# RECEIVED DEC122013 

## HEARINGDOCKET U.S. DEPARTMENT OF TRANSPORTATION

FEDERAL AVIATION ADMINISTRATION - - - - - - X In theMatter of SCOTT TICE, Docket No.: FAA-2013-0042 Respondent. - - - - - - - - - - - - - - - X U.S. Department of Transportation Office of Hearings, M-20 1200 New JerseyAvenue, S.E. (Ell-310) Washington, D.C. 20590 Thursday, November 14, 2013 MOTION PREHEARING CONFERENCE (TELEPHONIC) The above-entitledmatter came on for hearing at 1:33 p.m., pursuant to notice. BEFORE: HON. J.E. SULLIVAN, U.S. Administrative Law Judge

DiversifiedReportingServices,Inc. 1APPEARANCES: For theRespondents: SCOTT TICE, pro se (By telephone) 21125 TimberlandRoad Barronett, Wisconsin 54813-9540 For the Agency: R. BENNETT SARGENT, ESQ. (By telephone) Julie DeCosta, Agent (By telephone) Office of the Regional Counsel (ANE-7) New England Region FederalAviationAdministration 12 New EnglandExecutive Park Burlington, Massachusetts 01821 (781) 238-7058 Observer: CODY L. SMITH, Attorney-advisor U.S. Department of Transportation 1200 New JerseyAvenue, S.E. Washington, D.C. 20590

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P R0 CE E D I N GS 1 2 JUDGE SULLIVAN: We're on the record in thematter 3 of Scott Tice. This is Docket Number FAA-2013-0042. Today 4 is Thursday, November 14, 2013, and the parties have convened 5 by telephone for a motion conference. 6 Present todayby telephone is the FAA attorney of 7 record, Mr. R. Bennett Sargent. Also present, appearing as 8 an observer with him, is Agent Julie DeCosta from the FAA. 9 Present on behalf of the respondent, Scott Tice, isMr. Scott 10 Tice, who's appearingprose. Also present at the Office of 11 Hearings, sitting in as an observer only, is Mr. Cody L. 12 Smith, an attorney advisor with this office. 13 Good afternoon, everyone. I'lljustmention that 14 the most recent history of this case is set on October 1, 15 2013. There was an order canceling telephone conference. We 16 had originally scheduled this conference for October 10, 17 2013. As you all now, we all had a government shut-down 18 between October 1, 2013, and October 17, 2013, and, as a 19 result this office was not functioning during that budget 20 crisis. 21 The office reopened then on October 17, 2013, and 22 an order was issued on October 23rd, 2013, setting a deadline

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1 for the FAA to answer the respondent's motion to correct the 2 transcript and rescheduling the telephone motion conference 3 to today's date and time. So why don't we take up the 4 inferredmotion to correct the transcript that was contained 5 inMr. Tice's response that was filed with this office on 6 September 24, 2013. 7 Mr. Sargent, do you have any objection to the 8 proposed correction? 9 MR. SARGENT: No. No objection. 10 JUDGE SULLIVAN: There beingno objection, then I 11 will simplynote that the respondent's inferredmotion for 12 correction is granted, and the June 13, 2013 transcript shall 13 be corrected and is corrected so that page 31, line 7, which 14 currently reads**~circlingn** -- and I'll spell that, c-i-r-c-1- 15 i-n-g
-- is corrected to read cynical, c-y-n-i-c-a-1. 16 Then let's talk a littlebit about the motion 17 that's before us today. I'll simplynote that onAugust 20, 18 2013, the FAA filed complainant'smotion for decision on 19 issue of civil penalty. And on September 24, 2013, the 20 respondent, Scott Tice, filed a two-page letter of reply in 21 response to that motion, andwe're here todayto talk about 22 that. So before we get into themeat of the issues, I do

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1 needto talkjustbriefly about some proceduralmatters. 2 Mr. Sargent, as I understandthesemotions, 3 essentially, you'removing for a summaryjudgment motion. Is 4 that correct, or is your motion intendedtobe something 5 other than dispositive inthis case? 6 MR. SARGENT: No, you're absolutely correct, Your 7 Honor. s JUDGE SULLIVAN: Okay. You haveprovided in your 9 motion that this office received onAugust 20, 2013, a 10 varietyof arguments, but I did not see any kind of 11 testimonial data, testimonial submissions of any kind, nor 12 any reference, to anytestimonial submissionto support your 13 argument. In summaryjudgment motions, there certainly is an 14 opportunity for a litigatingpartyto explainhow this 15 particular argument couldtranslate into testimonial evidence 16 shouldthe case go to hearing. 17 You had identified at thetop of this conference an 18 observerbythe name Julie DeCosta. Is sheby any chance the 19 FAA agent that originally calculatedthe proposed $600 civil 20 penalty, or is that a witness that is not yet known to the 21 court? 22 MR. SARGENT: Well, Your Honor, the calculation

DiversifiedReportingServices,Inc.1 additional penalty isn't done by any one, particular 2 individual. And as is spelled out by our sanction guidance 3 policy, it's a matter ofjoint decisionmakingbetween our 4 office ofhazardous material safety and our legal office. 6

5 JUDGE SULLIVAN: Well, letme put this a different 6 way. Let's assume that you had not filed this motion and we 7 decided that we were going to have the hearing in Salt Lake 8 City, Utah, andwe all flew to Salt Lake City, Utah, to 9 convene at a Federal District Court House to holdthe hearing 10 on the issue of the contested civilpenalty. Who wouldbe 11 the witness you'd call to provide evidence tothe court and 12 to the opposingparty about how you calculatedthe penalty? 13 MR. SARGENT: Okay. I think I understandbetter 14 what youmean. Yeah. So, essentially, that witness would, 15 in fact, or at least one of those witnesses would likelybe 16 agent DeCosta? 17 JUDGE SULLIVAN: Okay. So when I look at this type 18 ofmotion, one of the things I'm looking for is whether or 19 not you aremaking an argument tome that is in essence 20 supportedbytestimonial evidence. Typically, when someone 21 files a motion for a dispositive decision, theywill identify 22 what evidence supports the argument. And so I'maskingyou

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1 if, in fact, we actuallywent to trial, if there's someone 2 that you could call to testifyto thematters that you argue, 3 that youpresent in argument tome today. And, if so, is 4 that Ms. DeCosta? 5 MR. SARGENT: Yes, that individual would, I 6 suppose, be Ms. DeCosta, given that she investigated the 7 underlying violation and gathered the facts. 8 JUDGE SULLIVAN: Okay. 9 MR. SARGENT: Now youwant 10 JUDGE SULLIVAN: Yes, go ahead. 11 MR. SARGENT: Your Honor, so as I understood it, 12 the issue, though, being that none of the underlying facts 13 which ledto the discovery of the violations and/or the 14 violations themselves are in dispute in thismatter, the only 15 issue that we're currently litigating over today is whether 16 the penalty selectedbythe agency in this case is 17 appropriate. 18 JUDGE SULLIVAN: Which involves
-- which involved 19 discretionarydecisionmakingbythe FAA and its agents? 20 MR. SARGENT: Correct. And in that discretionwe 21 utilize the facts that are no longer
-- that haven't been 22 disputed in order to apply our factor analysis in determining

