UNITED STATES OF AMERICA DEPARTMENT OF TRANSPORTATION OFFICE OF HEARINGS

IN THE MATTER OF: Paz Aviation, Inc. Respondent Wednesday, July 1, 2015 FDMS No. FAA-2014-0807 1

The teleconference convened, pursuant to notice, at 1:30 p.m. BEFORE: THE HONORABLE J.E. SULLIVAN, Administrative Law Judge

(202) 234-4433 

# RECEIVED JUL 162015 HEARiNG DOCf<;ET



## ORIGINAl

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 (202) 234-44332 APPEARANCES:
On Behalf of the Complainant: WILLIAM VINES, ESQ. of: Federal Aviation Administration Office of the Regional Counsel, AS0-7 Southern Region 1701 Columbia Avenue College Park, Georgia 30337 404-305-5200 404-305-5223 fax
On Behalf of the Respondent: DAVID M. MCDONALD, ESQ. of: McDonald & McDonald Attorneys at Law P.O. Box 669122 Miami, Florida 33166-9428 305-643-5313 305-643-4990 fax Also Present: CODY L. SMITH, Attorney Advisor,

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1 

### P-R-0-C-E-E-D-I-N-G-S 2 

### (1:33 p.m.) 3 

### JUDGE SULLIVAN: We're on the record in 4 

### the matter of Paz Aviation, Inc. This is Docket 5 No. FAA-2014-0807. Today is Wednesday, July 1st, 6 2015, and the parties have convened by telephone 7 for continued motion argument on the Respondent's 8 Motion To Dismiss. 9 The FAA is represented by its attorney 10 of record, Mr. William Vines. The Respondent, Paz 11 Aviation, is represented by its attorney of 12 record, David M. McDonald. Also present at the 13 Office of Hearings chambers is Mr. Cody L. Smith, 14 an attorney-advisor with this office, and he's 15 appearing as an observer only. 16 

### So, good afternoon to you all. I'11 17 note that we last convened on April 9th, 2015, 18 but at that time there was a problem with the 19 Court's telephone conference line, and as a 20 result, the motion conference was continued to 21 April 22nd, 2015 at 1:30 p.m. 22

(202) 234-4433 

### On April 22nd, 2015,

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLANDAVE., NW. WASHINGTON, D.C. 20005-3701 

### the parties

(202) 234-44334 1 convened by telephone, and we had some discussion 2 about the Respondent's motion. During that 3 discussion, the parties agreed that supplemental 4 materials might be helpful, and we set briefing 5 dates, and today's date and time for a new motion 6 conference, and that was codified by the April 7 23rd, 2015 order. 8 So, since that time I have received 9 the Respondent's Amended Motion To Dismiss the 10 memorandum of law which was filed with the office 11 on May 15, 2015, the FAA's June 5, 2015 Notice of 12 Amended Complaint, and a response to Respondent's 13 Amended Motion To Dismiss in a memorandum of law. 14 I also received on June 19, 2015, a Motion To 15 Dismiss Amended Complaint and Reply Memorandum 16 concerning Respondent's Motion To Dismiss. So 17 starting with you, since you were the moving 18 party, is there anything else that was filed 19 since our April 22nd, 2015 conference? 20 MR. MCDONALD: No. You listed the other 21 thing that I'm aware of. 22 JUDGE SULLIVAN: Okay. Mr. Vines, same

(202) 234-4433 NEAL R. GROSS COURT REPORTERS ANDTRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 (202) 234-44335 1 question to you. Anything that may have been 2 filed by the FAA that I didn't identify? 3 MR. VINES: I believe so, Judge. I 4 believe you recognized all filings. 5 JUDGE SULLIVAN: I'm sorry, sir. I 6 couldn't hear you. 7 MR. VINES: Judge, I don't believe you 8 left out anything. I believe you recognized all 9 of the agency's filings. 10 JUDGE SULLIVAN: Okay. Thank you both, 11 very much. I'11 note that I've read everything 12 that the parties have filed, and so Mr. McDonald, 13 this is your motion. Would you like to take five 14 or ten minutes just to highlight what you think 15 is important, and then let me ask you, before you 16 respond. Do you want me to --- is it easier for 17 you to do a brief presentation and then take some 18 questions? Or do you want to take questions 19 throughout your presentation? 20 MR. MCDONALD: I'm pretty flexible, 21 Judge. I'll take them as you send them. 22 JUDGE SULLIVAN: Okay. Well, why don't

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### 1 I give you some time, just to highlight your 2 client's position, and then I may ask you some 3 questions along the way, or wait until you are 4 

### finished. So please go ahead, sir. 5 

### MR. MCDONALD: Okay. Well, as the 6 Court's well aware, I 'm not going to spend very 7 much time at all in renewing all that's happened. 8 But the Complaint alleges, original Complaint 9 alleged actions occurring from 2008 through April 10 27th of 2011. It was originally filed October

-- 11 

### the Complaint was originally filed October 7th 12 of 2014. We have moved to dismiss based on 49 13 U.S.C. 46301, as set forth in the motion, on the 14 basis that more than two years has passed since 15 the last incident, which, as I mentioned a moment 16 ago, was April 27th, 2011. 17 Without invading the FAA's argument, 18 the FAA, in response to that, amended its 19 complaint and removed the alleged violations 20 based on incidents that occurred more than two 21 years prior to it issuing its Notice of Proposed 22 Civil Penalty, which is the amended complaint

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1 

### that's currently before the court. 2 In response, the Respondent still 3 maintains the position that under 29 U.S.C. 4 46301, the Complaint is the document that must be 5 

### filed in order to stop the statute of 6 

### limitations, and that is based on an analogy of 7 

### the cases interpreting the statute, 28 

### u.S.C. 8 

### Section

**2462~** 

### which says that

--- summarizing but 9 

### mostly quoting

--- an action for enforcement of a 10 civil fine shall not be entertained unless 11 

### commenced within five years. 12 The Aerocomp case, cited in our 13 memoranda, of the initial reply, and Aviation 14 Brake, found that it is the filing of a complaint 15 that starts the statute of limitations under

--- 16 it specifies in the statute, 28 

### u.s.c. Section 17 2462-- 18 

### JUDGE SULLIVAN: And let me stop you 19 and ask a question about that, sir. And 

### I'm 20 looking at specifically, as I ask this question, 21 your June 19, 2015 Motion To Dismiss Amended 22 Complaint and Reply, and it's clear that you are

