### SERVED: APRIL 30, 2012

UNITED STATES DEPARTMENT OF TRANSPORTATION OFFICE OF HEARINGS

WASHINGTON, D.C. Application of
SUN QUEST EXECUTIVE AIR CHARTER, INC.

FDMS No.**FAA~20IH294,** successorto FAA-2008-0238 (Equal Access to Justice Action)

INITIAL DECISION DENYING APPLICATION FOR ATTORNEY'S FEES AND OTHER EXPENSES



### I. Background
This application under the Equal Access toJustice Act, 5 U.S.C. §504, originated in a proceeding in which the Federal Aviation Administration ("FAAn or "the agencyn) charged Sun Quest .Executive Air Charter, Inc. ("Sun Questn or "Applicant") with four violations of §135.63(a)(4)(vii) ofthe Federal Aviation Regulations ("FARs"), 14 C.F.R. §135.63(a)( 4)(vii). That section requires certificate holders like Sun Quest to "keep [a]n individual record ofeach pilot

... including

... the pilot's flight time in sufficient detail to determine compliance with the flight time limitations ofthis part." The agency sought
a total civil penalty of $25,000. ·
In view ofthe provision allegedly violated, the underlying proceedingfocused on FARs circumscribing the number ofhours pilots may fly. It examinedflight time limitations during any 24 consecutive hours. Calculating those limits (which generally
are 8 hours for**one~pilot** crews and lO hours for two) involves adding to "total flight time

... any other commercial flying by that flight crewmember." See§135.267(b). The meaning of "other commercial flying" in the regulation became a particularpoint of controversy. My Initial Decision ("I.D.n) found two violations of§135.63(a)( 4)(vii) and assessed a total civil penalty of $5,000. The I.D. also ruled that the FAA failed to prove a violation regarding the other two counts 

### (FederalAviationAdministration 

### v. Sun**~uest** 

### ExecutiveAirCharter, Inc., FAA Docket No. CP08WP0004, Initial Decision of Administrative LawJudge Richard C. Goodwin, servedJanuary 26, 2010). The agency filed a limited appeal. Sun Quest did not appeal.2

The FAA appealed from one finding offailure ofproof. Its appeal originatedwith the charge that the carrierhad not included in its flight and duty time records 50.4 hours offlights it had undertaken for the Los Angeles Police Department ("LAPD"). The Administrator's Decision and Order affirmed the I.D.'s conclusion that no violation of §135.63(a)(4)(vii) occurred, but its conclusion rested on different grounds. The Administrator held that the agency hadfailed to prove a condition necessary to show that these operations had constituted "other commercial flying"**~~** that the LAPD had paid Sun Quest for the flights 

### (Sun**~uest**

### ExecutiveAirCharter, Inc., FAA Order No.**2011~13,** November 22, 2011, p. 3).

On December 20, 2011, Sun Quest filed an application ("the Application") for attorney's fees andother expenses under the Equal Access toJustice Act ("EAJA" or "the Act"), 5 U.S.C. §504, andimplementingregulations l4 C.F.R. Part 14. It seeks an award respecting three ofthe four charges ofthe Complaint. (In conformance with their numbering in the I.D., I 

### will refer to them as charges two, three, and four. 

### See I.D., p. 2). The agency answered with a briefin opposition ("Complainant's Brief") and Sun Quest,
now the Applicant, followed with a briefin support ofits Application ("Applicant's Brief"). For the reasons setforth below, I deny Sun Quest's Application in its entirety.



### II. Standards

The EAJA requires an agency conducting an "adversary adjudication" to award fees and other expenses to a prevailing party (other than the United States) unless the position ofthe agency was "substantiallyjustified" or special circumstances make an awardunjust (5 U.S.C. §504(a)(l)). The FAA's rules implementing the statute essentially track its language 

### (see §14.04). The burden ofproofthat an award should not be made rests with the agency. 14 CFR §14.04(a).
"Substantialjustification" connotes an active, searching inquiry into the quality ofevidence advanced and the overall reasonableness ofthe agency's position. 

### United Brotherhoodof Carpenters andJoiners v. 

### NLRB, 891 F.2d 1160, 1163 (5th Cir. 1990). The inquiry examines the totality ofthe-circumstances surrounding the government's adoption ofits position. 

