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## 21 2: 13 COASTAL AIR TRANSPORTATION, INC. FDMS No. FAA-2011-1005

11:05 a.m. Suite 600, Conference Room Heritage Reporting Corporation 1220 L Street, N.W. Washington, D.C. Monday, June 11, 2012

The parties met, pursuant to the notice, at

BEFORE: HONORABLE J.E. SULLIVAN Administrative Law Judge APPEARANCES: (Via Telephone) On Behalf of Respondent: MICHAEL FOSTER, President Coastal Air Transport, Inc. P.O. Box 3985 Christiansted, St. Croix, Virgin Islands 00822 (340)773-6862 On Behalf of Agency: RASHAWN RICH'GEORGE, Esquire Office of the Regional Counsel, SouthernRegion Federal AviationAdministration P.O. Box 20636 Atlanta, Georgia 30320 (404) 305-5200 AS0-7 

# Rc IVED JUN202012 

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### (11:05 a.m.) 3 

### JUDGE SULLIVAN: We're on the record inthe 4 matter of Coastal Transport, Inc. This is Docket No. 5 FAA-2011-1005. Today is Monday, June 11, 2012, and 6 the parties have convened for a second Civil Rule 16 7 litigation scheduling conference. 8 The Federal AviationAdministration, which 9 

### I'llhereinafter abbreviate as the "FAA" is 10 representedby its attorney-of-record, Ms. Rashawn 11 RichGeorge. Alsopresent inher office sitting as an 12 observer today is Andrew Serota, a law student intern 13 with the FAA. 14 Appearing onbehalf of Coastal Air 15 Transport, Inc. is its president, Michael Foster. 16 And, Mr. Foster, remindme again, are you a layperson 17 

### or an attorneywho serves as the president? 18 MR. FOSTER: I'm a layperson. 19 

### JUDGE SULLIVAN: Okay. Thankyouverymuch. 20 I'll note that prior to convening today, this Court 21 issued an order onMay 23, 2012 whichgranted the 22 Respondent's motion for a continuance of the second CR 23 16 conference. I'll also note that prior to issuing 24 that order onMay 22, 2012, the parties submitted a 25 jointRule 26-F report. Thankyou all

. Heritage Reporting Corporation (202) 628-4888 2

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• 1 What I need to do is talk a littlebit about 2 some housekeepingmatters if I may. And I'm going to 3 start withyou, Mr. Foster. We apparently don't have 4 a good telephone number of record for you since we 5 tried the number of record that you had givenus for 6 today's conference and it didn't work. 7 And as a result, Ms. George stepped in and 8 was able to give us an alternate number. Canyou tell 9 us for our records, what phone number we shouldhave 10 for you inorder to reachyou for these kinds of 11 conferences? 12 13 MR. FOSTER: Okay. It's (340)773-6862. JUDGE SULLIVAN: Okay. And is that the 14 number that my secretary calledyou to reachyou at 15 today? 16 MR. FOSTER: Yes. Oh, I don't know, but 17 that's the onlynumber we have. We onlyhave one 18 number. 19 JUDGE SULLIVAN: Okay. Is there another 20 number that you have utilized in the pastbecause 21 that's the number that she tried to reachyou at 22 originally, andMs. George endedup givingus a 23 different number for today's conference? 24 25 now. MR. FOSTER: This ismy cellphone I'mon
Heritage Reporting Corporation (202) 628-4888 3

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### JUDGE SULLIVAN: Okay. All right. Thank 2 you. We'll continue touse it as the phone number of 3 record. 4 

### MR. FOSTER: Okay. 5 

### JUDGE SULLIVAN: Let's talk a littlebit 6 about the CR-26-F report, and let's start with a 7 couple different things. There is, within this 8 CR-26-F report, what appears tobe a dispute about 9 venue with the FAA suggesting SanJuan, Puerto Rico 10 and the Respondent suggesting Saint Croix, Virgin 11 Islands. 12 Startingwithyou, Ms. George, have you 13 reached anykind of agreement about the venue? 14 MS. GEORGE: Your Honor, I indicatedtoMr. 15 Foster at the time we hadour discussion that it was 16 preferable for theAgency for SanJuan. Ourwitnesses 17 wouldbe coming out of the SanJuan area, and for 18 travel purposes we -- 19 

