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U.S. DEPARTMENT OF TRANSPORTATION 

FEDERAL AVIATION ADMINISTRATION 

- - - - - - X 

In the Matter of 

JET LOGISTICS, INC., Docket No.: FDMS-2013-0290 

Respondent. 

- - - - - - - - - - - - - - - *x 

U.S. Department of Transportation 

1200 New Jersey Avenue, S.E. 

Office of Hearings, M/20 

(E11-310) Washington, D.C. 20591 

Tuesday, September 24, 2013 

LITIGATION SCHEDULING CONFERENCE (TELEPHONIC) 

The above-entitled matter came on for hearing at 

1:33 p.m., pursuant to notice. 

BEFORE: HON. J.E. SULLIVAN, U.S. Administrative Law Judge 

APPEARANCES: 

RECEIVED 

CCT 2 8 2013 

HEARING DOCKET 
For the Respondent: 

Mr. W. Ashley Smith (By telephone) 

Jet Logistics, Inc. 

5400 Airport Drive 

Charlotte, North Carolina 28208 

For the Agency: 

Jose L. Nieves, Esq. (By telephone) 

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Office of the Regional Counsel, Southern Region 

Federal Aviation Administration 

1 Aviation Plaza 

Jamaica, New York 11434 

(718) 553-3278 
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1 P R 0 C E E D I N G S 

2 JUDGE SULLIVAN: We are on the record in the matter 

3 of Jet Logistics, Inc. This is Docket Number FAA-2013-0290. 

4 Today is Tuesday, September 24, 2013, and the parties have 

5 appeared by telephone for a Rule 16 litigation scheduling 

6 conference. 

7 The Federal Aviation Administration, which I'll 

8 hereinafter refer to as the FAA, is represented by its 

9 attorney of record, Jose L. Nieves. The respondent, Jet 

10 Logistics, Inc., is represented by its representative, W. 

11 Ashley Smith, Jr. 

12 Mr. Smith, before I go into any thing more 

13 substantive, can you tell me if you are a lawyer? 

14 

15 

16 

company. 

MR. SMITH: No, ma'am. I'm the owner of the 

JUDGE SULLIVAN: Okay. Thank you very much. 

17 Then, Mr. Smith, I'll hereby refer to you as a lay 

18 representative since you're not an attorney. 

19 

20 

MR. SMITH: That's fine. 

JUDGE SULLIVAN: Okay. Let's just chat a little 

21 bit about procedural matters, essentially on July 26, 2013, 

22 this administrative court issued an order setting Rule 16 

23 litigation scheduling conference and directing the parties to 

24 engage in a Rule 26(f) planning conference, and to submit a 

25 joint discovery and proposed schedule for litigation. The 

26 parties did file that on September 24, 2013. I'm sorry, 
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1 yesterday, September 23, 2013, and the parties are appearing 

2 today as previously noted. 

3 Mr. Nieves, I just want to point out a couple 

4 things to you. In the proposed Rule 26(f) scheduling and 

5 discovery plan, your assistant sent it to an old address, and 

6 our address changed two years ago, and we did not get your 

7 materials until yesterday. So I'm going to ask you to make 

8 sure to update your service list so that our correct address 

9 is on it. Do you have a copy of your proposed scheduling and 

10 discovery plan in front of you? 

11 

12 

MR. NIEVES: Yes, Judge. 

JUDGE SULLIVAN: Okay. If you look at the service 

13 list, the certificate of service under my name, under the 

14 street name, which says 1200 New Jersey Avenue S.E. 

15 

16 

MR. NIEVES: That's right. 

JUDGE SULLIVAN: It also indicates East Building, 

17 Ground Floor, and then a room number. We moved from the East 

18 Building in September 2011, and so you want to eliminate that 

19 line. And I would put RoomE, as in egg, 11-310, directly 

20 under the words •office of Hearings, M/20." Everything else 

21 may remain the same. What will happen is the mailed copy of 

22 your materials will go to the mail room in the DOT 

23 headquarters, and it will be irradiated as all federal mail 

24 must be now. 

