BEFORETHE. DEPARTMENT OFTRANSPORTATION OFFICE OFTHE SECRETARY WASHINGTON, DC
In the matter ofthe cancellation ofthe AirTaxi authority issuedto: ) ) ) ) ) ) DocketDOT-OST-2012-0022 VIHCOUGARHELICOPTERS,INC. REDACTED VERSION ) )


# ___________________________)

OPPOSITION OFPETROLEUMHELICOPTERS,INC.,NORTHERNPIONEER HELICOPTERSLLC,AND SOLOYHELICOPTERSLLC TO VIHCOUGAR HELICOPTERS,INC.AND CONSTRUCTION HELICOPTERS,INC.'SMOTIONFOR RECONSIDERATIONOFFINAL ORDERAND FORA HEARING

Communications with respectto this document shouldbe sent to: JohnLongstreth TimothyHobbs K&L.Gates LLP 1601 K StreetNW Washington, DC20006-1600 202-778-9100 (fax) john.longstreth@klgates.com tim.hobbs@klgates.com 202-661-6271 206-370-7664BEFORE THE DEPARTMENT OFTRANSPORTATION OFFICE OF THE SECRETARY WASHINGTONt DC
Inthe matter ofthecancellationofthe AirTaxi authority issuedto: VIH COUGARHELICOPTERS,

### INC. ) ) ) ) ) ) )

## ------------------------~-) DocketDOT-OST-2012-0022 REDACTED VERSION

OPPOSITION OF PETROLEUMHELICOPTERS,INC., NORTHERN PIONEER

HELICOPTERS LLC, 

### AND SOLOYHELICOPTERS LLC TO VIH COUGAR HELICOPTERS, INC. AND CONSTRUCTIONHELICOPTERS, INC.'S MOTIONFOR RECONSIDERATION OF FINAL ORDER AND FORA HEARING Continuing its campaign to delay the inevitable revocation of its air tax exemption authority due to its flagrant non-compliance**wi~** U.S. citizenship requirements, VIH Cougar Helicopters, Inc. ("VIH Cougar''),joined by Construction Helicopters, Inc. ("CHI"), 1 has moved for reconsideration oftheDepartment's Final Order in thisproceeding, Order 2013-6-8, revoking that authority effective September 9, 2013. There is no basis for the Motion and it should be denied?

1 CHI has not previously participated in this docket and its participation in the pleading is unexplained. CHI is not a shareholder inVlli Cougar, though its President and sole owner Christopher Turner set up a holding company to receive, for $10, a 76% "ownership" share in VIH Cougar. That 76% share was transferred to Mr. Turner's holding company from the lawyer for the VIH Group ofcompanies controlled byMr. KennethNorie, whom the Departmenthas also found to actually control VIH Cougar. 2 VIH Cougar's motion is untimely under 14 C.F.R. § 302.14(a)(2). VIH Cougar nevertheless asks that the Department rule by July 16, 2013. VIH Cougar waited three weeks to file its motion; yet for unexplained reasons seeks a decision within only two weeks. · the · to schedule its business at VIH 1

### I. TheMotion Directly Contravenesthe Department's Express DirectionThat Reconsideration Motions Will NotBeEntertained The Department's Final Order states clearly that "since we have allowed for objections to
ourtentative findings, we will notentertain a petition for reconsideration ofthis order."3 As the Order sets out in Appendix A, VIH Cougar filed at least four separate pleadings and made at least two supplemental evidentiary submissions in response to the Department's tentative conclusion that its air taxi exemption authority should be revoked. VIH Cougar has had many, many bites at the apple. And as Order 2013-6-8 correctly found, none of these submissions provided any basis whatsoever on which to alter the Department's conclusion thatVIH Cougar does not meet the applicable U.S. citizenship requirements. Indeed, the material confirmed, in
numerous ways, VIH Cougar's origins and continuing operations 

### as a front company controlled by a Canadian citizen for thepurpose ofunlawfully engaging in U.S. airtransportation. Throughout the Department's careful and lengthy consideration ofthis matter, legitimate**U~S.** operators such as Petroleum Helicopters, Inc. ("PHI"), Northern Pioneer Helicopters LLC, and Soloy Helicopters LLC have been subjected to continuing illegal competition from VIH Cougar. Particularly in light ofthe blatancy ofVID Cougar's violations, which warrant strong sanctions in addition to revocation of its air taxi authority,4 the Department's action is long overdue, and any additional delay would be especially unwarranted.

