UNITED STATES OF AMERICA DEPARTMENT OF TRANSPORTATION OFFICE OF HEARINGS

IN THE MATTER OF: COMPASS SYSTEMS & SALES, INC. RESPONDENT. DOCKET NO. FAA-2015-2440

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TELECONFERENCE HEARING BEFORE THE HONORABLE J.E. SULLIVAN WEDENESDAY, NOVEMBER 4, 2015 1:33 P.M. HISTORIC JORDAN SPRINGS 1160 JORDAN SPRINGS ROAD STEPHENSON, VIRGINIA 22656FAA vs Compass Hearing November 14, 2015 VR # 2956-1 Page 2 1 APPE ARANCES 2 ONBEHALF OF THE FEDERAL AVIATION ADMINISTRATION: 3 BRI AN K. KHAN, ESQUIRE 4 OFFI CE OF THE REGIONAL COUNSEL, AGL-7 5 2300 EAST DEVON AVENUE 6 DES PLAINES, ILLINOIS 60018 7 TEL EPHONE: 847.294.7109 8 FAC SIMILE: 847.294.7498 9 E-M AIL: BRIAN.K.KHAN@FAA.GOV 10 11 12 13 ONBEHALF OF THE RESPONDENT, 14 COMPASS SYSTEMS & SALES, INC: 15 LOU IS ALEXANDER, ESQUIRE 16 ROTH BLAIR ROBERTS STRASFELD & LODGE 17 100 EAST FEDERAL STREET, SUITE 600 18 YOU NGSTOWN, OHIO 44503 19 TEL EPHONE: 330-744.5211 20 FAC SIMILE: 330.744.3184 21 E-M AIL: LALEXANDER@ROTHBLAIR.COM 22 23 24 25FAA vs Compass Hearing November 14, 2015 VR # 2956-1 Page 3

1 HEARING 2 WEDNESDAY, NOVEMBER 11, 2015 3 1:33 P.M. 4 THE COURT: Okay. We're on the record in the 5 matter of Compass Systems and Sales, Inc. This is 6 docket number FAA-2015-2440. Today is Wednesday, 7 November 4, 2015 and the parties have convened for a 8 Rule-16 litigation scheduling conference. The Federal 9 Aviation Administration which I'll here and after 10 refer to by its initials, the FAA, is represented by 11 its attorney of record, Mr. Brian K. Khan. The 12 respondent, Compass System and Sales, Inc., is 13 represented by its attorney of record, Mr. Stuart A. 14 Strasfeld. He is not present today but sitting in for 15 him is a fellow attorney with that law firm, Mr. Louis 16 Alexander. 17 Welcome to you both. I'm going to briefly 18 just talk about the record so far and then I have some 19 questions that hopefully you'll be able to answer 20 today. I'll note that essentially an August 13, 2015 21 order set in a Rule-16 litigation scheduling 22 conference in directing the parties to confer and file 23 a Rule-26F proposed discovery plan was filed and made 24 part of the record on the date of service, August 13, 25 2015. Subsequently on August 29, 2015, the partiesFAA vs Compass Hearing November 14, 2015 VR # 2956-1 Page 4

1 timely filed a proposed discovery plan, which I have 2 in front of me today. This case, if I recall, let me 3 see, assigned on August 5, 2015 and the parties have 4 asserted among other things in their proposed 5 discovery plan that they would be potentially ready 6 for a hearing after May 20, 2015. 7 So what I'm going to do is I'm going to ask 8 a couple of questions to you both and then we'll talk 9 a little bit about the case itself to give the Court 10 an idea about what the real issues and dispute are. 11 I'll start with you, Mr. Khan. According to the 12 complaint that was filed with the Office of Hearings 13 on July 28, 2015, there's a proposed civil penalty 14 being requested by the FAA of $58,350 and I wanted to 15 make sure that I knew approximately how many 16 violations that you're alleging occurred from this 17 potential hazmat-shipping allegation. Are you 18 alleging seven separate violations or some other type 19 of a combination of violations based on the 20 allegations in the complaint? 21 MR. KHAN: Your Honor, we're actually 22 alleging five. A shipping paper violation, a labeling 23 violation, a marking violation, a training violation 24 and an emergency response violation. 25 THE COURT: Let me take some notes. SoFAA vs Compass Hearing November 14, 2015 VR # 2956-1 Page 5

1 shipping violation, a labeling violation, a training 2 violation and then what were the other two please? 3 MR. KHAN: Marking violation and an emergency 4 response violation. 5 THE COURT: Okay. So of the seven regulation 6 that you have identified in your complaint, which of 7 them are coupled together. 8 MR. KHAN: So 171.2 is kind of a catchall 9 general reg. 10 THE COURT: Okay. 11 MR. KHAN: It doesn't necessarily have a 12 dollar amount attached to it. So that kind of 13 encompasses all of them and the 200 and 204 are both 14 shipping paper related. 15 THE COURT: Okay. So that, those two 16 comprise one violation? 17 MR. KHAN: Correct. 18 THE COURT: Okay. That's helpful. And then 19 in terms of how you're looking at the five violations, 20 just so that I have a general idea, are you assigning 21 different amounts of money to each violation or the 22 same amount of money? 23 MR. KHAN: Your Honor, the same amount, 24 $11,670 per violation. 25 THE COURT: Okay. Thank you. That's veryFAA vs Compass Hearing November 14, 2015 VR # 2956-1 Page 6

