UNITED STATES OF AMERICA DEPARTMENT OF TRANSPORTATION OFFICE OF HEARINGS

IN THE MATTER OF: CLEAR DAY AVIATION, INC. Respondent Monday, March 7, 2016 FDMS No. FAA-2015-2439 1

The teleconference convened, pursuant to notice, at 2:00p.m. BEFORE: THE HONORABLE J.E. SULLIVAN, Administrative Law Judge

(202) 234-4433 NEAL R. GROSS COURT REPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 .

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(202) 234-4433APPEARANCES:
On Behalf of the Complainant: ZACHARY M. BERMAN, ESQ. of: Federal Aviation Administration Office of Regional Counsel 1 Aviation Plaza Jamaica, NY 11434 718-553-3258 zachary.berman@faa.gov

NEAL R. GROSS 2

(202) 234-4433 COURT REPORTERSAND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. WASHINGTON, D.C. 20005-3701 (202) 234-44333
1 P-R-0-C-E-E-D-I-N-G-S 2 2:08p.m. 3 JUDGE SULLIVAN: Okay. We're on the 4 record in the matter of Clear Day Aviation, Inc. 5 This is Docket Number FAA-2015-2439. 6 Today is Monday, March 7, 2016. And 7 the parties have convened for a court scheduled 8 prehearing status conference. 9 The Federal Aviation Administration, 10 which I'll hereinafter refer to by its initials, 11 the FAA, is represented by its attorney of 12 record, Mr. Zachary M. Berman. 13 The respondent, Clear Day Aviation, 14 Incorporated is represented by its attorney of 15 record, Mr. H. Brandon. He is not present today 16 and there is no explanation as yet for his 17 absence. 18 The record reflects that the parties 19 last convened on February 10, 2016 for a 20 prehearing status conference. At that time, the 21 parties indicated they were still discussing 22 settlement.

(202) 234-4433 NEAL R. GROSS COURT REPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 (202) 234-44334 1 They were hoping to have it scheduled, 2 and they both agreed to reappear today on March 3 7, 2016 at 2:00p.m. in the afternoon to provide 4 the Court with an update on their progress. 5 One day after the February 10, 2016 6 scheduling conference, the Court issued an Order 7 on February 11, 2016. This was the second Order 8 continuing the Rule 16 Litigation Scheduling 9 Conference, which codified the parties' 10 agreements and indicated in writing that the 11 conference was continued to Monday, March 7, 2016 12 at 2:00p.m. Eastern time. 13 So, Mr. Berman, let me turn to you 14 first, in part because you're the only person 15 here appearing as a litigant on behalf of the 16 litigants, and in part because you are the 17 complainant's counsel. Do you have any idea why 18 Mr. Brandon has not appeared today? 19 MR. BERMAN: No, I don't. Though I 20 would like to apprise you of like communications 21 I had with him. 22

(202) 234-4433 JUDGE SULLIVAN: Okay.

NEAL R. GROSS COURT REPORTERS ANDTRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. WASHINGTON, D.C. 20005-3701 (202) 234-44335 1 MR. BERMAN: On Friday, this was this 2 3 JUDGE SULLIVAN: And I'm sorry, could 4 you speak up? Because it's hard to hear you. 5 MR. BERMAN: Okay. On this past 6 Friday, on March 4, I sent him an email in which 7 I said that we were still having some delays in

- 8 - within our agency of coming to a conclusion as 9 to what kind of settlement agreement we want. 10 This is based on the new compliance 11 philosophy that we discussed at a -- regarding 12 another case, and you know, with you. And that I 13 would need more time. And that I would raise 14 that with the Judge. 15 And I asked him if he's okay with 16 that. And then he wrote me an email, this is 17 late on Friday when I was not working any more at 18 the time, but Friday, where he said, how about 19 sending a letter to the Judge so we don't have to 20 have the call. 21 And I didn't

-- I never responded

-- 22 I guess I maybe in hindsight I should have

(202) 234-4433 NEAL R. GROSS COURT REPORTERSANDTRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. WASHINGTON, D.C. 20005-3701 (202) 234-44336 1 responded. And that leads to this morning, I 2 just didn't get around to it. 3 And my inclination was to just go 4 ahead and have the conference, just to -- just to 5 tell Your Honor about the situation. 6 But, I never heard back from him 7 afterwards. So, you know, that's all I have. 8 And as I said