### JUDGE SULLIVAN: Okay. I'mgoing to 20 interruptyou. It sounds tome likeyou haven't 21 reachedan agreement onvenue sinceyou filed this 22 report. Would that be a fair statement? I'mhearing 23 no response. That was addressed toyou, Ms. George. 24 MS. GEORGE: Yes, I'm sorry. There was a 25 sirenthat we heard on our end. You might not have Heritage Reporting Corporation (202) 628-4888 4

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• 1 heardme over that. I indicatedthat we have not 2 discussed it since the date thatwe originally 3 discussed the issues that we have onMay 17. So we 4 have not come to an agreement. 5 

### JUDGE SULLIVAN: Okay. And as I understand 6 it from your original notice of complaint, youhave a 7 total of 16 alleged safetyviolations? 8 

### MS. GEORGE: Yes, Your Honor. 9 

### JUDGE SULLIVAN: Okay. And I wasn't able to 10 quite figure out from your notice of complaint or the 11 othermaterials, how you reached the $59,600 amount 12 for the proposed civilpenalty. Have youbeen able to 13 

### exchange that specific informationwithMr. Foster 14 

### yet? 15 

### MS. GEORGE: On May 17 during our 16 conference, I indicatedto himhow we reached the 17 $59,000. We hadpreviouslyprovided to him a copy of 18 our sanction, got itmatrixedwith ourmotion for 19 judgment on the pleadings. 20 And in that document, we explainedhow the 21 air carrierviolations were comprisedbasedupon the 22 FAA has its materials matrixed. Under ourpenalty 23 guidelines, Mr. Foster is being chargedwith 24 violations of regulations for improper acceptance of 25 hazardous materials. There's in fact

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• 1 JUDGE SULLIVAN: I'm going to stopyou. The 2 questionbefore you was: Have youprovided a specific 3 statement toMr. Foster about you reached that amount? 4 And it sounds like the answer is yes. 5 MS. GEORGE: Yes, ma'am. 6 JUDGE SULLIVAN: Okay. Mr. Foster, let me 7 turn toyou. There was previously a motion filed by 8 the FAA on February 23, 2012 whichwas a motion for 9 hearing on sanctiononly. And as youmay recall, I 10 subsequently took a look at that motion as well as 11 yourmotion to dismiss and some othermatters, and I 12 reserved that particularmotion for discussion for 13 today. Didyou andMs. George talk about that at all 14 during your CR-26-F conference that you convened and 15 held onMay 17, 2012? 16 MR. FOSTER: No, we didnot. 17 JUDGE SULLIVAN: Okay. Do you have any 18 particularpositionon that motion that you would like 19 to talk about today? 20 MR. FOSTER: Well, as I pointedout in the 21 motion to dismiss, there were numerous contradictions 22 inMs. George's charges. She actually contradicts her 23 own charges in the filings that she's made. And that 24 was the objection I had. And also, we really didn't 25 talk that much about the matrix andhow it affected Heritage Reporting Corporation (202) 628-4888 6

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• 1 us. 2 I had considered this, of course, it's my 3 first offense, and it's a veryminor offense. And I 4 questionedwhy we were at the top of the matrix for a 5 minor first offense, and she really didn't explain it 6 to me. 7 JUDGE SULLIVAN: Okay. So it sounds to me 8 like you are objecting then to the motion for hearing 9 on sanction only. Would that be a fair statement? 10 MR. FOSTER: That's correct. 11 JUDGE SULLIVAN: Okay. 12 MR. FOSTER: The sanctionwas from the date 13 of the original conference? 14 JUDGE SULLIVAN: There is a sanction in the 15 amount of $59,600 proposed as a total sanction for an 16 alleged 16 safetyviolations. 17 MR. FOSTER: Okay. No, I am objecting to 18 that. 19 JUDGE SULLIVAN: Okay. I'm sorry, sir. I'm 20 going to continue. When you want to object to 21 something like that andyou don't reach an agreement 22 about it prior to today's date, then essentiallyyou 23 have to file a written response and explainwhat your 24 objections are inwriting. And I'll set a deadline 25 for you to do that before we conclude today. Heritage Reporting Corporation (202) 628-4888 7

