# RECEI\/ED JAN 2 32015 12-138 U.S. DEPARTMENT OF TRANSPORTATION OFFICE OF HEARINGS FEDERALAVIATION ADMINISTRATION 

# HEARING**DOCK~l'** FEDERAL AVIATION ADMINISTRATION, DocketNo.: FAA-2014-0807 Complainant, FAA Case No. 2011S0190272 vs. Judge: J.E. Sullivan PAZ AVIATION, INC., Location ofHearing: Miami, FL Respondent

### ----------------------~/ MEMORANDUM OF LAW PAZ AVIATION, INC. ("PAZ"), by and through its undersigned counsel hereby submits its Memorandum ofLaw in support ofa Motion to Dismiss this action on the basis oflaches. This action is based upon an alleged violation ofthe Federal Aviation Regulations ("PARs") that allegedly occurred when PAZworked on certain components between July 30,2009through April27, 2011. The Federal Aviation Administration ("FAA") became aware ofwhatthey considered a possible violation in mid-June of2011 and inspected PAZ facility on June 20 through 21, 2011. The FAA issuedits Letter of Investigation June 23,201L The FAA took no action on this matter for neady a yearuntil it issued a Notice ofProposed Civil Penalty on May 24,2012. PAZ responded to the LOI onJune 4, 2012 and on Aprill8, 2013 the parties participated in aninformal conference. Thereafter the FAA filed its Complaint herein on October 7, 2014. PAZ filed its Answer and Affirmative Defenses ("A&AD") onNovember 5, 2014. Included in its A&AD is a defense based upon laches resulting from the FAA's failure to timely bring this matter which operates to the prejudice ofPAZ. This Court, having reviewed the A&AD, issued Ml'DONALD & McDONALD. P. A, P. 0. Brrx 669122, i\liRmi, FL33l66-9428 TEL.: (305)**643~5313,** FAX: (305) 643-4990; E-MAlL: dmm@Mcdonaldattomeys.com
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### Docket No.: FAA-2014-0807 its Order advising it was treating the Affinnative Defense ofLaches as a Motion to Dismiss and requiring the pmties to submit a briefand proposed Order. This Memorandum is timely filed in accordance withthe briefing schedule issued in this Coutt's Order ofDecember 23, 2014. PAZ alleged in its fourth affirmative defensethat: 

### For its fourth cif]irmative defense, Respondentalleges that the units it

### serviced andwhich are the subject of theAdministrator's complaint were servicedbetween July 2009 throughApril of20ll; that the FARs only require Respondent to maintain its records of service for 2years; that theAdministrator knew of these eventsyears ago, but failed to timely bring this action; and, as a result of the Administrator's delay, Respondenthas beenprejudicedji·om the loss of witnesses, loss of records, andor loss of witnesses' memmy of the events. Based upon the foregoing, the matter shouldbe dismissed based upon laches and/or estoppel. The FAA's civil penalty cases are subject to a five (5) year statute oflimitations as set forth in 28 USC §2462. In addition to this statute oflimitations, the FAA has also recognized the equitable defense oflaches ifit can be shown that the FAA's delay in prosecuting an action has resulted in prejudice to the Respondent. Although this action was initiated before the five (5) year statute oflimitations expired, the FAA's delay in prosecuting this matter has resulted in prejudice as is set forth below. PAZ is a Part 145 repair facility for aviation components. As set forth in the Affidavit ofJay Allen (Exhibit "A"), President ofPAZ, PAZ does not have class rating for the components it is authorized to service. Instead, PAZ has a Capability List that specifically itemizes the components by manufacturer and model that PAZ is authorized to service. In order to have anitem added to the Capability List, PAZ must apply for such authority and showthat it has the tools, test equipment, technical data, manuals, training, and facilities that are necessary to perfmm service on the component for which authority
2 McDONALD & McDONALD. P, A., P. 0, Dox 6-69122, l\tlllml, FL33l66-9428 TEL.: (305) 643--5313, FAX: (305) 643-4990; E-MAIL: dmrH@Mcdonaldattomcys.com