1 helpful. Mr. Alexander, let me turn to you next. I 2 was looking at the answers that your client has filed 3 and I wanted to ask you a little bit about what these 4 answers comprise. There appears to be from what I can 5 see, a potential assertion that your client did not 6 knowingly ship hazardous materials and that if it did 7 ship or attempt to ship hazardous materials it took 8 swift and direct action to try and retract that 9 shipment before it ever got on the airplane. 10 MR. ALEXANDER: That's correct, Your Honor. 11 It was an inadvertent act. It was not done knowingly 12 and that as soon as the error was discovered that 13 immediate action was taken. Being that it was 14 difficult to carry out that immediate action because 15 there was no cooperation from UPS personnel to act on 16 the emergency, but I think you summarized it well that 17 there was an inadvertent act followed by a prompt 18 response to correct the error. 19 THE COURT: Okay. Well, let's talk about a 20 couple of the defenses, just in general, because I 21 want to make sure that we address things as 22 expeditiously and cost efficiently as possible, short 23 of everybody traveling and spending a lot of time in 24 the courtroom. In the affirmative defenses you 25 indicate on page, I've got to paginate your answer forFAA vs Compass Hearing November 14, 2015 VR # 2956-1 Page 7

1 just a moment. Okay, you have a six-page answer so 2 I'm going to look at page four of the six-page answer 3 starting with the affirmative defenses. And as a 4 first offense, you indicate the catchall failure to 5 state a claim or cause of action and I'll just leave 6 that rest. The second defense indicates affirmative 7 defenses of laches, waiver, ratification and/or 8 estoppel. And I understand people will often make 9 those affirmative defenses immediately to allow for 10 the opportunity for research and review. My question 11 to you is are you and your client still planning to 12 raise laches and/or estoppel as an affirmative offense 13 and if so, wouldn't that be best addressed in a pre14 hearing motion? 15 MR. ALEXANDER: Your Honor, I wouldn't want 16 to waive it at the moment only because I don't have 17 the information before me as far as what their 18 timeframe should have been for raising it. I 19 understand that what you're saying is that you'd like 20 to see this disposed before trial. If it please the 21 Court I can have this addressed in advance one way or 22 the other, if we are going to sit on this defense then 23 we'll prepare a motion to address the issue ahead of 24 time. If not, then I suppose it would be best for us 25 to affirmatively waive it. Is that appropriate?FAA vs Compass Hearing November 14, 2015 VR # 2956-1 Page 8

1 THE COURT: Well, I think it would be helpful 2 to your clients, quite frankly, because if in fact 3 laches is applicable in this particular case, and I 4 didn't see anything in particular that led me to 5 believe that, but you may know things that I don't. 6 MR. ALEXANDER: Well, Your Honor ... 7 THE COURT: I'm just going to finish. Then 8 it's something that you'd want to raise soon because 9 then if laches does apply and the case has to be 10 kicked out, you haven't spent a lot of money and time 11 addressing other matters. 12 MR. ALEXANDER: Yes, Your Honor. 13 THE COURT: In addition, if estoppel is 14 applicable then sooner rather than later in my opinion 15 for the same reason and I raise that in particular 16 because I think estoppel is a very difficult defense 17 to prove in these particular types of cases because of 18 the burden on the moving party to present such 19 distinguished evidence to show affirmative misconduct 20 by the government. But if you have that kind of 21 information, I think preferable to raise it as soon as 22 possible so that we can all address that and then if 23 it turns out to be a successful defense, your client 24 can go home and look at other things that are on his 25 or her table. So I'm just going to put that in theFAA vs Compass Hearing November 14, 2015 VR # 2956-1 Page 9

1 back of your hat for the moment, if I may, while we 2 talk about some of these other things. 3 MR. ALEXANDER: Thank you, Your Honor. 4 THE COURT: In terms of the third, fourth, 5 fifth and sixth defense, it appears to me and I could 6 be wrong and you may correct me, but these may in fact 7 be going toward potential mitigation defenses to the 8 proposed penalty as opposed to primary defenses 9 against the possible violation. Is that correct or am 10 I misreading your answers? 11 MR. ALEXANDER: Well, Your Honor, with 12 respect to number four, it speaks directly to the 13 knowledge component in the statute I would think that 14 that one more or less stands out on its own. That 15 addresses the violation itself that Compass did not 16 act knowingly. 17 THE COURT: Okay. So the court defense in 18 particular is raised against the violation itself? 19 MR. ALEXANDER: Yes. 20 THE COURT: Okay. 21 MR. ALEXANDER: Now, and I believe that a 22 violation was brought for failure to take emergency 23 response and I believe that number five regarding 24 immediate action to correct also touches on one of the 25 violations.FAA vs Compass Hearing November 14, 2015 VR # 2956-1 Page 10