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• 1 MR. FOSTER: Okay. 2 JUDGE SULLIVAN: Let me askyou this, Mr. 3 Foster, is ityour intent to continue representing 4 your company onyour own? 5 MR. FOSTER: That's correct, Your Honor. 6 We're a very small companywith limited finances right 7 now. 8 JUDGE SULLIVAN: Okay. Just so that I have 9 a sense of what your level of expertise is in 10 appearing as a representative, I'mgoing to ask you a 11 couple of questions about yourbackground. Do you 12 have any experience serving as a legal representative 13 onbehalf of your companybefore this office on other 14 matters? 15 MR. FOSTER: We're violation-free, Your 16 Honor. We haven't had any -- I've been inbusiness 35 17 years, andwe haven't had anything like this happen. 18 JUDGE SULLIVAN: Okay. So I would assume 19 from that response the answer is no. You have no 20 experience appearing as a legal representative before 21 this forum. 22 23 24 25 MR. FOSTER: That's correct. JUDGE SULLIVAN: Okay. Do youhave any experience appearing as a legal representative for your company in anArticle 3 court like in a state Heritage Reporting Corporation (202) 628-4888 8

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• 9 1 court or a federal district court for example? 2 MR. FOSTER: No, we do not. 3 JUDGE SULLIVAN: Okay. How familiar are 4 you, if at all, with the Code of Federal Regulations, 5 the Rules of Civil Procedure or the Rules of Evidence? 6 And if you're not familiar, just say so. 7 MR. FOSTER: No, I have no background in 8 that. 9 JUDGE SULLIVAN: Okay. That helps me quite 10 a bit. In essence, Mr. Foster, whenyou appearbefore 11 me in this particular forum, you are required 12 essentially toplayby the rules, and there are lots 13 of different rules that govern the way we do things in 14 this litigation forum. 15 And I canprovideyou with informationabout 16 how to do certain things, but thenyou also have to 17 spend some time reading the rules andbecoming 18 familiar with them so that you canutilize them to 19 your ownbenefit because I cannot give you advice nor 20 can I advocate for your company. Does thatmake sense 21 so far? 22 MR. FOSTER: Yes, it does. 23 JUDGE SULLIVAN: Okay. You are always 24 welcome to consult privatelywith an attorney without 25 hiring an attorney to represent you. And some people Heritage Reporting Corporation (202) 628-4888

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• 10 1 

### do that. Usually companies like yours have someone 2 that theyutilize on occasion for businesspurposes. 3 You may find that it's veryhelpful to talk 4 to an attorney on occasion about how to navigate 5 through the dispute resolutionprocess. There are 6 people who also utilize

-- they see experts who may or 7 may not be as helpful as an attorney, but it's up to 8 you to decide. 9 In.essence, what you're doing right now is 10 that you're appearing for the purpose of setting the 11 litigation schedule onmy calendar and settingup a 12 calendartime line foryou and the other side to work 13 

### comfortably towards either trial or resolution. 14 

### And we call the trials "hearings" because 15 this is an adjudicative functionunder the executive 16 branch, but we are requiredtoprovide youwith the 17 same type ofprocess that youwould see ina trial 18 that youwould see on television. 19 And I say that with some cautionbecause 20 television trials are oftenquite dramatic anddon't 21 reallygive you the sense of all the hardwork that 22 peoplehave to do to get there. 23 

### 24 25 

### MR. FOSTER: I see. JUDGE SULLIVAN: Having saidthat, one of the first things that wouldbe veryhelpful toknow is Heritage Reporting Corporation (202) 628-4888