Order 2013-6-8, at 18 n.49. 4 The Department states that ithas referred various issues concerning the activities ofVIRCougar and the VIH Group to the Office ofAviation Enforcement and Proceedings for appropriate action, Order 2013-6- 8 atnn. 33 & 48. · 2

### ·II. TheMotion for Reconsideration Is Meritless In Any 

### Event Even ifthe Motion were considered and accepted notwithstanding the Department's prior direction and its untimeliness, 

### it provides no basis on which to alter the Department's conclusions. Rather, like many .of Vlli Cougar's prior submissions, it strengthens the Department's conclusionthatVIH Cougar's authority should be revoked. 

### A. The Motion Is Based On TheDepartment'sPurported FailureTo ConsiderMaterialThatVIRCougarDid NotProvideForThe Record The primary 

### basis of the Motion for Reconsideration is that the Final Order failed to consider by 

### Mr. Turner

- The short answer to this contention is that if VIH Cougar wanted that material considered in this proceeding it could have sought to provide it at that time. Instead, VIH Cougar chose to rely on the record as it was completed after its final submission on January 3, 2013. 

### VIH Cougar does not provide any authority suggesting that the Department was not entitled to act on the basis of**~e** 

### record before it in this proceeding, much less that it was somehow obligated to seek out and address information that VIH Cougar was surely aware of (its counsel having represented 

### Mr. Turner but chose not to provide. Likewise, there is no basis, and VIH Cougar cites none, for the assertion that the Final Order is "replete with errors"**bec~use** 

### it relies on thy record ofthis proceeding rather than. incl)lding the extra record material VIH Cougar now seeks to introduce after the fact. VIH Cougar also faults the Department for taking it at its word that CHI provides contract services to VIH Group as well as VIH Cougar, claiming that this is based on a
5 Motion, at 1. 3typographical error in a document VIH Cougar provided.6 VIH Cougar chides the Department for not recognizing that this statement was erroneous. Again, the appropriate time for VIR Cougar to have advised the Department of an error in its own submission was when the submission was made, not months later
.. But in any event, as discussed next; even if all this information were considered there would still be no basis for the Departmentto change its order revoking VIH Cougar's airtaxi authority. B. TheMaterial VIH CougarBelatedly Seeks To Add To TheRecord Fully Supports The Department's Conclusion ThatVffi Cougar's AirTaxiAuthority Must BeRevoked. 

### A review of

### Mr. Turner's -.suggestswhy VIH Cougar decided not to introduce it into the record previously, even though itnow seeks to do so in a last ditch effort to head off the Department's Final Order.



### In other words, 

### VIH Cougar represents that the target has moved since the time of the submissions on which the Department relied in its Final Order, and claims that the Department must take these belated (and previously undisclosed) changes into account by revising its Final Order. VIH Cougar has things exactly backwards. The changes to which 

### 11r. Turner refers,
even assuming they are an adequate basis to reverse the Department's determination, whichthey
are not, are not evidence of a lack ofcontrol over VIH Cougar by the VIH Group. -.

