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 to Justice 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) of the 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 of each pilot ... including ... the pilot's flight time in sufficient detail 

to determine compliance with the flight time limitations of this part." The agency sought 

a total civil penalty of $25,000. · 

In view of the provision allegedly violated, the underlying proceeding focused on 

FARs circumscribing the number of hours pilots may fly. It examined flight 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 particular point 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 (Federal Aviation Administration v. Sun ~uest 

Executive Air Charter, Inc., FAA Docket No. CP08WP0004, Initial Decision of 

Administrative Law Judge Richard C. Goodwin, served January 26, 2010). The agency 

filed a limited appeal. Sun Quest did not appeal. 
2 

The FAA appealed from one finding of failure of proof. Its appeal originated with 

the charge that the carrier had not included in its flight and duty time records 50.4 hours 

of flights 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 had failed 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 and other expenses under the Equal Access to Justice Act ("EAJA" or "the 

Act"), 5 U.S.C. §504, and implementing regulations l4 C.F.R. Part 14. It seeks an award 

respecting three of the four charges of the 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 brief in opposition ("Complainant's Brief") and Sun Quest, 

now the Applicant, followed with a brief in support of its Application ("Applicant's 

Brief"). For the reasons set forth 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 of the agency was "substantially justified" or special circumstances make an 

award unjust (5 U.S.C. §504(a)(l)). The FAA's rules implementing the statute 

essentially track its language (see §14.04). The burden of proof that an award should not 

be made rests with the agency. 14 CFR §14.04(a). 

"Substantial justification" connotes an active, searching inquiry into the quality 

of evidence advanced and the overall reasonableness of the agency's position. United 

Brotherhood of Carpenters and Joiners v. NLRB, 891 F.2d 1160, 1163 (5th Cir. 1990). The inquiry 

examines the totality of the-circumstances surrounding the government's adoption of its 

position. Smith v. Principi, 343 F.3d 1358, 1362 (Fed.Cir. 2003). 

The FAA's position consists of more than the quality of the allegations of its 

complaint. It also comprises the agency's posture in supporting the allegations during 

the pendency of the proceeding. Krecioch v. United States, 316 F. 3d 684, 689 (th Cir. 2002) . • 

An allegation is considered to be substantially justified when it has a reasonable 

basis in law and fact. Piercev. Underwood, 487 U.S. 552,565 (1988); 14 CFR 14.04(a); 

Michael Edward Wendt, FAA Order 93~9 (March 25, 1993), p. 3. The charge must be 

justified to the degree that could satisfy a reasonable person. The standard is met if there 

is a "genuine dispute," or if reasonable people could differ as to the appropriateness of the 

contested matter. Piercev. Underwood, p. 565. The agency must show (a) a reasonable 

basis in truth for the facts alleged; (b) a reasonable basis in law for the legal theory 

.. 
3 

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

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 not raise a presumption of lack of substantial justification. 

An agency's defeat in the underlying action on the merits does not r~ise a presumption 

that its position was not substantially justified under 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 4 26, 4 30 (5th Cir. 1982). Nor must the agency 

demonstrate that it had a substantial likelihood of prevailing to prove that its litigation 

position was substantially justified. Kiareldeen v. Ashcroft, 273 F.3d 54 2, 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 considered in turn. · 

A. Charge Two- Flight Training 

The agency had contended that 1.3 hours of flight training provided on January 

24, 2005 by Sun Quest's chief pilot, Mark Smith, to a company pilot should have 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 undersigned ruled 

that Complainant had failed to prove that Sun Quest had violated §135.63(a)( 4)(vii). As 

such, the Applicant satisfied EAJA's precondition that, in an adversary adjudication, it be 

the prevailing party. We next decide if the agency can defeat an award by showing 

either that it was "substantially justified" in bringing and maintaining this charge or that 

special circumstances would make an award unjust. 

I conclude that Complainant has demonstrated substantial justification. I find 

that the agency was reasonable in bringing and maintaining this charge. 

