' - ; r^-ji' / TC * UNITE D STATE S DEPARTMEN T O FTRANSPORTATIO N FEDERA L AVIATIO N ADMINISTRATIO N

WASHINGTON , D C I n th e Matte r

of: HELICOPTE RFLITE , INC . ' ' ^ ' ^ FA A Orde r

No . 2011- 6 DocketNo . CP09EA001 5 FDM S No . FAA-2009-0579 ' Served : Jun e 13,201 1 DECISIO N AND ORDER S Responden t

Helicopte r

Flite , Inc. , ha s appeale dfromth e initia l decisio n writte n b y Administrativ e La w Judg e ("ALJ" ) Isaa c D . Benkin , holdin g tha t Helicopte r

Flit e violate d1 4 C.F.R . § 135.25(b y b y failin g t o hav e exclusiv e us e o f th e onl y aircraf

t tha t i t wa s authorize dt o operat e unde r it s operation s specifications . Th e ALJ assesse da n $11,00 0 penalty . Helicopte r Flit e argue s o n appea l that : (1 ) it s Sixth Amendmen t right s

' Generally , material s file

di n the FA A Hearing Docke

t (except fo r material s file

di n securit y cases ) ar

e als o availabl e fo

r viewing a t http://www.regulations.gov . 14 CF.R . § 13.210(e)(1) . Th e Administrator' s civil penalt y decisions , along wit

h indexe s o

f the decisions , the rule s of practice , an

dothe r information , ar

e availabl e o

n the Interne

t a t the followin

g address : www.faa. gov/about/ofice_org/headquarters_o^ices/agc/pol_adjudication/ A GC400/Ci

v i l _Penalty/ . Se

e 1 4 C.F.R . § 13.210(eX2) . I n addition , Thomso

n Reuters/Wes t

Publishing publishe s Federa

l Aviation Decisions . Finally , the decision s ar e availabl e throug

h LEXI S (TRAN S library ) an

dWestLa w (FTRAN-FA

A database) . Fo

r additiona l information , see the We b site . ^ Th e regulation , i

n pertinen t part , provides : Eac h certificat e holde r must have the exclusiv e us e of

a t leas t one aircraf

t tha t meets th e requirement s fo

r a t leas t one kin dof operation authorizedi

n th e certificat e holder' s operation s specifications . I n addition , fo

r eac h kin do f operation fo

r whic h th e certificat

e holde r doe s not have the exclusiv e us e o

f a n aircraft , th e certificat

e holde r must hav e availabl e fo

r us e unde r awritte n agreemen t (including arrangement s fo r performin g requiredmaintenance ) a

t leas t on e aircraf t tha t meet s the requirement s fo

r tha t kin do f operation . 14 C.F.R . § 135.25(b ) (2008) .wer e violate dwhe n th e ALJ denie dit s reques t for acontinuanc e o f

th e hearin g after grantin g it s counser s motio n t o withdraw ; (2 ) it s Fourteenth Amendmen t right s wer e violate db y bein g preclude dfromintroducin g evidence ; (3 ) ther e wa s n o violation ; an d (4 ) th e $ n ,00 0 penalt y wa s excessive . Helicopte r Flit e request s tha

t th e Administrato r reman dth e cas e for

ane w hearing , or , i n th e alternative , reduc e th e civi l penalty . Th e FAA , i n it s repl y brief , argue s tha t

th e ALJ acte dappropriatel y whe n h e denie dth e motio n for

acontinuanc e an dgrante dth e motio n barrin g Helicopte r Flit e fi-om introducin g evidenc e a

t th e hearing . Th e FA A argue s further that th e $11,00 0 civi l penalty i s consisten t

with sanctio n guidance . Regardless , th e FAA submits , "reman do f th e cas e fo

r are-hearing , t o giv e Appellan t th e opportunit y for

ftjrther preparatio n o f

th e cas e .. . woul db e appropriate. " (Repl y Brie f a t 9. ) After consideratio n o f

th e recor dan dth e briefs , i t i s hel dtha t

i n th e absenc e o f evidenc e o f

operation , acertificat e holde r canno t b e foun dt o hav e violate dSectio n 135.25(b) . Consequently , th e FA A faile dt o prov e that Helicopte r

Flit e violate dSectio n 135.25(b ) becaus e th e FA A di dno t introduc e any evidenc e tha t Helicopte r

Flit e o r any othe r entit y operate dth e helicopte r i n questio n after

th e helicopte r

wa s sold . I . Cas e Histor y Helicopte r

Flite , base di

n Weatherly , Pennsylvania , hold s a n ai r carrie r certificat e an doperate s a n on-deman dhelicopte r transportatio n service* * unde r Part s 11 9 an d13 5 o f th e Federa l Aviatio n Regulation s (FAR). ^ Floy dHoffma n i s Helicopte r

Flite' s chie f pilot .

^ Unde

r it s operation s specifications , Helicopte r Flit e i s authorizedto conduct

o n deman d Par t 13 5 operation s i

n commo n carriage . ^ I4C.F.R . § § I19.I-lI9.71,an dI35.M35.443 .Th e FA A allege di n it s Secon dAmende dComplain t tha t betwee n Februar y 12 , 2008 , an dSeptembe r

15 , 2008 , Helicopte r

Fligh t di dno t hav e exclusiv e us e o f

aBel l helicopter , identificatio n numbe r N407Z , whic h wa s th e onl y aircraf t that i t wa s authorize dt o operat e unde r it s operation s specifications. * Th e FA A allege dtha t Helicopte r

Flit e violate d1 4 C.F.R . § 135.25(b) , whic h provide s that "[e]ac h certificat e holde r mus t hav e th e exclusiv e us e o f a t leas t on e aircraf

t tha t meet s th e requirement s fo r a t leas t on e kin do f

operatio n authorize di n th e certificat e holder' s operation s specifications. " Th e ter m"exclusiv e use " i s define di n 1 4 C.F.R . § 135.25(c ) a s follows : Fo r th e purpose s o f

paragrap h (b ) o f

this sectio n aperso n ha s exclusiv e us e o f a n aircraf t i f tha t perso n ha s th e sol e possession , control , an dus e o f i t for flight , a s owner , o r ha s awritte n agreemen t

(includin g arrangement s for performin g require dmaintenance) , i n effec t whe n th e aircraf

t i s operated , givin g th e perso n tha t possession , control , an dus e for a t leas t 6 consecutiv e months . Th e FA A sough t

a n $11,00 0 civi l penalt y for thi s violation . Helicopte r Fligh t denie dth e allegation s i n it s Answe r t o th e Secon dComplaint . Th e AL J initiall y ordere dth e partie s t o exchang e propose dexhibit s an dwitnes s list s b y Decembe r

8 , 2009 , an dschedule dth e hearin g fo r Decembe r

22 , 2009 . After

th e FA A move dfor

acontinuance , th e ALJ postpone dth e hearin g unti l Januar y 26 , 2010 , an dordere dth e partie s t o exchang e propose dexhibit s an dwitnes s list s b y Januar y 12 , 2010 . Th e FA A serve dit s propose dexhibit s an dit s witnes s lis t i n atimel y fashion , bu t Helicopte r

Flit e faile dt o serv e awitnes s lis t o r an y propose dexhibits . O n Januar y 19 ,