6 Motion, at I, 3n.2. 

### 4

### In fact, discloses much thatconfirms the Department's conclusion that VIH Cougar's presentation of itself as 

### an independent U.S. company is a sham.

-

Whatever the original purpose, the fact remains that, as found in 

### the Final Order VIH Cougar's purpose has always been to service .the U.S. operations ofthe
same customers VIH Group serv.ices in Canada. Indeed, the VIH Group's website initially held outVIH Cougar as a direct subsidiary ofVIH Group. 11

Dkt. No.**DOT-OST~2012-0022-0050** (May 4, 2012);

# at ExhibitA. 

### 5The identity. of VJH Cougar and. the VIH Group for these customers was expressly acknowledged by Mr. Turner



# - This acknowledgement also puts the lie to VIH Cougar's assertions with respect to Mr. Bill MacDonald, the Canadian citizen who acted as the General Manager of 

### Vlli Cougar while simultaneously managing U.S. operations for another of

### Mr. Norie's subsidiaries,-

12

- at 243-44 (emphasis added). 13 See Dkt. No. DOT-OST-2012-0022-0050 (May 4, 2012) at 12. 14 Motion, at Ex. A, at 3-4, 10, 15. 15 Order 2013-6-8 at 14. 

### 6Mr. Turner's

- confirms the correctness of the Department's Final Order in many other ways as well. 1.

2.



# - 3.

16-95. 17 Jd. at244-245. 18 !d. at227, 239; see id,. at72-74. 19 Id. at 84, 238; see id. at 196-197. 20 !d. at78-79, 83, 85. 

### 7

### 4.

how companies in a true arm's lengthrelationship would be expectedto behave. 

### 8

### 5 .

.6.

25 Jd at 196. 26 Jd. at 149, 151. 27 Jd at 59-60, 73. 28 I d. at 63-65
.. 29 Final Order at 6. 3a-·at98-99, 107. 31 Id at 100-101. 

### 9

### 7.

In light of all ofthis, and ofthe many other findings the Department has as made, VIH Cougar'ssuggestionthat consideration ofMr. Turner's

- would require a reversal ofthe Department's Order (were the Department required to consider it, which it is not), is entirely· without basis. VIH Cougar's suggestion that the Department's Final Order is "replete with errors" because it did not take account ofassertions made in that deposition is likewise without basis, and unjustly attempts.to impugn the Department'sthorough consideration ofthis matter.

32 !d. at 62, 67. 33 Id. at 126-128, 1 34 !d. at 243-244 10C. The Department's Final Order CorrectlyRelied Upon TheRecord Before The Agency. None of the 17 enumerated "factual errors" in the Final Order alleged by VIH Cougar reflects 

### an erroneous characterization oftherecordbeforethe agency as ofJanuary 3, 2013 when VIHCougar made its final submissionto the Department in this proceeding.35 Inparticular, VIH Cougar challenges the Department's findings that it has obtained inventory, services and empioyees from VIH Group. 36 Yet VIH Cougar's own explanation of these asserted "errors" makes clear that VIH Cougar is simply referencing matters that are not ofrecord. For instance, VIH Cougar states:

The Department's Final Order was based on the record before the agency through 

### VIR Cougar's final submission onJanuary 3, 2013. ·Reconsideration is not appropriate as to matters that could have been brought to a decisiomaker's attention earlier but were not.41 VIHCougar

35 See Motion, Ex. A. 36 See. Motion, Ex. A, at**4~~.** 7-8, 12. 37 Motion, Ex. A, 

### at 5. 38 !d., Ex. A, at 8 (emphasis added). 39 !d., Ex. A, at 12 (emphasis added). 40 !d., Ex. A, at 13. 41 See 14 C.F.R. § 302.14(b); see also Silvas Air Lines, Order Denying Petition for Reconsideration, 88 C.A.B. 1207, 1209, 1981 WL 29693 (Mar. 30, 1981) (applying predecessor to § 302.14 to deny reconsideration in circumstances similarto those here, statingthat, "Withholding information which could have been discovered earlier until after the Board has made its decision frustrates the purposes of the Rule, the need for notice, for finality ofBoard action, and for preservation ofBoard resources."); cfIn 11had many months after the Department's Order to Show Cause to provide information and advise the Department as to the fixes it proposed, and the Department acted on the record VIH Cougar provided. The rules properly recognize that proceedings cannot go on indefinitely while parties backfill with material they could and should have presented earlier, and those rules have particular application to this proceeding, in which VIH was given many, many opportunities to make its case. PHI pointed out at length in its Motion for Final Disposition the various arrangements whereby VIH Cougar was wholly dependent upon VIH Group for assets, maintenance, personnel, and business opportunities.42 VIH Cougar never disputed the factual basis ofPHI's contentions. In fact VIH Cougar openly acknowledged the pervasive relationships between it and VIH Group but asserted that those relationships were completely irrelevant to the inquiry before the Department: "PHI's reliam;e on the fact- fully disclosed by VIH Cougar- that VIH Cougar leases helicopters and purchases certain services from companies affiliated with Mr. Norie, and pays for those leases and services, is unavailing."43 Yet VIH Cougar n0w