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1 how to select the appropriatepenalty in this matter. 2 JUDGE SULLIVAN: I understandthat. But, 3 currently, currently, we are scheduledpotentially to have a 4 hearing in this case. You aremoving for summaryjudgment, s which is a dispositive motion on the issue of civilpenalty. 6 Summaryjudgment requires that you provide documentation or 7 some type of testimonial statement that supports whatever 8 argument you'remaking for the disposition you seek. 9 In the absence of any testimonial evidence or 10 documentation, you as a movingpartyhave to at leastmake an 11 offer ofproof that you're argument canbe supportedby 12 testimonial or admissible evidence of some kind. So I don't 13 dispute that you have laid out a very clear and articulate 14 discussion ofhow some personthat you represent has reached 15 the proposed amount that you are suggesting to the court to 16 consider. But I simplyneed to know from you, as an officer 17 of the court, who that person orpersons is. And I'mhearing 18 from you as an officer of the court that you are asserting 19 that the arguments that youmake regardinghow your client 20 took information andutilizedthe sanction guidelines is 21 something that was done by a personwho exercised their 22 discretion andjudgment in reaching this proposal, and that

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1 Lhis person, if calledupon, could come and testifyto that. 2 And I'mhearing from you that that's in fact true, and that I 3 that person is Julie DeCosta. 4 MR. SARGENT: Yes, Your Honor, along with, I 5 suppose, there couldbe documentary evidence to also evidence 6 Ms. DeCosta's investigation of the case as well. 7 JUDGE SULLIVAN: Well, I've already issued an order 8 finding that the underlying facts are true and that the 9 violations were committed. So the only issue that's before 10 the court at this point is what appropriate fine shouldbe 11 imposed for those violations. And so we have a very narrow 12 focus. You're absolutely right. The underlying allegations 13 havebeenprovedby court order after vigorously contested 14 motion conferences. 15 And so all I'mtrying to do right now ismake sure 16 that I have a sufficient evidentiary record to support what 17 I'mgoing tobe doing for the rest of this conference, and 18 perhaps later. And I justwant tomake sure that we're on 19 the samepage, that this is equivalent to a summaryjudgment 20 motion, and that summary judgmentmotions are supported, 21 essentially, by evidentiarydocumentation or testimonial 22 statements, or, inthe alternative, with the assertionby the

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1 proponent of the argument that such argument canbe 2 translated into testimonial or documentary evidence that's 3 admissible. And I'mhearing from you that that is, in fact, 4 the case, and that the person who is most likelyto be called 5 ifwe ever showedup on Salt Lake Citytogether to present 6 this material under oath is Julie DeCosta. 7 8 9 MR. SARGENT: That's correct, Your Honor. JUDGE SULLIVAN: Okay. Thank you verymuch. Now, Mr. Tice, turning to you, I have a document 10 from you that is dated, stampedreceived in this office as of 11 September 24, 2013. And you, likeMr. Sargent, made various 12 arguments in this two-page document. MR. TICE: Yes. 13 14 JUDGE SULLIVAN: You didnot submit any testimonial 15 or evidentiary documentation in support of your arguments. 16 So my question to you is very similar to the question I just 17 askedMr. Sargent. Ifwe showedup in Salt Lake City and 18 I'mjust using Salt Lake City as a hypothetical. Ifwe 19 showedup in Salt Lake City for a hearing, who would you call 20 to testifyto the evidence supportingthe arguments that you 21 make in your letter? 22 MR. TICE: Well, I guess that wouldbe myself. I

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1 nean it doesn't seemthat I'mmaking an argument thatmy 2 ctions didn't in fact endanger anybody, because the 3 rontainerwas empty, is something that I'mgoing to argue. 4 JUDGE SULLIVAN: Okay. I'mnot going to askyou to 5**~et** into themeat of your arguments right now. I just wanted 6 1co know who, if anyone, you wouldbe calling. Andwhat I'm 7 rearing from you is that you wouldbe calling yourself. 8 MR. TICE: Yes. 9 JUDGE SULLIVAN: Okay. All right. Mr. Tice, I'm 10 going to staywithyou. Based on what you've heardMr. 11 Sargent say, do youhave any objection or any response to his 12 identification ofMs. DeCosta as the testimonial expert who 13 wouldbe able to support his arguments on the stand? 14 MR. TICE: I wouldjust like to know if she 15 actually sawthe container in question. 16 JUDGE SULLIVAN: Okay. Well, that's a different 17 question. 18 19 MR. TICE: Okay. JUDGE SULLIVAN: Yeah. Mr. Sargent is basically 20 saying thatAgent DeCostawas the actual person, who, at the 21 FAA, eitherwho put the civilpenalty calculations together 22 orwho couldtestifyhow theywere done in accordance with

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1 FAApolicy. Do youhave any information that would say 2 differently, at this point, abut the FAA's potential witness? 3 MR. TICE: No. Certainlynot. 4 JUDGE SULLIVAN: Okay. Mr. Sargent, turningback 5 to you, Mr. Tice has identifiedhimself as the potential 6 witness who would testifyto anytestimony in support of his 7 arguments. Do you have any objection or any reason to 8 believe that that informationwouldbe incorrect? 9 MR. SARGENT: No, itwouldmake sense that Mr. Tice 10 wouldbe the witness on his end. 11 JUDGE SULLIVAN: Okay. Stayingwith you, Mr. 12 Sargent, do you have any objection tome considering, then, 13 these arguments in terms of themotion for summaryjudgment 14 todaythat havebeen raisedbyMr. Tice withhimidentifying 15 himself as his potential witness, should this case ever go to 16 hearing? 17 MR. SARGENT: No objection. 18 JUDGE SULLIVAN: Okay. Mr. Tice, same question to 19 you. Mr. Sargent has identifiedMs. DeCosta as his potential 20 witness in support ofhis arguments that he's presented 21 today. Do youhave any objection tome considering all of 22 those arguments with that evidentiary foundationproffered?

DiversifiedReportingServices,Inc.1 2 MR. TICE: No. I don't. JUDGE SULLIVAN: Okay. Then let's talk a little 3 bit about this, and I'm going to start withMr. Sargent, 4 since he's theproponent of themotion. And I willjust 13

5 caution everybody that in a motion for summaryjudgment the 6 court's review of the material is different than ifthe court 7 reviews it on simply an evidentiary standard. So in a motion 8 for summaryjudgment, all inferences, reasonable inferences, 9 go to the non-respondingparty. And that's not true if 10 you're looking at a case solely for decisionmaking on a 11 written record. 12 So we're going to talk first under a standard for 13 moving for summaryjudgment, and then we maybe talking about 14 the standard if theparties don't prevail inthe way they 15 want for submission on the written record. So, for the first 16 part, we're going to talk about the summaryjudgment motion 17 with the burden ofproof on the proponent with all reasonable 18 inferences allowed for the non-moving party. 19 So, Mr. Sargent, there were 10 violations charged 20 against Mr. Tice arising out of a single incident occurring 21 on or about September 11, 2012. Those violations were found, 22 proven after a contestedmotion earlier this year, and you

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1 have gone through in yourmotionmaterial and clearly 2 3 4 5 identified in an articulate fashion how your client came to the point where it was suggesting to Mr. Tice that a $600 penaltywas fair and reasonable, andjust. So I want to talk a littlebit about the first several prongs that are 6 contained in your motion, andwe'll start withpage 2 to 3, 7 if you want to turn to those pages. 8 It appears to me in reading your material that in 9 the first several phases of going through the factors that 10 are identifiedby statute, and taking a look at FAA's order, 11 2150.3(b), Appendix C, that there's very little room :for your 12 client to have discretion in looking at the case. For 13 example, once you identify as the found :facts show that the 14 substance in question was liquidpetroleumgas and that it's 15 categorized as a flammable gas, that just tiptoes you down a 16 series of steps where you :findthat it's Class 2, Division 17 2.1, in categoryA, with the weight o:fmaximum. It doesn't 18 appear to be any particularhuman discretionin that type of 19 analysis. Would you agree or disagree? 20 MR. SARGENT: As it applies to that particular 21 factor, Your Honor, I would agree. 22 JUDGE SULLIVAN: Okay. And then we go into the