25 MR. NIEVES: Okay. 

26 JUDGE SULLIVAN: The room number basically 
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1 identifies where it goes from there, and my office is two 

2 blocks away from the headquarters building, and it does not 

3 receive mail directly. 

4 

5 

MR. NIEVES: Understood. 

JUDGE SULLIVAN: Okay. And then in the future when 

6 I give a due date to have something filed in this office, you 

7 may want to tell your assistant that means it should be in my 

8 hand on that day. So if you have not filed it in the U.S. 

9 mail post office with enough time for the mail service to get 

10 to my hand, then you also want to fax me a courtesy copy. 

11 And that's what most people do, in part because there's no 

12 certainty as to how long the mail room will take to irradiate 

13 the U.S. mail. They're usually pretty quick, but five days 

14 to two weeks is not unusual. So I just wanted to kind of 

15 clear that up so that you have some better understanding of 

16 how to get things to me efficiently, if you can. 

17 

18 

MR. NIEVES: I appreciate that, Judge. 

JUDGE SULLIVAN: You're welcome. Now, let's talk a 

19 little bit about the proposed scheduling and discovery plan. 

20 Neither of you, I don't think, have ever appeared before me 

21 before, and I'm going to just generally tell you a little bit 

22 about how I handle most litigation. I generally provide the 

23 parties with a lot more deadline and discovery planning than 

24 what you have provided to me, and I do that in part to allow 

25 parties sufficient time to exchange discovery, file motions 

26 if they need to, file dispositive motions, and also appear 
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1 before me for argument on any prehearing motion before the 

2 trial or the hearing. 

3 So I think what I can do with you two today is just 

4 talk a little bit about what you anticipate the final hearing 

5 will be, and then I can backtrack and kind of give you an 

6 idea of what I think we can add to the proposed schedule 

7 you've already offered to me. So, starting with you, Mr. 

8 Nieves, can you tell me how long you think a hearing would 

9 take in this case, if you assume that no matters are resolved 

10 prior to the hearing and that all issues remain on the table? 

11 How long do you think your client would need to try a prima 

12 facie case, and about how many people do you think you might 

13 be calling? And I understand that this is speculative, since 

14 discovery is not yet complete at this time? 

15 MR. NIEVES: Based on that understanding, judge, I 

16 would approximate that the hearing would take no more than 

17 three days, probably two days would be sufficient. In 

18 addition, I believe that on the government side as far as 

19 witnesses, we would call approximately five witnesses. 

20 JUDGE SULLIVAN: And how many of those five would 

21 be expert witnesses in your opinion? 

22 

23 

MR. NIEVES: One. 

JUDGE SULLIVAN: And when you say two to three 

24 days, you're talking not only about your prima facie case, 

25 but the respondent's case, or just your prima facie case? 

26 MR. NIEVES: I'm talking about the prima facie 
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1 case, the respondent's case and possible time for decisions. 

2 JUDGE SULLIVAN: Okay. Thank you. Mr. Smith, let 

3 me turn to you, and I'm going to ask you a few questions that 

4 are a little different. Can you tell me if you've ever 

5 appeared as a lay representative for your company or someone 

6 else in a case like this? And the reason I ask is not to 

7 cause you any concern or nervousness. I just want to get a 

8 sense of how much I'm going to need to explain today. 

9 

10 

MR. SMITH: Urn. First of all, you couldn't add to 

the nervousness or concern. It's probably already at the 

11 maximum level. 

12 

13 

JUDGE SULLIVAN: Okay. 

MR. SMITH: I have not -- I've never been through 

14 this system before. The few cases that I've been involved in 

15 as a member of management for previous air carrier operations 

16 were all settled before it ever got to this particular point, 

17 so I mean completely unchartered waters for me. 

18 JUDGE SULLIVAN: Okay. Let me ask you if you ever 

19 watch television shows involving pretend trial. 