-- and

-- yeah. 9 And what I'm telling you now is what 10 I would have said had he been here, is that we're 11 still

-- the FAA internally is still working on 12 trying to come up with a settlement proposal. 13 That we've had some problems in coming 14
-- because of this new compliance philosophy, and 15 everybody's trying to get a handle on it, there's 16 just some delays that we -- that we have in some 17 of these cases in trying to come up with a 18 settlement proposal that's amicable to both the 19 Legal Division and Flight Standards. 20 That's where we are with this case. 21 22 JUDGE SULLIVAN: Okay. What would you suggest we do at this point Mr. Berman? The

(202) 234-4433 NEAL R. GROSS COURT REPORTERSAND TRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 (202) 234-44337 1 world is your oyster since your friend across the 2 aisle didn't show up today. 3 MR. BERMAN: I would suggest that we 4 reschedule the conference until a later date, say 5 in late

-- either late March or early April. 6 JUDGE SULLIVAN: Well, let me ask you 7 this about the internal processes that are going 8 on in your agency right now. Because this is the 9 second case I've had just today, where this has 10 been raised as a delay concern. 11 And I understand that this is a whole 12 new system for everybody. Does it mean in 13 essence that you are no longer the decision maker 14 regarding settlement process on a case that's 15 been assigned to you? 16 MR. BERMAN: Well, I never -- well, I 17 wouldn't consider myself the decision maker, but 18 this

-- I mean, in general we don't enter into 19 settlement agreements without the concurrence of 20 Flight Standards. But, it's even more so in 21 these types of cases. 22 And this is, it's a small minority of

(202) 234-4433 NEAL R. GROSS COURT REPORTERS ANDTRANSCRIBERS 1323 RHODE ISLANOAVE., N.W. WASHINGTON, D.C. 20005-3701 (202) 234-44338 1 cases -- of cases that arose after September 3, 2 2015. That whether to go for enforcement action 3 or non-enforcement action, is pretty much in the 4 hands of Flight Standards. 5 If they decide to go for like a 6 warning letter or a corrective action instead of 7 an enforcement action, I and my colleagues and I 8 will never see that case. Okay? It's only when 9 they send it for enforcement action. 10 The problem that you're seeing with 11 these delays and settling the cases, arises in 12 cases that preceded September 3, 2015 that were 13 already initiated as legal actions. 14 So

-- and but in the spirit of the 15 compliance philosophy, we're looking back at 16 these cases and reevaluating them. And in some 17 cases, downgrading the actions to warning letters 18 or corrective actions. 19 But, in these in particular in 20 these cases, we need not only the concurrence of 21 Flight Standards, but we need them as active 22 participants.

(202) 234-4433 NEAL R. GROSS COURT REPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 (202) 234-44339 1 Because they're the ones that will 2 eventually be writing and signing I should

-- 3 would be a better word for it. Signing and 4 mailing the warning notices or letters of 5 correction act -- letters of correction that go 6 out. 7 They can't just say it as they do in 8 some cases, go ahead Legal Division, do what you 9 like. We need the we need to work more 10 closely with Flight Standards in these cases. 11 So, that's where the problem comes in. 12 And everybody has to be onboard

-- 13 JUDGE SULLIVAN: Okay. 14 MR. BERMAN: For that to happen. 15 JUDGE SULLIVAN: Okay. That makes 16 perfect sense. So, let me ask you this, it 17 sounds to me as though there's no particular time 18 frame for the Flight Standards Office to get back 19 to you on any particular given case. 20 If that'S if that is so, then 21 wouldn't it be more efficient for both of us to 22 push this out farther then say, a month from now?

(202) 234-4433 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLANDAVE., NW. WASHINGTON, D.C. 20005-3701 (202) 234-443310

1 We've already tried that once and it didn't work 2 very well. 3 MR. BERMAN: Mm-hum. Okay. I'm-- I 4 think two months would be reasonable. 5 JUDGE SULLIVAN: Well, I am just 6 asking. Because it doesn't appear as though a 7 Court calendar date makes any difference to your 8 counterparts at Flight Standards. 9 MR. BERMAN: Well, I am trying to 10 convey to them that I can't keep on coming, you 11 know, like that's