^ The FA A file dthe origina

l Complain

t o n June 30 , 2009 , alleging tha t Helicopte r Flit e violated1 4 C.F.R . § 135.25(b ) becaus e i t didnot have exclusiv e us e of

adifferen t aircraft , N407J G (which wa s the onl y aircraf t listedo n its operation s specifications ) afte r i t wa s soldo

n July 9 , 2008 . Th

e FA A file dits AmendedComplain

t o n Septembe

r 29 , 2009 , substitutin g N407 Z forN409JG .2010 , on e wee k befor e th e hearing , th e FA A file damotio n i n limin e seekin g t o preclud e Helicopte r

Flit e fro mofferin g int o evidenc e an y exhibit s o r testimon y du e t o it s failur e t o compl y with th e ALJ' s order . Helicopte r Flit e di dno t

repl y t o tha t

motion . O n Januar y 20 , 2010 , Helicopte r Flite' s attorne y file damotio n seekin g leav e t o withdra w a s counsel . Th e motio n state dtha t Helicopte r

Flite' s principal , Floy dC . Hoffrnan , n o longe r

desire dfor

thi s attorne y t o represen t th e company . At th e hearin g hel di n Allentown , Pennsylvani ao n January 26 , 2010 , th e AL J grante dHelicopte r

Flite' s attorney' s reques t t o withdra w a s counsel . (Tr . 4-5. ) Mr . Hoffman , a s th e company' s representative , the n requeste dapostponement , bu t th e AL J denie dth e request . (Tr . 8-10. ) Th e agenc y attorne y renewe dth e motio n i n limin e a t th e hearing . (Tr . 11-12. ) Th e ALJ grante dth e FAA' s motio n i n limine , precludin g Helicopte r Flit e fro m"put[ting ] o n acas e i n chief, " an dlimite di t t o cross-examinatio n o f

th e FAA' s witnesses . (Tr . 12. ) Two witnesse s testifie dfor th e FAA , an dMr . Hoffma n cross-exeimine dbot h o f them . After th e FA A pu t

o n it s case-in-chief, both Mr . Hoffma n an dth e agenc y attorne y presente dora l closin g arguments , an dth e hearin g wa s adjourned . O n Februar y 4 , 2010 , th e AL J issue dhi s writte n initia l decision , holdin g tha t th e FA A ha dprove n b y th e preponderanc e o f

th e evidenc e tha t

Helicopte r

Flit e violate dSectio n 135.25(b) . II . Evidenc e O n Novembe r

12 , 2007 , Ai r

Chopper , LLC , aholdin g compan y controlle db y Mr . Hoffman , lease dN407 Z t o Helicopte r Flit e fo r athree-year

perio dbeginnin g o n Novembe r

12 , 2007. ' Th e leas e provide dtha t "both partie s understan dan dagre e tha t i n Th e leas e was signedb

y Mr . Hoffma

n fo r Ai r Choppe r an db y Marion Hoffma

n fo r Helicopte r Flite .th e even t th e sai dhelicopte r

i s sol db y Ai r

Chopper , LLC , the n thi s Leas e shal l automaticall y terminate." * (Exhibi t A-6. ) Helicopte r

Flite' s operation s specification s provided , a t paragrap h A008 , a s follows : Exclusiv e Aircraf

t Us e Requirement s for

Part 13 5 Operations . At

leas t on e aircraf t tha t meet s th e requirement s for a t leas t on e kin do f

operatio n authorize di

n th e certificat e holder' s operation s specification s mus t remai n i n th e certificat e holder' s exclusiv e lega l possessio n an dactual possessio n (directl y o r throug h th e certificat e holder' s employee s an dagents ) a s specifie di n Sectio n 135.25 . Thi s aircraf t canno t b e liste do n an y othe r

Part 11 9 certificat e holder' s operation s specificatio n durin g th e ter mo f th e exclusiv e us e lease . O n Januar y 30 , 2008 , th e FA A approve doperation s specification s paragrap h D085 , authorizin g Helicopte r Flit e t o operat e N407 Z i n commercia l operations . N407 Z wa s th e onl y aircraf

t liste do n Helicopte r

Flite' s operation s specification s at thi s time . Les s tha n tw o week s later , o n Februar y 12 , 2008 , Ai r Choppe r sol dN407 Z t o Pumpco , Inc. , acompan y basedi n Texas . (Exhibi t A-5 ; Tr . 64-65. ) Mr . Hofftnan signe d th e bil l o f sal e o n behal f

o f Ai r Chopper . O n Marc h 11 , 2008 , Mr . Hoffma n sen t vi afacsimil e acop y o f

th e leas e date d Novembe r

12 , 2007 , t o th e Allentow n Fligh t Standard s Distric t

Offic e (FSDO) , i n respons e t o a

n earlie r reques t b y th e FSD O for

documentatio n establishin g that Helicopte r

Flit e ha doperationa l contro l ove r th e aircraf

t that i t used . Th e FSD O ha d mad e similar

request s for

documentatio n t o al l th e Part 13 5 certificat e holder s ove r whic h i t ha djurisdiction . (Tr . 70. )

^ I t ma y fairl y be questionedwhethe

r aleas e wit

h aprovisio n lik

e thi s on e satisfie s Section 135.25(c)' s requiremen t fo r awritten agreemen

t giving the certificat

e holde r sole possession , contro l an

dus e fo r flight/o r a t leas t 6 consecutive months .O n Ma y 30 , 2008 , Robert s Ranc h Investments , LLC , anothe r Texas-base d company , purchase dN407 Z fro mPumpco . In Septembe r

2008 , Hoffman contacte dth e FSD O t o reques t aconformity inspectio n o f

anothe r helicopter , N407JG , whic h Mr . Hoffma n wante dt o ad dt o Helicopte r

Flite' s operation s specifications . (Tr . 42-43 ; Initia l Decisio n a t 2. ) FA A Inspector s Eugen e McCo y an dWillia mRus h inspecte dN407J G a t Helicopte r

Flite' s hangar o n Septembe r

15 , 2008. ^ (Tr . 44-46 ; Initia l Decisio n a t 2. ) After inspectin g N407JG , th e inspectors , wh o wer e unawar e that N407 Z ha dbee n sold , aske d Mr . Hoffma

n i f the y coul dinspec t

N407 Z o r

examin e it s records . (Tr . 47. ) Inspecto r McCo y testifie dtha t

Mr . Hoffma

n replie dtha t

h e ha dsol dth e aircraf

t recentl y an dtha t h e di dno t

hav e th e aircraf

t o r th e records . (Tr . 47-48. ) Inspecto r McCo y wrot e i n hi s statement , date dSeptembe r 18 , 2008 , that

