U.S. v . Emerson CV-94-152-JD 03/29/95 UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE

United States of America v. Civil N o . 94-152-JD Alan D. Emerson, Ind. and d/b/a Emerson Aviation

O R D E R

The plaintiff, the United States of America, has brought this action against the defendants, Alan Emerson d/b/a/ Emerson Aviation ("Emerson Aviation") and Alan Emerson, individually, to recover a civil penalty of $320,000 for past violations of federal aviation law and to permanently enjoin future violations. Before the court is the defendants' motion to dismiss (document n o . 11) for lack of subject matter jurisdiction. Rule 12(b)(1), Fed. R. Civ. P.1

Background On May 1 2 , 1992, the Federal Aviation Administration ("FAA") issued an emergency order of revocation revoking the airman not qualified pilots under 14 C.F.R. §§ 135.293(a) 2 and 135.295.3 Id., ¶ 14. The plaintiff further alleges that in (iii) Operating in or near thunderstorms (including best penetrating altitudes), turbulent air (including clear air turbulence), icing, hail, and other potentially hazardous meteorological conditions; and (8) New equipment, procedures, or techniques, as appropriate. 14 C.F.R. § 135.293(a) (1994).

connection with the above-mentioned flights the defendants violated 14 C.F.R. § 135.314 by advertising or otherwise offering to perform charter flight operations for which they failed to possess either the proper certification or the required operations specifications. Complaint, ¶ 1 5 .

Pursuant to the Federal Aviation Act at 49 U.S.C.A. § 1471, the plaintiff contends that each defendant is subject to a civil penalty not to exceed $10,000 for each of the thirty-two violations alleged in the complaint, for a total not to exceed $320,000. Complaint, ¶ 1 6 .

On February 1 4 , 1995, the court issued a preliminary injunction requiring, inter alia, that each of the defendants refrain from performing any aviation related acts unless and until they validly possess the proper FAA authority to do s o .

Discussion

The defendants assert, inter alia, that the court lacks subject matter jurisdiction to adjudicate the plaintiff's claims because the plaintiff has not exhausted its administrative remedies before the National Transportation Safety Board ("NTSB"), that the plaintiff's claims are untimely under the NTSB's "stale complaint" rule, that the FAA lacks authority to maintain its claims, and that the excercise of the court's jurisdiction would violate the double jeopardy clause of the United States Constitution. See Plaintiff's Motion to Dismiss ("Motion to Dismiss") at ¶¶ 3-7. In response, the government argues that the court's exercise of subject matter jurisdiction is consistent with the governing statutes and would not impinge on the defendants' constitutional rights.

A motion to dismiss for lack of subject matter jurisdiction under Rule 12(b)(1), Fed. R. Civ. P., challenges the statutory or constitutional power of the court to adjudicate a particular case. 2A Moore's Federal Practice ¶ 12.07 (2d ed. 1994). In ruling upon a motion to dismiss for lack of subject matter jurisdiction, "the allegations of the complaint should be construed favorably to the pleader." Scheuer v . Rhodes, 416 U.S. 232, 236 (1974).

I. Statutory Authority for Federal District Court Jurisdiction

The plaintiff asserts that the court has exclusive jurisdiction over its action pursuant to the appropriate federal statutes. Government's Objection to Defendants' Motion to Dismiss at 2-6. Under 49 U.S.C.A. § 1430,

(a) It shall be unlawful---

(2) For any person to serve in any capacity as an airman in connection with any civil aircraft, aircraft engine, propeller or appliance used or intended for use, in air commerce without an airman certificate authorizing him to serve in such capacity, or in violation of any term, condition, or limitation thereof, or in violation of any order, rule, or regulation issued under this subchapter.

(4) For any person to operate as an air carrier without an air carrier operating certificate, or in violation of the terms of any such certificate;

(5) For any person to operate aircraft in air commerce in violation of any other rule, regulation, or certificate of the Administrator under this subchapter.