### Smith v. 

### Principi, 343 F.3d 1358, 1362 (Fed.Cir. 2003).
The FAA's position consists ofmore than the quality ofthe allegations ofits complaint. It also comprises the agency's posture in supporting the allegations during the pendency ofthe proceeding. 

### Krecioch v. 

### UnitedStates, 316 F.3d 684, 689 (th Cir. 2002)

. • An allegation is considered to be substantiallyjustifiedwhen ithas a reasonable basis in law andfact. 

### Piercev. Underwood, 487 U.S. 552,565 (1988); 14 CFR 14.04(a); 

### Michael EdwardWendt, FAA Order**93~9** (March 25, 1993), p. 3. The charge mustbe justified to the degree that could satisfy a reasonable person. The standardis met ifthere is a "genuine dispute," orifreasonable people could differ as to the appropriateness ofthe contestedmatter. 

### Piercev. Underwood, p. 565. The agency must show (a) a reasonable basis in truth for the facts alleged; (b) a reasonable basis inlaw for the legal theory 

## ..3

propounded; and (3) a reasonable connection between facts and theory; 

### ValleyAir Services, 

### Inc., FAA Order No. 95-27 (December 19, 1995), p. 6,

### pet.for reconsid. denied, FAA Order No. 96-15 (May 3, 1996); 

### Smith v. 

### National Transportation Safety Board, 992 F.2d 849, 852 (8th Cir.1993).

Failure to prevail does notraise a presumption oflack of substantialjustification. An agency's defeat in the underlying action on the merits does 

### not**r~ise** a presumption that its position was not substantiallyjustifiedunder EAJA (emphasis in original). 

### Nancy ReniFloyd, FAA Order No. 2006-4,2006 WL 465372 (February 10, 2006), p. 5; S & 

### H Riggers & 

### Erectors v. 

### OSHA, 672 F.2d 426, 430 (5th Cir. 1982). Nor must the agency demonstrate that ithad a substantial likelihood ofprevailing to prove that its litigation position was substantiallyjustified. 

### Kiareldeen v.

### Ashcroft, 273 F.3d 542, 554 (3rd Cir. 2001); 

### Michael Edward Wendt, FAA Order 93-9,1993 WL 833111 (March 25, 1993).



### III. Findings and Conclusions

I will deny the Applicant's Application. The three charges for which Sun Quest argues for an award are consideredin turn. ·
A. Charge Two- Flight Training

The agency had contended that 1.3 hours offlight training provided onJanuary 24, 2005 by Sun Quest's chiefpilot, Mark Smith, to a company pilot shouldhave been considered "other commercial flying" under §135.267 and thus added to Smith's flight time in calculating his flight time limitations. The I.D. disagreed. The undersignedruled that Complainant hadfailed to prove that Sun Questhadviolated §135.63(a)(4)(vii). As such, the Applicant satisfied EAJA's precondition that, in an adversary adjudication, itbe the prevailing party. We next decide ifthe agency can defeat an awardby showing either that it was "substantiallyjustified" inbringing andmaintaining this charge or that special circumstances wouldmake an awardunjust.

I conclude that Complainant has demonstrated substantialjustification. I find that the agency was reasonable in bringing andmaintaining this charge.
The agency's assertion that Sun Questviolated §135.63(a)(4)(vii) rests on its contention that Mr. Smith 1) acted as pilot-in-command ("PIC") and, as such, was a required crewmember and 2) was compensated. Flights in which a pilot is a paid and required crewmember shouldbe considered "other commercial flying" and thus an element ofthe flight time tally, the argument continues.
The I.D. ruled that Mr. Smith was not a required crewmember. It stated additionally that the fact ofMr. Smith's compensation was not determinative because he had notbeen compensatedfor serving as a crewmember. Yet, I find, Complainant's arguments have substantial merit. The flight training record for this flight lists the company pilot - a trainee

- as "SIC' (second-in-command). The agency wasjustifiedin concluding from this circumstance that Mr. Smith must have been the PIC. Its4

conclusion also followed naturally from the fact that Mr. Smith, the check airman, had much the greaterknowledge and experience. The agency also had a reasonable basis for arguing that the fact ofMr. Smith's compensation demonstrated a component ofthe status ofrequired crewmember. The agency made a case for its position on this charge that a decisionmaker rationally could have endorsed.