Mr . Hoffma

n explaine dtha t

h e "neede dt o ge t [N407JG ] o n th e FA R13 5 certificat e a s soo n a s possible. " (Exhibi t A-3. ) Accordin g t o th e inspector' s statement , Mr . Hoffma n answere d"that' s correct " after bein g asked , "yo u mea n tha t yo u don' t

hav e a n aircraf t for 13 5 a t thi s time? " (Exhibi t

A-3 ; Tr . 54. ) Th e inspector s subsequentl y explaine dth e situatio n t o Fran k Alotta , th e principa l operation s inspector . (Exhibi t A-3 ; Initia l Decisio n a

t 2.)" ^ Inspecto r

Alott asen t

alette r o f investigatio n t o Helicopte r Flit e o n Octobe r

7 , 2008 , statin g that

"[y]ou r company' s aircraft , th e exclusiv e us e aircraft , wa s sol d.. . leavin g th e compan y withou t a n aircraft. " (Exhibi t A-7. ) Th e inspecto r

requeste dMr . Hoffman' s pilo t logbook s fo

r inspectio n Du e to certain discrepancie s foun dduring the conformit

y inspection , N407JG was not addedt o the Helicopte

r Flite' s operation s specification s until Octobe r 2008 . (Tr . 45. ) Inspector Alottathe n researchedN407Z' s statu s o n the FAA' s electroni c database , an d foun drecord s indicatin g tha

t N407 Z ha dbee n soldo n Februar y 12 , 2008 , an

dagai n o n Ma y 30 , 2008 . (Exhibit s A-3 , A-4 , A-5 ; Tr . 61-64 ; hiitia l Decision a

t 2-3. )"alon g wit h an y evidenc e o r statement s yo u migh t

car e t o mak e regardin g thi s matter. " (Exhibi t A-7. ) Mr . Hoffma

n responde db y lette r

date dOctobe r

10 , 2008 . H e wrot e tha t h e ha d tol dth e inspecto r

tha t negotiation s wer e underwa y for th e sal e o f

N407Z , an dthat

h e plarme dt o replac e N407 Z with ane w helicopter . H e als o wrot e tha t h e ha dlef

t th e inspecto r avoic e messag e after

N407 Z wa s sold . (Exhibi t A-8. ) Mr . Hoffman explaine d tha t th e inspecto r

shouldschedul e a n appointmen t t o inspec t

hi s pilo t logboo k a t th e hangar i n Weatherly . (Exhibi t

A-8) . III . Initia l Decisio n I n hi s initia l decision , th e AL J hel dtha t th e FA A prove db y apreponderanc e o f th e evidenc e tha t

froma t leas t Februar y 12 , 2008 , unti l Septembe r 15 , 2008 , Helicopte r Flit e lacke dexclusiv e us e an dpossessio n o f th e onl y aircraf

t liste di n it s operation s specification s i

n violatio n o f

1 4 C.F.R . § 135.25(b) . (Initia l Decisio n a t 5. ) Althoug h th e ALJ ha drule dtha t Helicopte r

Flit e coul dno t

pu t o n acase-in-chief

, th e ALJ foun dtha t

Mr . Hoffman' s allusion s a t th e hearin g (durin g cross-examinatio n an d argument ) t o a

n ora l leas e givin g Helicopte r Flit e exclusiv e us e o f

N407 Z after

it s sale " "straine dcredibility. " Th e AL J explained , "pruden t businessme n d o no t

transfe r exclusiv e us e an dpossessio n o f suc h valuabl e asset s o n th e basi s o f ahandshak e o r

a n 'ora l lease.' " (Initia l Decisio n a t 5. ) Furthermore , eve n i f suc h a n oral leas e existed , th e ALJ held , Helicopte r

Flit e violate dth e regulatio n becaus e "i f aPart 13 5 operato r

seek s t o satisf y th e 'exclusiv e use ' requiremen t b y leasin g a

n aircraft , th e arrangemen t mus t tak e

" Fo r example , i

n hi s opening statement , Mr . Hoffma n asserted , "W

e ha da n ora l contrac t tha t tha t aircraf t woul dremai n o n the certificat

e unti l the Allentown FSDO wa s able to pu t [N407JG] o

n the certificate. " (Tr . 26. ) H e claimedtha

t Helicopte r Flit e stil l retainedcontro l o

f N407 Z despite the fac

t tha t i t ha dbee n sol dan dwa s i n Texas . (Tr . 26. )plac e unde r awritte n agreement. " (Initia l Decisio n a t 5. ) Th e AL J als o foun dtha t Hoffma n "knowingl y an ddeliberatel y trie dt o mislead " th e FA A b y providin g a"fals e an dfictitious " writte n leas e for N407 Z ft:omAi r

Chopper t o Helicopte r

Flite.' ^ (Initia l Decisio n a

t 8. ) In determinin g a

n appropriat e civi l penalty , th e AL J discusse dth e FA A sanctio n guidanc e se t

fort h i n FA A Orde r

No . 2150.3B , entitle d"FA A Complianc e an d Enforcemen t

Program " ("FA A Order" ) an dth e testimon y o f Inspecto r Alott aregardin g th e applicatio n o f

th e guidanc e t o th e fact s o f this case . Th e AL

J note dtha t

th e FA A sough t a n $11,00 0 civi l penalty , which , unde r th e guidance , i s th e highes t penalt y tha t shouldb e assesse dagains t asmal l busines s concer n like Helicopte r Flit e fo r non complianc e with operation s specification s resultin g i n th e "likel y potentia l o r actua l advers e effec t

o n saf e operation. " (Initia l Decisio n a t 8 , quotin g FA A Orde r

No . 2150.3 B Appx . B , a

t B-I2. ) Th e AL J wrot e tha t h e "woul dnormall y reduc e this figur e t o tak e accoun t o f mitigatin g factor s an dth e technica l natur e o f th e violations , a s wel l a s th e realizatio n tha t

th e Responden t

is , after all , asmal l businessman. " (Initia l Decisio n a t 8. ) However , accordin g t o th e ALJ , Hoffman' s "reprehensible " attemp t t o mislea dth e FA A

^ ^ The evidenc e doe s no

t suppor t th e ALJ' s findin

g tha t Helicopte r Flit e "hadprovided the FA A wit h hfals e an dfictitiou s leas e of th e aircraf

t fro mAi r Choppe r to Helicopter s Flite s (sic ) datedamont

h afte r the purporte dlessor

ha dsoldthe aircraft. " (Initia

l Decisio n a

t 6 ) (emphasi s added) . Th

e leas e agreemen

t wa s signedo

n Novembe

r 12 , 2007 , 3 month s befor

e Ai r Chopper , the lessor , sol

dN407 Z t o Pumpc o o

n Februar y 12 , 2008 . Consequently , there i s als o n o suppor t fo r th e ALJ' s finding tha

t "whe n askedto submi

t hi s leas e o

r othe r paper s containin g evidenc e o f

hi s righ t to exclusiv e us e an

dpossession , the Responden t cookedu p apurportedleas e fro manothe r entit y controlle db

y Mr . Hoffman. " (Initia

l Decision a

t 8) (emphasi s added. ) Nonetheless , i

t doe s appea

r tha t Mr . Hoffma

n wa s tryin g to mislea

dthe FA A whe n he sen t th e FA A aleas e tha

t he must have know

n wa s no longe

r i n effect, becaus e unde

r it s terms , th e leas e terminate dwhe

n Ai r Choppe r soldN407 Z to Pumpco .wa s a

n aggravatin g factor , that "warrant[ed ] assessmen t o f th e maximu mcivi l penalty, " an da s aresult , h e assesse da n $11,00 0 civi l penalty . (Initia l Decisio n a t 8-9. ) III . Discussio n Helicopte r

Flit e argue s i n it s appea l brie f that th e FA A sanctio n guidanc e pertainin g t o violation s b y ai r carrier s an dcommercia l operator s doe s no t specificall y refer t o situation s i n whic h th e carrie r o r operato r doe s no t hav e exclusiv e us e o f

a n aircraft.' ^ H e concludes , a s aresult , tha t "i n fac t accordin g t o [th e guidance ] N O violatio n occurred. " Certificat e holder s authorize dt o conduc t operation s unde r