(202) 234-4433 NEAL R. GROSS COURT REPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE., NW. WASHINGTON, D.C. 20005-3701 (202) 234-44338 1 citing to 1:40:06 In re Aerocomp, which is FAA2 2005-21064, a 2005 case issued by Judge Benkin of 3 this particular office. 4 As I read that particular case, and 5 perhaps I misread it, and I wanted to ask you 6 about it, it appeared to me that Judge Benkin was 7 unaware that 28 U.S.C. Section 2462, which he 8 relied on in that case as he discussed it, had 9 actually been superseded, or at least what 10 appears to me, to be superseded by 49 U.S.C. 11 Section 1471, subsection (a) (3), which was 12 enacted in 1992, two years after the FAA 13 published its 1990 final discussion about its 14 Federal Rules. And if we assume, as it appears 15 to be in that particular case, Judge Benkin was 16 unaware of that, would that not then limit the 17 support it provides in your argument for a five 18 year period of time, utilizing the Complaint 19 only? 20 MR. MCDONALD: Yes. I'm not suggesting 21 that five years would be appropriate time period. 22 We're suggesting that of course two years would

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1 

### be appropriate time period. The argument I'm 2 trying to make is that the cases interpreting the 3 

### statute and I'm making a comparison of 4 

### statutes, which is 49 

### U.S.C. 46301 

### v. 28 

### U.S.C. 5 2462. 

### 6 JUDGE SULLIVAN: Right. So you're 7 

### MR. MCDONALD: It explains the same 8 

### thing that the statute is the language of the 9 

### two of them are the same, Your Honor, in that an 10 

### action, a civil action must be commenced within 11 

### the applicable period, whether it's five years 12 

### under 2462, 

### or two years under 46301. 

### An action 13 

### must be commenced. And then various cases, 14 

### Aerocomp Aviation and Aviation Brake, both stand 15 

### for the proposition that it is a Complaint that 16 

### must be filed, and that a Notice of Proposed 17 

### Civil Penalty is not the initiation of a civil 18 

### action. 19 

### JUDGE SULLIVAN: Okay. But as I 20 

### understand it from those cases --- and correct me 21 

### if I'm wrong Judge Benkin reached that 22 decision because he did not know, or at least did

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### 1 not reference the enabling statute that passed in 2 1992, that provided for the two year period of 3 

### time. 4 

### MR. MCDONALD: I can't guess on what he 5 

### was aware of. The cases come to you, Your Honor, 6 

### as briefed by counsel, and, you know, issues that 7 

### aren't raised may, you know, may not be 8 

### considered. I can't guess why

-- 9 

### JUDGE SULLIVAN: Well, I 10 

### MR. MCDONALD: that's not 11 

### mentioned in there. 12 JUDGE SULLIVAN: Yes. It appeared to 13 

### me, from the reading that I did, and I'm 14 

### certainly willing to be corrected, but it 15 appeared to me that Judge Benkin had not been 16 informed, that there was an enabling statute for 17 the two year period of time, that did not specify 18 that the initiation had to be a Complaint. It 19 simply specified that the initiation of the 20 action had to occur, and under the final rule 21 discussion that preceded that enabling statute by 22 two years, there was a decision made by the

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### 11 1 Administrator that the initiation of the action 2 was the filing of the Notice of Proposed Civil 3 Penalty, and not the filing of the Complaint. 4 So I'm wondering if you could help me, 5 and tell me here your client wants me to go with 6 that, because it's something that I would have to 7 deal with in addressing your motion. In order for 8 me to grant your request under this particular 9 prong of your argument, I have to know where you 10 think I should be going with that particular 11 history, that's clearly enunciated in both the 12 Federal Register and in the enabling statute that 13 was subsequently passed. 14 

### So can you give me an idea of where 15 

### you think, or how you think I should be 16 addressing that particular point of historic 17 reality. 18 MR. MCDONALD: Well, it appears to me 19 that we're dealing with two different types of 20 rules, and those are identified within the cases, 21 which is there are cases interpreting the 22 administrative ---your rules of practice, 13.208

(202) 234-4433 NEAL R. GROSS COURT REPORTERS ANDTRANSCRIBERS 1323 RHODE ISLANDAVE ,N.W. WASHINGTON, D.C. 20005-3701 (202) 234-443312 1 is the applicable one here, and those cases 2 clearly have held that the Notice of Proposed 3 Civil Action is sufficient to stop the statute 4 under 13.208. 5 However, the cases dealing with the 6 statutes as opposed to the CARS have held that a 7 civil action is commenced with the filing of the 8 Complaint and not a civil

--- Noticed of proposed 9 Civil Penalty, and as a result, it is the filing 10 of the Complaint which complies with the statute, 11 as opposed to the Code of Federal Regulations

-- 12 JUDGE SULLIVAN: And

-- 13 MR. MCDONALD: requirement to file 14 a Complaint within two years. 15 JUDGE SULLIVAN: And when you're 16 talking about the cases, you're specifically 17 referring me back to those cases that Judge 18 Benkin had issued after 19

-- 19 MR. MCDONALD: Yes. 20 JUDGE SULLIVAN: Okay. Thank you. Go 21 ahead. 22 MR. MCDONALD: Yes. The Johnson v. SEC.

(202) 234-4433 NEAL R. GROSS COURT REPORTERS ANOTRANSCRIBERS 1323 RHODE ISLANDAVE., NW. WASHINGTON, D.C. 20005-3701 (202) 234-443313 1 3M v. Bowser. Also

--- I think those were cited 2 as well. 3 JUDGE SULLIVAN: Correct. That's on 4 page one of your Reply. 5 MR. MCDONALD: Right. Yes. Those were 6 also cited in Aviation Brake. 7 JUDGE SULLIVAN: Yes, and you also had 8 cited other cases on page two of your Reply. 9 MR. MCDONALD: Yes. 10 JUDGE SULLIVAN: Yes. Okay. Thank you, 11 sir. Go ahead. 12 MR. MCDONALD: So that's the 13 distinction we're making. I think there's no 14 doubt, and I have no argument, I have no doubt in 15 my mind, that the Administrator's position has 16 been that the interpretation of its rules of 17 practices doesn't also propose civil penalty is 18 sufficient. But to meet the requirements, to stop 19 the statute under 13.208. 20 However, now, we have also a two year 21 statute of limitations on civil penalties, which 22 requires the initiation of a civil action, and a

(202) 234-4433 NEALR. GROSS COURT REPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 (202) 234·443314 1 civil action is initiated by a Complaint. 2 JUDGE SULLIVAN: So you are taking a 3 position that the Administrator does not have the 4 authority to rule that the initiation of the 5 action comes with the filing of the Notice of 6 Proposed Civil Penalty. That that's beyond the 7 scope of the Administrator's power? 8 MR. MCDONALD: I believe that's beyond 9

--- as it applies to 49 U.S.C. 46301. Yes. 10 JUDGE SULLIVAN: As I understand it, 11 that's the enabling statute that you're using to 12 claim, or to assert, that it trumps, essentially, 13 the Rules of Practice under 49 CFR Section 14 13.208, specifically, and to the Administrator's 15 line of decisions following the adoption of that 16 rule. That's my understanding of your argument. 17 MR. MCDONALD: That is correct. 18 JUDGE SULLIVAN: Okay. 19 MR. MCDONALD: That the statute trumps 20 the rule. Yes. 21 JUDGE SULLIVAN: okay. And this 22 particular statute, let's go to that very