In view ofthe foregoing, I conclude that the agency was substantiallyjustifiedin bringing and maintaining this element ofthe action. I deny the Applicant's request for anaward. 1

B. Charge Three
- Check Ride

On March 9, 2005, Captain Smith gave a company pilot a check ride lasting 1.5 hours. Sun Quest didnot record this action as part of Smith's flight time in calculating his flight time limitations. Complainant's contention that Sun Quest shouldhave added the check ride to Smith's flight time (as "other commercial flying" under §135.267) was upheldby the undersigned (I.D., pp.**5~6).** The Applicant seeks an awardbasedon this charge (Applicant's Brief, p.ll). Applicant, however, was not the prevailing party. As such, it may not qualify for an award. 2
C. Charge Four- the LAPD Operations

Sun Quest, as the Respondent in the underlying matter, had opposed the agency's claim that its LAPD operations should have been set outinits records ofpilots' flight time. It had asserted that these were "public aircraft" operations over which the agency hadnojurisdiction. A "public aircraft" is defined as an aircraft usedexclusivelyfor the service ofany government which is not carrying persons orproperty for commercial purposes (49 U.S.C. §40102(a)(4l)(D)). The agency countered that the LAPD operations constituted "other commercial flying" under FAR §l35.267(b) and, as such, were required to be recordedunder §l35.63(a)(4)(vii). As noted (p. 2), it was adjudged that the agency failed to prqye the violation. Sun Quest thus was the prevailing**p~rty.** We now turn to the question ofwhether the agency can show that itwas "substantially justified" on this element ofits case or that special circumstances wouldmake an award unjust andforeclose it nonetheless.

I conclude that the agency was substantiallyjustifiedin bringing and maintaining this charge. I find that its argument had a reasonable basis in bothfact andlaw.

1 In view ofmy ruling, I do not consider Complainant's argument that the situation described constituted "special circumstances" foreclosing in any event an EAJA award as "unjust." See Complainant's Brief, pp. 12-13. 2 See Part II, p. 2. The Applicant concedes that it lost on this issue. Application, pp. 2, 3; Brief, p. 6. Its suggestion that because the I.D. found mitigating factors and assessed a civil penalty (for the two §135.63(a)(4)(vii) violations found) lower than that suggested by the agency (for the four violations alleged) warrants an award nonetheless is rejected as irrelevant. See Application, pp. 3-4.5

The FAA's position was consistent with its longstanding interpretation of the meaning of "other commercial flying" (Order No.**2011~**13, p. 6). It drewuponjudgments reached after previous examination ofthe issue. It is appropriate to defer to an agency's interpretation so long as itrepresents the agency's "fair and consideredjudgment on the matter."

### Auerv. Robbins, 519 U.S. 452,456 (1997). Further, the Administrator indicated that the matter of jurisdiction, rather than foreclosing the agency's power to regulate,
was an issue not free from doubt. Order No.**2011~13** found that the agency indeed "has jurisdiction over some public aircraft operations." (p. 6). Against this background, the agency's assertion of jurisdictionwas reasonable. I find that the agency's position on this issue was rationally based.

The Administrator held that the agency's proofhadfailed because ithad not shown that the Sun Quest pilot acting onbehalfofthe LAPD hadbeen compensated. Compensation is an indispensable element of "other commercial flying" necessitating recording for**flight~**limitation purposes (Order No.**2011~**13, pp. 7**~8).** The agency's position on that issue nonetheless was reasonable. It had suggested a number oftimes in the proceeding below that itbelieved that the pilot hadreceived payment for these flights, yet Respondent never commented 

### (see Complainant's Reply, pp.**15~**19). When a party fails to take issue with a contention in circumstances in which denial would naturally follow, it may be concluded that no disagreement exists. Against this background, I find sufficient proofthat, inviewing the totality ofthe circumstances surrounding the agency's adoption ofits position, Complainant was substantially justifiedin moving forward and continuing to pursue this charge.3
My conclusion also is reached with due regardfor the principle that the FAA must be entitled to "err" on the side ofbringing close cases to trial to properly fulfill its mandate ofpromoting and ensuring air safety. 4