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• 11 1 howmuch informationyou andMs. George need to 2 exchange and talk about inpreparation for the trial. 3 And the amount of information that would 4 need tobe exchangedwouldbe very different if the 5 motion for hearing on sanctiononlywas grantedversus 6 if it were deniedbecause what that motion does is ask 7 this Court to substantiallynarrow the issue that 8 wouldbe in litigationbefore me. 9 In essence, this motion is askingme to find 10 that all the violations occurredand that the only 11 thing that is incontroversy is the amount of money 12 that shouldbe paid as a penalty. So it seems to me 13 14 15 that the very first thing that needs to be done is to decide what the scope of the dispute is. Andbefore I go on, I justwant to check in 16 withyou, Mr. Foster, and see ifyouunderstandwhat 17 I'm talking about so far. 18 MR. FOSTER: I believe so. 19 JUDGE SULLIVAN: Okay. Do youhave in front 20 of you a copy of that motion that was filed on 21 February 23, 2012 byMs. George? 22 23 24 25 MR. FOSTER: No, I do not. JUDGE SULLIVAN: Okay. Do youhave a file that youhave inyour office somewhere that's perhaps not at your fingertips right now inwhichyou would Heritage Reporting Corporation (202) 628-4888



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• 12 1 have placedyour copy of that document? 2 MR. FOSTER: Sure. I do have a file. 3 JUDGE SULLIVAN: Okay. Is it close at hand? 4 Couldyou get up from the phone and go get it and come 5 back? 6 MR. FOSTER: I'm inmy car right now. 7 JUDGE SULLIVAN: Okay. You're inyour car. 8 That's not good. Are you talking while you're 9 driving? 10 MR. FOSTER: No, I'mparked at the Home 11 Depot. 12 JUDGE SULLIVAN: Okay. Inthe future, when 13 you appear for these kinds of conferences, you should 14 be prepared to answer any question the Court has of 15 you about any of the documentation that the Court has 16 before it. 17 So I particularlyhave no preference as to 18 where you sitwhenyou're talking on thephone with 19 me, but I do have a preference and a requirement that 20 youhave all the documentationwithyou. So for 21 future conferences, youmight want to start carrying 22 aroundyour file. Does that make sense? 23 24 25 MR. FOSTER: Yes, it does. JUDGE SULLIVAN: Okay. What I'm inclined to do is this: It seems to me that before we set up all Heritage Reporting Corporation (202) 628-4888

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• 13 1 the litigation in this case/ we set up a time frame 2 for you 1 Mr. Foster/ to file a formal response to the 3 motion for hearing on sanctiononly. 4 And then I will give Ms. George an 5 opportunity to file a reply to your response. She 6 doesn1t have to file a replyr but I always like to 7 give the moving party an opportunity to do that. 8 And then I can set up a second telephone 9 conference/ not only to talk to you all about the 10 motion if I need to 1 but also to setup the second 11 conference so that we can reach some of these other 12 issues which is the discovery issues/ the dispositive 13 motion/ and those kinds of things. 14 The otherway to go about it is to setup a 15 whole bunch of different dates and times withyou 16 folks not knowing today about what the scope of the 17 litigation is. 18 And given the factr Mr. Foster1 that you are 19 the lay representative/ I think it 1s better to take 20 the whole litigationprocess one step at a time so 21 that you don1t get too confusedbecause it 1s easy to 22 be confused. 23 24 25 Ms. George 1 let me check-inwithyou. Do youhave any objectionto doing this on a step-by-step basis? Heritage Reporting Corporation (202) 628-4888

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• 14 1 

### MS. GEORGE: No, Your Honor. 2 JUDGE SULLIVAN: Okay. Mr. Foster, turning 3 back to you. How soon orhow much time doyou think 4 youwouldneed to read thatmotion for hearing on 5 sanctiononly? Maybe chat with someoneprivately 6 about it and thenwrite a formal response andhave it 7 served, not only served tome, but toMs. George, to 8 the hearing docket clerk, and so forth. What's your 9 time frame for something like that? 10 

### MR. FOSTER: Oh, I guess two weeks wouldbe 11 enough time. 12 

### JUDGE SULLIVAN: Okay. Do youhave access, 13 

### sir, toyour calendarwhileyou're sitting inyour 14 car? 15 

### MR. FOSTER: I don't, no. 16 

### JUDGE SULLIVAN: Okay. Do youhave a sense 17 of what your calendar is like inyourhead? Many 18 people have that ability. 19 

### MR. FOSTER: I do. I'm generally, like I 20 say, availableMondays, Tuesdays, andThursdays. 21 

### JUDGE SULLIVAN: Okay. Well, I'm thinking 22 interms of how much time you're going to take to read 23 the case law that's citedhere and the rules and 24 figure out what youwant to say inresponse. Have you 25 