-- everybody's you know, I 12 can't keep on telling the Judge that we're being 13 delayed, and to tell the opposing counsel we need 14 to -- you know, I tried, you know, I'm not an 15 official deadline maker. 16 But, you know, here in the Legal 17 Division, we're trying to convey that. You know, 18 we need to get these resolved. 19 JUDGE SULLIVAN: Okay. And I'm just 20 wondering what works best for you. Because 21 you're the only person appearing today. And so 22 I'm happy to give you whatever relief would make

(202) 234-4433 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. WASHINGTON, D.C. 20005-3701 (202) 234-443311 1 the most sense. 2 MR. BERMAN: Uh-huh. 3 JUDGE SULLIVAN: So, if you want more 4 time, I'm happy to give you more time. 5 MR. BERMAN: All right. 6 JUDGE SULLIVAN: Because your friend 7 across the aisle failed to appear today. So, 8 there's no objection to whatever request you make 9 that's within reason. 10 MR. BERMAN: All right. I'd like to 11
-- have another meeting schedule two months from 12 now. 13 JUDGE SULLIVAN: Okay. And let's take 14 a look at our calendars and see what works for 15 both of us. 16 Today is March 7, 2016. We're looking 17 at around May 9, 2016. Does that work for you? 18 MR. BERMAN: Yes. 19 JUDGE SULLIVAN: Do you have a 20 preference as to morning or afternoon? 21 22

(202) 234-4433 MR. BERMAN: No preference. JUDGE SULLIVAN: Well then, why don't

NEALR. GROSS COURT REPORTERSAND TRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 (202) 234-443312 1 we just put -- 2 MR. BERMAN: Well, actually, you know 3 something, I prefer the afternoon. 4 JUDGE SULLIVAN: Okay. Would 1:30, 5 2:00, 2:30 work? Which would you like? 6 MR. BERMAN: 2:30. 7 JUDGE SULLIVAN: 2:30 it is. May 9, 8 2016, 2:30 p.m. is our it'll be the third, I 9 think. Let's see. Let me just double check how 10 many I have now. 11 MR. BERMAN: Yeah, we're up to a 12 third. 13 JUDGE SULLIVAN: Yeah. A third 14 I'm just going to put litigation scheduling 15 conference. And why don't I give you a 26-F 16 deadline as well. 17 You had one filed for February 3, 18 2016. And it's really not going to work very 19 well. 20 MR. BERMAN: Right. 21 JUDGE SULLIVAN: All right. So, I'm 22 going to just ask you to update that if in fact

(202) 234·4433 NEAL R. GROSS COURT REPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. WASHINGTON, O.C. 20005-3701 (202) 234-443313 1 settlement doesn't occur. 2 MR. BERMAN: Okay. 3 JUDGE SULLIVAN: And to file that by 4 May 2, or before, depending on how things work 5 out. 6 MR. BERMAN: Okay. 7 JUDGE SULLIVAN: Okay. And then 8 anything else we can do to take care of you and 9 your client today? 10 MR. BERMAN: No, Judge. 11 JUDGE SULLIVAN: Okay. Then I thank 12 you very much for your information and your 13 assistance. It appears our business is complete. 14 I'll look forward to either receiving 15 some settlement paperwork from you, or talking to 16 you on May 9, 2016 at 2:30 p.m. regarding 17 litigation. 18 MR. BERMAN: Okay. All right. Thank 19 you. 20 JUDGE SULLIVAN: Okay. We can go off 21 the record, and I wish you a good day. And good 22 luck.

(202) 234-4433 NEALR. GROSS COURT REPORTERSAND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. WASHINGTON, D.C. 20005-3701 (202) 234-443314

1 MR. BERMAN: Okay. Thanks. 2 JUDGE SULLIVAN: All right, bye, bye. 3 MR. BERMAN: Have a good day. 4 JUDGE SULLIVAN: You too. 5 (Whereupon, the above-entitled matter 6 went off the record at 2:20 p.m.) 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22

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www.nealrgross.com17 C E R T I F I C A T E

This is to certify that the foregoing transcript

In the matter of: Clear Day Aviation

Before: DOT/OH

Date: 03-07-16

Place: teleconference

was duly recorded and accurately transcribed under my direction; further, that said transcript is a true and accurate record of the proceedings.

Court Reporter

(202)234-4433 NEAL R. GROSS COURTREPORTERSANDTRANSCRIBERS 1323RHODE ISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com