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1 circumstances and extent factors under the first categoryof 2 factors. And, again, it appears that giventhe particular 3 facts of this case, there's little, if any, discretionbythe 4 human agent, since the amount that canbe carried on an 5 airline passenger plane is zero, since it's a forbidden 6 amount, and thus the weight againby nature of the sanction 7 guidancematerial is themaximumweight assessed. 8 MR. SARGENT: I would also agree with that, Your 9 Honor. 10 JUDGE SULLIVAN: So then let's go to the fourth 11 factor in the first category, which is gravity. And, here, 12 again, you indicate that there reallywas not, in the way 13 that the sanction guidance is set up, that there's very 14 little if any discretion since even though the shipment 15 didn't cause damage, the lackof damage is not mitigating. 16 And so there's reallynothingto do for you in following the 17 sanction guidance. It's not mitigating. It's not 18 aggravating. It's kind of a nullification standard. 19 Nothing canbe done butmove on. Would you say 20 that's true in terms of your argument in the way that you 21 applythe sanction standard, at least under this prong? 22 MR. SARGENT: Yeah. I would agreewith that, Your

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1 Honor, such that a lack of harm, so to speak, would not be 2 considered a mitigating factor. Thepresence of harmwould 3 likelybe considered an aggravating factor, but I thinkyou 4 capturedthat fairly accurately, I guess. s JUDGE SULLIVAN: Right. And there was no assertion 6 in the found facts that there was any aggravating factor in 7 this case scenario under this prong. 8 9 MR. SARGENT: Correct. JUDGE SULLIVAN: Okay. So still onpage 3 of your 10 motion, taking into account the FAA's order, 2150.3(b), 11 Appendix C, our next factor is the culpability factor. And, 12 again, as you've identified inthebottomparagraph of your 13 motion, page 3, there were no factors appliedto the 14 weighting analysis because ofthe answers to various 15 boilerplate questions that are asked, such as was the 16 respondent a manufacturer of the material. The answer is 17 clearlyno, and so forth. So no weighting was givenunder 18 this factor, because there was no particular culpability 19 found under this factor. 20 21 MR. SARGENT: That's also correct, Your Honor. JUDGE SULLIVAN: Okay. So then, if I go to page 4 22 of yourmotion, we start to look at other factors tobe

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1 considered, and this is where I think the parties may have 2 theirprimary dispute. In these factors, some of the factors 3 that you discussed and that have been discussed in other 4 cases, and inthe sanction guidance itself, talk about things 5 such as an abilityto pay, an ability to continue doing 6 business, and then the catchall of training, future actions 7 taken in a swift and appropriatemanner, those kinds of 8 things that have oftenbeen recognized in other types of 9 hazardous, material violation cases. 10 And inthis particular case, you indicatedthe top 11 of page 4 that you gave**~some** consideration" to Mr. Tice's 12 assertion that a minimal amount of liquefiedpetroleumgas 13 remained in the canister at the time. So let's talk a little 14 bit about that. When you say**~some** consideration," what do 15 youmean by that? 16 MR. SARGENT: Okay. So, Your Honor, as I write 17 just after that inthe motion, the FAA, with regard to this 18 factor, would have beenperfectlyjustifiedin applying no 19 weighting whatsoever or considering this as any kind of 20 additional factor, because the fact of the matter is that the 21 material offered liquefiedpetroleum gas in this case, is 22 forbidden. So, essentially, there's no amount that would

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1 have been acceptable to be offered for air transportation. 2 However, given the evidence that we had at the 3 time, which included respondent's assertion that there was a 4 minute amount of fuel that remained in the canister, we 5 didn't have --we essentially decided to take respondent at 6 his wordwith regard to that assertion, and apply some 7 mitigation to that factor, despite the fact that it's 8 arguable that we could and shouldhave maybe appliedno 9 mitigationto that factor. 10 Even if the material involved orthe container 11 involvedwas in fact entirely empty and containedonly 12 residue, there's regulations that deal with that, because 13 this particularmaterial is forbidden and doesn't qualify 14 under any deminimis or small quantity exception or consumer 15 commodity. There's no way that the quantitywouldhave 16 affected its status inbeing forbidden aboard transportation. 17 JUDGE SULLIVAN: Well, let's talk about that, just 18 a minute, if I may. And let's go to 49 C.F.R. § 173.29, just 19 for a short period of time. And I took a look at that and it 20 indicated that emptypackages are not subject to any other 21 requirements of this subchapter if they conformto the 22 following provisions. And then it gives a whole laundry list

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1 pf different conforming standards, including under (b)(2), if 2 he package is sufficiently cleanedof residue andpurged of 3 vapors to remove any potential hazard. So are you saying you 4 could not as a passenger even check an empty, purged canister 5 pf this particular type of cannedpropane gas? You can't 6**~ven** do an empty canister under 49 C.F.R. § 173.29? 7 MR. SARGENT: No, Your Honor. In fact, if, 8 somehow, you couldprove that the canister, that in fact all 9 it was was just a canister devoid of any residue or trace of 10 hazardous materials whatsoever, then I think that's a 11 different consideration, Your Honor. However, we didn't have 12 any evidence that, in fact, that was the case, and so closed 13 my argument that, essentially, that wouldprovide an 14 affirmative defense. 15 There was no evidence that in fact that was the 16 case. So the fact that any amount of fuel remainedwithin 17 that canisterwould subject it to its normal classification 18 as a forbidden material. 19 JUDGE SULLIVAN: Okay. So you gave some 20 consideration toMr. Tice's assertionthat a minimal amount 21 of liquefiedpetroleumgas remained in the canister. And, as 22 I understoodhis argument, he is assertingthat itwas

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1 approximatelyhalf an ounce, or about a tablespoon of 2 liquefiedpetroleumgas. What type of consideration did you 3 give to that? 4 I mean, are you looking at, saying, gosh, a 5 tablespoon of gas wouldn't cause a problem? Or the impact on 6 the safetyhazard ismuch more minimal than if it was an 7 actual eight-ounce full container? I mean what kind of 8 considerationwas given to that particularpiece of 9 information, because you don't talk about that at all? You 10 simply say you gave it consideration, and I'mnot quite sure 11 how you considered it. 12 MR. SARGENT: But, yes. So I guess we sort of gave 13 Mr. Tice a break, given the fact that it couldpotentially, 14 and given his statements, a rather small enough amount so as 15 to constitute, I suppose, what might be considered a lesser 16 safety risk, despite the fact that, arguably, that depends on 17 the governingbody that's designatedhazardous materials and 18 such would likely disagree with us. 19 JUDGE SULLIVAN: Well, I'mnot disagreeingwith you 20 that it is not acceptable. It is not acceptable to try and 21 check liquidgas in your luggage, for any reason. But, every 22 case is different and every case is unique; and, clearly,