### had a chance to read this material indepthprior to Heritage Reporting Corporation (202) 628-4888

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• 15 1 

### today? 2 MR. FOSTER: Yes, I have. I didn 1

### t quite 3 understand what the sanctiononlywas. And, of 4 course, we object to that now that we knowbecause 5 we,re objecting to the charges as a whole, not just 6 the sanctions. We also are objecting to the 7 sanctions. So that wouldbemy response in that 8 respect. 9 

### JUDGE SULLIVAN: Okay. You have basically 10 filed a motion to dismiss, and that was filed in this 11 office onMarch 23, 2012. And I took thatmotion to 12 dismiss, and I converted it intowhat I thought it 13 reallywas which was ananswer, and I accepted the 14 motion to dismiss on its face. 15 

### But I also found that this was, in large 16 part, an answer to the motion for sanction. So what 17 wouldbe helpful, and I,mnot quite sure that youknow 18 how to do this, is if you can look at that motion for 19 hearing on sanctiononly and take a look at what,s 20 actually indispute. 21 There may be some things that the two of 22 you, thatbeingyou andMs. George can actuallyagree 23 to are undisputed. So, for example, this motion for 24 25 

### hearing on sanctiononly talks about the fact that there,s an allegation that you sent somethingby Heritage Reporting Corporation (202) 628-4888

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• 16 1 shipment on a day and at a place and at a time. 2 I think it was October 21, 2009. There's an 3 allegation that your company accepted a shipment of 4 gas, oil, Class 3 flammable liquid for air 5 transportation onboard a passenger aircraft. And then 6 it goes on to talk about some other things leading to 7 the safetyviolation. 8 It's reallyhelpful ifyou can decide what's 9 actually indispute so that whenyou answer this 10 motion for hearing on sanctiononly, you can state 11 something to the effect of, and I'm going tojust make 12 this up, Coastal AirTransport, Inc. did not engage in 13 business on October 21, 2009 because I gave everybody 14 the day off. 15 As a result, this factual allegation is 16 untrue on its face across the board. Or you could say 17 something like Coastal Air Transportation, Inc. was 18 doing business onOctober 21, 2009 and accepteda 19 shipment of gas, oil, Class 3 flammable liquid for air 20 transportation, but we didnot doA, B, and C. 21 That kind of thing so that youhone in on what the 22 actual issues indispute are. Does that make sense so 23 far? 24 MR. FOSTER: Yes, it does, and I think we've 25 prettymuch done that in the motion to dismiss that we Heritage Reporting Corporation (202) 628-4888

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• 17 1 had sentyou. We took it itemby item and objected, I 2 believe, to each individual item. 3 

### JUDGE SULLIVAN: Well, I have the motion to 4 dismiss in front of me, and I see what you've done a 5 littlebit here. But it wouldbe helpful if you could 6 state inwritingwhat yourposition is on the motion 7 for hearing on sanctiononly. You do have to respond 8 to that. 9 So itmay be that you canutilizeyour 10 motion to dismiss ina way that helps you answer the 11 motion for hearing on sanctiononlyor itmay be that 12 you'll need to add some information. 13 

### It sounds tome when I readthis motion to 14 dismiss that there are a lot of things that you don't 15 disagree with, but maybe I'mmisreading this. It 16 sounds tome inreadingyourmotion to dismiss that 17 you agree that you were inbusiness on October 21, 18 2009. 19 That youwere engaged in accepting shipments 20 of certaintypes for air transportationonboard a 21 passenger aircraft, that you do have some matters that 22 youmight ship that couldbe potentially labeled as 23 hazardous material, maybe not. I don't know. 24 25 

### But youwant to, in looking at this motion for hearing on sanction only, see if there are places Heritage Reporting Corporation (202) 628-4888

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• 18 1 in this litigationwhere you can come to an agreement 2 without giving up what you think is what's in dispute 3 because the more narrowyou can get, the more narrowly 4 you can frame your issues, the better off you are. 5 MR. FOSTER: I understand and I do agree 6 withyou on that. 7 JUDGE SULLIVAN: Okay. So what I'd like to 8 have you do is take a look at the motion for hearing 9 on sanction only and one of the ways that you can do 10 this is to do draw a line down the vertical