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### Docket No.: FAA-2014-0807 is sought. Documentation supporting the above requirements are submitted to the FAA and the FAA inspector in charge ofPAZ' operation, who then physically inspects the facility to ensure compliance with the FARs. Only after all the above requirements are met is a component added to PAZ' Capability List. Attached is a copy ofPAZ' Capability List issued in 2008 by PAZ' prior Principal Maintenance Inspector ("PM!") which specifically lists PAZ' authority to work on these components which are the subject ofthe FAA's Complaint. This is proofthat PAZ had, prior to the issuance ofthis Capability List, the necessary tooling, test equipment, manuals, data, etc. required by the PARs to service these components. See Affidavit ofJay Allen attached. Subsequent to the issuance ofthe FAA's LOI and PAZ' response, it appears the engineer consultant who assisted increating the blueprints for the test equipment required to service the components listed inthe FAA's Complaint left the State ofFlorida and, as ofsubmitting this Memorandum, PAZ lms been unable to locate him. This witness, Mr. Jack Batista, would testify in support ofPAZ about his creation ofthe documents, blueprints, and other items required to show that PAZ' privately built test equipment was equivalent to that required 

### by the manufacturer ofthe components for the testing ofthe components and was approved by the FAA for equivalency by PAZ's then PM!. Atthe time ofthe inspection ofPAZ' facility which resulted in this action, PAZ had sent the subject test equipment for these components out to Ledo Industrial Machine Shop ("Ledo") for modification, The subject test equipment consisted ofa single test stand that was capable oftesting both hydraulic and pneumatic components. The purpose ofhaving the test stand modified was to separate it into two separate test stands, one designed solely for pneumatic components and the other designed solely for hydraulic 3 McDONALD & l\-lcDONALD. P. A., P. 0. Box 669122, l\JiAllli, FL 33166·9428 TEL.: (305) 643-5313, f.AX: (305) 643-4990; E-MAIL: dmm@Mcdonnldattotneys.co!ll

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### Docket No.: FAA-20 14-0807 components. As a result, the test stand was not at PAZ' facility on the date the PM! inspected the premises. The test stands have since beenreturned from Ledo and have been approved for PAZ's use by the FAA and PAZ still maintains the components listed in the Administrator's Complaint on its Capability List. Subsequent to the FAA's LOI, Ledo has gone out ofbusiness. PAZ is unable to locate the principals ofLedo. As a result, PAZ has lost a second witness who could testify to corroborate the above information and provide supp01ting documentation. The FAA has recognized the defense oflaches. PAZ bears the burden ofproofto show laches is applicable, as is true with all Affirmative Defenses. In order to carry the burden ofproof, PAZ must showthat the agency's pursuit ofthe case was inexcusably dilatory, that the delay resulted in a loss ofevidence for witnesses supporting PAZ position, or that PAZ changed its position in a manner that would not have occurred, but for the delay. In ReUnited Parcel Service, FAADocket No. CP95WP0135, 1995 FAA LEXIS 400 (July 26, 1995), citing In The Matter ofJohn J. Carroll, FAA Order 90-21 (August 16, 1990). As set forth in the Affidavit ofJay Allen, two witnesses and the documents they may possess were lost as a result ofthe FAA's delay ofover fow· years in bringing this matter to prosecution. Itis clear the FAA has known about this matter since June 20, 2011. No new facts were discovered, the FAA has conducted no additional investigation. Failure to file within the statute oflimitations which would have been a basis for dismissal, see In The Matter ofAviation Brake Service, Inc., 2006 FAA LEXIS 226 (March 9, 2006). The evidence clearly shows that both witnesses and evidence have been lost as a result ofthe FAA's failure to timely prosecute this matter. The FAA has no 4 l\-1-cDONALll & McDONALD. P. A., P. 0. Box 669122, i\lifl.mi, li'L 33166-9428 TEL.: (305)643-5313, FAX: (3-05)643-4990; E-MAIL: dmm@Mcdmmldattomeys.com tn· 9

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### U,S, DEPARTMENT OF TRANSPORTATION OFFICE OF HEARINGS FEDERAL AVIATION ADMINISTRATION FEDERAL AVIATION ADMINISTRATION, Docket No,: FAA-2014-0807 Complainant, FAA Case No. 2011S0190272 VS, 