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1 passengers have a slightly different standing thanbusinesses 2 'n terms of their knowledge, their familiarity with hazardous I 3**~aterials** laws and their frequency of use of such things. I 4**~ean** the statute and the guidance obviously recognizes 5 passengers in a different class with lowerminimum and 6**~aximum** ranges for violations. And so I justwanted to get a 7 sense in terms of what your client's use of these factors 8 were in exercising their discretion andjudgment in reaching 9 this proposed civilpenalty. Do you have anything else to 10 add to that particular sectionbefore I go on? 1l MR. SARGENT: Sure. 12 JUDGE SULLIVAN: I'll ask you some questions. I'm 13 going to ask you a couplemore questions. And then if I have 14 missed something or you feel like I need to know something 15 else, I'll certainly give you a chance to fill in those 16 blanks. 17 MR. SARGENT: Sure. So, yeah. At the timeMr. 18 Tice hadprovidedus withhis response and indicatedto us 19 this is before he had the opportunitytoparticipate in a 20 formal conference, but he had at the time expressedto us his 21 positionwith regard to the small amount of fuel, and 22 indicated, obviously, a compliant attitude, you know, which

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1 we considered in his favor with regard to assessing a civil 2 penalty, which we considered another factor as justicemight 3 require, and combine that with the other factors, which 4 obviouslywere weighted, you know, differently. 5 JUDGE SULLIVAN: Why would you -- and letme ask 6 you this. You had gave a factor that this particular section 7 of factors says "moderate weight," and you**ide~tify** it as the s "other" factor. And I'mwondering where you went for 9 guidance on terms of giving it moderate weight versus maximum 10 weight orminimumweight in this particular section. How do 11 you know? What leads you or guides you in that regard? 12 MR. SARGENT: Yeah. And I think if you look at the 13 policy, 2153(b), there isn'tmuch guidance with regard to 14 this particular factor, whereas, there's a series of actual 15 questions that sort of don't direct you into a particular 16 weighting analysis. This one sort of allows you to consider 17 the facts as they stand and apply a weight to those factors. 18 Now, so with regard to the information that he presented to 19 us, itwould have been considered compelling, and compelling 20 enough so as not to be the result of a maximumweight for 21 that factor, but not quite somitigating or compelling so as 22 to reach us to find a minimumweight shouldbe applied.

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1 JUDGE SULLIVAN: When I look at the sanction 2 guidance that is available to the public, it appears to me 3 that there is ample informationprovided to give businesses 4 guidance on some of the factors that they can argue to the 5 FAA agent or to the legal department onmitigation? There 6 appears tobe very little, if any guidance, regarding those 7 kinds of things for an individual, particularly an individual 8 passenger, perhaps because these are not the majority of 9 cases that at least I see andpreside over. 10 I'mwondering if you canpoint tome where, if at 11 all, the sanction guidance deals specificallywithpassenger12 relatedmitigating circumstances that don't rise to the level 13 ofbusiness activity. Is it simply a discretionary call for 14 all ofus at this point? 15 MR. SARGENT: I think to some degree you could 16 argue that it's a discretionary call, but I also think you 17 could look at the other factors, as justicemight require, 18 where it discusses evidence of corrective action that exceeds 19 legal requirements. You know, in other cases, evidencemight 20 bepresentedto us that someone in response to the notice of 21 proposed civil penaltywent out and took some action to 22 ensure future compliance that went above andbeyond simply

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1 stating I'mgoing to comply in the future, you know, things 2 like participation in FAA outreachprograms or something that 3 was evidence to us that they've gone above andbeyond, just 4 essentially assuring us that they'll comply in the future. 5 JUDGE SULLIVAN: Are there FAA outreach programs 6 for passengers in distress? 7 8 9 not know. 10 MR. SARGENT: There are, Your Honor. JUDGE SULLIVAN: Where can one find those? I did
MR. SARGENT: Well, typically, again, and it's 11 somethingwe wouldhandle on a case by case basis. We 12 usually in that instance wouldput the respondent intouch 13 with someone from our hazmat division or even special agent 14 investigatedthe case, and theyusuallyworked together to 15 discuss some sort of
-- whether itbematerial distribution 16 or a speaking engagement. There's various ways that people 17 can go about that sort of corrective action. 18 JUDGE SULLIVAN: So it's basically an individual as 19 you come, as opposedto a set schedule that's published on20 line or in the newspaper, that kind of thing? 21 22 MR. SARGENT: That's correct. JUDGE SULLIVAN: Okay. Let's talkthen about the

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1 minimumweight in this category. You saidthe facts in this 2 case did not rise to an assessment of a minimumweight as 3 opposed to a moderate weight, and that there was no 4 particular guidance for the weight analysis. Is there some 5 type of factor that youwere hoping to see in this case that 6 would guide you tominimumthat you didn't see, and therefore 7 you didn't go there? Or is it simplyjust a matter of 8 judgment, taking into account all the factors in this case? 9 MR. SARGENT: I would saymore likelythe latter in 10 this case, Your Honor. 11 JUDGE SULLIVAN: Okay. Let's talk about the total 12 aggregate weight, which, again, is the last paragraph ofpage 13 4 of your motion. As I understand it, this again is a 14 discretionary callby your client, and you take into account 15 both all the information that you've acquiredthrough this 16 step by step sanction guidance analysis and any othermatters 17 that you deemto be appropriate to get to the aggregate 18 19 20 weight assessment. Is that correct? MR. SARGENT: That's correct. JUDGE SULLIVAN: And in the sanction guidance 21 material, at least for businesses, the sanction guidance 22 talks about an agent's discretion, for example, inweighting

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1 the penalty, doing other things that are short of assessing a 2 penalty. And I know that those kinds of actions do occur, 3 although not on a regularbasis, but do occur. And I'm 4 wondering, again, ifthose actions also are available to the 5 special agent or the FAA employee who is looking at 6 individual passenger cases likeMr. Tice's. Does the agent 7 also have the ability to suggest solely administrative 8 actions or to waivepenalties, that kind of thing, like the 9 agent does withbusinesses? 10 MR. SARGENT: Not with regard to this particular 11 case, or this type of case. I'm sorry, Your Honor. Because 12 special agents have a process they go through, considering 13 various factors, one of which is the nature of thematerial 14 which are fairly similar to the factor analysis that we use, 15 which guide their abilityto determine the appropriate action 16 to take in a particularmatter with regardto this particular 17 case. And in the material and the circumstances underlying 18 this case, that analysis wouldhave requiredthe special 19 agent topursue legal enforcement action. 20 JUDGE SULLIVAN: Okay. Andwhen you saythis 21 special nature, you're talking about the fact that this type 22 ofmaterial is strictly forbidden. You're kind of goingback

DiversifiedReportingServices,Inc.1 to that? 2 MR. SARGENT: Correct. 27

3 JUDGE SULLIVAN: Okay. Let's go topage 6 of your 4 motion. You state inparagraph 2 that Mr. Tice's arguments 5 raised no genuine issues ofmaterial fact with regard to the 6 proposed civil penalty. So when you say that, it appears to 7 me that perhaps I'mnot quite clear when you saythat. 8 Because as I understand it, Mr. Tice is asserting a variety 9 of different arguments that take issue with how the FAA has 10 utilized its discretion in assessing the various factors and 11 whether or not the FAA has included in its assessment all the 12 factors that Mr. Tice believed are important. 13 So canyou tellme This? You're arguing that, as I 14 understand it, that betweenthe minimumof $250 and the 15 maximumof $1,000, withinthe sanctionmatrix, that you have 16 taken the median of about 625. You originallyproposed a 17 $700 penalty and then reduced it after discussion to $600, 18 and that's what you'reproposingto the court. 19 Is there some reason that the FAA doesn't start 20 lower than the median? Because as I read the sanction 21 guidance
-- and I'mgoing to pull that up very quickly 22 there's a language inthe sanctionguidance under SectionH.