-- the 11 middle of the page. 12 And you start taking the notice of complaint 13 and all of the different information that is 14 identified in the notice of complaint and thenyou 15 compare it to what you agree to or don't agree to. 16 And thenyou can kind of come up withyour response, 17 which is, yes, we agree to the hearing on sanction 18 only. 19 Or, no, we don't agree to the hearing on 20 sanction onlybecause of A, B, and C. But everything 21 else, we think is fine. You now? That kind of thing 22 23 24 25 so that you give bothmyself andMs. George an idea of where you reallywant this litigation to go. And at that point, then I can say to you folks, okay, since you have, let's say, youhave the Heritage Reporting Corporation (202) 628-4888

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• 19 1 hazardous material issue indispute, but there is no 2 dispute about the companybeing inbusiness or the 3 date that this occurred et cetera, et cetera. 4 This is how much time I'm going to giveyou 5 to exchange documentation on the rest of the case. 6 This is how much time I'm going to giveyou to 7 propoundinterrogatories to eachother. 8 This is how much time I'm going to give you 9 toput a motion together for motion on dispositive 10 issues such as a summaryjudgment motion or a motion 11 to have a decision onwrittenmaterial or that kind of 12 thing. 13 In the meantime then, you andMs. George 14 should alsobe talking about howmuch time you want to 15 reserve for trial and how manypeople you thinkyou 16 want to call for each side of the case. And I didn't 17 see any of that inyour CR-26-F conference material. 18 And I suspect that you haven't gottendown 19 to those nitty-gritty issues yet. You shouldbe 20 21 22 23 24 25 talking to eachother about howmuch time you think this trial is going to take, who you thinkmight be called, how much time itwill take to elicit these witness's testimony, whichwould then informme as to how much time to reserve for trial for you all. Inaddition, I would really like you all to Heritage Reporting Corporation (202) 628-4888

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• 20 1 talk about the venue a littlebit more. You can avoid 2 some work for yourselves, and I address this toboth 3 of you, if you talk substantiallyabout who you're 4 going to call, where they're located, andwhy a 5 certainplace is better than anotherplace. 6 So I have to travel to you. When I say, "to 7 you," I'm talking about toboth of you no matter who 8 you call. So really, I'mhappy to travel to either 9 Puerto Rico or to the Virgin

-- Saint Croix. Am I 10 mispronouncing that? Is it Saint Croix? 11 MR. FOSTER: Saint Croix, Your Honor. 12 JUDGE SULLIVAN: Saint Croix. Thank you. 13 Happy to travel to eitherplace. It wouldbe helpful 14 if the two of you talk a littlebit more substantially 15 about the merits of one place over the other. 16 So, Mr. Foster, doyouhave access to a law 17 libraryby any chance? 18 MR. FOSTER: I do, Your Honor. 19 JUDGE SULLIVAN: Okay. Hopefully, there's a 20 law libraryup there as well, is there by any chance? 21 22 23 24 25 MR. FOSTER: In Saint Croix? Yes, there is. JUDGE SULLIVAN: Wonderful. What I'd like you to do is go to the law librarywith the February 23, 2012 motionby the FAA for hearing on sanction only, and I want you to have the law librarianhelp Heritage Reporting Corporation (202) 628-4888

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### you look up material that is identified in this 21

2 particularmotion, specificallyonpage 3, which 3 references under Paragraph 6 of the Code of Federal 4 Regulations that talks about the civil penalty. 5 In addition, there are various numbers of 6 citations both to case lawand othermaterials in this 7 particulardocument that youmay find to be of 8 interest toyoubecause of how the material is cited 9 and what support it's giving for this kind of 10 complaint. 11 There are lots of different things that this 12 Court has to take into account for looking at a civil 

# • 13 penaltyassessment. But before I go to the civil 14 penaltyassessment, I have to decide whether a 15 violation actuallyoccurred, and inorder to do that, 16 I look at the federal regulations. 17 In the notice of complaint that was issued 18 long before February 23, 2012, there are specific 19 citations in that notice of complaint whichyou've 20 denied, talking about the transportation of hazardous 21 material, the type of plane that the allege hazardous 22 material was transported on, and so forth. 23 You really shouldread all of those 24 citations to see whether ornot you actuallyhave 25 ground to deny it. Information ispower essentially, 