D. Conclusion

Inview ofthe foregoing, I conclude that the FAA met itsburden ofdemonstrating that ithad substantialjustificationunder the Equal Access toJustice Act to bring and to maintain the charge that**th~** Applicant and Respondent below, Sun Quest Executive Air Charter, Inc., violated §135.63(a)(4)(vii) ofthe FARs by 1) the action ofits chiefpilot in providing flight training for 1.3 hours onJanuary 24, 2005; 2) the action ofits chiefpilot in providing a checkride for 1.5 hours on March 9, 2005; and 3) failing to record in its pilot and duty time records the 50.4 hours ithadundertakenfor the LAPD.

3 In view ofmy ruling, I do not consider Complainant's argument that the situation described constituted "special circumstances" foreclosing in any event an EAJA award as "unjust." See Complainant's Brief, pp. 13,20-21. 4 Richard W Kuhling, Initial Decision ofAdministrative Law Judge Burton S. Kolko Denying Attorney's Fees and Other Expenses, FAA Docket No. CP03GL0002, DMS No. FAA-2003-15769 (August 8, 2003), p. 4, aff'd, FAA Order No. 2005-13,2005 WL 2214611 (August 15, 2005). The Administrator there noted Congress' dictum that the EAJA was not intendedto deter Federal agencies from "advancing in good faith the novel but credible extensions and interpretations ofthe law that often underlie vigorous enforcement efforts." Order 2005-13, p. 14, quoting H.R. Rep. No. 96-1418, 96th Cong.2d Sess.11, reprinted in U.S. Code Cong. & Ad. News 4984, 4990.6

All arguments ofthe parties have been considered. Those notspecifically discussed herein are rejected without further comment. ·
In view ofthe foregoing, I deny Applicant's application in its entirety.5

Attachment

- Service List m Administrative Law Judge

5 This decision becomes fmal 30 days after its issuance unless a party appeals or the FAA Decisionmaker takes review under his or her own initiative. 14 CFR §14.28(a). The appeal must be either (a) mailed to the Federal Aviation Administration, 800 Independence Avenue, S.W., Washington, D.C. 20591, Attention: Hearing Docket Clerk, AGC-430, Wilbur Wright Building- Suite 2W1000; or (b) delivered personally or via expedited courier service to the Federal Aviation Administration, 600 Independence Avenue, S.W., Wilbur Wright Building- Suite 2W1000, Washington, D.C. 20591, Attention: Hearing Docket Clerk, AGC-430.

# --------------------

# .............

Federal Aviation Administration 800 Independence Avenue, S.W. Washington, DC 20591 SERVICE LIST
ORIGINAL & ONE COPY

Attention: Hearing Docket Clerk, AGC-430, Wilbur Wright Building-Suite 2W1000 1

Sun Quest Executive Air Charter, Inc. Attn: Mark Charles Smith, ChiefPilot 7436 Hayvenhurst Ave. Van Nuys, CA 91406

Arthur Wasserman, Esq. Law Offices ofWasserman & Miller 16380 Roscoe Blvd., Suite 120 Van Nuys, CA 91406-1221 TEL: (818) 895-8234 FAX: (818) 895-0675

Naomi Tsuda, Regional Counsel Federal Aviation Administration Office ofthe Regional Counsel Western-Pacific Region, AWP-7 P.O. Box 92007 Los Angeles, CA 90009-2007 TEL: (310) 725-7101

. FAX: (310) 725-6816

The Honorable Richard C. Goodwin Administrative Law Judge Office ofHearings, M-20 U.S. Department ofTransportation 1200 New Jersey Avenue, S.E. (Ell-310) Washington, DC 20590 ONE COPY

TEL: Attorney-Advisor (202) 366-2139; StaffAssistant 6-5121 FAX: (202) 366-7536 FAA Docket No. CP08WP0004 (Civil Penalty Action)

1 Service was by U.S. Mail. For service inperson orby expedited courier, use the following address: Federal Aviation Administration, 600 Independence Avenue, S.W., Wilbur Wright Building-Suite 2WIOOO, Washington, DC 20591; Attention: Hearing Docket Clerk, AGC-430.