings "appearto be clearly" within the definition of 11 U.S.C. § 362(b)(4)). 26 Bankruptcy filing does not stay "the commencement or continuation ofan action or proceeding by a , governmental unit ... to enforce such governmental unit's or organization's police or regulatory power[.]" 11 U.S.C. § 362(b)(4). See also S. Rep. No. 989, 95th Cong., 2d Sess. 53, reprinted in 1978 US Code Cong. & Ad News 5787, 5838, which states the following: "Paragraph (4) excepts commencement or continuation ofactions and proceedings by governmental units to enforce police or regulatory powers. Thus, where agovernmental unit is suing adebtor to prevent or stop violation offraud, environmental protection, consumer protection, safety, or similar police or regulatory laws, or attempting to fix damages for violation ofsuch a law, the action or proceeding is not stayed under the automatic stay."FAADocketNo. CP09EA0018 (Civil Penalty Action) SERVICE LIST ORIGINAL & ONE COPY Federal Aviation Administration 800 Independence Avenue, S.W. Washington, DC 20591 Attention: Hearing Docket Clerk, AGC-430 Wilbur Wright Building-Suite 2W100027 ONE COPY (VIA FIRST CLASS MAIL, FOLLOWING FAXED COURTESY COPY) Mark A. Dombroff& Charles W. Ryan, III,

Respondent's Counsel DOMBROFF GILMORE JAQUES &

FRENCH, P.C. 1676 International Drive- Penthouse McLean, VA22102 TEL: 703-336-8700 FAX: 703-336-8750 W. Chris Harrison,

Counsel for PinnacleAirlines, Corp. In-House Counsel PinnacleAirlines, Corp. 40 S. Main Street, 14th Floor Memphis, TN 38103 TEL: 901-348-2483 Colgan Air, Inc., Respondent One Commerce Square 40 S. Main St. Memphis, TN 38103 Christian L. Lewerenz, Complainant's Counsel Office ofthe Regional Counsel, EAL-7 Federal Aviation Administration 1Aviation Plaza Jamaica, NY 11434 TEL: 718-553-3273 FAX: 718-995-5699 The Honorable Ronnie A. Yoder,

Chief Administrative Law Judge U.S. Department ofTransportation Office ofHearings, M-20, Room E12-320 1200 New Jersey Avenue, S.E. Washington, DC 20590 TEL: 202-366-2142 FAX: 202-366-7536

27 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-Suite2WIOOO, Washington, DC 20591, Attention: Hearing Docket Clerk, AGC-430.

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