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1 This is Appendix C, Section H, where it specificallytalks 2 about the sanctions applicable to air carrier and commercial
I 3 operatorpassengers and crewmembers. And it says, "The 4 range for the total civilpenalty to be assessed, absent 5 mitigating or aggravating factors, is 250 (the statutory 6 minimum) to $1,000." 7 So if you have a range that begins with 250 and it 8 ends at 1,000, why would the FAA just automaticallyjump into 9 the median, or looking at thepenalty range? Is that because 10 you assessed a total aggregate weight ofmoderate tomaximum? 11 [The telephone operator interruptedthe 12 proceedings.] 13 JUDGE SULLIVAN: I'm sorry. I just got a -- I'm 14 just getting an automatedmessage from the DOT operator that 15 our conference call is going to end if we don't take action. 16 So Mr. Smithhas left the hearing room, andhe's going to 17 call the conference operator and extend our time. And I will 18 let you all know when he returns to the hearing room so that 19 you knowwhen he's present again. 20 So, Mr. Sargent, if you could address that 21 question, if you remember it, please? 22 MR. SARGENT: Sure. I think if I can rephrase the

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1 question, so that I know I'm answering it correctly, the 2 question was why the FAA doesn't start in the middle of the

... 3 range or start somewhere else within the range. 4 JUDGE SULLIVAN: Why don't I ask the question 5 again? You have a range of $250 to $1,000, absent mitigating 6 or aggravating factors. So you have the ability to go below 7 the $250 amount withmitigating factors, and you have the s ability to go above the $1,000 amount with particular 9 aggravating factors. The range you have, obviously, is 250 10 to 1,000. The goal is consistency. The goal is public 11 awareness. 12 The goal is to provide a message essentially, that 13 is consistently applied with various different case facts to 14 the public. So, obviously, the majority of cases should land 15 between $250 and 1,000, within that matrix range. You have a 16 total aggregate penaltyproposal of moderate to maximum, and 17 so as I understand the way that you have calculated this 18 penaltywith the guidance factors, you've taken the median of 19 625. 20 You upped it to 700, and then you reduced it down 21 to 600 after consideringwhat you could say is minimal 22 mitigation presentedby the respondent in this case. Is that

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1 correct in terms ofjust in general how you approachedthat 2 midpoint andhow you got there, got from 700 to 600? And

.... 3 then I have a question or two to ask you about that. 4 MR. SARGENT: Sure. No. I thinkthe way we -- so 5 obviously the way the sanction range that's appropriate for 6 this case is a reflection of or the weighting analysis is to 7 be done withinthe range that were given or the applicable s range for a particular case. So we go through ourweighting 9 analysis, applying all the statutory factors ofwhich the 10 mitigating information is done within that factor analysis. 11 So the waywe calculate it, considering each factor 12 as we did with regard to each fact that applied in this case, 13 we arrived at our weighting analysis. So the weight in this 14 case happened tobemoderate tomaximum, so we look at that 15 in terms of obviously the calculationbeing the median, 16 medianminimumandmaximumwithin that range. 17 So a moderate penaltywouldbe somewhere within 18 thatmiddling 625 figure, more or less. With regard to this 19 case, itwas moderate to maximum, which would haveput it 20 higher thanthat, which arguably couldhave put it higher 21 than that 625 figure. Given the information that we 22 consideredbothprior to and afterMr. Tice's informal

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1 conference, which we thought that there was additional 2 information-to support a lesser weighting with regard to the 3 other factors, we chose the $600 penalty, which arguably is 4 below the median. So, despite the fact itwas a moderate to 5 maximumweight, we chose a penaltythat was more reflective 6 of a moderate weight. 7 JUDGE SULLIVAN: Okay. Thank you. And I'll simply 8 note thatMr. Smith has returned to the hearing room and our 9 conference time has been extended. 10 When you look at a moderate range and a minimum 11 range and a maximum range, within the 250 to 1,000, are those 12 fairly flexible ranges within the sanction guidance? So, for 13 example, a minimum range couldbe potentially 250 to 400; a 14 moderate range couldbe potentially 400 to 800; a maximum 15 range couldbe 800 to 1,000? Or, is it somewhat more 16 flexible than that? 17 MR. SARGENT: And, again, it's not an exact 18 application, but I would saythat's relatively accurate. You 19 know, something inthemoderate range wouldbe more likely to 20 be in that area you described. 21 JUDGE SULLIVAN: Okay. And, let's assume that 22 well, I shouldn't say let's assume. There's no question that

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1 his particular fact pattern shows some maximumweight, given 2 krithout any discretion at all. But as I understandthe 3**~tatute** and the guidancematerial and your argument, the FAA 4**~ould** have assigned a maximum total aggregate weight, or it 5**~ould** have assigned a minimumtotal aggregate weight, 6 depending onhow you looked at these factors andmade some 7 decisions. 8 MR. SARGENT: Well, I guess you could say, 9 arguably, any casewe could assign a minimumweight or a 10**~aximum** weight. Given the factors that werepresent in this 11 case and the facts as we knew them and know them today, I 12 would submit we wouldn't have, or couldn't have
-- in 13 following our guidance, couldn't have assigned a minimum 14 weight. 15 JUDGE SULLIVAN: In following your guidance as you 16 understand it for an individualpassenger, is there ever a 17 time to your knowledge that an individual passenger could 18 inadvertently, as Mr. Tice has asserted, checked a forbidden 19 substance and achieved, potentially, a minimumtotal 20 aggregate weight in the civilpenalty assessment phase? 21 MR. SARGENT: Absent some extraordinary, mitigating 22 factors that I have not inmy experience beenprivyto, I

DiversifiedReportingServices,Inc.1 don't believe that given thatmaterial, or, well, I should 2 say given the types of factors that \vere present here, I 3 don't believe that itwouldhave been a minimum. Now, 4 there's other factors that didn't apply to this particular 5 case, whichmight have affected that analysis, such as 6 financial abilityto absorb the penalty and other sorts of 7 things, corrective action, those sorts of things. So I 33

s wouldn't saythat that's an absolute by anymeans, but with 9 regard to the particular factors that were present here, it 10 wouldn't have resulted in a minimumpenalty. 11 JUDGE SULLIVAN: Okay. Thankyou. Do you have 12 anything else that you would like to add to your primary 13 argument before I turn toMr. Tice? And I will be giving you 14 an opportunity for final reply, of course. 15 MR. SARGENT: No, Your Honor. Just again, we 16 understand whileMr. Tice hasn't pled any specific, 17 affirmative defenses, that he has submitted or set forth a 18 number of issues he's taken withthe waywe calculatedthe 19 civil penalty, which I'm sure he's about to talk about. 20 However, none of the points that are about tobe raised are 21 those that ultimatelywouldbe considered inthe waywe 22 arrived at ourpenalty.