(202) 234-4433 NEAL R. GROSS COURT REPORTERS ANDTRANSCRIBERS 1323 RHODE ISLANDAVE., NW. WASHINGTON, D.C. 20005-3701 (202) 234-443315 1 briefly. I have a copy in front of me. 2 This particular statute, that which we 3 identified as 49 

### u.s.c. 46301, subsection 4 (d) (7)©, states, quote, "except for good cause, a 5 civil action involving a penalty under this 6 paragraph may not be initiated later than two 7 year after the violation occurs.'' End quote. 8 This particular enabling statute does 9 not identify the initiation of the action 10 specifically as the filing of a Complaint. There 11 has been discussion in the FAA's briefing 12 material, that says that that is compelling, and 13 should be deemed compelling in this court's 14 review of this motion. What is your response to 15 that? Should it say Complaint specific, or does 16 it not need to? 17 MR. MCDONALD: Well, I think in the 18 Administrator's response, the only case 19 JUDGE SULLIVAN: I'm going to just stop 20 you. The Administrator's not a litigant in this 21 proceeding. 22 MR. MCDONALD: I am sorry.

(202) 234-4433 NEAL R. GROSS COURT REPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 (202) 234-443316 1 JUDGE SULLIVAN: Okay. Go ahead. In the 2 FAA's response. 3 MR. MCDONALD: In the FAA's response. 4 The only case that they cite, that a Notice of 5 Proposed Civil Penalty is sufficient to stop the 6 statute running under 49 U.S.C. 46301, is the 7 Vanguard case, which was filed in 2002, and if 8 you look at that case, the

-- 9 JUDGE SULLIVAN: If you give me a 10 minute, I'll pull it up. Okay. I have it in 11 front of me. 12 MR. MCDONALD: And what'S before the 13 court there is a Motion To Dismiss under Rule 14 13.208, and the case was ultimately dismissed on 15 the basis that no good cause was found for the 16 administrative delay and not filing the Notice of 17 Proposed Civil Penalty within the two years 18 required by 13.208. 19 However, it's in Note 3 that the FAA 20 is hooking its fingernails, and the problem is 21 that Note 3 is a general comment that both 13.208 22 and 49 U.S.C. 46301 require the Notice of

(202) 234-4433 NEAL R. GROSS COURT REPORTERS ANDTRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 (202) 234-443317 

### 1 Proposed Civil Penalty to be filed within two 2 years. That comment, though, is pure dicta. It's 3 

### a summary comment, but it's also pure dicta, 4 

### because the only issue before the court was the 5 

### Motion To Dismiss under 13.208. I don't know why 6 

### the court, in its order, picked up a reference to 7 

### 49 U.S.C. 46301, but it

--- whatever. It was not, 8 

### in my opinion, a finding by the court, but merely 9 

### dicta. 10 JUDGE SULLIVAN: I would agree with you 11 

### that footnotes don't have

--- that footnotes are 12 typically dicta. I don't have any problem 13 agreeing with you about that. What else would 14 you like to add to this particular section of the 15 

### argument? 16 MR. 

### MCDONALD: I 

### think we have 17 

### addressed it, Judge. It's, you know, it's as you 18 suggest, it's quite simply it's our position 19 that the statute, 49 

### u.s.c. Section 46301, 20 trumps, or prevails over the Administrator's rule 21 in 13.208, and its cases interpreting 13.208. 22 JUDGE SULLIVAN: What I'm going to do,

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### 18 1 Mr. McDonald, is I'm going to ask you to reserve 2 the rest of your argument regarding laches, so 3 that we --- so that our transcript record kind of 4 follows this argument closely. 5 MR. MCDONALD: Okay. 6 JUDGE SULLIVAN: And then I'm going to 7 turn to Mr. Vines next, and I'm going to ask him 8 to respond to this primary argument that you've 9 made, both orally and in writing. Mr. Vines, if 10 you could limit your response at this point to 11 simply the issue regarding the timeliness, we 12 will then come back to you later regarding the 13 

### laches defense. If you would be so kind. I seem 14 to have lost Mr. Vines. 15 MR. VINES: Judge, I'm here. I'm sorry. 16 In the conferences with the Court, I normally put 17 my phone on mute, so there's not any background 18 noise with me shuffling papers, interrupting 19 conversations with yourself and the other party. 20 So I apologize for that. I am here and I've been 21 listening. Judge, I would just

--- I direct your 22 attention to the Agency's response regarding the

(202) 234-4433 NEALR. GROSS COURT REPORTERS ANDTRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 (202) 234-443319 1 case file, that was cited where

-- 2 JUDGE SULLIVAN: And Mr. Vines, can you 3 give me a specific page number, so that I can be 4 right with you in whatever argument you're 5 making. 6 MR. VINES: Yes, Judge. On the FAA 7 Notice of Amended Complaint, and FAA's response, 8 the Respondent's Amended Motion To Dismiss 9 JUDGE SULLIVAN: All right. 10 MR. VINES: that would be page 11 seven. 12 JUDGE SULLIVAN: Okay. Let me go to 13 page seven. All right. Go ahead, sir. 14 MR. VINES: So there, Judge, the Agency 15 cited, in the matter of David Everson, where the 16 Respondent moved to dismiss several of FAA's 17 allegations under the stale complaint rule, 18 because FAA filed a Notice of Proposed Civil 19 Penalty more than two years after the Respondent 20 committed violations. 21 There, the Administrator cited both 46 22 301 (d) (7) ©'

(202) 234-4433 and of course the

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(202) 234-443320 1 13.208 (d), for the position that the statute of 2 limitations required initiation of a notice, not 3 a Complaint. So there, Judge, I would again, in 4 defense to the Respondent's claim that the 5 statute, 49 U.S.C. 46301 requires a Complaint be 6 issued. I would argue, Judge, that the

--- that 7 is not the case. In fact, that it's the notice, 8 as you yourself, Judge, indicated earlier. 9 JUDGE SULLIVAN: Well, why don't we 10 talk a little bit about that, because some of my 11 questions are simply it's not stating a 12 position. It's simply asking for more 13 information. Let's talk a little bit about your 14 position that 49 U.S.C. Section 46301(d) (7)©, 15 basically is not in conflict, according to your 16 client's position, with the regulation identified 17 under 14 CFR Section 13.208. 18 You're saying, essentially, that the 19 enabling statute that we talked about is 20 consistent with the Administrator's 21 interpretation that preceded the enactment of 22 that enabling statute. And why is that, in your

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### 21 1 opinion? How did that

--- how is that a symbiotic 2 

### dialogue, if you will? 3 MR. 

### VINES: Will 

### you repeat the 4 

### question, Judge? 5 

### JUDGE SULLIVAN: I'm not sure I can, 6 

### because it was a fairly long one, but I will give 7 

### it my best. You are relying upon 4 9 

### U.S.C. 8 

### Section 46301, subsection as the 9 

### enabling statute that says that you must 10 initiate a Complaint within two years of the 11 action. You're asserting that the 12 MR. 