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• 1 and when youmake a general denial like you have so 2 far, I'm concerned, givenyour lay status, that you 3 may not have read the material that you need to read 4 in order to reach those perceptions. 5 That's not to say that you're not correct. 6 You may be verywell correct, but typically some of 7 this material couldjust as easilybe admitted without 8 interfering withyour defense against the civil 9 penalty. 10 So I want to give you a chance to do that, 11 and then file a written response. And I'm going to 12 erron the side of cautionjust in case, and I'm going 13 to set a time for you to file a written response on 14 the motion for hearing on sanction only to July 9. 15 MR. FOSTER: Okay. 16 JUDGE SULLIVAN: And then are you aware of 17 the service requirements that we have in this office 18 where youhave to file a notice or certificate of 19 service of who you file it with? 20 MR. FOSTER: Well, that's the individuals 21 that have to be mailed copies? 22 JUDGE SULLIVAN: Correct. Yes, you'll see 23 on the May 23, 2012 order that I sent to you andMs. 24 George and several otherpeople that page 2 of that 25 order is called a service list. And you'll see that I Heritage Reporting Corporation (202) 628-4888 22

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• 23 1 sent a copy to the Federal AviationAdministration/ to 2 the hearingdocket clerk. 3 

### I sent a copytoyou. I sent a copy toMs. 4 George. I sent a copy to George Loganr your companyrs 5 agent for service/ and then I also kept a copy inmy 6 file. And you couldreplicate that service listjust 7 the way it is anduse it. 8 So wheneveryou sendme anything/ youhave 9 to send the same material to everybody else that I 1

### ve 10 justmentioned. And you should also attach to that 11 material that you sendr the service list showing that 12 everybodyhas beennotified. 13 

### Andpart of the reason is so that there is a 14 record for everyone to show that everybodyhad notice 1 

### 15 andpart of the reason is that that way youhave 16 compliedwith the rules which essentiallyrequire you 17 to do that. 18 If you donrt 

### have a copy of the May 23 1 

### 2012 19 order that I issued1 

### any order that I 1

### Ve issued in 20 this case will have the service list attached. Soyou 21 canuse it. AndMs. George also has attached service 22 lists to any of the material that she 1

### s sent as well. 23 So yourll 

### see that theyrre prettymuch the same. 24 So July 9 1 

### 2012 for the Respondent 1S 

### answer 25 to the motion for hearing on sanction only. And1 

### Ms

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• 1 George, canyou respond to that, if you so choose, by 2 July 20? 3 MS. GEORGE: Yes, YourHonor. 4 JUDGE SULLIVAN: Okay. Then, folks, what 5 I'm going to do is I'm going to set this up for 6 another litigation scheduling conference. Ms. George, 7 I'm going to start withyou. Do you have time 8 available on eitherJuly 30 orJuly 31? 9 MS. GEORGE: I'm available bothdays, Your 10 Honor. 11 JUDGE SULLIVAN: Okay. Mr. Foster, you had 12 indicated that Mondays, Tuesdays, andWednesdays are 13 best for you. Is eitherJuly 30 orJuly 31 good for 14 you? 15 MR. FOSTER: Yeah. Monday, Tuesday or 16 Thursday, YourHonor. 17 JUDGE SULLIVAN: Oh, okay. Well, July 30 is 18 a Monday. July 31 is a Tuesday. 19 MR. FOSTER: I'm available for both of 20 those. 21 JUDGE SULLIVAN: Okay. Why don't we try to 22 do this onMonday, July 30 at 11:00 eastern time. 23 Okay? 24 25 MS. GEORGE: Okay. MS. GEORGE: Okay. Heritage Reporting Corporation (202) 628-4888 24

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• 25 1 JUDGE SULLIVAN: And I'm going to ask you 2 both to talk one more time. I'd like to have you talk 3 again about venue. I'd like to have you talk about, 4 assuming that all matters are going to go to trial, 5 howmuch