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l JUDGE SULLIVAN: Well, is it your position if yol' 2 an show you followed the guidance that this court has to 3 dopt it? MR. SARGENT: Yes. 4 5 JUDGE SULLIVAN: So this court has no discretion at 6 all other than to rubber-stamp the proposedpenalty you offer 7 [ne? 8 MR. SARGENT: No, and letme clarify, Your Honor. 9 I believe that ifthe court finds that we've acted in 10 accordance with our policyand guidance that the court should 11 defer to our application of our sanction guidance policy 12 provided. It wasn't done in an arbitrary and capricious 13 manner. I don't believe there's any facts that the 14 respondent can raise or that wouldbe present in this case 15 that would show that we acted in an arbitrary and capricious 16 manner. 17 JUDGE SULLIVAN: Do you have case law that supports 18 that there has tobe a finding of arbitrary and capricious 19 actionbefore the court can exercise its own discretion? 20 MR. SARGENT: Not with regard to this particular 21 matter, Your Honor; but, in general practice, the agency that 22 has followed its own guidance, we would typically ask that

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l the court defer to that. 2 JUDGE SULLIVAN: I understand that. I guess my 3 concern is, and I thinkyou probablyhave heard some of that 4 inmy questioning, is that the guidance for individual 5 passenger violations such as this one is very slim. And 6 because of that, that creates an open door for not only a 7 larger, discretionarydecisionmakingby your client; and I s don't necessarilytake exception to that at all, but it also 9 means that your clientmay not be looking at all the lO different factors that couldbe utilized that are not spelled ll out inthe sanction guidance material. And, sometimes
-- not l2 always but sometimes
-- there aremany different factors that l3 can come intoplaythat an agent used to using the guidance l4 for anotherpurposemay not be considering or thinking about lS as having genuine weight in assessing a penalty. l6 That's not to saythat I agree that's happenedhere l7 or disagree for the time being, because I haven't heard lB argument fromMr. Tice. But I think in theseparticular l9 cases, because there is so little guidance and somuch 20 depends on the individual facts that there is room for 2l disagreement, andreasonably so. 22 So, Mr. Tice, that leavesme to you. Let's talk a

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1**~ittle** bit about your materials, and I'mgoing to go topage 2 of yourmaterials. And I'mgoing to askyou a couple 3**~uestions** to start off, and I'm going to dove-tail a little 4 pit onMr. Sargent's argument. 5 One of the things that Mr. Sargent has mentioned in 6 his oral argument, and I think in some of his written 7 materials, is that youhave not raised an affirmative defense s of a lackof abilitytopay. You're not required to do so, 9 certainly. Some people do and some people don't. My 10 question to you, since you are a layperson representing 11 yourself, is whether or not you knew that you could raise 12 that defense andwhether or not you are inferring or 13 informallypleading that type of defense here. Was that 14 something you knew about? 15 MR. TICE: Well, yes, Judge. You know, I mean I 16 seemyself as a law abidingmember of society, and I fully 17 expect topay any debts that I reasonably owe society; and, 18 whether or not it's a burdentome or not to do that, I 19 intendto do that. So I just don'twant to go there
-- pay 20 whatever fines that appropriate. 21 JUDGE SULLIVAN: Okay. Sojust so that we're clear 22 that that's an affirmative defense that you know you have,

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1**~nd** you're choosingnot to**r~ise** it, I'm fine. I justwant 2 o make sure that you know that. 3 4 MR. TICE: Yes, ma'am. JUDGE SULLIVAN: Okay. So let's talk about some of 5 these different factors. You heardme go through the FAA's 6 primary argument, and it appearedto me from the arguments 7 that you have onpage 1 andpage 2 of yourmaterials that you 8 take exception to the FAA's $600 proposedpenalty and that 9 you think it shouldbe lower. Is that correct? 10 MR. TICE: It is correct. 11 JUDGE SULLIVAN: Okay. You indicated onpage 2 of 12 your two-pagematerials in, I think, the thirdparagraph, 13 that you want to have theminimal penalty. Are you aware 14 that the minimal penaltyunder the guidance is $250? 15 MR. TICE: Yes, I am aware of that. 16 JUDGE SULLIVAN: Okay. Was that what you were 17 referring to when you saidyou wanted
-- and I'm going to 18 quote -- "aminimalpenalty?" 19 MR. TICE: Well, as you brought up earlier, and as 20 you said, I understand this better than I do, I thinkthere 21 are mitigating circumstances that where thepenaltycanbe 22 lower than $250, even though that is what you --

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1 JUDGE SULLIVAN: Well, tell me first Hhat your goal 2 is in terms of thepenalty, and then we cantalk about how 3 you think you can get there. If you are not asking for the 4 court to consider $250, what sum are you asking the court to 5 consider on your behalf? 6 MR. TICE: Well, my goal is justjustice and 7 fairness, and for people. You know, there needs to be room s in society for people tomake honest mistakes and not have 9 thebook thrown at themby the government. Again, I've said 10 from the first that I believe that this thing shouldhave 11 been handled administratively and not civilly, and I still 12 don't understand why that couldn't have been. 13 JUDGE SULLIVAN: Okay. So let me ask you again. 14 What penalty are you askingme to consider? What amount of 15 money are you suggestingthat I have inmy head in looking at 16 your side of the story? 17 MR. TICE: Is that really appropriate for me to 18 say? 19 JUDGE SULLIVAN: You shouldbe tellingme what 20 amount ofmoney you think is fair, if $600 is not fair? So, 21 for example, you could say $250. You could say $400. You 22 could say $1. Just tellme what it is that you honestly

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1 believe is an appropriate amount ofmoney to assess you for 2 these 10 violations that have been charged and found against 3 you? 4 MR. TICE: What I honestlybelieve? 5 JUDGE SULLIVAN: Yes. 6 MR. TICE: I honestlybelieve it shouldhave been 7 handled administratively, and there shouldbe no civil s penalty. But, I will also say whatever civilpenalty, if you 9 feel that a civilpenalty is appropriate, I believe that the 10 civilpenalty shouldbe stayeduntil I
-- unless I were to 11 reoffend. 12 The onlypossiblejustification I can see for 13 pursuing a civilpenalty in a situation such as this where an 14 honest mistake was made is tomake sure that it doesn't 15 happen again. And, so, it seems tome the best course of 16 action here wouldbe to say, okay. Here's your penalty. We 17 understand it was a simple, unintentionalmistake. Don't do 18 it again. If you do do it again, yourpenaltywill be more 19 severebecause you have done it again. 20 So I thinkthis is the way these cases -- not this 21 particular case, but in other courtroom situations when 22 offenses happen, I thinkthe legal terms statingthe penalty

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1 where, youbasically said, just don't do it again. And that 2 seems to be the appropriate figure for the goal of keeping 3 the planet safe, which we all share. 4 JUDGE SULLIVAN: Letme ask you a couple questions 5 about that. You say that this case shouldhave beenhandled 6 administratively, instead of going into a penaltyphase. 7 What do youmeanbythat? What would you have likedto have 8 seen happen instead ofhaving the case charged, and then 9 ultimately reach my desk? 10 MR. TICE: Aletter from the FAA, you know, 11 informingme ofmymistake, showingtome that the government 12 does take their obligation to keep the airplanes safe 13 seriously, andthat they consider this to be a serious 14 mistake. As do I. I don't believe
-- you know. I certainly 15 don't thinkthat people should check fuel of any kind on 16 planes, and itwas a mistake. 17 I understandthat. But, you know, people domake 18 mistakes, and so I think that that couldbe recognizedhere. 19 And I would feel good about the actions thatmy government 20 has taken iftheyhad done that instead of feeling as I do 21 that that's not appropriate. 22 JUDGE SULLIVAN: You indicatedthat youwould

DiversifiedReportingServices,Inc.1 prefer if a civil penaltywas assessed that it be stayed. 2 That is the correct termthat is used in other situations. 3 In this particular forum, we don't stay civil penalties. 4 It's not an optionthat I have available inmy judicial 5 toolkit. So I understand the sentiment, but I can't offer 6 you that particular type of relief. 41