Part 13 5 mus t

compl y wit h th e requirement s set fort h i n Part 13 5 o f th e Federal Aviatio n Regulations , 1 4 C.F.R . § § 135. 1 -135.507 . Sectio n 135.25(b ) require s that acertificat e holde r

hav e exclusiv e us e o f a t leas t on e aircraf

t tha t meet s th e requirement s for a t leas t on e kin do f

operatio n authorize di

n it s operation s specifications . Th e FA A di dprov e tha t Helicopte r

Flit e di d no t hav e exclusiv e us e o f

th e onl y aircraf

t liste do n it s operation s specification s betwee n Februar y 12 , 2008 , an dSeptembe r 15 , 2008 . However , i t

make s n o sens e t o enforc e this requiremen t b y imposin g acivi l penalt y unles s ther e i s evidenc e tha t th e certificat e holde r

continue dt o operat e durin g th e tim e perio dtha t

i t di dno t hav e exclusiv e us e o f

a t leas t on e aircraft . I f

ther e i s n o implici t operatio n requirement , then , for example , th e FA A coul dasses s acivi l penalt y

' ^ Th e FA A ha s publishedthe Administrator'. s guidanc e regarding sanction s fo r violation s of

thos e requirement s i

n FA A Orde r No . 2150.3B , FA

A Complianc e an

dEnforcemen

t Program . Th

e pertinen t sanction guidance , se

t fort h i n Figur e B-l- c o f FA A Orde r No . 2150.3B , provide s tha

t aminimu mcivil penalt

y i s appropriat

e whe n a n ai r carrier' s operatio n constitute s a technica l violatio n of

it s operation s specifications . I t als o provide s tha

t amoderat e or maximu m civil penalt

y i s appropriat

e fo r aviolatio n involving a

n operation contrar

y t o operation s specification s involving "likely potentia l o r actua l advers e effec

t o n saf e operation. "1 0

onc e acertificat e holder' s exclusiv e us e aircraf t wa s destroye db y fire o r natura l disaster. Likewise , acertificat e holde r woul dno t

b e abl e t o sel l it s exclusiv e us e aircraf t an dus e th e proceed s t o purchas e anothe r aircraf t withou t bein g i n violatio n o f

Sectio n 135.25(b) . Th e FA A di dno t

introduc e an y evidenc e t o sho w tha t Helicopte r

Flit e operate d an y aircraf t after th e sal e o f

N407Z . Th e evidenc e i

n th e recor dshow s onl y that :

• Helicopte r

Flit e lease dN407 Z fro mAi r Chopper o n Novembe r

12 , 2007 ,

• N407 Z wa s adde dt o Helicopte r Flite' s operation s specification s o n Januar y 30 , 2008 ;

• Ai r Choppe r sol dN407 Z t o Pumpc o o n February 12 , 2008 ;

• Pumpc o sol dN407 Z t o Robert s Ranc h Investments , LLC , o n Ma y 30 , 2008 . Simpl y no t

havin g a n exclusiv e us e aircraf t wil l no t b e considere da s constitutin g a violatio n o f

Sectio n 135.25(b) , warrantin g th e assessmen t o f acivi l penalty , absen t evidenc e o f

operatio n unde r

Part 135.'' ' Hence , n o civi l penalty i s warrante di n thi s case . IV . Conclusio n Fo r th e foregoin g reasons , th e ALJ' s decisio n i s reversed , an dn o civi l penalt y i s assessed.

J . RANDOLP H BABBIT T ADMINISTRATO R Federa l Aviatio n Administratio n

' * I n ligh t of thi s determination , ther

e i s n o nee dto addres s Respondent' s othe r arguments pertainin g t o violation s of

constitutiona

l right s o r regarding a

n excessiv e civil penalty .

### SERVE D FEBRUAR Y 4 , 201 0 U.S . DEPARTMENT O FTRANSPORTATI(J>j'' ' '-'• ' , '' '

OFFIC E OFHEARING S WASHINGTON , D C ' ' ^ ' • I N THE MATTERO F HELICOPTER S FLITE , INC. , Respondent . FAA DOCKET NO . CP09EA0001 5 (Civi l Penalt

y Proceeding ) DM S NO . FAA-2009-057 9 ADMINISTRAT I VE LAWJUDGE' S INITIA L DECISIO N ASSESSIN G A

N $11,00 0 CIVI L PENALT Y Th e questio n fo

r decisio n i n thi s civi l penalty cas e i s whether , durin g th e perio dfromFebruar

y 12 , 200 8 t o September

15 , 2008 , th e Respondent ha d exclusiv e us e an dcontro l o f th e only aircraf

t liste di n it s operation s specifications , aBell Mode l 40 7 helicopte r bearin g identificatio n number N407Z . Th e Responden t

i s Helicopter s Flite , Inc . It operate s afor-hir

e helicopter transportatio n servic e fromth e airpor t at Weatherly , Pennsylvania . It i s aPar t 13 5 carrier , so-calle dbecaus e regulation s governin g it s activitie s ar e foun din Par t 13 5 ofth e Federa

l Aviatio n Regulation s (FAR) , 1 4 C.F.R . § § 135.1-135.443 . A s aPar t 13 5 carrier , th e Responden t i s obligate dto observ e th e term s o f it s operation s specifications , w^hic

h were issue db

y th e Federa

l Aviatio n Administratio n (FAA ) andaccepte do n it s behal f b y it s principal , Floy dHof&nan . Operation s specification s includ e alistin g ofth e specifi c aircraf t tha t aPar t 13 5 operato r

ma y fly. They requir e that

"[a] t leas t on e aircraf

t tha t meet s th e requirement s fo r a t leas t on e kin do f

operatio n authorize di

n th e certificate holder* s specification s mus t remain i n th e certificate holder' s exclusiv e lega l possessio n an

dactua l possessio n . .." , Th e "exclusiv e use " requirement i s re-enforce dby § 135.25(b ) ofth e FAR , which state s that

eac h certificate holder

mus t hav e the exclusiv e us e o f

a t leas t one aircraf t tha t meet s th e requirement s fo r a t leas t on e kin do f

operatio n authorize di

n th e certificate holder' s operation s specifications. .At al l relevan t

times , th e operation s specification s o f Helicopter s Flit e liste d onl y on e aircraft : aBel l mode l 40 7 helicopte r bearin g registratio n numbe r N407Z . A s w e hav e noted , Helicopter s Flite* s principa l an dpoin t o f contac t for th e FAA' s Allentown , Pennsylvani aFligh t Standard s Distric t

Offic e (FSDO ) wa s Floy d Hoffman . Th e Allentow n FSD O ha dsurveillanc e an dapprova l authorit y ove r th e Respondent . Hoffrna n ha dspen t man y year s i n th e aviatio n busines s and , i n additio n t o bein g th e pilo t fo r Helicopter s Flite , deal t

i n th e purchas e an dsal e o f use dhelicopters . Mr . Hoffman ha dapractic e o f purchasin g helicopter s an d applyin g t o th e FA A t o ad dthe mt o hi s firm' s Par t 13 5 operation s specifications . Then , after

th e machin e wa s o n th e operation s specifications , i t woul db e sol dat

a profit . Whe n aPar t

13 5 operato r

seek s t o ad da n aircraf

t t o it s operation s specifications , th e FA A wil l perfor maver y thoroug h"conformit y inspection " o f th e machine , requirin g i t t o b e i n first-clas s operatin g conditio n befor e approva l wil l b e granted . Thi s practic e i s sai dt o hav e resulte di n an increas e i n th e valu e o f th e machin e o n th e used-aircraf t market . I n Septembe r