1 THE COURT: Okay. Thank you. 2 MR. KHAN: Your Honor, just to jump in here. 3 I don't believe that we're alleging that they didn't 4 take emergency response. Emergency response part is 5 failing to include an emergency response phone number 6 on the shipping, like out on a shipping paper in case 7 of an emergency during the transit of the shipment. 8 And just for clarification too, when we say knowingly, 9 it's not synonymous with intentionally. It's from 49 10 U.S. C5123A1B, a reasonable person acting in the 11 circumstances and exercising reasonable care would 12 have that knowledge of the shipment. 13 THE COURT: So Mr. Khan, same with you. As 14 you talk about the knowing element, you're saying, as 15 you understand the statute, the regulation, that it 16 doesn't require proof of individual knowledge it 17 simply requires proof that a reasonable person should 18 have known? 19 MR. KHAN: Yes, there's two prongs, a person 20 has actual knowledge of the facts giving rise to the 21 violation or a reasonable person acting in the 22 circumstances and exercising reasonable care would 23 have that knowledge. And that's basically what the 24 knowing aspect is. 25 THE COURT: Okay. Thank you. That'sFAA vs Compass Hearing November 14, 2015 VR # 2956-1 Page 11

1 helpful. Okay, seventh defense. In terms of getting 2 back to the respondent's answer. Respondent reserves 3 the right to raise additional defenses as discovery in 4 this matter proceeds and I agree with respondents 5 regarding that. So let's talk a little bit about the 6 time period that the parties are anticipating and the 7 amount of discovery and I'm going to turn back to Mr. 8 Khan just to get a sense of the actual hearing if it 9 goes to hearing. Mr. Khan, let's assume that you've 10 done all your discovery and despite everyone's best 11 efforts all the issues that are in the complaint are 12 still on the table. If that were the case, how much 13 time do you think it would take for your client to 14 present its prima facie case? 15 MR. KHAN: Are we talking about after the 16 close of discovery? 17 THE COURT: Correct. This is just assuming 18 that you've done all the discovery that you need. 19 You've down all your settlement discussions and for 20 whatever reason the parties have not been able to hold 21 hands across the table on any matter and so everything 22 is still up for litigation. 23 MR. KHAN: Okay. I would say thirty to 24 forty-five days. 25 THE COURT: So you would take a month to tryFAA vs Compass Hearing November 14, 2015 VR # 2956-1 Page 12

1 your case? 2 MR. KHAN: Oh, I'm sorry. I thought you 3 meant when would I ideally feel comfortable having a 4 hearing after discovery. 5 THE COURT: No, let me try and ask you the 6 question again. 7 MR. KHAN: Okay. 8 THE COURT: And I apologize if it wasn't 9 clear. Let's assume that you and your client have 10 done all the discovery that you need. Let's also 11 assume that despite having done all that discovery and 12 despite having engaged in settlement discussions with 13 your friend across the aisle, you have not been able 14 in any way to narrow the issues or to stipulate to any 15 matter. As a result just assume that all the issues 16 on the table presented by your complaint need to be 17 litigated. If you make that assumption that nothing 18 has been resolved and no matters have been stipulated 19 to, how much time would it take your client to present 20 its prima facie case? 21 MR. KHAN: Okay. I understand, Your Honor. 22 One day maximum. 23 THE COURT: Okay. How many fact witnesses, 24 just as a best guess estimate, would you be calling? 25 MR. KHAN: At that time the only person IFAA vs Compass Hearing November 14, 2015 VR # 2956-1 Page 13

1 think would have information relevant to the proving 2 of the prima facie case would be the inspector, so 3 one. 4 THE COURT: And I presume the inspector has 5 some expert knowledge, some expertise. 6 MR. KHAN: Yes, Your Honor. He's probably 7 been with the FAA for around twenty-plus years. 8 THE COURT: So your fact witness would also 9 be serving as one expert witness? 10 MR. KHAN: Yes, Your Honor. 11 THE COURT: Okay. Based on what you know, 12 assuming, you know you've done all your discovery and 13 it's about the same as what you know today, is there 14 potential for you on behalf of your client to move for 15 any type of partial or full summary judgement prior to 16 a hearing convening? 17 MR. KHAN: I would say so, Your Honor. I 18 think the actual disputes from when before we filed 19 the complaints seems to come down to the penalty. You 20 know I think our facts and evidence can actually show 21 that the violation occurred. I think it mostly just 22 comes down to the actual penalty and whether or not 23 it's fair in their opinion. For the violation. 24 THE COURT: Okay. That's helpful. Thank 25 you. Turning to you, Mr. Alexander. I'm going to askFAA vs Compass Hearing November 14, 2015 VR # 2956-1 Page 14