20 MR. SMITH: Not really. No. 

21 JUDGE SULLIVAN: So you never -- and this may date 

22 me -- excuse me. You've never seen shows like Perry Mason, 

23 Judge for the Defense, L.A. Law, those kinds of shows that 

24 show trial work? 

25 MR. SMITH: I saw "A Few Good Men," the movie. 

26 JUDGE SULLIVAN: Okay. Well, that is a military 
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1 court and that gives you a general sense. 

2 MR. SMITH: Right. 

3 JUDGE SULLIVAN: In terms of your particular issues 

4 here, if this case went to a hearing like the one not exactly 

5 the same, but similar to a hearing you saw in that movie that 

6 you just talked about, how many witnesses do you think you 

7 would call? Do you have any idea? Have you thought about 

8 

9 

that? 

MR. SMITH: Yes, ma'am, I have. I don't think it 

10 would be any more than five for me, either, and probably more 

11 likely three. 

12 

13 

14 

JUDGE SULLIVAN: Okay. 

MR. SMITH: Yes, ma'am. 

JUDGE SULLIVAN: And would any of those people be 

15 experts? And when I say expert, I'm talking about someone 

16 who might have special knowledge, either because they have 

17 experience, education, some other type of specialized 

18 understanding of a topic. 

19 MR. SMITH: In my opinion, at least two would be, 

20 possibly three. Yes, ma'am. 

21 JUDGE SULLIVAN: Okay. Would you be the person 

22 that continues to represent your business, or are you 

23 planning on having some help? 

24 MR. SMITH: At this point it's just going to be us, 

25 and that's part of the point that the reason we're going 

26 to the hearing. And I was unable to come to an agreement on 
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1 the amount of a fine. 

2 

3 

4 

5 

6 

7 

8 

JUDGE SULLIVAN: Okay. 

MR. SMITH: Yeah. The company's just not in a 

position to afford it. I can't afford an attorney either, so 

I'm going to have to just do the best I can. And I apologize 

in advance for my ignorance of what we're doing. 

JUDGE SULLIVAN: Thank you very much. And you are 

not the first person who has chosen to represent his company 

9 and you will not be the last. So you join many other people 

10 in this endeavor. 

11 

12 

MR. SMITH: I do? 

JUDGE SULLIVAN: Yes. I would say to you that 

13 there are people who have been very successful in 

14 representing their companies and there are others who have 

15 not been. And part of it simply is, I think, a combination 

16 of good sense and perhaps persistence. And some of it is 

17 also dealing with the facts, because however brilliant you 

18 might be as a person, you still have a certain type of fact 

19 to deal with. And that can help shape the case as it were. 

20 So let's talk a little bit about the place. 

21 Starting with you, Mr. Nieves, and I should point out to you, 

22 Mr. Smith, in this type of case the litigation rules are 

23 fairly traditional. So what you'll see me do is I will 

24 always turn to the prosecuting agent, first. In this case 

25 it's the FAA; always ask the FAA first, and then ask the 

26 respondent second. 
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1 In the hearing itself you'll see the same 

2 hierarchy. The FAA has the burden of initial proof. It puts 

3 on its case first, and then the respondent, your company, 

4 goes second. And that's just the way it is, traditionally, 

5 in virtually all litigation. So it's not in any way a 

6 statement that the FAA has any particular priority over you 

7 or that there's a favoritism of any kind. It simply means 

8 that there's a prosecuting agent and the court turns to them 

9 first. 

10 So, Mr. Nieves, let's talk to you for a moment. 

11 Where do you think this case would be tried if it goes to 

12 

13 

trial? 

MR. NIEVES: Um. The venue that the government 

14 would prefer is Charlotte, North Carolina, where the 

15 witnesses will be actually situated. 

16 JUDGE SULLIVAN: And are almost all of your 

17 witnesses located there? Is that what you're telling me? 

18 

19 

MR. NIEVES: Yes, judge. 

JUDGE SULLIVAN: Okay. And, Mr. Smith, would 

20 Charlotte, North Carolina, be a preferred place for you as 

21 well to actually have the hearing? 

22 MR. SMITH: Yes, ma'am. For resource reasons that 

23 would be preferred. 