2008 , Eugen e McCoy , the n a n avionic s inspecto r at th e Allentow n FSDO, ' receive dareques t fro mth e Responden t

t o perfor ma conformit y inspectio n o f ahelicopter , N407JG , tha t wa s i n it s hanga r

an dtha t Mr . Hoffrnan wishe dt o ad dt o hi s company' s operation s specifications . Inspecto r McCo y arrange dt o inspec t th e machin e o n Septembe r 12 , 2008 . I n compan y with anothe r Inspector , Willia mRush , h e wen t t o Respondent' s facility . Whe n the y arrived , the y note dtha t

helicopte r

N407 Z wa s missing . Whe n aske dabou t it s whereabouts , Mr . Hoffrnan replie dtha t th e aircraf

t ha dbee n sol d"recently.' ' H e als o sai dtha t

h e coul dno t

produc e th e logbook s for th e aircraf

t becaus e the y wer e with th e helicopter . Inspecto r McCo y sai dt o Mr . Hoffman , "yo u mea n yo u don' t hav e a n aircraf t fo r 13 5 a t thi s time? " Hoffman sai dtha t wa s correc t

bu t tha t th e dea l ha dbee n complete di n th e las t fe w weeks . McCo y reminde dHoffman tha t hi s operation s specification s require dhi mt o hav e an exclusive-us e aircraft . (Th e conversatio n i s reporte di n Ex . 3. ) McCo y an dRus hinspecte dth e "new " helicopte r

an dpointe dou t

severa l discrepancie s requirin g attentio n befor e it coul d b e adde dt o th e certificate . The n the y lef t an dreturne dt o thei r

office . Whe n the y arrived , McCo y tol don e o f hi s colleagues , FA A Inspecto r Fran k Alotta , abou t

hi s conversatio n wit hHoffrnan . Alott athe n researche dth e statu s o f N407 Z i n th e FAA' s electroni c dat abase . H e foun dtha t th e aircraf

t ha dbee n sol d severa l time s prio r

t o th e dat e o f

McCoy' s visit , an dtha t th e first transaction , fa

r frombein g "recent " o r

"i n th e las t

fe w weeks, " ha dtake n plac e o n Februar y 12 ,

' McCo y hi w sinc e bee n promote dt o th e positio n o f Assistant Manage r ofth e Allentow n FSDO . 22008 , mor e tha n seve n month s earlier . (Se e Ex . A-5. ) O n tha t date , accordin g t o th e FAA' s records , afirmcalle dPumpco , Inc. , o f Gittings , Texa s ha dpurchase d th e helicopte r

fromAi r

Chopper , LLC , Thi s wa s significan t becaus e o n Marc h11 , 2008 , Responden t

ha danswere dan FA A reques t for it s leas e agreemen t

b y sendin g th e Allentow n FSD O acop y o f aleas e (Ex . A-6) , unde r whic hth e Respondent ^ represente di t

ha dlease ddi e sam e aircraf t fromAi r

Chopper , LLC. ^ I n othe r words , it appeare dt o th e FA A inspector s tha t Helicopter s Flit e ha drepresente dt o th e agenc y ^a t

i t ha dexclusiv e us e ofth e machin e unde r leas e fro man owne r

wh o ha dsol dth e helicopte r

amont h earlier ! I n addition , th e leas e containe daclaus e statin g tha t

i t woul dautomaticall y terminat e i n th e even t th e helicopte r

wa s sol db y Ai r Chopper . Throug h thei r research , th e FAA' s inspector s learne dtha t i n fac t th e machin e ha dbee n sol db y Ai r Choppe r befor e th e dat e o n whic hth e Responden t ha dsen t th e documen t

t o th e FSDO , representin g tha t i t wa s acurren t

leas e unde r whic h Helicopter s Flit e ha d"exclusiv e use " ofth e Bel l Mode l 407 . Furthe r researc h int o th e statu s ofth e helicopte r indicate dtha t

Pumpco , th e part y tha t

ha d bough t it fromAi r Chopper , ha ditsel f

sol dth e aircraf

t t o anothe r

party , Robert s Ranc h an dInvestments , LLC , i n Ma y o f 2008 . Se e Ex . A-4 . (Bot hRobert s Ranc h an dPumpc o lis t

addresse s i n Gittings , Texas ; however , th e recor ddoe s no t disclos e wha t

relationship , i f

any , the y ma y hav e ha dt o on e another. ) A t tha t point , it appeare dt o th e FAA' s investigator s tha t th e Responden t

wa s ou t o f complianc e wit h th e "exclusive-use-and-possession " requirement s i n § 135.25(b ) ofth e FA Ran dth e co-ordinat e provision s i n it s operation s specifications . A Lette r

o f Investigatio n (LOI ) wa s prepare dan dsen t t o th e Respondent . Se e Ex . A-7 . Th e lette r suggeste dtha t

th e sal e o f

N407 Z t o aTexa s fir mha dlef t th e Responden t

withou t a n aircraft . I t

invite dth e Responden t

t o provid e th e FA A wit h an y evidenc e i t migh t car e t o submit , showin g th e contrary , an dspecificall y aske dMr . Hoffrna n t o provid e hi s pilot' s logbook s fo r inspection . Mr . Hof&nan' s reply , date dOctobe r 10 , 200 8 (Ex . A-8 ) concede dtha t th e Bel l 40 7 ha dbee n sol dan dasserte dtha t h e planne dt o replac e i t

withanewe r

machin e an d plac e th e ne w on e (presumabl y N407JG ) o n th e company' s operation s specifications." * Mr . Hoffinan' s respons e t o th e reques t for hi s logbook s wa s t o invit e th e investigator s t o inspec t diemb y appointmen t

a t Respondent' s Weatherly , Pennsylvani ahangar . Wha t i s mos t significan t

abou t th e respons e t o th e LO I i s tha t th e Responden t

a t n o tim e claime dtha t

helicopte r

N407 Z remaine dimde r

^ At som e earlie r

time , ther e ha dbee n aseriou s aviatio n acciden t a t Tcterbor o Airpor t

i n Ne w Jersey . Investigatio n ofth e acciden t

showe dtha t

on e ofth e involve daircraf t ha dbee n leased , an di t wa s virtuall y impossibl e t o ascertai n wh o wa s th e rea l operato r ofth e aircraf

t an dresponsibl e fo r

it s maintenance . A s aresult , th e FA A ordere dit s FSDO s t o contac t

lessee s an dt o as k

the mt o produc e fo r

inspectio n copie s o f

thei r leases . ^ S o fa r a s th e recor dshows , No . N407J G wa s neve r place do n th e Respondent' s operation s specifications . It s fate i s undisclosed .leas e t o it , no r wa s acop y o f

aleas e t o Helicopter s Flit e enclose dwit hth e letter . I f suc h adocumen t

ha dexisted , i t

woul dhav e mad e th e Respondent' s problem s with th e FA A instantl y g o away , a s i t i s well-establishe dtha t

th e "exclusiv e use " requiremen t

ma y b e satisfie db y leasin g an aircraf t t o th e holde r

ofth e Par t

13 5 certificate . O n Jun e 30 , 2009 , th e FA A file dacomplain t agains t th e Respondent , seekin g an $11,00 0 civi l penalt y for violatio n o f