### tim~ each side thinks it's going to take, how 6 many witnesses each side would take. 7 And then let's assume that the trial does 8 not encompass everything. Let's say it only 9 encompasses part of the violations allegedand all of 10 the sanctionsjust as a hypothetical, thenyou also 11 want to talk about how that might reduce the time that 12 you think the trial would take and/orreduce the 13 

### number of witnesses it would take. 14 

### And then if there are other things that you 15 want to talk about privately, that's fine. You're 16 free to do that at anytime. But I will look forward, 17 I'mnot going to set anyother litigationmatters 18 today. You're welcome to continue to exchange initial 19 discoveryrequests. Mr. Foster, are you aware of what 20 that means when I say "initial discovery"? 21 MR. FOSTER: Yes, I am, YourHonor.JUDGE 22 SULLIVAN: Okay. You're also welcome at this point, 23 since this is really the first litigation scheduling 24 conference, to start exchanginggeneral discovery 25 according toyour original plan. And general Heritage Reporting Corporation (202) 628-4888

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• 26 1 discovery would include, but is not limited to, 2 notices of deposition, propounding interrogatories, 3 request for production of documents, the request for 4 disclosure of expert witnesses. Any and all of those 5 kinds of things. 6 If there are objections, there shouldbe 7 objections noted to me. Well, noted to me only after 8 an objectionhas been filed to the other side and a 9 CR-37 discussion has not resolved the matter I should 10 say. 11 But hopefully, the discovery exchange will 12 go smoothly inbetween now and July 30, 2012. We'll 13 have some additional time after that to do discovery 14 so it's not as though Your Honor has a tight deadline 15 for that. 16 What reallywhat I think is critical is for 17 you, Mr. Foster, to review the Code of Federal 18 Regulations specifically about the regulations that 19 your company is accused of violating so that you can 20 kind of see what exactlyyou want to fight on and what 21 22 23 24 25 you don't need to fight onbecause you want to

conserve your energy for those things that are really in dispute. In addition, it's very important for the two of you to talk againbefore July 30, 2012 to discuss Heritage Reporting Corporation (202) 628-4888

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• 1 more fully the issue of venue, and to also talk about 2 howmuch time this trial is going to take first if no 3 issues are resolved and the whole matter goes to 4 trial, and second, if, in fact, you can narrow the 5 issues and create a more finely honed dispute about 6 what's in controversy. 7 Mr. Foster, startingwithyou, is there 8 anything that I need to address then at this point for 9 your company or are youpretty clear about what you 10 need to do betweennow and July 30? 11 MR. FOSTER: No, I think I'mprettyclear, 12 Your Honor. 13 JUDGE SULLIVAN: Okay. Ms. George, anything 14 I need to address for your client before we conclude 15 today? 16 17 18 19 20 21 22 23 24 25 MS. GEORGE: No, Your Honor. JUDGE SULLIVAN: Okay. What I'm going to do is I'm going to send out an order, basicallycodifying the due dates that I've given to you orally today. When we reconvene on July 30, 2012, we will pickup where we left off and continue with litigation scheduling. If I have material before me as of July 20, 2012 that gives me enough informationwhere I can issue an order immediately on that motion, I'll do it. Heritage Reporting Corporation (202) 628-4888 27

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• 28 1 If I have some questions, I'll reserve the motion 2 until the top of the hour on July 30, 2012 just to ask 3 those questions before I make a ruling. Ideally, I'll 4 have a ruling out to youbefore July 30, 2012. 5 With that, it appears ourbusiness today is 6 complete. Thankyou all verymuch for yourpresence. 7 I'mgoing to wishyou a good day, andwe cango off 8 the record. 9 (Whereupon, at 11:46 a.m., the telephone 10 conference inthe above-entitledmatterwas 11 concluded.) 12 

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• REPORTER'S CERTIFICATE

DOCKETNO.:

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### 2..0005 SU!TG(.{)00 

### HIZCCO!VFe.f2CJVUE. 

### 120011 

### I herebycertifythat theproceedings and evidence are containedfullyandaccuratelyonthe tapes andnotes reportedbyme at thehearing in the 

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### ALJ J 

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### OfficialReporter HeritageReporting Corporation Suite 600 1220 LStreet, N.W. Washington, D.C. 20005-4018

Heritage ReportingCorporation (202) 628-4888