The agency's assertion that Sun Quest violated §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 should be considered "other commercial flying" and thus an 

element of the flight time tally, the argument continues. 

The I.D. ruled that Mr. Smith was not a required crewmember. It stated 

additionally that the fact of Mr. Smith's compensation was not determinative because he 

had not been compensated for 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 was justified in 

concluding from this circumstance that Mr. Smith must have been the PIC. Its 
4 

conclusion also followed naturally from the fact that Mr. Smith, the check airman, had 

much the greater knowledge and experience. The agency also had a reasonable basis for 

arguing that the fact of Mr. Smith's compensation demonstrated a component of the 

status of required crewmember. The agency made a case for its position on this charge 

that a decisionmaker rationally could have endorsed. 

In view of the foregoing, I conclude that the agency was substantially justified in 

bringing and maintaining this element of the 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 did not record this action as part of Smith's flight time in calculating 

his flight time limitations. Complainant's contention that Sun Quest should have added 

the check ride to Smith's flight time (as "other commercial flying" under §135.267) was 

upheld by the undersigned (I.D., pp. 5~6). 

The Applicant seeks an award based on 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 out in its records of pilots' flight 

time. It had asserted that these were "public aircraft" operations over which the agency 

had no jurisdiction. A "public aircraft" is defined as an aircraft used exclusively for the 

service of any government which is not carrying persons or property 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 recorded under §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 of whether the agency can show that it was "substantially 

justified" on this element of its case or that special circumstances would make an award 

unjust and foreclose it nonetheless. 

I conclude that the agency was substantially justified in bringing and maintaining 

this charge. I find that its argument had a reasonable basis in both fact and law. 

1 In view of my 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 drew upon judgments 

reached after previous examination of the issue. It is appropriate to defer to an agency's 

interpretation so long as it represents the agency's "fair and considered judgment 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 jurisdiction was reasonable. I find that the agency's position on this 

issue was rationally based. 

The Administrator held that the agency's proof had failed because it had not 

shown that the Sun Quest pilot acting on behalf of the LAPD had been 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 of times in 

the proceeding below that it believed that the pilot had received 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 proof that, in viewing the totality of the circumstances 

surrounding the agency's adoption of its position, Complainant was substantially 

justified in moving forward and continuing to pursue this charge. 3 

My conclusion also is reached with due regard for the principle that the FAA 

must be entitled to "err" on the side of bringing close cases to trial to properly fulfill its 

mandate of promoting and ensuring air safety.4 

D. Conclusion 

In view of the foregoing, I conclude that the FAA met its burden of demonstrating 

that it had substantial justification under the Equal Access to Justice 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) of the FARs by 1) the action of its chief pilot in 

providing flight training for 1.3 hours on January 24, 2005; 2) the action of its chief pilot 

in providing a check ride for 1.5 hours on March 9, 2005; and 3) failing to record in its 

pilot and duty time records the 50.4 hours it had undertaken for the LAPD. 

3 In view of my 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 of Administrative Law Judge Burton S. Kolko Denying Attorney's 

Fees and Other Expenses, FAA Docket No. CP03GL0002, DMS No. F AA-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 intended to deter Federal agencies from "advancing in good faith 

the novel but credible extensions and interpretations of the 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 of the parties have been considered. Those not specifically 

discussed herein are rejected without further comment. · 

In view of the 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 2W10001 

Sun Quest Executive Air Charter, Inc. 

Attn: Mark Charles Smith, Chief Pilot 

7436 Hayvenhurst Ave. 

Van Nuys, CA 91406 

Arthur Wasserman, Esq. 

Law Offices of Wasserman & 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 of the 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 of Hearings, M-20 

U.S. Department of Transportation 

1200 New Jersey Avenue, S.E. (Ell-310) 

Washington, DC 20590 

ONE COPY 

TEL: Attorney-Advisor (202) 366-2139; Staff Assistant 6-5121 

FAX: (202) 366-7536 

FAA Docket No. CP08WP0004 

(Civil Penalty Action) 

1 

Service was by U.S. Mail. For service in person or by 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.