24 JUDGE SULLIVAN: Okay. Then I'll just note that 

25 venue is agreed to be in Charlotte, North Carolina, at this 

26 point. 
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Mr. Nieves, let me ask you this. In terms of your 

2 complaint and the answer that you received, are all issues in 

3 your opinion still on the table, or has there been some 

4 resolution by the parties regarding some of the issues at 

5 this point? 

6 MR. NIEVES: Judge, based on the admissions, the 

7 response from Mr. Smith, he admits to all the allegations as 

8 far as 1 through 11. He admits to 1 through 11, which 

9 includes 11 being that the operation of the flight in 

10 question was done outside of the operation specifications 

11 that was approved for the company. So that would mean that 

12 three of the six charges that are on the complaint, 

13 basically, are admitted. The other three that deal with the 

14 training qualifications of the pilots involved in the flight 

15 is still in question. 

16 JUDGE SULLIVAN: And when you say three of the six 

17 charges, I as unable to determine exactly how many violations 

18 you were alleging. It looks like there might have been six 

19 or seven, and it sounds like you're saying six at this point. 

20 Is that right? 

21 MR. NIEVES: Correct. The charges that I'm 

22 referring to that were admitted by the respondent is the 

23 charge alleging violation of Section 119.5(g), 119.5(j), and 

24 119.5(1). Those are the charges that deal with the operation 

25 of an aircraft outside of an air carrier or certificate 

26 holders operation specification. 
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1 The charges that deal with the training of the 

2 individual pilots that operated the specific flight in 

3 question are the latter three of the charges on the 

4 complaint, which is 135.95(b), 135.293(a) and 135.343. Those 

5 are the charges that are disputed at this point. 

6 JUDGE SULLIVAN: So essentially we've been talking 

7 about the initial complaint that's dated June 18, 2013, and 

8 you have been referring me to page 5 and page 6 of that 

9 complaint. 

10 

11 

MR. NIEVES: Correct. 

JUDGE SULLIVAN: And as I understand it from what 

12 you've been telling us, you're asserting that on page 5 under 

13 paragraph 3, section b as in boy, c as in cat, d as in david, 

14 which outline three different violations, have been admitted 

15 in your opinion by the respondent's answer, and that sections 

16 e as in egg, f as in frank, and g as in george all of 

17 which are contained on page 6 of the complaint-- are still 

18 in dispute. Is that correct? 

19 

20 

MR. NIEVES: Correct, judge. 

JUDGE SULLIVAN: And then I also have on page 5 of 

21 the complaint, section a as in apple, that you've identified 

22 as Section 91.13 alpha. Is that simply an explanatory 

23 section? 

24 MR. NIEVES: One second, judge. No. Actually, 

25 alpha was disputed. So that's, I guess, a fourth charge. I 

26 correct what I said before. It's a fourth charge that is 
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1 disputed by the respondent. He disputes it. 

2 JUDGE SULLIVAN: Okay. I'm going to stop you. So, 

3 essentially, we have seven violations and not six. 

4 

5 

MR. NIEVES: That's correct. 

JUDGE SULLIVAN: And four which remain in dispute 

6 according to you? 

7 MR. NIEVES: Correct. 

8 JUDGE SULLIVAN: Okay. Mr. Smith, I'm going to 

9 turn to you next. Were you aware when you filed your answer 

10 that you might have been admitting to some of the violations 

11 that were alleged in the complaint? 

12 

13 

MR. SMITH: Yes, judge, I was. I was very clear. 

JUDGE SULLIVAN: Okay. Would you agree or disagree 

14 with Mr. Nieves that the violations identified on page 5 and 

15 6 of the FAA's complaint under the paragraphs labeled bas in 

16 boy, c as in cat, and d as in david, are the violations that 

17 you wanted to admit to when you filed your answer? 

18 

19 

MR. SMITH: Yes, ma'am. That is correct. 