1 you the same kinds of questions starting with the 2 amount of time it would need, your client would need 3 for trial assuming that nothing is settled between now 4 and the trial date. 5 MR. ALEXANDER: I would agree with the one6 day, Your Honor. I don't think it would take any 7 longer than that for us to put on our evidence in our 8 case. 9 THE COURT: Okay. So we're talking about two 10 days total? 11 MR. ALEXANDER: Maximum, yes. One each I 12 would say at most. 13 THE COURT: Okay. Thank you. And then how 14 many fact witnesses would you estimate that you might 15 need to call and also answer that for potential expert 16 witnesses? 17 MR. ALEXANDER: Well, Your Honor, I don't 18 know how many individuals are involved in the packing 19 procedure or would have been involved that day for my 20 client. I'd have to verify. I would have to think 21 somewhere between, and forgive me, one to four, I 22 would guess. 23 THE COURT: Okay. 24 MR. ALEXANDER: I'm giving a rough estimate. 25 THE COURT: Sure.FAA vs Compass Hearing November 14, 2015 VR # 2956-1 Page 15

1 MR. ALEXANDER: But I would say between one 2 and four. 3 THE COURT: And then what about any 4 particular experts? Do you anticipate calling any 5 experts? 6 MR. ALEXANDER: At the moment we do not, Your 7 Honor. 8 THE COURT: Okay. And then what about the 9 potential for any kind of motions for summary 10 judgement from your client? 11 MR. ALEXANDER: Well, I think given the 12 interpretation of, I guess that's more of a legal 13 issue, the interpretation of the knowledge qualifier. 14 I don't believe we would be doing a summary judgement 15 at the moment. 16 THE COURT: Okay. And then we still need to 17 talk about the laches and estoppel issue, I think. 18 Okay. All right. That's very helpful. In terms of 19 discovery, Mr. Khan, turning back to you. What kinds 20 of discovery are you anticipating your client might 21 need? Are you looking at a particular set of 22 depositions? Some interrogatories, request for 23 admission, what kinds of discovery packages are you 24 looking to provide to your friend across the aisle? 25 MR. KHAN: I would expect mostlyFAA vs Compass Hearing November 14, 2015 VR # 2956-1 Page 16

1 interrogatories, basic interrogatories, requests to 2 admit maybe, or request to produce some documents. 3 But in terms of, I mean the enforcement investigative 4 report that we have on this case seems to have, I 5 would say, almost all the information we need. 6 THE COURT: Okay. 7 MR. KHAN: So probably fairly limited form 8 our perspective. Maybe just some information to make 9 sure we have all our bases covered. 10 THE COURT: Okay. Mr. Alexander, same 11 question to you, sir. 12 MR. ALEXANDER: I would think similarly. 13 Interrogatories and request for production of 14 documentation. 15 THE COURT: Okay. Mr. Khan, I have a 16 question for you. In terms of the exclamation that 17 you provided regarding the knowledge issue, do you 18 have some particular type of case law that you have 19 been utilizing to lend weight to that explanation or 20 is there a certain passage in the regulations that 21 you're quoting from? Can you give us a little more 22 information about that? 23 MR. KHAN: Sure. I know case law. I don't 24 have any specific citations in front of me but the 25 underlying regulatory code is 49 U.S.C. Section 5123.FAA vs Compass Hearing November 14, 2015 VR # 2956-1 Page 17

1 That discusses the civil penalty and give us some 2 authority to charge for a civil penalty for these 3 types of violations and it specifically 5123 A1, which 4 I have two components, A and B. I don't want to limit 5 myself to just B, the reasonable person section of it. 6 So I'll just cite 49 5123 A1. 7 THE COURT: Okay but my question to you was 8 simply where do you find that language? 9 MR. KHAN: Oh, it's right in the U.S. Code 10 itself. I can read it to you or ... 11 THE COURT: No, I'm just looking for the 12 citation and so you're telling me that it's in 49 13 U.S.C. Section 5123 A1? 14 MR. KHAN: Correct. 15 THE COURT: Okay. Thank you very much. Now, 16 back up I need to look at my materials. Let's talk 17 about place of trial. I think we have a request from 18 the FAA for Cleveland, Ohio and from the respondent 19 Canton, Ohio and it's my understanding as I've looked 20 at the materials that were before me and some 21 geographic references that we have an international or 22 a fairly large airport in Cleveland and then a 23 regional airport in Canton. Mr. Alexander, why don't 24 I talk to you about that since you are working in 25 Ohio?FAA vs Compass Hearing November 14, 2015 VR # 2956-1 Page 18

1 MR. ALEXANDER: Yes, Your Honor. 2 THE COURT: So is that correct that there is 3 a regional airport in Canton and a more larger airport 4 in Cleveland? 5 MR. ALEXANDER: Yes, Your Honor. I would 6 think Canton/Akron would be best described as more of 7 a regional hub or regional airport. Cleveland, 8 although it's more limited over the recent years is 9 clearly a larger airport than Canton/Akron. 10 THE COURT: Okay and you're in Youngstown, 11 Ohio? 12 MR. ALEXANDER: Yes, Your Honor. Compass 13 Systems and Sales, Inc. is situated in Barberton, 14 which is, I guess for a lack of a better word, 15 adjacent to or you know nearby Canton, Ohio. Its 16 nearest access to an airport is Canton. That's the 17 nearest big city. It seemed like an appropriate 18 request and would create the least amount of burden on 19 our client. That was why we proposed Canton. 20 THE COURT: And how far is Canton from 21 Cleveland? 22 MR. ALEXANDER: Approximately an hour, 23 perhaps less depending on which part of Cleveland we 24 would be suggesting. If it's the far west side it 25 would probably be more like an hour and fifteen to anFAA vs Compass Hearing November 14, 2015 VR # 2956-1 Page 19