### VINES: Judge, no, it's the 13 Agency's

--- I'm sorry to interrupt, Judge. It's 14 the Agency's position that that particular 15 statute requires a Notice of Proposed Civil 16 Penalty be issued. 17 

### JUDGE SULLIVAN: Correct, whereas the 18 Respondent is asserting that it's a Complaint. So 19 explain to us why, in your opinion, that I can 20 read, and that the Respondent should be reading, 21 the enabling statute as reflective of the rules 22 of practice which were adopted prior to the

(202) 234-4433 NEAL R. GROSS COURT REPORTERSAND TRANSCRIBERS 1323 RHODE ISLANDAVE, N.W. WASHINGTON, D.C. 20005-3701 (202) 234-443322 1 enactment of the statute. How is that possible, 2 in your opinion? 3 MR. VINES: As the rule

--- again, I'm 4 doing my best to answer your question. The rules 5 that, my understanding, that were enacted prior 6 to 49 U.S.C. 46301, in fact, discussed a two year 7

--- there was, I believe, if I recall, there was 8 a two year limitation, in that the Agency was 9 required to issue a notice in two years of the 10 hearing of the claim taking or the violation 11 having taken place. If I recall correctly. 12 JUDGE SULLIVAN: Right. They both did. 13 But neither of them cited to either a Notice of 14 Proposed Civil Penalty or to a Complaint, 15 specifically as the triggering action for the 16 initiation of an action. So can you explain, and 17 maybe you can't, but I'm just asking if you can, 18 why

-- 19 MR. VINES: Judge, I may not I 20 don't feel like I'm in the best position to 21 go down that route without engaging in further 22 research to effectively respond to that.

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1 JUDGE SULLIVAN: Okay. All right. Then 2 let me ask you what your position is, or your 3 response is to Respondent's assertion that in 4 Judge Benkin's cases, and some of the other cases 5 the Respondent listed, should not be deemed 6 compelling. Why not? 7 MR. VINES: Judge, it's my 8 understanding that Judge Benkin's cases dealt 9 with whether or not the five year statute of 10 limitations that is applicable

--- and that was a 11 specific statute 12 (Telephonic interference.) 13 JUDGE SULLIVAN: I'm sorry, but I'm 14 going to stop you, Mr. Vines. We're getting some 15 static. So could you start again, because there 16 was some static, and I don't think we got 17 everything you said. 18 MR. VINES: Yes, Judge. It's my 19 understanding that Judge Benkin's opinions, or 20 orders, were based on whether 28 U.S.C. Section 21 2462 , were applicable to whether the Agency had 22 a five year statute of limitations by way of

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1 filing a Complaint, versus limited to just a 2 requirement that the FAA had to issue a two year 3 issue a Notice of Proposed Civil Penalty 4 within two years of the violation. 5 I don't I'm not quite sure if 6 Judge Benkin's opinions are on point with whether 7 or not 46 49 

### u.s.c. 46301 should be 8 interpreted as -- a Complaint should be issued or 9 a notice should be filed. Does that appropriate 10 answer your question, Judge? 11 JUDGE SULLIVAN: I'm happy to accept 12 that answer. Thank you so much. Anything else 13 that you would like to add to your client's 14 response to this portion of the Respondent's 15 motion? 16 MR. VINES: Not at this time, Judge. 17 JUDGE SULLIVAN: Mr. McDonald, I'm 18 going to turn back to you. First, you have a 19 right of final reply on this particular issue, 20 and then we're going to move in to the laches 21 affirmative defense. So do you have anything 22 else you would like to add to the timeliness

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### 1 portion of your Motion To Dismiss? 2 MR. MCDONALD: Yes. I'd like to say my 3 

### motion was timely, but responding to the 4 directness of your question, but joking aside, 5 Your Honor, the 13.208 specifically states that a 6 Motion To Dismiss may be filed if the Agency has 7 failed to issue a Notice of Proposed Civil 8 Penalty within two years after the incident 9 occurred. 10 And so it specifically is referring to 11 a Notice of Proposed Civil Penalty. Now when you 12 look at the statute, which is 49 U.S.C., it very 13 similar to the language used in 28 U.S.C. 2462, 14 that is that a civil action must be initiated, 15 and it's our position that, consistent with Judge 16 Benkin's decision, that a civil action requires a 17 filing of a Complaint. That is the initiation of 18 a civil action, and hence, the requirement in the 19 current statute, 49 U.S.C. 46301, which also 20 requires the initiation of a civil action, 21 requires the filing of a Complaint within the 22 time period. That's all I have.

(202) 234·4433 NEAL R. GROSS COURT REPORTERS ANDTRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. WASHINGTON, D.C. 20005·3701 (202) 234-443326 1 JUDGE SULLIVAN: You did have a chance 2 to read the 1990 Federal Register sections that 3 dealt with the final rules discussion by the 4 Administrator before today, did you not, Mr. 5 McDonald? 6 MR. MCDONALD: I did. I did. 7 JUDGE SULLIVAN: Okay. Then let's talk 8 a little bit about that. Specifically, this is 9 Volume 55 of the Federal Register, starting at 10 page 27548 and running through to approximately 11 page 27572. There was a lot of information in 12 this particular publication about the final rules 13 and why the FAA was adopting them. And in this 14 particular material, the Administrator basically 15 said, and I'm going to refer you to 55 Federal 16 Register page 27556, that the FAA

--- and I'm 17 going to quote
--- quote: "has always considered 18 legal enforcement action to be initiated with the 19 issuance of a Notice of Proposed Civil Penalty.'' 20 End quote. 21 So if the FAA has publicly announced 22 that it is utilizing the Notice of Proposed Civil

(202) 234-4433 NEAL R. GROSS COURT REPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 (202) 234-443327 1 Penalty as its first pleading, and on civil 2 penalty action, isn't that enough? And if it's 3 not enough, what authority do you have to tell me 4 that it's not enough? 5 MR. MCDONALD: Well, I've always 6 you know, the FAA addresses that when it says, 7 you know, after careful consideration, at the top 8 of

--- I have an excerpt of the paragraph dealing 9 with the limitations paragraph. It's in there. 10 JUDGE SULLIVAN: Do you have a page 11 number