49 U.S.C.A. § 1430(a)(2)(4)(5) (West 1976). Section 1430 is contained in subchapter VI of the Federal Aviation Act, which addresses the safety regulation of civil aeronautics. See 49 U.S.C.A. §§ 1421-1432 (subchapter V I ) . The regulations at issue,

14 C.F.R. §§ 135.31, 135.293 and 135.295, were promulgated pursuant to subchapter V I . See Air Taxi Operators and Commercial Operators Rules, 14 C.F.R. Part 135 at 578 (1994) (indicating that Part 135 was promulgated pursuant to 49 U.S.C. §§ 1421-1431, in addition to 49 U.S.C. §§ 1354(a) (stating certain broad powers and duties of the Administrator), 1355(a) (authorizing the Administrator to delegate powers and duties related to the issuance of certificates under subchapter V I ) , 1502 (dealing with international agreements) and 49 U.S.C. § 106(g) (revised Pub. L . N o . 97-449, January 1 2 , 1983) (authorizing the FAA administrator to carry out certain duties of the Secretary of Transportation).

In pertinent part, 49 App. U.S.C.A. § 1471 provides, (a)(1) Any person who violates (A) any provision of subchapter I I I , IV, V , V I , V I I , or XII of this chapter or of section 1501 or 1514, or 1515(e)(2)(B) of this title or any rule, regulation, or order issued thereunder, or under section 1482(i) of this title, or any term, condition, or limitation of any permit or certificate issued under subchapter IV of this chapter, or (B) any rule or regulation issued by the United States Postal Service under this chapter, shall be subject to a civil penalty of not to exceed $1,000 for each such violation, except that a person who operates aircraft for the carriage of persons or property for compensation or hire (other than an airman serving in the capacity of an airman) shall be subject to a civil penalty of not to exceed $10,000 for each violation of subchapter I I I , V I , or XII of this chapter, or any rule, regulation, or order issued thereunder, occurring after December 3 0 , 1987.

(3) Administrative assessment (A) General authority

Upon written notice and finding of a violation by the Administrator, the Administrator, or the delegate of the Administrator, may assess a civil penalty for a violation of subchapter I I I , V , V I , or XII of this chapter or subsections (c) and (d) of this section, section 1501 or 1515(e)(2)(B) of this title or any rule, regulation, or order issued thereunder.

(C) Continuing jurisdiction of district courts Nothwithstanding subparagraph ( A ) , the United States district courts shall have exclusive jurisdiction of any civil penalty initiated by the Administrator--- (i) which involves an amount in controversy in excess of $50,000. (iv) in which a suit for injunctive relief based on the violation giving rise to the civil penalty has also been brought. 49 App. U.S.C.A. §§ 1471(a)(1), 1471(a)(3)(A), 1471(a)(3)(C)(i) and (iv) (West 1994). The defendants are charged with thirty-two violations of regulations promulgated under 49 U.S.C.A. § 1430(a)(2), (4) and (5). Pursuant to 49 App. § 1471(a)(1), each of these violations carries a civil penalty not to exceed $10,000; thirty-two violations carry an aggregate civil penalty not to exceed $320,000. Because this amount in controversy exceeds $50,000 the court has exclusive jurisdiction over the plaintiff's civil penalty claims under 49 App. § 1471(a)(3)(C)(i). Further, under

49 App. § 1471(a)(3)(C)(iv), the court has exclusive jurisdiction of the plaintiff's claim for injunctive relief because this claim is based on the violation giving rise to the civil penalties at issue.

II. Exhaustion of Administrative Remedies Section 1471(a)(1) specifies the circumstances in which civil penalties must be determined by the administrative agency: The amount of any such civil penalty which relates to the transportation of hazardous materials shall be assessed by the Secretary, or his delegate, upon written notice upon a finding of violation by the Secretary, after notice and an opportunity for a hearing. . . . The amount of any such civil penalty for any violation of any provision of subchapter IV of this chapter, or any rule, regulation, or order issued thereunder, or under section 1482(i) of this title, or any term, condition, or limitation of any permit or certificate issued under subchapter IV of this chapter shall be assessed by the Board only after notice and an opportunity for a hearing and after written notice upon a finding of violation by the Board. Section 1471(a)(1) requires an administrative assessment of a civil penalty in only three instances: (1) if the penalty 'relates to the transportation of hazardous materials,' (2) if the penalty is imposed for 'violation of any provision of subchapter IV of this chapter,' which relates to the economic regulation of air carriers, or (3) if the penalty issues for violations under 49 U.S.C. § 1482(i), which governs establishment of through service and joint fares within the states of Alaska and Hawaii and for overseas flights. 49 U.S.C. § 1471(a)(1); see United States v . Kilpatrick, 759 F.2d 1250, 1252-53 (5th Cir. 1985). United States v . Gaunce, 779 F.2d 1434, 1436 (9th Cir. 1986).