### Judge: J.E. Sullivan PAZ AVIATION, INC., Location ofHearing: Miami, FL Respondent.

### ----------------------~/ AFFIDAVIT OF JAY ALLEN Personally appeared before me the undersigned authority duly authorized to administer oaths and take acknowledgments, Jay Allen, who npon being duly sworn did depose and say: 1. My name is Jay Allen, I am over the age of 18 years, and I am a resident ofMiami-Dade County, Florida. 2. I am the president and shareholder ofPAZ AVIATION, INC. (hereinafter referred to as "PAZ") 3. PAZ does not hold a Class rating for component testing, repair or overhaul. PAZ' FAA approved capabilities are limited to specific components listed by manufacturer and model on PAZ' Capability List. In order to have these items added to the Capability List, PAZ had to show it has the required tooling, test equipment (or equivalent equipment), manuals, data, and training all ofwhich was approved by PAZ' previous Principal Maintenance Inspector ("PM!"). 4. Jack Batista, was an aviation consultant PAZ hired to assist in PAZ' application for approval ofPAZ' repair station Capability List. He assisted in preparing McDONALD & 1\tcDONALD. P, A., P. 0. Box 669122, I\lhnnl, FLJJ166-9428 TEL.: (305) 643-5313, FAX: (305) 643-4990; E-MAlL: dm1n@Mcdonaldatlorneys.com**t~:t 9~0ZI£Zt** **~0** 9£ jO L a6ed**£6Z~-L9G** (GQZ) 1.+ :xe.:J EXHIBIT "A" nz-s-£-t9 (SO£) :xa.:1

### Docket No.: FAA-2014-0807 the drawings and other data that was used to show that the privately made tooling and test equipment were equivalent to the manufacturer's recommended test equipment. Based upon that data and actual inspection by PAZ' then PM!, in2008 the FAA issued PAZ' Capability List listing the components which the FAA now alleges that PAZ did not have approved equipment to test. See attached Capability List issued by the FAA and suppmiing documents. Since the FAA issued its Letter oflnvestigation ("LOI"), Jack Batista has moved out ofState and PAZ has been unable to locate him. 5. The equipment (a test stand), which is the subject ofthe FAA's Complaint, was capable oftesting bothpneumatic and hydraulic components. On or about June 10,2011,the test stand was sent toLedo Industrial Machine Shop for modification into two stand-alone test stands that are documented and blue printed for equivalency to the fixtures shown inthe Boeing Component Maintenance Manual. That is the reason the test stand was not at PAZ when the FAA performed its June 20-21, 20I 1 inspection. Since the FAA issued its LOI, Ledo has gone out ofbusiness and PAZ has been unable to locate the principals ofLedo. 6. As a result in the FAA's delay in bringing this action, two key witnesses who could corroborate my testimony and their underlying records have been lost, significantly prejudicing PAZ' ability to defend itselfand corroborate the validity of PAZ' defense.

2 McDONALD & !'rlcDONALD. P. A., P, 0. Box 669122, .Mi11mi, FL33166-9428 TEL.: (305) 6<13-5313, FAX: (305) 643-4990; E-MAlL: dmm@Mcdorwldattorneys.com EXHIBIT "A"**lj~nB::J** UU\;f :WO.I.:J

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## REPAIR STATION MANUAL PAZAVIATION, INC.

CAPABILITYLIST ESTABLISHMENT AND REVISION PROCESS
Establishment and Revision Paz Aviation,Inc. may perform maintenance, preventive maintenance, or alterations on the articles listed in a Capability List. The Accountable Managers is responsible for ensuring that Paz Aviation,Inc's Capability List is consistent with Paz Aviation, Inc. ratings. Before placing an article on the Capability List, the Manager of Qnality Control

### will1. Determinethat the article is within the scope ofPaz Aviation,Inc's ratings. 2. Perfmm a self-evaluation to determine that Paz Aviation, Inc. has the appropriate housing, facilities, equipment, material, technical data, processes, and trained personnel to performthe work on that article 

### as requiredbyPart 145. 3. Documentthe results ofthe self-evaluation 4. Keep a copy ofthe self-evaluation assessment onfile. The Accountable Manager will review and approve the evaluation before establishing or revising the Capability List. The Capability List is a controlled docUlllent, and once an initial list or revision has been approved by the Accountable Manager it will be forwarded to the F.A.A. By electronic means or in writing within seven days ofcreation orrevision. The CapabilityList included as appendixA to this manual.