### f~ults the Department for failing to recognize recent, extra-record evidence about how VIH Cougar modified some of. these relationships that it previously claimed were irrelevant to this proceeding. The Departmentproperly relied upon the facts in the record before it.

the Matter ofSorens.en Grain Company, Inc., Docket No. DOT-FHWA-1997-2537, Order Denying Petition for Reconsideration (Apr. 22, 2004), at 2-3 ("The purpose ofa petition for reconsideration is not to provide a party with a second opportunity to submit that which it was required to have submitted earlier. It is to allow the party to argue that, based upon the evidence submitted, the decision issued was in error."). · 42 PHI's Motion for Final Disposition, Docket No. DOT-OST-2012-0022-0088 (Oct. 31, 2012), at 5-7, 9- 10. 43 VIH Cougar's Response to PHI's Motion for Final Disposition, Docket No. DOT-OST-2012-0022- 0090 (Nov, 9, 2012) at7. 12

### D. Asserted "FactualErrors"InTheFinal OrderAreInAny Event Simply VIH Cougar's DisagreementsWith The Department's Conc1usions Seeking to create the false impression that the Final Order is somehow infirm, VIH Cougar repeatedly tries to characterize as "factual errors" its disagreement with conclusions the Department drew based on uncontested facts in the record.· Three ofthe 

### 17 purported errors (Motion, 

### Ex. A, Nos. 

### 3, 7 and 

### 15) in the Final Order involve the role of

### Bill MacDonald, the Canadian citizen who at one pointran both Cougar and VIH Cougar'

- Butofcourse the lease 

### is linked to a specific aircraft. This is a distinction without
a difference and does not change the fact that 

### VIR Group unlawfully engaged in cabotage by providingboth aircraft and crewto VIH Cougarfor use 

### in U.S. operations.
44 Motion, Ex. A, at 15 (emphasis added). 13

### Several more Of 

### the purported "errors" relate to the Department's findings that the various contracts between VIH Cougar and VIH Group affiliates were not arm's length transactions.45 

### VIH Cougar asserts thatthese agreements were arm's length merely because they
were negotiated by 

### Mr. Turner, did not mandate VIH Cougar to use VIH Group's services, and could be terminated by VlH Cougar. The Department acknowledged these facts in 

### the Final Order but found them unconvincing, noting that the agreements are "nearly identical" to those thatMr. Steeper negotiated 

### and allow VIH Cougar to "request various services from VIH Group
on a cost-plus basis or fee basis" but on unspecified or vague terms that indicate the agreements
were not in fact negotiated at an arm's length basis.46 

### And as noted above, Mr. Turner's • -reflectsnumerous otherways in

### ~hich VIH Cougar fails to keep at arm's length from Mr. Norie. VIH Cougar's other asserted factual "errors" are barely worth discussing. VIH Cougar asserts it was not really "obligated".to hire

VIH Cougar takes issue with the statement that**~~all** 

### ofthe Rescue Specialists used in its operations are contractors provided by Cougar," VIH Cougar asserts**that:the~artment** 