§ 135.25(b ) ofth e FAR , failur e t o hav e exclusiv e us e o f

a t leas t on e aircraf

t cite di n it s operation s specifications . Th e Respondent' s answe r

asserte dtha t

i t ha dexclusiv e us e o f

an aircraf

t whic hit ha d lease dan dcontinue dt o lease . Th e Respondent , throug hcounsel , als o requeste da hearing . Th e cas e wa s assigne dt o m e fo r th e conduc t

ofth e hearin g unde r

Part 1 3 ofth e FAA' s regulations . A t alate r date , th e FA A amende dit s complain t twic e t o specif y tha t th e aircraft , th e statu s o f whic hwa s at

issu e wa s Bel l No . N407Z , no t N407JG , a s it s origina l complain t ha dalleged , an dt o asser t specificall y tha t

durin g th e perio dfi-omFebruar y 12 , 200 8 unti l Septembe r 15 , 2008 , th e Responden t di d no t hav e exclusiv e us e ofth e onl y aircraf t liste di n it s operation s specifications . I n aprehearin g orde r

serve do n Jul y 28 , 2009, 1 se t th e cas e fo r

hearin g i n Allentow n o n Decembe r 22 , 2009 . Th e orde r

als o require dth e partie s t o exchang e propose dexhibit s an dlist s o f intende dwitnesse s tw o week s befor e th e dat e ofth e hearing . O n motio n ofth e Complainant , I postpone dth e dat e ofth e hearin g unti l Januar y 26 , 201 0 an dth e dat e fo r exchang e o f

witnes s list s an dpropose dexhibit s t o Januar y 12 , 2010 . O n th e latte r date , th e Complainan t

submitte dit s propose d exhibit s an dalis t

o f it s witnesses , bu t

nothin g wa s hear dfi-omth e Respondent . O n Januar y 21 , 2010 , five day s befor e th e hearin g wa s schedule dt o begin , I receive da motio n fromcounse l for th e Responden t

seekin g leav e t o withdra w a s attorne y for Helicopter s Flite . Th e motio n state dtha t "Helicopter s Flite , Inc. , throug hit' s Csic l principal , Floy dC . Hoffina n n o longe r wishe s m e t o ac t

a s hi s attorne y i n th e matter. " A t

th e outse t

ofth e Januar y 26 , 201 0 hearing , I grante dRespondent' s former.counsel' s reques t an dwa s advise dtha t

Mr . Hoffinan himsel f

woul d represen t th e Respondent . I als o grante damotio n i n limine , submitte db y counse l for th e Complainant , precludin g th e Responden t fromofferin g i n evidenc e document s no t

disclose di n advanc e o r th e testimon y o f

awitnes s whos e identity ha dno t been disclose di n accordanc e wit hmy prehearin g order . A t th e hearing , th e Complainan t sponsore dth e testimon y o f tw o witnesses . Inspector s McCo y an dAlotta . Mr . McCo y testifie dgenerall y abou t hi s meetin g wit h Mr . Hof&nan i n Septembe r 2008 , whil e Mr . Alott atestifie dabou t th e result s o f hi s researc h int o th e statu s o f N407Z . Mr . Hoffina n cross-examine dbotho fthe mvigorously . Hi s cross-examinatio n wa s aime dat showin g tha t

bothofth e FA A investigator s share dapersona l animu s agains t hi mbecaus e hi s practic e o f "flipping " helicopter s o n t o hi s operation s specification s an dthe n promptl y sellin g the mresulte di n an increas e workloa dfor th e inspector s wh o woul dhav e t o perfor madetaile dinspectio n ofth e machin e eac htim e i t wa s adde dt o th e certificate . I n general , i t appeare dt o m e tha t

th e effor t t o sho w persona l bia s wa s a failure . Thoug h i t

wa s clea r

tha t neithe r Mr . Hof&nan , o n th e on e hand , no r Inspector s McCo y an dAlotta , o n th e other , coul daccuratel y b e describe da s "boso mbuddies, " ther e i s n o evidenc e tha t thes e FA A employee s wer e engage di n anythin g mor e than thei r legitimat e dutie s t o detec t violation s ofth e FA Ran dt o tak e enforcemen t

actio n whe n warranted . Indeed , i t appear s tha t

Mr . Hoffinan ha s faile dt o "perceiv e th e bea mi n hi s ow n eye. " I f ther e wer e alegitimat e leas e o f N407 Z t o Respondent , al l h e ha dt o d o wa s t o exhibi t acop y o f

tha t lease , an dth e cas e woul db e over . Th e fac t tha t h e di dno t

d o s o whe n twic e give n th e opportunit y (an dha s no t don e s o t o thi s day ) speak s volumes . Durin g th e hearing , Mr . Hoffinan adverte dt o th e existenc e o f an "ora l lease. " Tha t

strain s credulity . N407 Z was , an dis , atop-of-the-lin e machin e wort habou t on e millio n dollar s in th e marketplace . Pruden t businessme n d o no t

transfe r exclusiv e us e an d possessio n o f

suc h valuabl e asset s o n th e basi s o f ahandshak e o r

an "ora l lease. " Moreover , th e regulation s specif y tha t i f aPar t 13 5 operato r

seek s t o satisf

y th e "exclusiv e use " requiremen t b y leasin g a n aircraft , th e arrangemen t mus t tak e plac e unde r

awritte n agreement . 4 9 C.F. R§ 135.25(b) . A t th e hearing , th e Responden t mad e muc hofth e fac t

tha t neithe r Inspecto r McCo y no r

Inspecto r

Alott o ha daske dth e purchaser s ofth e aircraf t whethe r i t wa s subjec t t o Respondent' s exclusiv e use , eve n thoug hit wa s locate di n Texas . The y migh t hav e don e so . Th e questio n raise db y th e Respondent , however , i s no t whethe r the y shoul dhav e conducte damor e thoroug hinvestigation . Th e critica l questio n i s whethe r

th e FAA' s failur e t o inquir e ofth e ne w owner s abou t th e statu s ofth e helicopte r

vitiate s th e evidenc e tha t the y di dfindt o th e poin t wher e it can b e sai dtha t th e FA A ha s faile dt o sustai n it s burde n o f comin g forwar dwithproo f tha t th e Responden t

wa s i n violatio n o f

§ 135.25(b ) ofth e FAR . I a munabl e t o find tha t it di dso . Th e FAA' s representative s a t th e Allentow n FSD O ha dfoun d enoug h evidence , whic h the y presente dat th e hearing , t o establis hb y a preponderanc e ofth e evidenc e tha t Helicopter s Flite , froma t leas t Februar y 12 , 200 8 on , an despeciall y o n Septembe r 15 , 2008 , di dno t

hav e exclusiv e us e an d possessio n ofth e onl y aircraf t liste di n it s operation s specifications . At th e tim e thes e charge s wer e prepared , th e FA A investigator s ha d evidenc e indicatin g tha t

th e Responden t

n o longe r

ha dexclusiv e us e o f

tha tmachine . Th e mos t significan t

piec e o f evidenc e wa s Mr . Hoffinan' s statemen t t o Mr . McCo y o n Septembe r 15 , 200 8 tha t

th e aircraf

t wa s n o longe r

o n hi s premise s becaus e i t

ha dbee n sol d"recently " an dMr . Hof&nan' s failur e t o demu r whe n McCo y said , "yo u mea n yo u don' t hav e a n aircraf t for 13 5 [service ] a t

thi s time. " Durin g th e sam e meeting , Hoffman decline dt o allo w th e investigator s t o examin e N407Z' s logs , presumabl y becaus e the y wer e i n th e hand s ofth e ne w owner . T o ad dverisimilitud e t o thei r suspicions , th e inspector s the n learne dtha t FA A record s showe dtha t