7 Let's assume that I am considering assessing civil 8 penalty against you. If zero is not available to you, what 9 is your second option? Do you have any option to offerme 10 other than the $600 proposal profferedby your friend across 11 the aisle? 12 MR. TICE: Well, I offered to settle this case to 13 himpreviously for
-- for $50, and he didn't think that that 14 was appropriate, so. 15 JUDGE SULLIVAN: Okay. So your second option is to 16 go below the statutoryminimumbecause of mitigating 17 circumstances, as I understand your argument. What 18 mitigating circumstances do you want to highlight for me that 19 would support your suggestion? 20 MR. TICE: Well, the ones that I triedto outline 21 inmy written response, that it was a completely inadvertent, 22 honest mistake, that the canisterwas essentially emptyand

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1 'twas a piece of trash that shouldhave beenjust disposed 2**~f.** Those are themitigating factors that I see. 3 JUDGE SULLIVAN: You also indicatedthat you wanted 4 che fine tobe fair and reasonable. Letme ask you a s Ruestion as you wear your attorneyhat for yourself. If I 6**~ranted** your request for a $50 fine, I understandthat you 7**~ould** thinkthat wouldbe fair and reasonable. But, part of s the fine's purpose is to create a deterrent effect, not only 9 for you, but for everyone in the public forum. 10 Is it your argument that $50 would serve that 11 particularpolicy, that people would feel curedby a $50 12 fine? 13 

### MR. TICE: Well, yes. And letme -- the problem is 14 deterrent in a situation like this was, isjust an honest 15 mistake. It's reallyhard to-- I meanpeoplemakemistakes. 16 You know? I know that if I wouldnever forget a single 17 thing again for the rest ofmy life
-- and I thinkwe all 18 would, but that'sjust not the human condition, 19 unfortunately. So we're stuckwith ourhuman frailties, and 20 inthis case I ran afoul ofmy own -- 21 JUDGE SULLIVAN: I'm sorry. I didn't hearthe last 22 part, sir.

DiversifiedReportingServices,Inc.1 MR. TICE: I said in this case I ran afoul of my 2 own human frailties. I certainly didn't intend to do this. 3 I made a mistake. 4 5 JUDGE SULLIVAN: Okay. Thank you. MR. TICE: Having gone through this whole 6 experience with all this time and all these hearings, and 7 blah, blah, blah, I think that's the real deterrent for me. 8 So I never want to go through this again. This is awful. 9 10 11 JUDGE SULLIVAN: Okay. MR. TICE: Not the money; it's all of this. JUDGE SULLIVAN: Okay. Thank you. Let's talk 12 about
-- a littlebit about
-- page 2 of your two-page 43

13 materials. You have at the bottom of the page some material 14 that's in italicizedwriting, and it talks about a comparison 15 of the forbidden, liquidpetroleum gas that was in your 16 canister to Isobutene, a refrigerant under the trade name of 17 R-600A, as you assert. And you're asserting that this 18 particular substance is equal or similar to the petroleum gas 19 that you tried to ship and didn't, essentially, and that this 20 particular refrigerant, basically, is permitted as checked 21 bags on passenger carrying airplanes. Do you see that on 22 page 2 of yourmaterials?

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MR. TICE: Yes. JUDGE SULLIVAN: Okay. What makes you thinkthat 3 this particular refrigerant is similar or exactlythe same as 4 the liquidpetroleumgas that was in your container? Where do you get that? 5 6 MR. TICE: If you look it up onWikipedia, that's 7 how it's described, as that Isobutene is also soldunder the s trade name that I gave there and it's used as a refrigerant. 9 JUDGE SULLIVAN: Okay. So this is somethingthat 10 you did some research on onthe web? 11 12 MR. TICE: Yes, ma'am. JUDGE SULLIVAN: And I need to know this. Do you 13 have anyparticular expertise in this field to make these 14 kinds of statements? 15 MR. TICE: No, certainlynot, and that's why I put 16 it in italics, and that's why I said it's out of the scope of 17 this hearing, and it certainly is. I onlymeant ittobe 18 helpful, and if itwasn't helpful, I apologize. 19 JUDGE SULLIVAN: Okay. I justwant tomake sure I 20 knowwhere this is coming from. Okay. You also stateup 21 above on that same page 2 that "The quantityof fuel that you 22 offeredwas nearly identical to that in cigarette lighters."

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l Do you see that? That's the first, full paragraph on page 2 2. 3 4 MR. TICE: Yes, ma'am. JUDGE SULLIVAN: Okay. And are youmaking that s analogy againbased on some research that you did or personal 6 knowledge? Where do you come up from with that? 7 MR. TICE: Well, yeah. It'spersonal knowledge. I s had used the stove to thepoint where, as I saidbefore, I 9 was worried of running out of fuel. I was babying it along lO to trytomake it last to the end of the trip. It was ll essentiallyempty. I'mquite confident that ifwe had the l2 container and fuel to examine this evidence, as I feel we l3 shouldbe able to have, that we would see clearly that there l4 was less fuel in there than there is in a whole cigarette l5 lighter. l6 JUDGE SULLIVAN: All right. It appears undisputed l7 that you and the FAA had some discussion about this case lB before it was referredtomy office. And, at that time, l9 during that discussion, were you offered some type of 20 educational trainingwiththe agent or some other entitywith 2l the FAA as part of a settlement agreement? 22 MR. TICE: No, and I wouldhave likedto havebeen.

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1 I meanjust hearing that for the first time today that there 2 might havebeen options for that, and ifthere would have 3 been, I would have likedto have known about it. 4 [Pause.] 5 6 MR. TICE: Hello? JUDGE SULLIVAN: Yes, I'm stillhere. I'mlooking 7 throughmy notes. I'm sorry I should have mentioned that 8 moment of silence. Is there anything else that you would 9 like to add to your argument at this time before I turnback 10 to the FAA's attorney? 11 MR. TICE: No, ma'am. 12 JUDGE SULLIVAN: Okay. Mr. Sargent, is there 13 anything else that you would like to add to your reply? 14 MR. SARGENT: Your Honor, just again, having heard 15 Mr. Tice's assertions and the factors he wants to be 16 considered, the reason why the FAA doesn't believe that 17 there's any reasonable dispute is because the factors or the 18 arguments that are raised are already coveredbythe 19 application of ourpolicy or a matter of law, particularly 20 the fact that, again, we understand this was an honest 21 mistake. But the fact that no damage occurred or that there 22 was no --Mr. Tice doesn't consider this tobe an actual

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1 threat to somebody, it's irrelevant, and, in fact, something 2 we already discussed as part of ourpolicies, not something 3 that factors
-- wouldbe factored in his favor into the 4 sanction analysis. s And the fact that Mr. Tice doesn't believe this 6 matter shouldbe prosecuted or should result in something 7 other than a civilpenaltyprosecution, also flies in the 8 face of ourpolicy. And, in fact, there's legal authority 9 that I think I cited inmy motion, the Heckler v. Chaney 10 case, where that's not something that's up for consideration. 11 The FAA has grantedthe prosecutorial discretion int.hese 12 types of cases from the court and exercisedthat discretion 13 and applied itspolicy. 14 Again, the sanction that was selected in this case 15 wasn't done in an offhandedmanner. It was the result of a 16 careful calculation of all the factors that wereputbefore 17 us. This certainlywasn't arbitrary or something that we 18 just decided shouldhappen. We looked at all these factors. 19 We applied our guidance the best we could, given the factors 20 that were available to us, and arrived at the number, the 21 $600 figure that we're at today. 22 So that's all I have to offer, Your Honor.