1 hour and thirty minutes. If it was further southeast 2 closer to Canton, it would be closer to an hour. 3 THE COURT: Okay and how far are you from 4 Canton and/or Cleveland? 5 MR. ALEXANDER: I'll just give you from 6 downtown Cleveland to downtown Youngstown is 7 approximately an hour and fifteen to an hour and 8 thirty minutes. And Canton is a shorter driver, 9 closer to an hour to an hour and fifteen minutes from 10 Youngstown to Canton. 11 THE COURT: Okay. So you're almost 12 equidistance from each place. 13 MR. ALEXANDER: For the sake of counsel, yes, 14 Your Honor. We're not much different. 15 THE COURT: Okay and then Mr. Khan, turning 16 to you. You're in Des Plaines, Illinois? 17 MR. KHAN: Correct, Your Honor. 18 THE COURT: And how far are you from either 19 Cleveland or Canton? 20 MR. KHAN: From Cleveland about an hour 21 flight. I don't know if they have service from here, 22 I assume, to Canton. I don't know what the airport 23 situation is like there. But if that's the case an 24 hour to each. 25 THE COURT: Okay. Thank you.FAA vs Compass Hearing November 14, 2015 VR # 2956-1 Page 20

1 MR. KHAN: Just for the record too, the 2 inspector that I plan on calling, he's based out of 3 North Olmstead, which is a suburb of Cleveland. 4 THE COURT: Okay. If I understand it from my 5 brief search into U.S. District Court locations that 6 there are U.S. District Courts in both Cleveland and 7 in Canton. Is that correct, Mr. Alexander? 8 MR. ALEXANDER: Yes, Your Honor. 9 THE COURT: Okay. Okay. Well, why don't I 10 do this? Typically, Mr. Alexander, I schedule cases 11 in the location that has the larger airport abilities 12 just because of the difficulties to schedule cases and 13 travel at the same time. But what I will do is I will 14 set the matter in Cleveland with Canton as a backup. 15 MR. ALEXANDER: Okay. 16 THE COURT: Because we have varying degrees 17 of success as visiting judges at the U.S. District 18 Courthouses. So sometimes the more populous areas 19 actually are the more difficult to get courtroom 20 access and so I always have a backup or even two 21 depending on how big the metropolitan area might be. 22 So that if we're having trouble getting into the 23 Courthouse in the major metropolitan area we have a 24 way to default into perhaps a less metropolitan 25 backup. So I'll note that in the procedural orderFAA vs Compass Hearing November 14, 2015 VR # 2956-1 Page 21

1 that we'll start with Canton but then we'll go to, I'm 2 sorry, we'll start with Cleveland but then we'll go to 3 Canton as a potential backup. If Cleveland proves 4 difficult to find a courtroom space. And I'll ask 5 your client to make that trip with you or in separate 6 cars simply because we need to have everybody stretch 7 a little bit in terms of being available for the most 8 central location. 9 Let's talk then about time periods. 10 Currently, as you may or may not know, we are 11 experiencing a bit of a challenge in the office 12 because one of the judge's in our office is gone. So 13 we have a judicial vacancy and that means that I'm 14 covering that calendar while he is gone and while 15 we're waiting to get his replacement. So we may not 16 be looking at as early a trial date as you would like. 17 And I'm going to be looking at my calendar to see what 18 I've got. I need to take a few minutes quietly to 19 look at my calendar if you'd be so kind as to indulge 20 me. And I have to consider your dispositive motions 21 too. Okay. I'm looking through a couple different 22 months to see what might work. So if you'll bear with 23 me. 24 (WHEREUPON, the Judge reviewed the calendar.) 25 THE COURT: What about the week of August 1,FAA vs Compass Hearing November 14, 2015 VR # 2956-1 Page 22

1 2016? Mr. Khan, do you have the week available on 2 your calendar? 3 MR. KHAN: First week, I should. Yes, Your 4 Honor. 5 THE COURT: Mr. Alexander, how about for you? 6 MR. ALEXANDER: Your Honor, without having 7 the benefit of seeing Mr. Strasfeld's calendar in 8 front of me, I would think that given how far out it's 9 set, it should be fine. 10 THE COURT: Okay. Let's try for that and 11 we'll set the trial for August 2 and August 3, which 12 is a Tuesday and Wednesday, unless either of you would 13 prefer to start on Wednesday and end on Thursday. Mr. 14 Khan, any preference? 15 MR. KHAN: No preference, Your Honor. 16 THE COURT: Mr. Alexander? 17 MR. ALEXANDER: No preference, Your Honor. 18 THE COURT: Then let's try for August 2 and 19 August 3 with August 1 and August 4 being travel days. 20 That being the case, we can then look at dispositive 21 motions and so I'm going to take a look at my calendar 22 real quick about that. And again I'm going to have to 23 think quietly to myself for a minute. 24 (WHEREUPON, the Judge examined the calendar.) 25 THE COURT: Okay, if we did dispositiveFAA vs Compass Hearing November 14, 2015 VR # 2956-1 Page 23