-- 12 MR. MCDONALD: And it states that

--- 13 you know, the way this printed, my page numbers 14 are showing, it's very difficult to find. 15 JUDGE SULLIVAN: Okay. Well, sir, go 16 ahead and 17 MR. MCDONALD: But the paragraph starts 18 with, "After careful consideration, the FAA's 19 adopting a tiered statute of limitations and is 20 amending 21 (Telephonic interference.) 22 JUDGE SULLIVAN: Let me stop you. Just

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### 28

1 

### for your record, it's page 27553. Go ahead. 2 

### MR. MCDONALD: is amending Section 3 

### 13 2

.208 of the Rules of Practice to so 4 

### reflect, where for pursuant to this limitations 5 period, the Agency will be required to issue a 6 

### Notice of Proposed Civil Penalty within two years 7 

### after the date of the alleged violation in all 8 

### cases in which it has a subsequent authority." 9 

### It doesn't deal with, in my opinion, 10 the issue of 49 

### u.s.c. 46301. The FAA 

### is 11 

### certainly entitled to issue its own guidance on 12 

### the interpretation of its rules. What you're 13 asking me is, does the if I understand your 14 question, Judge is, does the FAA 

### have the 15 

### right to issue binding authority on its 16 interpretation of the United States statutes? 17 

### And my response to that is no. And we 18 

### look at other court decision which have 19 interpreted those statutes on what is required to 20 initiate a civil action, and, you know, as some 21 

### of the courts said, plea, plea negotiations, what 22 have you, even if they're statutorily required,

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### are not the initiation of a civil action. The 2 initiation of a civil action is accomplished with 3 

### the filing of a Complaint. 4 JUDGE 

### SULLIVAN: What is the 5 

### difference, in your opinion, substantively, 6 

### between the Notice of Proposed Civil Penalty that 7 

### your client received in this particular case, and 8 

### the subsequent Complaint that was filed? Was 9 

### there any difference, in your opinion, other than 10 

### the title of the document? 11 MR. 

### MCDONALD: Oh, I would have to look 12 at those real quick, Judge. I don't think there's 13 a 

### huge difference between the two. There 14 

### typically is not. However, it's

--- what we're 15 

### talking about is how to comply with a statute 16 

### that requires a Plaintiff to do a certain thing 17 

### within a certain time limitation, and that 18 

### statute clearly, in my opinion, requires 19 initiation of a civil action and that's done with 20 a Complaint. 21 The Notice of Proposed Civil Penalty 22 would not otherwise be filed. It's not really

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### 1 filed in these cases. This court doesn't receive 2 

### it. You receive a Complaint. Yes, it is a 3 refiling of the Notice of Proposed Civil Penalty, 4 as the Administrator's Complaint, but that is the 5 initiation, the filing of the Complaint. That's 6 when it comes to you. 7 

### JUDGE SULLIVAN: There was discussion 8 in the Federal Register, same Federal Register 9 portion that we've already identified, about why 10 the FAA Administrator, in 1990, was choosing not 11 to file a Complaint within the two year period, 12 or providing that a rule would not be issued to 13 force the FAA to file a Complaint within the two 14 year period. 15 And why the FAA felt that it was of 16 benefit to the Respondent not to have a Complaint 17 

### issued immediately. So I mean, there's a lot of 18 dialogue about that in the Federal Register, that 19 we've been talking about. So 20 

### MR. MCDONALD: I'm generally familiar 21 with that, Your Honor, from having read through 22 

### this.

(202) 234-4433 

### And part of that was, as I recall, to

NEALR. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLANDAVE., NW. WASHINGTON, D.C. 20005-3701 (202) 234-443331 1 allow for the informal conference period to take 2 place. 3 JUDGE SULLIVAN: Right. And there was - 4 5 MR. MCDONALD: Two years is plenty of 6 time for that. 7 JUDGE SULLIVAN: Okay. Is it your 8 position that the FAA Administrator was without 9 authority to do this, and remains without 10 authority to make this type of ruling? 11 MR. MCDONALD: Which ruling? 12 JUDGE SULLIVAN: The ruling on how it's 13 going to effectuate its statutory mission. 14 MR. MCDONALD: Your Honor, I really, I 15 think it's entitled to do that, to make that 16 ruling with regard to 49 U.S.C. 13.208. However17 --I'm sorry. I said 40 ---with regard to 14 CFR 18 Section 13.208. I think it is entirely up to the 19 Administrator, and it has the authority to issue 2

### o guidance and interpret its own rules. It is my 21 position, and my legal opinion, that the FAA does 22 not have authority to issue binding guidance and

(202) 234-4433 NEAL R. GROSS COURT REPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE., NW. WASHINGTON, D.C. 20005-3701 (202) 234-443332 l interpretation on the statute, 49 U.S.C. 4630l. 2 JUDGE SULLIVAN: And in your argument, 3 just so that I'm clear, under either the first 4 statute that was passed by Congress in l992, 5 which was 49 U.S.C. Section l47l(a) (3), it talked 6 about the two year period between the violation 7 and the initiation of a civil action. And then 8 the recodification of that statute in to 49 9 

### u.s.c. 4630l(d) (7)©. That language that is lO repeated in both of those statutes, it talks ll about the initiation of a civil action, has to be l2 interpreted by this court as meaning a Complaint, l3 as opposed to the Notice of Proposed Civil l4 Penalty. l5 MR. MCDONALD: That is my position. l6 Yes, Your Honor. l7 JUDGE SULLIVAN: Okay. And other than lB the case law that you've provided in your--- I'm l9 sorry, I shouldn't say other than. Your support 20 for that argument is provided in the case law 2l authority that you've given in your written 22 materials?

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1 

### MR. MCDONALD: Yes, Your Honor. 2 JUDGE SULLIVAN: Okay. Thank you very 3 

### much. Let's talk about laches now. You've 4 indicated that you believe that if

--- well, I 5 

### shouldn't say if. You've indicated, and you've 6 

### raised a defense of laches. Can you identify, or, 7 

### you know, basically highlight what you have 8 

### shown, and why you believe that it's enough to 9 

### demonstrate that the action should be dismissed 10 

### under the grounds of laches. 11 

### MR. MCDONALD: Yes, I believe we've 12 

### heard, I think we've fully addressed that. I 13 

### mean, you look at the cases that have dealt with 14 

### laches, many of them are summarily dismissed on 15 

### the basis that Respondent bears a burden of 16 

### proving in its motion facts giving rise to the 17 

### defense of laches, and as a result, many of those 18 

### have been summarily dismissed on the basis that 19 

### the Respondent failed to do so. 20 

### In this particular case, the 21 

### Respondent not only alleged facts that give rise, 22 or support its laches defense, which is namely

(202) 234-4433 NEALR. GROSS COURT REPORTERS ANDTRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. WASHINGTON, D.C. 20005·3701 (202) 234·443334 

### 1 that there's been a passage of time, that it's 2 lost the ability to locate witnesses, and that 3 the facility that did the work on the tooling, 4 which is the subject matter of this suit, if we 5 ever get there, was done by a company that's 6 since gone out of business and we can't find it 7 