APPROVED BY: 

### 8,JULY 2008 GENE L MANAGER

EXHIBIT"A"l.Lt.:::HJ' L_rJnn 'r. 'r-.

**.1~'~''** 1 n ...,u:on From: Ann Fauth Fax: (305) 643-53·13 To: o-EV-l _, Jf' ,,_. ... , Fax: +1 (202) 267-1293 Page 11 of 36 0112312b'1'5' 4:14 tltl CAPABJLlTY LIST 

### PAZ AVIATION, INC. 7455 

### WEST 2ND 

### COURT

HIALEAH, FL33014 PAZ AVIATION, INC.



### FAAREPAIR STATION XPZRl85L CAPABILITY LIST PAGE: I 

### DATE: JULY 08,2008 REVISION14 LIST OFEFFECTIVE PAGES TITLE COVERPAGE PAGENQ. LIST OF EFFECTIVEPAGES RECORD OF 

### REVISION CAPABILITY LIST ESTABLlSHMENT

# .. '" I I 

### AND REVISION PROCESS IT 

### MANUAL DISTRIBUTION ffi 

### LIST OFCOMPONENTS 

### 1-:23 LIST OF

### COMPONENTS l-4 

### LIST OF COMPONENTS 1-10 RECORD OF 

### REVISION DATE July 08, 2008 July 

### 08, 2008 July 08, 2008 July 08,

### 2008 July 08, 

### 2008 July 08, 2008 

### July 

### 08, 2008 July 08, 2008 REVISION NQ. DATE REVISE)) DATE INSERTEO 

### FEB. 08, !991 INITIAL ORIGINAL ISSUE 

### REY.l REV.2 REV.3 REV.4 REV.S REV.6 REV.? 

### REV.8 

### REV.9 REV.. 1.0 REV.ll REV.12 

### REV.I3 REV.l4 02/08/91

**03/Q~m,** 

### 07/02/92 

### 07/.15/92 02/19/93 

### 12/06/93 02/0l/94 

### 02/15/94 03/14/94 02/28/95 03/15/99 

### 07/03/00 l0/31/01 

### 03/03/03 07/08/08 MAX. 02, 1992 

### JUL. 02, 

# 1992. JUL. 

### 15, 1992 FEB. 19, l993 DEC. 

### 06, !993 FEB. 01, 1994 

### NEVER ACCEPTED MAR. 24, 1994 MAR. 

### 10, 1995 

### MAR 15,1995 JUL, 03, 2000 

### OCT. 31, :2001 MAR. 03, 2003 

### JUL. 08, 2008 

### C.P. C,):'. 

### C.P. C.P. 

### J.V.M. .l.V.M J.V.M 

### J.V.M .LV.M J.V.M J.A 

### J.Z. 

### J.Z. 

## .r.z. J.Z.

EliHIBir'A"From: Ann Fauth Fax: (305) 643-5313 CAPABILlTY LIST



### MANUAL NUMBER Master Manual 100 101 To: Fax: +1 (202) 267·1293 Page 12of 3601123-/20154:14 PAZ AVIATION, INC. Page No: Issue Date: Revision Date: Revision No.: ill 02/02/91 07/08/08 14 

## M.At'I1JAL I>tStiu'lll.i'rJ:ONLIST ASSIGNED TO TITLE OR CONTACT ORGANIZATION INFORMATION Jay Allen Accountable 305-825-4828 Manager 

### FAA Aviation Safety 305-716-3400 Inspector JuanZamora 

## _\ Quality Control 305-825-4828 Manager

IXHIBIT""A..From: Ann Fauth Fax: (305) 643-5313 

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# {j) EXIIIBIT"A"From: Ann Fauth Fax: (305) 643-5313 To: Fax: +1 (202) 267-1293 Page 15of 3601123120154:14