th e aircraf

t i n questio n ha dbee n sold—no t onc e bu t twice—^t o partie s in Texas , an dth e first

ofth e sale s ha dtake n plac e i n Februar y 2008 , mor e tha n seve n month s earlier . Thi s evidenc e contradicte dMr . Hoffinan' s stor y abou t asal e tha t ha doccurre d"recently. " Th e record s chec k als o showe dtha t

i n Marc hth e Responden t

ha dprovide dth e FA A wit hafals e an dfictitious leas e ofth e aircraf t fromAi r Choppe r t o Helicopter s Flit e date damont hafte r th e purporte dlesso r

ha d sol dth e machine . Finally , i n respons e t o th e LOI , th e Responden t ha dsai dno t

a wor dabou t

it s entitlemen t

t o exclusiv e us e o f

N407Z . Instead , it

spok e abou t

it s effort s t o ad dadifferen t

helicopter , N407JG , t o it s operation s certificate . In thes e circumstances , i t i s littl e wonde r

wh y th e FAA' s investigator s conclude dtha t

the y di dno t

hav e t o persever e an y furthe r wit hthei r

inquiries . The y believe dthe y ha daclea r cas e o f violatio n ofth e "exclusive-use " requiremen t agains t Helicopter s Flite . An dthe y wer e right. Whe n w e ad dt o thi s combinatio n o f event s th e Respondent' s inabilit y o r unwillingnes s t o sho w th e investigatio n team , o r provid e for

th e recor din thi s case , an y bon afide writte n leas e o r othe r agreemen t

givin g i t exclusiv e us e an d possessio n ofth e onl y aircraf t o n it s operation s specifications , th e conclusio n become s irresistibl e that , durin g th e perio di n question , Februar y 12 , 200 8 throug h Septembe r

15 , 200 8 (an dperhap s thereafter) , th e Responden t di dno t hav e exclusiv e us e o f

an y aircraf

t tha t me t th e requirement s fo r

th e kin do f

operatio n authorize dunde r

it s operation s specifications . Thi s mean s that , throughou t tha t period, , th e Responden t

wa s i n violatio n o f

§ 135.25(b ) ofth e FAR , an d1 s o find. I t i s wort h inquirin g at

thi s poin t

wh y th e FA A woul dconcer n itsel f withth e right t o exclusiv e us e an dpossessio n o f an aircraf

t o n th e par t

o f aPar t 13 5 operator . Th e reason , i t

appears , i s tha t

th e relationshi p betwee n th e FA A an da Par t 13 5 operato r

i s on e o f specia l trus t

an dconfidence . B y authorizin g th e operato r t o us e th e aircraf

t t o transpor t

passenger s fo r

hire , Le ^ th e genera l public , th e FA A i s i n effec t

representin g t o th e publi c tha t th e operatio n o f

tha t machin e b y tha t operato r meet s it s mos t

stringen t safety regulations . Tha t i s wh y th e agenc y put s a n aircraf t liste do n th e operation s specification s throug hsuc han onerou s• ^ serie s o f

check s an dinspection s befor e i t wil l permi t

th e listing . Tha t

i s als o wh y \th e FA A carefull y vet s th e Par t 13 5 operato r

befor e i t grant s th e authorit y t o operat e afor-hir e service : th e gran t o f authorit y i s arepresentatio n o n th e par t o f th e governmen t

agenc y tha t

this'operato r

i s fully qualifie dt o maintai n th e aircraf t i n tip-to p conditio n an dt o fly i t safely . I f

th e aircraf

t i s liste do n aPar t

13 5 operator' s certificat e an dye t i s no t subjec t t o th e Par t

13 5 operator' s exclusiv e us e an dcontrol , th e FAA' s promis e ma y b e illusory : someon e wh o ha s no t successfull y complete dth e inspection-and-investigatio n proces s i s no w i n charg e ofth e maintenanc e an doperatio n ofth e aircraft , an dth e publi c i s subjec t t o th e ris k tha t tha t operato r ma y no t com e u p t o th e hig hstandard s expecte do f agenuin e Par t 13 5 operator . This , a t least , wa s th e explanatio n give n b y Mr . McCo y an dInspecto r Alott a when , a t th e hearing , the y wer e aske dwhethe r th e Respondent' s violatio n o f § 135.25(b ) ha dth e potentia l t o impai r aviatio n safety . Th e hypothesi s tha t a potentia l passenge r

woul dinquir e abou t

th e operator' s Par t

13 5 statu s befor e boardin g an aircraf

t may , a t first glance , see mrathe r

far-fetche d—particularl y t o thos e o f u s wh o ar e accustome dt o fly o n aircraf t operate db y th e like s o f America n Airline s o r

U.S . Airways . Nevertheless , ther e i s som e meri t t o it . B y failin g t o maintai n exclusiv e us e an dcontro l o f a t leas t on e aircraf

t liste do n it s operation s specifications , th e Par t

13 5 opera.to r

ha s betraye dth e specia l confidenc e tha t th e FA A veste di n i t

a t th e tim e i t

certificate dth e carrie r

a s aPar t 13 5 operator . I t cause s on e t o doub t

th e overal l integrit y ofth e carrier ; for i f i t ha s faile dt o compl y wit h th e exclusive-us e requirement , th e questio n tha t arise s is : Wha t

othe r regulator y requirement s i s th e carrie r violating ? S o ther e i s som e sens e t o th e notio n tha t acarrier , suc ha s th e Respondent , wh o i s i n violatio n o f

§ 135.25(b ) shoul dpa y asubstantia l civi l penalty . Unde r th e statutory authorit y foun di n 4 9 U.S.C . § 46301(a)(5) , th e Respondent , a s asmal l business , i s liabl e fo r

acivi l penalt y o f

no t mor e tha n $10,00 0 for

violatio n o f

a n FA A regulation . Th e ceilin g o n liabilit y wa s increase dt o $11,00 0 b y th e Federa l Civi l Penalty Inflatio n Adjustmen t Ac t o f 1990 , 2 8 U.S.C . § 146 1 (note) . Se e als o 1 4 C.F.R , § 13.305(d) . I n thi s case , th e FA A ha s sough t th e maximu mpenalty , even thoug h i t

ha s no t sough t t o giv e effec t

t o it s theor y tha t

eac hda y th e violatio n continue s ma y warran t

aseparate , an dadditional , penalty . At th e hearing , th e Complainan t place di n evidenc e excerpt s fromFA A Orde r No . 2150.3 B a s o f

Octobe r 10 , 2007 , whic hset s forthth e agency' s polic y o n th e calculatio n o f

civi l penaltie s for

variou s type s o f

violation s ofth e FAR . Mr . McCo y testifie dthat , b y usin g th e Order , h e an dhi s colleague s ha darrive da t th econclusio n tha t apenalt y o f