### somehowerred in stating thatVIH Cougar failed to disclose the role ofLarry Lippert.byTesponding

### that**Mr~** 

### Lipperthas smce

451d. Nos. 5, 7, 11. 46 

### Final Order at 12. 47 Motion, Ex. A, No. 13. 48 Id., No. 9. 14- None ofthese inconsequential and meritless complaints warrants reconsideration of the Final Order. The remaining factual "errors" raised by VIH Cougar are either premised on recent, extra record evidence that only provides further supportfor the Department's conclusions as discussed above,5° or stem from an alleged typographical error in VIH Cougar's own filing that similarly does not change the fundamental problems the Department found and thus provides no cause for reconsideration.51 VIH Cougar thus continues its pattern of providing inconsistent and contradictory statements to the Department in connection with this proceeding, while at the same time making false

### as.serti~ns that it is the Department that has somehow acted improperly.

-

As has often been the case in the past, even VIH Cougar (and now apparently CHI as well) evidently have trouble keeping trackoftheirpervasive relationships withthe VIH Group. III. Conclusion VIH Cougar has failed to offer any sound basis whatsoever for reconsideration of the Department's conclusionthat VIH Cougar's air taxi exemption authority shouldbe revoked, and the Motion for Reconsideration should be denied. The Department should continue its investigation into the sanctions appropriate for VIH Cougar's and VIH Group's violations, past

49Id., Ex. A, No. 14. 50 See id., Nos. 4, 6, 10, 12, 14. 51 See id., Nos. 1, 2, 3, 11, 16, 17. 52 Motion, Ex.A, p. 4.
. 53 See id. at 16 ("the only services that CHI provides [to VIH Group] are to GAO FBO Services, Inc., beginning onMay 1, 2013 and consisting ofan FBO manager and three linemen"). 15

### and continuing. The Department should also maintain vigilance to assurethat Mr. Norie and his companies are not allowed to reap gains from their illegal activities through ongoing arrangements with VIH Cougar or, after its authority is terminated, with CHI. Mr. Norie's apparentproblem now is how to extricate himselffrom the illegal structures he has created while still trying to capture the value ofthe investments he made as the true owner in interest ofthe ' 

### illegal entity VIH Cougar. The Department should make sure he does not getawaywith that.

Dated: July 12, 2013 Respectfully submitted,

John Longstreth Timothy Hobbs K&L Gates LLP 1601 KStreetNW Washington, DC 20016 Counsel forPetroleum Helicopters, Inc., Northern PioneerHelicoptersLLC, andSalayHelicopters LLC



### 16CERTIFICATE OF SERVICE I certify that Ihave onthis 12thday ofJuly 2013 servedthe foregoing Opposition ofPetroleum Helicopters, Inc., Northern PioneerHelicopters LLC, and Soloy HelicoptersLLC to VIH Cougar Helicopters, Inc. and Construction Helicopters, Inc.'sMotionfor Reconsideration ofFinal Order andfor a Hearing upon the personslisted below, and have also filed a redactedversion electronically in the docket ofthis proceeding: Susan 

### L. Kurland Office ofthe Assistant Secretary for Aviation and InternationalAffairs U.S. Department ofTransportation 1200 New Jersey Avenue, SE Room W96-495 Washington, DC 20590 Lauralyn Remo Office oftheAssistant Secretaryfor Aviation and International Affairs U.S. Department ofTransportation 1200New Jersey Avenue, SE Room W96-495 Washington, DC 20590 PeterLynch, AGC-300 Asst. ChiefCounsel for Enforcement FederalAviation Administration 800 IndependenceAve. SW Washington, DC 20591 William J. Weber Certification SectionManager FAAAFS-900 45005 Aviation Drive Suite 131 Dulles, VA20166 Roy Hardie Aviation Safety Inspector Federal Aviation Administration 1601 Lind Avenue SW, Suite 260 Renton, W A 98057

17DavidM. Nadler David Y. Yang Andrew E. Smith DICKSTEIN SHAPIRO LLP 1825 Eye Street, NW Washington, DC20006 Telephone: (202)**420~2200** Facsimile: (202) 420-2201 nadlerd@dicksteinshapiro.com yangd@dicksteinshapiro.com smitha@dicksteinshapiro.coni Counsel to VIHCougarHelicopters, Inc.

JohnLongstreth



### 18