### anymore. So records have been lost, and a 8 witness, at least one witness has been lost, 9 whose allegations within the motion are supported 10 by the affidavit of Respondent. So it is

-- 11 JUDGE SULLIVAN: Well, I must go to 12 that, briefly. As I'm looking at the affidavit of 13 a Mr. Jay Allen, that is attached to your May 15, 14 2015 Amended Motion To Dismiss, and on page two 15 of that three page affidavit, part of paragraph 16 four, Mr. Allen states that since the FAA issued 17 

### its Letter of Investigation, its potential 18 witness, Respondent's potential witness named 19 Jack Batista, has moved out of state, and the 20 Respondent has been unable to locate him. 21 My question to you about this is that 22 the FAA, in its responsive materials, asserts

(202) 234-4433 NEAL R. GROSS COURTREPORTERS ANDTRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 (202) 234-443335 1 that you need to show some effort that you've 2 made to try and locate witnesses, and that you 3 haven't. What is your response to that? Why 4 should this particular statement be deemed 5 sufficient to show that a witness is missing and 6 is unable to be found? 7 MR. MCDONALD: Well, it's my opinion, 8 Your Honor, that this is testimony before the 9 court, under oath, subject to the penalty of 10 perjury, that while not enumerating what steps 11 have been made to locate the witness, that the 12 witness has, that' we've been unable to locate 13 him as of the time of filing that affidavit. 14 I'll add that we haven't found him yet either. 15 But that is a proffer to the court. Certainly 16 also that the company which performed the work, 17 and very likely its records regarding the work 18 that was performed on this drawing have also been 19 lost. 20 The Administrator, I thought, gave a 21 clever response in its argument against this. 22 They say that to attack the affidavit, and in my

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### 1 view, if you read the cases dealing with prior 2 summary motions to dismiss, if you will, under 3 

### the stale complaint no, I'm sorry--- under a 4 laches defense, you see that the FAA looks to the 5 Respondent to make at least a showing, provide an 6 evidentiary basis, for the defense. I don't think 7 it's a matter of proving it all now. That it is a 8 matter of certainly making a showing that there's 9 evidence, testimony, or other evidence which 10 would support the minimum requirements of the 11 defense. 12 At that point, it's our position that 13 the burden moves to the Administrator, to show 14 that, to provide some evidentiary basis that 15 there is no laches defense, that there was no 16 prejudice, or whatever the case may be, however 17 he chooses to actually attack the defense. 18 

### Here, the Administrator chose not to 19 do that. The Administrator, instead, chose to do 20 what many Respondents do when initially raising 21 the issue of laches, and just simply say it, you 22 know, this has gone on for too long, and we're

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1 

### prejudiced, and the matter should be dismissed 2 under a laches defense, without providing any 3 

### basis, evidentiary basis, for the claim of 4 prejudice. 5 Here, we have done that. We've met the 6 

### obligations to show the defense is a viable 7 

### defense, by alleging facts supporting the 8 

### defense, and it's now the Administrator's burden 9 

### to go forward with the evidence to prove 10 

### otherwise. It's failed to do so. 11 

### JUDGE SULLIVAN: Well, let me ask you a 12 

### question about this, and I'll be talking with the 13 

### FAA about this as well. Again, I'm going to turn 14 

### back to Volume 55 of the Federal Register, and in 15 

### this particular discussion, let's turn 16 

### (Telephonic interference.) 17 

### JUDGE SULLIVAN: And in this 18 

### particular discussion, the FAA is talking about 19 

### the defense of laches, and when the defense of 20 

### laches should be raised, and under what 21 

### circumstances. Now on page 27556, there's a 22 statement that says that essentially, part of the

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### 38

1 

### laches defense should be, quote, "because 2 documents or witnesses become unavailable due 3 solely to the Agency's unreasonable or excessive 4 delay in initiating the case." End quote. 5 

### And what I'm seeing in this affidavit 6 that was presented by your client, is that the 7 client received a Letter of Investigation. This 8 particular affidavit doesn't say when, but it 9 does acknowledge that a Letter of Investigation 10 was received, and according to the FAA's 

### 11 responsive materials, which it filed on June 5, 12 2015, that Letter of Investigation was fairly 13 detailed, and was provided on or about June 23rd, 14 2011, giving a tremendous amount of information 15 to your client about what the allegations were, 16 the basis for the allegations, the rationale and 17 analysis supporting the investigation results, 18 and so forth. 19 

### So if that has been provided, and I 20 would agree that it doesn't serve, or supplant 21 the need for some type of initial pleading, 22 whether that be the Notice of Proposed Civil

(202) 234-4433 NEAL R. GROSS COURT REPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 (202) 234-443339 1 Penalty or Complaint we haven't decided yet. But 2 if that Letter of Investigation has been 3 provided, doesn't that trigger your client's 4 responsibility to start preserving evidence and 5 obtaining evidence in the event of a future 6 filing? And if so, and your client failed to do 7 that, can I possibly find that it was only the 8 FAA's fault? 9 MR. MCDONALD: Well, Your Honor, as I 10 sit here right now, I don't recall the exact 11 dates, but that equipment was modified, as I 12 recall, back in about 2008, and

-- here are the 13 exhibits we sent. No. That was in 2011. 14 JUDGE SULLIVAN: Well, I have, on your 15 Amended Motion, filed May 15, 2015, an exhibit 16 that's entitled Capability List, Establishment 17 and Revision Processes Approved as of July 8, 18 2008, and signed by a general manager whose 19 signature I can't read. But there's certainly 20 material in your exhibits that are dated back to 21 July 2008, and then subsequently, December 2008. 22

(202) 234-4433 MR. MCDONALD: Yes. It's a different

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1 

### argument I'm making there, Your Honor, possibly 2 unclearly, but I'll try and make it more clear. 3 JUDGE SULLIVAN: Okay. 4 

### MR. MCDONALD: I took a two-prong 5 

### attack on that. I think this is a little bit 6 

### beyond the motions before the court, possibly, 7 

### but to respond to your inquiry, the position the 8 

### Respondent's taking is two things. One: it had 9 

### tooling--- I'm not sure how relevant this is now 10 that the Administrator's amended the Complaint. 11 

### But it had tooling that was approved for its use. 12 

### It had the manuals, tooling, 13 facilities, everything that is required in order 14 to conduct repair on these particular units, back 15 in 2008, and it proved that to the FAA, and upon 16 that proof, its capabilities list was expanded to 17 include the ability to work on these particular 18 units, and then it began working on those. 19 At a subsequent point in time, the FAA 20 via a 

### different inspector, visited the 21 

### Respondent's facilities, and that particular 22 tooling was not there. The reason that particular

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### 41 1 tooling was not there was that it had been sent 2 out to be modified. 3 