1 motions I could schedule a telephone conference on 2 dispositive motions the week of May 30, which is 3 Memorial Day week, but I could set it out in the 4 latter part of the week, say like the second or the 5 third, which is a Thursday or Friday. I could also 6 set it in the following week, which is the week of 7 June 5. Mr. Khan, do you have a preference? 8 MR. KHAN: Maybe just to be on the safe side 9 the first week in June. 10 THE COURT: Okay. 11 MR. KHAN: The June 5. 12 THE COURT: The week of June 5? 13 MR. KHAN: Correct, Your Honor. 14 THE COURT: Okay. Mr. Alexander, would that 15 work for you as well? 16 MR. ALEXANDER: That's fine, Your Honor. 17 THE COURT: Okay. Do either of you have a 18 preference for a morning telephone conference or an 19 afternoon? 20 MR. KHAN: I have no preference, Your Honor. 21 THE COURT: Mr. Alexander? 22 MR. ALEXANDER: No, Your Honor. 23 THE COURT: Okay. Are you both an hour 24 behind Eastern Time? It's almost ten after two for me 25 right now.FAA vs Compass Hearing November 14, 2015 VR # 2956-1 Page 24

1 MR. KHAN: I'm in the Central Time zone, Your 2 Honor. 3 THE COURT: Okay. So does that mean that 4 you're one-hour behind? 5 MR. KHAN: Oh, yeah, I'm an hour behind. 6 THE COURT: Okay. And Mr. Alexander, is that 7 true for you too? 8 MR. ALEXANDER: Your Honor, I'm in the 9 Eastern Time zone. Likewise it's almost ten after two 10 here. 11 THE COURT: Okay. Okay. Well, why don't we 12 do this? Why don't we schedule this for June 8, 2016 13 at 10:30 A.M. to run until noon? That's ninety 14 minutes and then Mr. Khan, you would be starting with 15 us at 9:30 your time. 16 MR. KHAN: Okay, Your Honor. 17 THE COURT: Okay and then let's set the 18 dispositive motion schedule like this unless someone 19 has a problem. Motion filed on or before April 22, 20 2016, response filed on or before May 6, 2016, and 21 reply, if any, filed on or before May 20, 2016. If 22 you'd both take a look at your calendars really 23 quickly and let me know if that works or if it 24 doesn't, what would work better, that would be great. 25 And then I'll wait for Mr. Khan to start first.FAA vs Compass Hearing November 14, 2015 VR # 2956-1 Page 25

1 MR. KHAN: That works for me, Your Honor. 2 THE COURT: Mr. Alexander, how about for you? 3 MR. ALEXANDER: Your Honor, that should be 4 fine. 5 THE COURT: Okay. Then let's plan on that. 6 In terms of your proposed discovery plan, I'm going to 7 go back to that. On page one you've indicated that 8 you plan or would like to exchange initial disclosures 9 on or before November 20, 2015, which is about two 10 weeks from today's date and I'm happy to accept that. 11 When do you want to start general discovery? Do you 12 want to start that immediately? I mean, you can start 13 it earlier but I usually like to have the initial 14 disclosure exchanged first and then start a date for 15 the general discovery to begin and in this particular 16 case it would make sense to have it start on the 23rd 17 of November unless you give me a different date. Mr. 18 Khan? 19 MR. KHAN: The 23rd would be a good start 20 date for me, Your Honor. 21 THE COURT: Okay. Mr. Alexander? 22 MR. ALEXANDER: Yes, Your Honor, that's fine. 23 THE COURT: Okay. Then in terms of 24 exchanging the expert disclosures, Mr. Strasfeld, I'm 25 sorry, not Strasfeld. Mr. Alexander, did you want toFAA vs Compass Hearing November 14, 2015 VR # 2956-1 Page 26

1 have a contemporaneous exchange of expert disclosures 2 on December 11, 2015 or do you want to have your 3 expert disclosure delayed by a week or so? 4 MR. ALEXANDER: Your Honor, we'll accept the 5 delayed by a week. 6 THE COURT: Okay. Then why don't we have the 7 FAA file its expert disclosure by December 11 and then 8 we'll have the respondent filed by December 18? And 9 then I was going to ask you all, you've indicated that 10 rebuttal disclosures will be by the 30th of December. 11 I'm wondering if you think that it's going to actually 12 work with all the holidays. The reason I say that is 13 because my experience working around the holidays is 14 that everybody wants to take time off. Likely your 15 experts will too. Do you want to push that time 16 period out into early January or do you want to take 17 the chance that December 30 will work? Mr. Khan? 18 MR. KHAN: I see no problem in pushing it 19 into January, Your Honor. 20 THE COURT: Mr. Alexander, how about you? 21 MR. ALEXANDER: I agree, Your Honor. 22 THE COURT: Do you, Mr. Khan, starting with 23 you, do you have a particular date in January you'd 24 like to take a look at? 25 MR. KHAN: Get my calendar, is, let's see.FAA vs Compass Hearing November 14, 2015 VR # 2956-1 Page 27