EXHIBIT"A"From: Ann Fauth



# 1 ON 111 Fax: (305) 643-5313

BAA To: Fax: +1 (202) 267-1293

**~L:Tei/V&'** COMPONENT MAINTENANCE MANUAL

SIMULATOR f.iOLD ARM Page 16of 360112312015 4:14

!ATTACHESTO PISTON)------

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F!XTUAE FB0124--60

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# 27-60-41 TESTING AND FAULT ISOLATION P::lnA 11? IXIIIBIT"A"From: Ann Fauth Fax: (305) 643-5313 To: Fax: +1 (202J 267-1293 Page 17of 3601/23120154:14From: Ann Fauth Fax: (:305) 643-5313 To: Fax: +"I (202j 267-1293 Page 18of 3601!23120154:14From: Ann Fauth Fax: (305) 643-5313 To: Fax: +1 (202) 267-1293 Page 18of 360112312015 4:14From: Ann Fauth Fax: (.305) 643--5.31.3 To: Fax: +1 (202) 267-1293 Page 20of 360112312015 4:14From: Ann Fauth Fax: (305) 643-5313 To: Fax: +"I (202) 267-1293 Page 21 of 36 01/23!:2015 4:14F1:om: Ann Fauth Fax: (305) 643-5313 To: Fax: +1 (202) 267-1293 Page 22of 3601123120154:14

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### q:J..?DE/ND' COMPONENT MAINTENANCE MANUAL

SIMULATOR

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Positional Accuracy Test Ftgure 104 POWER CONTROL UNlr

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# 27-60· TESTING AND FAULT iSOI p, EXIIIBIT"A"From: Ann Fauth Fax: (305) 643-5313 To:



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# FJI\ZAVIATION Fax: +1 (202) 267-1293 Page 25of 3601/23/20154:14



## NEW FIXTURE BY LEDO INDUSTRIAL MACHINE SHOP

EXHIBIT"A"From: Ann Fauth Fax: (305) 643-5313 To: Fax: +1 (202) 267-1293

SIMULATOR HOLD ARM OEM P/N: F80224·60 DESC: FIXTURE EQUIVALENT P/N: PA-25 DESC: FIXTURE

PROTRACTOR ASSY CRANK

POWER CONTROL

UNIT MOUNT PISTON ATIACH FORK



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EXHIBIT"A"From: Ann Fauth Fax: (305) 643-5313 To: Fax: +1 (202} 267-1293. Page 27of3601/23120154:14

AIR VIEW

FRONT VIEW RIGH1 VIEW

REAR VIEW LEFT VIEW

OEM PART NUMBER DATE OBSERVAllONS DATE FB0224-60 SHEET: 

# Paz ASSET H PA-25 B/5/2011 MAIN {1 PAGE) PAZ P/N PA-25 B/5/2011 5 V1 EWS, 5 PAGES 

### Aviation, Inc. APPROVED J, ZAMORA 8/5/2011 DRAWING NUMBER MATERIAL ALUM 6061 8/5/2011 

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### J. ZAMORA DATE 8/5/2011 MATERIAL 6061 ALUM EXIIIBIT"A"From: Ann Fauth Fax: (305) 643-5313

BORE AREA A= AREA

**A~** rrD 2/4 A=3.14 X 2 X 2/4 A=3.14 ROD AREA A=3.14 XY. A=.785 A=3.14- .785 A=2.355
PULL FOR LBS 2400 4200 4300 4400 4500 4600 PSI 1019 1783 1825 1868 1910 1953 To: Fax: +1 i202) 267-1293, Page 36of 3601123/20154:14 

# PAZ AVIATION

REFERENCE CALCULATION CYLINDER FORCE CALCUCATION 2.0" BORE AND 1" ROD PUSH FORCE IN LBS

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PULL FORCE IN LBS F=PXA F= PX2.355 FORCE 

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FOR LBS PSI 2400 764 4200 1338 4300 1370 4400 1401 4500 1433 4600 1465

EXHIBIT"A"