### So that and I'll just briefly 4 explain this to you, Your Honor. The tooling, 5 originally, was made so it could both test 6 pneumatic and hydraulic systems, and it was 7 decided, based upon, as I understand it, new 8 requirements of the FAA on the repair station, to 9 have separate tooling for each testing function. 10 So this test unit was essentially divided in to 11 two separate pieces of tooling, one solely for 12 pneumatic, the other solely for hydraulic. 13 

### And that is when this new inspector 14 came in, and inspected, and found that they were 15 missing the tooling, because at that time it was 16 out at the shop, being turned from one unit in to 17 two test units. 18 

### And then the FAA said, well, if you 19 don't have the tooling, then all the parts that 20 require this tooling that you've returned to 21 service must have been in violation of the FARs. 22 And so they backed it all the way up to 2008, in

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1 the Administrator's Original Complaint, which is 2 every one of these units my client ever released 3 to service. So the purpose of the argument with 4 regard to the fact that the OpSpecs were amended 5 in 2008, was to show that we obviously had the 6 tooling then, because the inspector then involved 7 issued the OpSpecs, and he couldn't do so unless 8 we had the tooling, the manuals, and training, et 9 cetera, to do so. 10 Subsequently, a new inspector comes 11 in, and inspects the facility, one that this 12 tooling is out being made in to two separate 13 pieces. Now my client is still in business, its 14 OpSpecs have not been rewrote, he still has these 15 capabilities, and it's because he has these two 16 units in his shop. And so, you know, it's 17 ultimately our position, if we ever get to trial 18 that, you know, he always had the tooling to do 19 the work, and so the Administrator's position is 20 incorrect. That's what that argument is going 21 to. 22 So I'm saying that my witness can say

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### 1 that yes, I received this tooling from Paz, and I 2 modified it in accordance with the drawings which 3 are attached to Mr. Allen's affidavit, within my 4 shop, and I was working on it, and on such and 5 such date I returned it to Paz. And I think 6 that's a pretty important witness to be able to 7 put in front of the court, an independent witness 8 with no dog in this fight, who will say where the 9 tooling was, why it wasn't in the shop when the 10 inspector investigated, and what was being done 11 to it. It's really what this case is about. 12 JUDGE SULLIVAN: Okay. Thank you. 13 

### MR. MCDONALD: And that's the witness 14 

### I •ve lost, and his records receivers, 15 travelers, work orders, and things that went with 16 that business, they're lost. That's evidence that 17 I no longer can obtain, and that's the basis of 18 my claim of laches. 19 

### JUDGE SULLIVAN: And which witness is 20 this? 21 MR. MCDONALD: That would be the owner 22 of the shop. Mr. it's I'm looking for

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### 1 where I have his name in the affidavit. Oh. Jack 2 

### Batista, who is the owner of Ledo. Ledo 3 

### Industries. 4 

### JUDGE SULLIVAN: Okay. Thank you. 5 

### Anything else that you would like to add to your 6 

### primary argument about laches, before I turn to 7 

### the FAA? 8 

### MR. MCDONALD: No, Your Honor. 9 

### JUDGE SULLIVAN: Okay. Mr. Vines, could 10 

### you basically highlight for me your response? 11 

### MR. VINES: Yes. So with the Agency's 12 argument, obviously we, under the two elements

-- 13 

### first of all, 

### they're slotted as the 14 

### affirmative defense of proving laches has the 15 burden of proving their affirmative defense of 16 laches, and that requires two elements. That the 17 FAA brought the action with some sort of delay, 18 and that that delay resulted in prejudice. 19 

### And Judge, that's the first element. 20 It's the Agency's position that the Respondent 21 has not effectively presented, or met its burden 22 in proving the first element by way of the

(202) 234·4433 NEALR. GROSS COURT REPORTERSAND TRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 (202) 234·443345 

### 1 evidence that it's submitted to this court in 2 support of that first element, and that the 3 Respondent has not submitted either timelines or 4 any evidence of when some of these witnesses were 5 contacted, or attempted to be contacted, as you, 6 as the Judge noted earlier, by way of the 7 Agency's Letter of Investigation which was issued 8 a couple of months after the violations took 9 place, followed by the Notice of Proposed Civil 10 Penalty, followed by the Complaint, inclusive of 11 the five year statute of limitations as required, 12 or promulgated by I think it' s 4 9 28 13 

### u.s.c. 2462. 14 

### Respondent was aware. You'11 notice 15 that it would need to begin gathering evidence in 16 defense of this potential action, and again, the 17 Respondent has not submitted any timeline, or any 18 evidence showing when the Respondent reached out, 19 to try to obtain, gather, and keep this evidence 20 

### to prove its case. So we felt, the Agency felt 21 the Respondent hasn't met its burden with regard 22 to the first element, as well as the second

(202) 234·4433 NEAL R. GROSS COURT REPORTERSAND TRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. WASHINGTON, D.C. 20005·3701 (202) 234-443346 

### 1 element. So again, Judge, as -- to best as I 2 can. 3 JUDGE SULLIVAN: Thank you, Mr. Vines. 4 Mr. McDonald, I'm going to turn back to you. You 5 have the right of final reply on the laches issue 6 

### as well. Do you have anything else you would 7 like to add to your primary arguments? 8 

### MR. MCDONALD: Yes, Your Honor. Just 9 ever so briefly. I'd like to point out, we need 10 to remember where we are, and right now, we are 11 at the pleading stage. We've raised a --- we've 12 raised the affirmative defense of laches, which 13 is a defense that ultimately would have to be 14 proved at a hearing, and we're not there yet. 15 

### The court chose, and asked us to, 16 asked to treat this as a Motion to Dismiss, which 17 we have, and we have submitted affidavits in 18 support of the Motion To Dismiss on the defense 19 of laches. What I don't want this to turn in to, 20 by accident, if you will, is a Motion For Summary 21 Judgment on the defense of laches, because, for 22 starters, the FAA hasn't filed a Motion For

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### 1 Summary Judgment on the issue. We're not at 2 issue. It is an affirmative defense, and we may 3 very well plead it at the hearing, if we get 4 there. 5 So I just want to point out to the 6 court, you know, to remind the court where we are 7 in the pleadings. It's our position, ever-so8 briefly restated, that the FAA has the burden of 9 going forward with the evidence based on what 10 we've provided. 11 

### We've shown that the company who did 12 the work is out of business. We've shown that we 13 can't locate the witness, and we've shown, as you 14 can see by the engineering documents, which are 15 dated in 2011, which is consistent when the 16 inspectors were at the Respondent's premises, 17 that the equipment was out being modified. 18 

### As I've mentioned before, the courts 19 have typically been somewhat hesitant to accept 20 the veracity of a Respondent when not supported 21 by other evidence or other witnesses, due to 22 their obvious self-interest in the proceedings,