1 How about just January 15? 2 THE COURT: Mr. Alexander, is that 3 acceptable? 4 MR. ALEXANDER: It is, Your Honor. 5 THE COURT: Okay. So noted. And then you've 6 indicated all discoveries be completed by February 19 7 and we've got a little bit of time between February 8 and April, do you want to push that out a little bit 9 and it's up to you but it seems to me that you could 10 have the time if you wanted to use it. Mr. Khan? 11 MR. KHAN: I have no problem with that, Your 12 Honor. Do you want to push it maybe to March 16? 13 THE COURT: Mr. Alexander, would that work 14 for you? 15 MR. ALEXANDER: That's fine, Your Honor. 16 THE COURT: Okay. So we'll have discovery 17 cut-off March 16, 2016 instead of February 19, 2016 18 and we'll basically use the same date, March 16, 2016, 19 for the amendments to the pleadings, if any. And then 20 we've talked about the dispositive motions schedule 21 ending with a telephone motion conference on June 8, 22 2016 at 10:30 A.M. until noon. I'll simply note for 23 you if no dispositive motions are filed, we'll still 24 convene on that date and time. Just for a prehearing 25 status conference. In addition, let's talk aboutFAA vs Compass Hearing November 14, 2015 VR # 2956-1 Page 28

1 witness exchange and exhibit lists. Mr. Khan, do you 2 have a preference for how much time you would like to 3 have those filed before the hearing date? Do you like 4 thirty days, forty-five days? What's your preference? 5 MR. KHAN: Thirty days should be sufficient, 6 Your Honor. 7 THE COURT: Mr. Alexander, same question to 8 you. 9 MR. ALEXANDER: Yes, Your Honor, I think 10 thirty days is fine. 11 THE COURT: Okay. So we're talking about 12 July, let's say July 8. A little bit tight but that 13 way you're not running up into the July 4 holiday. 14 Let me get my calendar correctly. We could either do 15 it July 1 or July 8. Is July 8 acceptable, Mr. Khan? 16 MR. KHAN: Yes, Your Honor. 17 THE COURT: Okay and Mr. Alexander? 18 MR. ALEXANDER: Yes, Your Honor. 19 THE COURT: Okay. Let's plan on that and 20 then let's take a look, I need to take a look at one 21 or two other things to make sure I'm not missing 22 anything. You had asked for a final settlement 23 conference. I generally don't participate in 24 settlement discussions, Counsel. If you would like to 25 have another prehearing status conference after JuneFAA vs Compass Hearing November 14, 2015 VR # 2956-1 Page 29

1 8, 2016, I can set one up. I'm not sure that you 2 would need to have one but I'm happy to put it on the 3 calendar. Do you have a preference, Mr. Khan? 4 MR. KHAN: No preference, Your Honor. 5 THE COURT: Mr. Alexander? 6 MR. ALEXANDER: No, Your Honor. I guess I 7 would only suggest that since trial is set for early 8 August that it might make sense to set it sometime in 9 mid to late July. 10 THE COURT: Okay. Well, let's look at our 11 July calendars just very quickly. Why don't we try 12 for on or around July 20, 2016? Mr. Khan, looking at 13 your calendar do you have any blackout times during 14 that day? 15 MR. KHAN: I do not, Your Honor. 16 THE COURT: Mr. Alexander? 17 MR. ALEXANDER: No, that's fine for me too, 18 Your Honor. 19 THE COURT: Let's say July 20, 2016. Let's 20 keep with our timeframe of 10:30. This time it will 21 be 10:30 to 11:30 A.M. and it'll simply be a 22 prehearing status conference instead of a final 23 settlement conference because I don't feel comfortable 24 being both a settlement conference judge and a trial 25 judge. I don't want to be in a position where you'reFAA vs Compass Hearing November 14, 2015 VR # 2956-1 Page 30

1 telling me things that I don't need to know. But I'm 2 happy to check in with the parties on that date and 3 just discuss the status of the case. 4 Let's also talk, just very briefly, about 5 some other matters. I'll be sending out a litigation 6 scheduling order that talks about all of these 7 different dates so that you have a handy reference. 8 This particular order will also give you information 9 about how to move to for protection orders, how to 10 move to limit discovery if you need to, how to move to 11 compel discovery if that's a problem and so forth. It 12 will also talk about how to mark and tag your exhibits 13 that you file and bring to the hearing, the 14 examination process of the hearing, as well as how to 15 withdraw from a case if your client no longer wishes 16 to work with you for any reason. In addition on the 17 last page of the order, you'll see name of the 18 attorney who works with me and his phone number. If 19 you have any questions about the procedural order once 20 you get it, you're welcome to give him a call. In 21 addition, he's a good contact person and in the event 22 that you need to schedule a motion or a telephone 23 conference before me and you want my calendar 24 availability and he can help you with that so that you 25 can get in on my calendar very quickly. Having saidFAA vs Compass Hearing November 14, 2015 VR # 2956-1 Page 31