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1 JUDGE SULLIVAN: Okay. And I'm looking at page 6 2 of yourmotionmaterials, and I did read these materials 3 quite carefully. And I would agree 'tlith you that you have 4 the abilityto exercisebroad discretion andprosecution of 5 these cases in deciding whether tobring a legal enforcement 6 action or inmaking decisions to compromise or settle the 7 action. 8 I have no dispute about that, whatsoever, but this 9 case did not settle, and it was not compromised under your 10 watch. And so this court has an obligation to take a look at 11 the facts anew. And as I understandmy statutory and 12 regulatory duty, I am supposed to exercisemy soundjudgment 13 and independent discretion in doing a review of this. 14 Let me ask the two of you this, and I'll start with 15 you, Mr. Sargent. And this kind of dovetails into our first 16 discussion. It appears to me that the parties have presented 17 a fairly sound and complete argument about what their 18 positions are regarding the $600 proposedpenalty. If this 19 court does not grant full summaryjudgment onmotion today, 20 would you feel comfortable with the writtenmaterials as-is, 21 for a decision on the merits based on the writtenmaterials? 22 MR. SARGENT: Are you askingme, first, Your Honor?

DiversifiedReportingServices,Inc.1 JUDGE SULLIVAN: Yes, I always go to the 2 prosecuting agent, first. I'm sorry I didn't make that 3 clear. 49

4 MR. SARGENT: Urn. I think at this point the agency 5 wouldbe comfortable with that. 6 JUDGE SULLIVAN: Mr. Tice, turningto you next, 7 same question. And I may need to explain that a littlebit 8 if you would like. Do you understand the question? 9 MR. TICE: No. I wish you would explain it a 10 11 littlebit, please. JUDGE SULLIVAN: Sure. Currently, this motion is 12 before the court as a dispositive, prehearingmotion, and as 13 a dispositive prehearingmotion there is a certain standard 14 of review that the court must utilize that is different from 15 the standardof review that the court utilizes when it simply 16 looks at the evidence before issuing a decision onthe 17 merits. Under the review standard for a motion for summary 18 judgment, the court looks at whether there is anymaterial 19 issue of fact in dispute. And, in looking at that issue, the 20 court looks at all the disputed issues in a lightmost 21 favorable to the non-movingparty; and, in this case, that's 22 you.

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1 So let's assume, just for the sake of argument, 2 that I find today that there are some issues ofmaterial fact 3 that are in dispute because I've looked at them in a light 4 most favorable to you. The next step wouldbe then a 5 decision on the merits without having that special standard 6 utilized. Andwhen I say "decision on the merits," then I 7 would look at the materials again and I wouldweigh them to 8 see, number one, whether the prosecuting agent, the FAA, has 9 made a primafacie case under a preponderance of evidence 10 standard; and, number two, whether in your responsive 11 materials you have raised sufficient factors or arguments 12 that would giveme a basis to decide whether or not the FAA 13 was correct in assessing theproposed $600 penalty, and then 14 I would issue a decision. 15 That means that there would not be a hearing. 16 would simplydo it on the written record, as opposed to 17 having everybody appear andbasically tellme exactlytheI

18 same thing that you toldme today. So, what I'm saying, and 19 I didn't saythis very well, as I listen tomyself talk, is 20 that I'masking you if you feel comfortable with the amount 21 ofmaterial that you've submittedtoday and the arguments 22 that you submittedtodayto forego appearinginperson and

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1 simply resting onthe written record, and lettingme make a 2 decision on the written record and the oral transcripts that 3 we have so far. 4 MR. TICE: Yes, ma'am. It does seem a little 5 foolish to havepeople appear and say the same thing that's 6 alreadybeen said. 7 JUDGE SULLIVAN: Yeah. And I justwant to make 8 sure that you feel comfortable with that, because it sounds 9 like we really covered, I think, everybody's issues fairly 10 well, but I don't want tomake that decision for you. 11 12 13 14 15 MR. TICE: Yes. JUDGE SULLIVAN: And it sounds like you're okay. MR. TICE: I am. JUDGE SULLIVAN: Okay. Then what I will do is I'm going to look at this a littlebit more. I willmake a 16 decision on themotion for summaryjudgment, which is the 17 dispositivemotionbeforeme. If I don't rule in the FAA's 18 favor, I will then take the matter under advisement on the 19 written submission, and I will not set a hearing. I will 20 simply issue an order on the written record. And, so, that 21 means, essentially, that today is the last day that we will 22 be talkingto each other. And, Mr. Sargent, it'smy

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1 understanding that that's acceptable to you that we're not 2 going to have a hearing, that this is our last time to speak 3 to each other. 4 MR. SARGENT: Yes, it is, Your Honor. And the 5 agency andmyself probably shouldhave been clearer, but 6 that's essentiallywhat was the intent of the motion that we 7 filed inthe first place, Your Honor. 8 JUDGE SULLIVAN: Oh, okay. Well, I would recommend 9 something different in the future, because if youmake a 10 dispositivemotion like this, I have tomake a ruling under 11 the dispositivemotion standard. If you and the opposing 12 side have agreed for argument on written submissions only, 13 you really need to tell me. I nevermake that inferenceby 14 myself. 15 16 MR. SARGENT: Understood, Your Honor. JUDGE SULLIVAN: Okay. Thank you. 17 Mr. Tice, just so that we're clear, you understand 18 that, essentially, you wouldbe givingup your right to a 19 hearing inperson and that this will be the last time we talk 20 to each other about this. 21 MR. TICE: Yes, I do understandthat and I am okay 22 with it. I mean I understandthat if youwere to do

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1 something that I completely disagree with, I stillhave other 2 3 4 5 avenues of appeal. I mean I don't JUDGE SULLIVAN: Yeah. MR. TICE: -- think I'm giving those up. Am I? JUDGE SULLIVAN: Yes, you would. And, in fact, I 6 usuallyput inmy decisions how much time you have to write a 7 request for an appeal andwho you send it to. 8 9 MR. TICE: Yes, thank you. JUDGE SULLIVAN: Yeah. So you'll see that, and 10 it's usually right abovemy signature or right below it on 11 the very last page, if you want to jump to the end. So 12 you'll see that, and eitherparty can appeal, so I recall 13 correctly. 14 Okay. Then I'm goingto thank you all verymuch 15 for yourmaterials, for your arguments today and for your 16 presence. I apologize that this took longer than we had 17 scheduled, but itwas very, veryhelpful for me to hear this 18 extended argument. 19 With that, Mr. Sargent, is there anything else you 20 would like to add or correct, or comment on, on behalf of 21 your client today? 22 MR. SARGENT: No, Your Honor.

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1 JUDGE SULLIVAN: Okay, Mr. Tice. On behalf of 2 yourself, anything you would like to add, correct or cornnent 3 onbefore we close today? 4 MR. TICE: No, Your Honor. 5 JUDGE SULLIVAN: Okay. Thank you all verymuch for 6 your presence. It appears ourbusiness is complete. Since I 7 won't be talking to you again, I want to wish you all a very 8 happy holiday, however you choose to celebrate it. With 9 that, we can go off the record and I wish you all a good day. 10 Thank you somuch. 11 [The telephoneprehearingmotion conference was 12 concluded at 3:00p.m.] 13 14 15 16 17 18 19 20 21 22 

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