JUDGE SULLIVAN: Okay. Then I will note that has 

20 occurred, and as I understand it, Mr. Smith, from your 

21 answer, you still challenge all of the proposed civil penalty 

22 that the FAA has suggested in this case. 

23 MR. SMITH: I have rejected the proposed amount, 

24 yes, ma'am. That's correct. 

25 JUDGE SULLIVAN: Okay. All right. Then I'm 

26 looking at my clock and I'm running out of time, and I'm so 
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1 sorry. I think what I'll do is I'll bifurcate this, because 

2 we have a lot of information to go to and discuss. What I'm 

3 going to do next is I'm going to ask both the parties to take 

4 a look at your calendars. I'm going to calendar a second CR 

5 16 conference. I'm going to schedule a little more time, 

6 because I think that would be helpful, and then I'm going to 

7 talk to you a little bit about what we're going to be 

8 discussing at this next conference so that you have a better 

9 idea of what's going to be coming down the pipe. 

10 So, Mr. Nieves, let's turn to you. I think we 

11 should probably schedule an hour and a half to finish up with 

12 this, and when we do that, we'll be able to really tie down 

13 where the parties want to spend their time in terms of 

14 discovery, I think, and also in terms of any prehearing 

15 motion. I know that there is a pending threat of a 

16 government shutdown. We all know that. So let's talk about 

17 perhaps the latter part of October, just to be on the safe 

18 side. Do you have time, Mr. Nieves, the week of October 28, 

19 2013, for a 90-minute telephone conference? 

20 MR. NIEVES: Yes, judge. The 28th, the 29th are 

21 open as of today. 

22 JUDGE SULLIVAN: Okay. And just so that I know in 

23 terms of full availability, do you have time the 30th, 31st 

24 through the 1st? 

25 MR. NIEVES: The 31st I'm not available. The 30th 

26 I am available in the morning. 
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2 

3 

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JUDGE SULLIVAN: Okay. And what about the first? 

MR. NIEVES: The 1st I am available. 

JUDGE SULLIVAN: Okay. Mr. Smith, turning to you, 

4 looking at the same week of October 28th, do you have any 

5 black-out time during that week where you could not be in a 

6 90-minute telephone conference? 

7 MR. SMITH: The only challenge for me, judge, would 

8 be the morning of the 29th. Other than that, I'm available 

9 the entire week. 

10 JUDGE SULLIVAN: Okay. Why don't we try then for 

11 Wednesday, October 30, 2013? And let's plan on a 10 a.m., 

12 and that would be until 11:30 Eastern Time. And my office 

13 again will contact both of you with a conference call number, 

14 and I do appreciate it when you're on time as you were today. 

15 We have so far talked about how the trial may take 

16 two to three days. Mr. Smith, I did not ask you 

17 specifically, and I should. Do you also agree that that's 

18 about how much time the total trial would be? Do you have a 

19 sense of that, now? 

20 MR. SMITH: Yes, ma'am. I can't see where it would 

21 be any longer than that. What I need to do would be quite a 

22 bit less. 

23 JUDGE SULLIVAN: Okay. We'll just assume for the 

24 sake of discussion that it would be a total of three days at 

25 this point. There's been an agreement that it would occur in 

26 Charlotte, North Carolina. There's also been an agreement 
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1 that three of the seven charges have been admitted by the 

2 respondent's answer, and that the respondent still challenges 

3 four of the remaining seven charges and also challenges the 

4 total penalty of $40,000 as proposed by the FAA. 

5 Now, when we meet again, what we're going to be 

6 talking about is a couple different things, and I'm going to 

7 give you Mr. Smith, some resource information as well. What 

8 I generally do is I schedule deadlines for initial 

9 disclosure, which is a very limited disclosure of very basic 

10 information, and then I schedule deadlines to begin general 

11 discovery and to end general discovery. And, general 

12 discovery is usually things that involve depositions, 

13 requests for production and exchange of basic information 

14 regarding experts, the names of your witnesses, those kinds 

15 of things, serving interrogatories, that type of general 

16 discovery. 