1 all of that in terms of the laches and estoppel issue, 2 Mr. Alexander, I think it's very, it would be very 3 helpful if you had a deadline of some sort to let us 4 know if you're going to pursue a laches motion and/or 5 a motion or release based on equitable estoppel. And 6 when do you think, based on your client's availability 7 and Mr. Strasfeld's availability that you could look 8 into that and either file motions or let us know that 9 those particular issues are no longer on the table? 10 MR. ALEXANDER: Well, Your Honor, I guess to 11 get it disposed of in advance, we have discovery 12 deadlines coming up in December and January, well, how 13 about sixty days, Your Honor? 14 THE COURT: Well, today is November 4, let's 15 say by January 29. 16 MR. ALEXANDER: Okay, Your Honor. 17 THE COURT: File those motions or, you know, 18 waive them. And then I have also, let's see if I can 19 find it. From the material on equitable estoppel. I 20 don't know how often you raise this defense but it's 21 something that I've addressed before in other cases. 22 Let's see if I can find it. And of course right now 23 for some reason I can't find it. If you folks could 24 give me a minute I'm going to see if I can find that 25 for you. I have a feeling as soon as I hang up I'llFAA vs Compass Hearing November 14, 2015 VR # 2956-1 Page 32

1 find it. Not helpful to you at all. If you folks 2 give me just a quick minute, I think I'll be able to 3 find the reference to it. Do you have a moment to 4 wait? 5 MR. KHAN: Yes, Your Honor. 6 THE COURT: Okay. Okay. I'm going to give 7 you a case citation just so that you have it. This is 8 Federal Motor Carrier Safety Administration case but 9 it is on West Law and Lexus Nexus and it's called in 10 the matter of Northeast Freightways, Inc. The docket 11 number is FMCSA-2011-0204. It was ... 12 MR. ALEXANDER: I'm sorry, Your Honor, could 13 you repeat that? 14 THE COURT: Sure. It's docket number FMCSA15 2011-0204. It was served March 8, 2012 and it is West 16 Law 826474. And the reason I'm providing the 17 reference to you both is because there was an 18 affirmative defense of equitable estoppel raised by 19 the respondent in this case and so this particular 20 order which was an order granting partial summary 21 judgement talked about that particular defense raised 22 in that case and provides some case law citations. So 23 I'm not saying that it's dispositive in this case but 24 it certainly will give you an idea of what I've seen 25 in the past and a ruling that I've made based on that.FAA vs Compass Hearing November 14, 2015 VR # 2956-1 Page 33

1 And it may be that you both can improve upon this 2 particular body of law substantially and educate me in 3 the process and I would look forward that that and I 4 hope that would be helpful to you. So ... 5 MR. ALEXANDER: Thank you. 6 THE COURT: You're welcome. So with that is 7 there anything else we need to address for your 8 client, Mr. Khan? I think we went through the entire 9 proposed discovery plan and addressed all those dates 10 as well as some others. 11 MR. KHAN: I think we went over everything, 12 Your Honor. Thank you. 13 THE COURT: Okay and Mr. Alexander, on behalf 14 of your client, any other things that we need to 15 address for you right now? 16 MR. ALEXANDER: No, Your Honor. I guess one 17 point of clarification, I know we mentioned during 18 types of discovery that I mentioned request, I'm 19 sorry, request for production and interrogatories. I 20 assume that does not bar my client from taking 21 depositions if they feel necessary? 22 THE COURT: No, not at all and in fact I 23 should mention that you do not need to file any of 24 your discovery requests with this Court. The only 25 time I need to see a discovery request is if it is aFAA vs Compass Hearing November 14, 2015 VR # 2956-1 Page 34 1 sub ject of a motion. So you're welcome to play in the 2 fie ld of discovery as much as you wish and engage in 3 wha t discovery you think is necessary for your 4 cli ent's best interest. 5 MR. ALEXANDER: Tha nk you, Your Honor. 6 THE COURT: You 're welcome. With that it 7 app ears our business is complete. I'm going to thank 8 you both very much for your presence today and for 9 you r good work in preparing the discovery plan. I 10 fou nd it very helpful. I look forward to talking to 11 you in the early new year. If there is any kind of 12 sti pulation or settlement between now and our next 13 con ference please let me know and we'll take care of 14 you accordingly. With that we can go off the record 15 and I wish you all a good day. Thank you. 16 MR. KHAN: Tha nk you, Your Honor. 17 MR. ALEXANDER: Tha nk you, Your Honor. Thank 18 you . 19 (WHE REUPON, the Hearing was concluded at 2:27 P.M.) 20 21 22 23 24 25FAA vs Compass Hearing November 14, 2015 VR # 2956-1 Page 35

1 STIPULATION 2 3 The foregoing matter was taken on the date, and at 4 the time and place set out on the title page hereof. 5 6 It was requested that the matter be taken by the 7 reporter and that the same be reduced to typewritten 8 form. 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 251 2 3 4

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25 24 23 22 **CERTIFICATE OF REPORTER AND SECURE ENCRYPTED**

I, **Andrea F. Mikus** , do hereby certify that the foregoing matter was reported by stenographic and/or mechanical means, that same was reduced to written form, that the transcript prepared by me or under my direction, is a true and accurate record of same to the best of my

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