$11,00 0 wa s warrante din thi s case . Th e analysi s t start s with atabl e calle d"Figur e B-l-c " listin g type s o f violation s pertainin g t o / operation s specification s o f domesti c ai r

carriers . Failur e t o hav e exclusiv e us e and/o r possessio n o f

an aircraf

t i s no t specificall y listed , bu t

"Operatio n contrar y t o op s specs " i s liste dtwice . Th e first listin g deal s with"technica l noncompliance " an dprovide s tha t

a"Minimum " civi l penalt y i s warranted . Th e secon dlistin g speak s t o "likel y potentia l o r actua l advers e effec t

o n saf e operation " arisin g ou t

o f non-complianc e wit h operation s specifications . I t call s for a"Moderat e t o Maximum " civi l penalt y for suc hviolations . Accordin g t o Mr . McCoy' s testimony , th e Respondent' s non-complianc e fel l int o th e secon do f thes e tw o categories , thoug h h e acknowledge dtha t thi s wa s ajudgmen t

call . Havin g decide d tha t a"Moderat e t o Maximum " penalt y wa s appropriate , th e enforcemen t staf f the n turne dt o page s B-3 , B- 4 an dB- 5 ofth e regulation , whic hcategorize dth e violator s b y thei r siz e an dth e natur e ofth e offense . H e testifie dtha t Helicopter s Flit e fel l int o Grou p FV , asmal l busines s concer n tha t ha dcommitte daviolatio n covere db y 4 9 U.S.C . § 46301(a)(5)(A) . Fo r suc hafirmth e amount s liste dar e a s follows : Maximu m$4,400- $ 11,00 0 Moderat e $2,200-54,39 9 Minimu m$ 550-$2,19 9 S o i t ca n b e see n tha t

th e FAA' s enforcemen t staf f selecte dth e highes t amoun t tha t Orde r No . 2150.3 B woul dallo w (absen t adail y penalty ) for

th e violatio n committe db y th e Respondent . I woul dnormall y reduc e thi s figur e t o tak e accoun t

o f mitigatin g factor s an dth e technica l natur e ofth e violation , a s wel l a s th e realizatio n tha t

th e Responden t

is , afte r all , asmal l businessman . Ther e is , however , apowerfu l consideratio n tha t cut s th e othe r

way . Th e fac t is , a s th e evidenc e clearl y shows , tha t th e Respondent' s principa l knowingl y an ddeliberatel y trie dt o mislea dth e local FSDO , an dth e agenc y a s a whole , .abou t

th e provenanc e o f

hi s asserte dexclusiv e right t o th e us e an d possessio n o f

N407Z . Whe n aske dt o submi t hi s leas e o r

othe r paper s containin g evidenc e o f

hi s right t o exclusiv e us e an dpossession , th e Responden t cooke du p a purporte dleas e fromanothe r entit y controlle db y Mr . Hof&nan , Ai r Chopper . Th e documen t appear s t o hav e bee n completel y spuriou s becaus e Ai r Choppe r ha dsol d th e machin e som e tim e previousl y and , i n an y event , th e leas e b y it s term s terminate dwhe n an di f

suc h asal e too k

place . Yet , Mr . Hoffinan , actin g o n behal f o f Helicopter s Flite , furnishe di t t o th e FA A knowin g tha t th e agenc y woul drel y upo n it t o establis h hi s bon afides unde r th e exclusive-us e provision s ofth e FAR . Thi s wa s reprehensible . I n m y judgment , it i s a n aggravatin g circumstance s tha twarrant s assessmen t ofth e maximu mcivi l penalt y tha t ca n lawfull y b e imposed . Tha t i s wha t th e FAA' s enforcemen t staf f ha s recommended , an dI agre e wit hthem tha t thi s i s a n appropriat e occasio n o n whic ht o impos e it . On e final wor dbefor e thi s decisio n ca n b e concluded . Throughou t th e hearing , Mr . Hoffina n proteste dmightil y abou t my refusal t o postpon e th e hearin g t o allo w hi mt o replac e hi s counsel , who mh e ha ddischarge dafe w day s earlier . H e first aske dfor

th e postponemen t

afte r th e hearin g ha dbegun , whe n ther e wer e assemble dFA A witnesse s an dcounsel , a s wel l a s th e reporte r an dadministrativ e la w judge , severa l o f

who mha dcom e grea t

distance s t o Allentown , alocatio n chose n t o sui t

Mr . Hoffinan' s convenience . Th e discharg e o f a n attorne y o n th e ev e ofth e hearin g i s a n often-attempte dgambi t o n th e par t

o f partie s wh o wan t

t o protrac t th e proceedin g a s lon g a s possible . I n th e U.S . Distric t Courts , th e judge s dea l with thi s tacti c b y simpl y refusin g th e allo w th e party' s retaine dcounse l t o withdra w hi s o r

he r representatio n ofth e client . See , e.g. . Unite dState s v . Castro , 972F.2 d1107 , 1109-1 0 (9 ^ Cir . 1992) : Da n River . Inc . v . Humi k Fabric s Corp. . I979U.S.Dist . LEXI S 1105 1 (S.D.N.Y . 1979) . Bu t administrativ e la w judge s hav e n o suc h authority . S o i t become s eviden t

tha t th e remed y fo r

th e dilator y tacti c o f dischargin g a n attorne y withi n day s ofth e schedule dstar t o f ahearin g i s simpl y t o requir e th e hearin g t o g o forwar dan dth e Responden t t o b e represente d b y adesignate drepresentative . Tha t i s wha t occurre di n thi s case . I n th e circumstances , I canno t

agre e tha t

th e conduc t

ofth e proceedin g deprive dth e Responden t

o f eve n asoup9o n o f

du e process . WHEREFORE , I T I S ORDERED , subjec t t o appea l t o Ui

e Administrato r

a s provide di n § 13.23 3 ofth e Rule s o f Practic e an dProcedure , 1 4 C.F.R . § 13.233 , o r revie w o n th e Administrator' s ow n motion , tha t - 1 . Th e Respondent , Helicopter s Flite , Inc. , i s liabl e t o th e Unite dState s o f America , a s represente db y th e Federa l Aviatio n Administration , fo r a civi l penalt y i n th e amoun t o f eleve n thousan ddollar s ($11,000.00) ; an d 2 . Th e amoun t

fo r whic h th e Responden t

ha s bee n hel dliabl e herei n shal l b e pai dt o th e Federa l Aviatio n Administratio n forthwith .

Isaa c D . Benki n Administrativ e La w Judg e[Note : Thi s decisio n ma y b e appeale dt o th e Administrato r ofth e FAA . Th e Notic e o f Appea l mus t

b e file dno t

late r tha n 1 0 day s afte r

servic e o f

thi s decisio n (plu s fiv e additiona l days , i f thi s decisio n i s serve db y mail) . 1 4 C.F.R . § § 13.233(a) , 13.211(e) . Th e appea l mus t b e perfecte dwit hawritte n brie f o r memorandu mno t

late r tha n 5 0 day s afte r

servic e o f

thi s decisio n (plu s fiv e additiona l days , i f thi s decisio n i s serve db y mail) . 1 4 C.F.R . § § 13.233(c) , 13.211(e) . Th e Notic e o f Appea l an dbriefe r

memorandu mmus t b e eithe r (a ) maile dt o th e Federa l Aviatio n Administration , 80 0 Independenc e Avenue , S.W, , Washington^D C 20591 ; Attention : Hearin g Docke t Clerk , AGC-430 , Wilbu r

Wrigh t Building—Suit e 2WJ000 , o r (b ) delivere d personall y o r

vi aexpedite dcourie r

servic e t o th e Federa l Aviatio n Administration , 60 0 Independenc e Ave. , S.W. , Wilbu r Wrigh t Building — Suit e 2W1000 , Washington , D C 20591 , Attention : Hearin g Docke t Clerk , AGC-430 . 1 4 C.F.R . § § 13.233(a) , 13.210(a)(2) , (1) . A cop y ofth e Notic e o f Appea l an dbrie f

o r memorandu mshoul dals o b e sen t t o counse l fo r

th e FA A i n thi s proceeding . 1 4 C.F.R . § 13.233(a). ]

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