17 I then set a very short period of time for any 

18 necessary supplemental discovery after general discovery is 

19 done, and I do that, particularly in cases where depositions 

20 are being taken during general discovery because as fate 

21 often has it, a person deposed will often not bring 

22 everything or think of something during a deposition that 

23 they didn't realize they knew, and so forth. And so 

24 supplemental discovery can be helpful at that point. 

25 I then schedule a time to file a motion or motions 

26 to address dispositive issues with answer and reply as well 
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as a telephone conference to address those dispositive 

motions. If the parties want, I'll also schedule after that 

a final conference, prehearing conference, to see where 

you're at in terms of the litigation. Then I set a witness 

list, exchange of exhibits due date, and then the trial. 

So those are the kinds of things that we're going 

to be talking about at the next conference, and I'll also 

talk a little bit more about what discovery is and what it 

means. 

Mr. Smith, just so that you're not on the edge of 

your seat for a whole month, discovery is actually just a 

period of information exchange between you and the FAA and 

it's a formal process that has over the years acquired the 

name of discovery, because you are in essence discovering new 

information about the dispute. So your friend across the 

aisle, Mr. Nieves, will be giving you information that you 

request from him and alternately you will be responding to 

requests for information from Mr. Nieves. 

It may be by this point that you both know pretty 

much what you want to know, or it may be that you have more 

questions to ask of each other; and, if so, then this 

22 discovery period is the time to do it. And there are 

23 different rules and processes that apply, but we can talk 

24 more about this at the next conference. We can also talk a 

25 little bit more about the process of the hearing and answer 

26 or address other questions that either party might have about 
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1 this. 

2 I typically stop discovery long before 15 days 

3 before the hearing, in part because I think it's very 

4 important to have most, if not all of your discovery 

5 completed before you file for dispositive motions. And 

6 dispositive motions are requests to the court, prior to the 

7 hearing, or final decision on some or all of the dispute, a 

8 very important part of the prehearing process. Sometimes 

9 those requests are granted; sometimes the requests are 

10 denied; and, sometimes, part of the request is granted and 

11 part of the request is denied. It just depends on what the 

12 facts are and what the parties present during those motions, 

13 but we'll talk a little bit more about that, as well. 

14 And I think we'll also talk a little bit more about 

15 what the crux of this civil penalty dispute is so that we can 

16 kind of clear the air at least for what the coming months 

17 might bring and also see if there's a possibility to still 

18 retain some discussion privately between the parties about 

19 continuing settlement. And, as I say to everyone, settlement 

20 discussions remain part of the litigation process for 

21 everybody. It's just part and parcel of litigation, because, 

22 as you discovery more about each other's positions, you may 

23 discover that you're not as far apart as you thought, and you 

24 want to always keep the door open for shaking hands. 

25 With that, Mr. Nieves, is there anything else we 

26 can address for your client today before we close? 
1 

2 judge. 

3 

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MR. NIEVES: No, I think we've done just fine, 

JUDGE SULLIVAN: Thank you. Mr. Smith, anything on 

4 behalf of your client before we close? Because I don't want 

5 you to feel uncomfortable, nervous or anxious between now and 

6 our next conference on October 30, 2013. 

7 MR. SMITH: No, judge. I really appreciate you 

8 taking it to an elementary level and explaining it as 

9 thoroughly as you have. I'm much more comfortable with what 

10 to expect going forward. So, thank you. 

11 JUDGE SULLIVAN: Okay. You're very welcome. Just 

12 so that you both know, I'll be sending out an order that 

13 codifies in writing what we've just talked about, which 

14 essentially is we'll be meeting again on Wednesday, October 

15 30, 2013, 10 a.m. to 11:30 Eastern time; and, also, that 

16 there's been a stipulation of venue as well as an admission 

17 of three of the seven charges. 

18 So, with that, I thank you all for your presence. 

19 It appears our business is complete. I look forward to 

20 speaking with you in one month. We can go off the record, 

21 and I wish you all a good day. 

22 (Whereupon, at 2:03 p.m., the telephonic scheduling 

23 conference was concluded.) 

24 * * * * *