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1 

### and hence, the loss of an independent witness is 2 a huge loss to a Respondent in any type of FAA 3 

### action, whether it's a 

### civil penalty or 4 

### certificate action. And that's all I have to say 5 

### about it, Your Honor. It's our position that we 6 

### have been definitely prejudiced. 7 

### JUDGE SULLIVAN: Okay. Let me ask you 8 

### this. It's just a procedural point. Are you 9 

### saying that the court is premature in its 10 

### (Telephonic interference.) 11 

### JUDGE SULLIVAN: laches with you 12 

### now? Or that there is simply a wide opportunity 13 

### for the Respondent to bring the defense of laches 14 

### to the court's attention? You know, I have not 15 

### heard the argument before, that the court cannot 16 

### take and consider the laches any time. But I just 17 

### wanted to check in with you on that. You're 18 

### saying that it's too soon in this case? 19 

### MR. MCDONALD: Well, generally, 20 affirmative defenses are defenses that aren't 21 

### raised by the Complaint, that are defense based 22 on other evidence which must be proven at a

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### 1 hearing. I don't

--- there's been many of these 2 cases where the court, as you, has treated the 3 motion for dismissal on the basis of laches as a 4 motion, and has denied it or whatnot. I don't 5 I just don't want the court, or I'm asking the 6 court to please not issue an order that is 7 drafted in such a way, that it essentially grants 8 summary judgment on the defense of laches. 9 It may be that at a hearing, if we get 10 there, that I could put on additional witnesses 11 and prove the defense of laches at hearing. I 12 

### just don't think we're I don't think we're at 13 the summary judgment phase here. 14 

### JUDGE SULLIVAN: Well, it clearly is 15 not a summary judgment type motion, since the 16 review in judgment is so different than the 17 review under any other type of prehearing motion. 18 The reason I consider laches as early as possible 19 is because it saves the parties money, in my 20 opinion. 21 

### If there is a viable laches defense 22 that can be shown early in the proceeding, it

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1 

### takes a case off the books for everyone, when, if 2 there is proof positive that it simply could not 3 be tried in fairness to the charged party. 4 

### There's no, no benefit to spending a year in 5 

### discovery, and doing interrogatories, 6 

### depositions, and other types of prehearing 7 

### litigation, if it's all for naught in the end. 8 

### So I think that's my particular focus, 9 

### when I want to hear about this as soon as 10 

### possible, because if evidence has been lost, 11 

### irrevocably, and the party is prejudiced, and 12 

### cannot have equal standing with its friend across 13 

### the aisle, then we should address that, you know, 14 

### rather than later. 15 

### But that doesn't mean that I'm not 16 

### open to deferring ruling on the question, if, in 17 

### fact, a party needs additional time to see if 18 

### that is in fact the case. So I just wanted to 19 

### kind of mention that, so that it's an explanation 20 

### of why I would take it as early as possible, as 21 

### opposed to waiting until the time of trial. 22 It

(202) 234-4433 

### certainly would

NEALR. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLANDAVE ,N.W. WASHINGTON, D.C. 20005-3701 

### be a 

### deep

(202) 234-443351 

### 1 disappointment to a litigating party, to find out 2 that the court did not quite agree with its 3 perception that it had done all it could, and yet 4 the hearing has been held and there's no more 5 time, essentially, for the party to look for 6 witnesses, for example, if a laches defense was 7 

### not persuasive. So I like to take that as soon 8 as possible, if it's timely for the parties 9 themselves. But that doesn't mean that I'm not 10 more than happy to push it out too. So hopefully, 11 that's an explanation that can kind of give you a 12 better understanding to share with your client. 13 MR. MCDONALD: Your Honor, I understood 14 that, quite frankly, from the beginning

--- your 15 motivation. I think you're very clear in that in 16 our early conversations back in December. I just 17 don't want to lose

--- I think that what we've 18 presented is sufficient for dismissal based on 19 both the laches defense and on the statutory 20 statute of limitations. But I just don't want the 21 court to inadvertently wipe out any --- but if 22 the court determines that the case should go on

(202) 234-4433 NEAL R. GROSS COURT REPORTERS ANDTRANSCRIBERS 1323 RHODE ISLANDAVE., NW. WASHINGTON, D.C. 20005-3701 (202) 234-443352 1 to a hearing, that the order is not written in 2 such a way that it bars me from raising the 3 statute of limitations defense, and continuing to 4 try and put that information before the court at 5 a hearing, if I'm able to obtain additional 6 evidence. That's all. 7 JUDGE SULLIVAN: All right. Thank you. 8 Mr. McDonald, I'd like to ask you, as the moving 9 party, is there anything else that you would like 10 to add to your oral argument today? Or any 11 question you have before we close? 12 MR. MCDONALD: The answer to both 13 questions is no, Your Honor. Thank you for the 14 opportunity. You've been very kind to give us 15 quite a bit of time to discuss this with you, and 16 to brief it. 17 JUDGE SULLIVAN: Thank you. Mr. Vines, 18 on behalf of the FAA, same question to you, sir. 19 MR. VINES: Nothing further, Judge. 20 JUDGE SULLIVAN: I want to thank you 21 both very much for all of your materials. It's 22 been a pleasure to read all of your materials,

(202) 234-4433 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 (202) 234-443353

1 

### and to be prepared for this very interesting 2 issue before the court. I want to take a look at 3 one or two other cases before I make a ruling, 4 

### but I will try and get the ruling out as soon as 5 

### possible. I'm looking at no later than the end 6 

### of this month, at the very latest. 7 

### So I will thank you both very much for 8 

### your presence today. I will wish you all a very 9 

### happy holiday coming up this weekend, and I look 10 

### forward to talking with you again, if that is in 11 

### fact the case after the ruling is made, going 12 

### forward with some or all of the case that is 13 

### before the court. So with that, we can go off 14 

### the record, and I wish you all a good day. Thank 15 

### you. 16 

### (Whereupon, at 2:40 

### 17 teleconference was concluded) 18 19 20 21 

### 22

(202) 234·4433 NEAL R. GROSS COURT REPORTERS ANDTRANSCRIBERS 1323 RHODE ISLANDAVE, N.W. WASHINGTON, D.C. 20005·3701 

### p.m.' the

(202) 234·443354 A

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www.nealrgross.com61 C E R T I F I C A T E

This is to certify that the foregoing transcript

In the matter of: Paz Aviation

Before: DOT OH

Date: 07-01-15

Place: teleconference

was duly recorded and accurately transcribed under my direction; further, that said transcript is a true and accurate record of the proceedings.

Court Reporter

(202)234-4433 NEAL R. GROSS COURTREPORTERSANDTRANSCRIBERS 1323RHODE ISLANDAVE., NW WASHINGTON,D.C. 20005·3701 WoNW.nealrgross.com