The defendants argue that the NTSB must impose a civil penalty before the jurisdiction of the federal district court can be established under 49 U.S.C. § 1471(a). Defendants' Motion to Dismiss at 1-3.

Where a civil penalty is sought for alleged violations of regulations promulgated under subchapter V I , no administrative assessment is required by section 1471(a)(1). Gaunce, 779 F.2d at 1436.

Because the civil penalties at issue in this case are sought for alleged violations of regulations promulgated under sub- chapter V I , the court finds that no administrative assessment of such penalties is required for the court to excercise jurisdic- tion pursuant to 49 App. U.S.C.A. §§ 1471(a)(3)(C)(i) and ( i v ) .

III. The "Stale Complaint" Rule

The defendants next assert that the plaintiff's action is barred by the NTSB's "stale complaint" rule, set forth at 49 C.F.R. § 821.33 (1994), because the complaint was brought more than six months after the offenses at issue allegedly occurred.

The provisions of [49 U.S.C. Part 821] govern all air safety proceedings, including proceedings involving airman medical certification, before a law judge on petition for review of the denial of any airman certificate or on an appeal from any order of the [FAA] Administrator amending, modifying, suspending or revoking any certificate. The provisions of this part also govern all proceedings on appeal from an order of the Administrator imposing a civil penalty on a flight engineer, mechanic, pilot, or repairman, where the underlying violation occurred on or after August 2 6 , 1992, and all proceedings on appeal to the Board from any order or decision of a law judge. 49 C.F.R. § 821.2 (1994).

Section 821.33 is a provision governing administrative air safety proceedings which does not apply to claims properly brought in a federal district court. Because the plaintiff's claims are properly before the court pursuant to 49 App. U.S.C.A. § 1471(a)(3)(C)(i) and ( i v ) , section 821.33 does not apply to the plaintiff's action.

IV. Double Jeopardy The defendants next assert that "Emerson's rights to defend properly are before an administrative law judge until the FAA's complaint has been adjudicated. To subject him to this Court's jurisdiction now places him in the unconstitutional position of 'double jeopardy.'" Defendants' Motion to Dismiss, ¶ 7 . Further, they contend that "[b]y seeking such a penalty simultaneously with an order of emergency revocation the Plaintiff is pursuing an excessive degree of enforcement amounting to harassment and intimidation. Id., ¶ 3 .

"[T]he Double Jeopardy Clause protects against three distinct abuses: a second prosecution for the same offense after acquittal; a second prosecution for the same offense after conviction; and multiple punishments for the same offense." United States v . Halper, 490 U.S. 435, 440 (1989). Under the Double Jeopardy Clause, "a civil sanction that cannot fairly be said solely to serve a remedial purpose, but rather can only be explained as also serving either retributive or deterrent purposes, is punishment." Halper, 490 U.S. at 448. A civil penalty qualifies as punishment in "the rare case" where the penalty is "overwhelmingly disproportionate" to the damage caused. Halper, 490 U.S. at 449. "Removal of persons whose participation in [government] programs is detrimental to public purposes is remedial by definition." United States v . Bizzell, 921 F.2d 263, 267 (10th Cir. 1990).

The FAA revoked the airman certificate of Alan Emerson for alleged violations of federal regulations designed to promote air safety. The violation of such regulations would obviously be detrimental to public purposes. Therefore, the court finds that the FAA's revocation of Emerson's air certificate was remedial rather than punitive and the Double Jeopardy Clause is not implicated by the plaintiff federal claims. Further, and nothwithstanding the court's finding as to the emergency order of revocation, the court finds that the Double Jeopardy Clause is not implicated in this case because the civil penalties sought by the plaintiff are not overwhelmingly disproportionate to the damage inherent in the alleged conduct of the defendants.

Conclusion

For the reasons set forth above, the court finds that it may properly excercise subject matter jurisdiction over the plaintiff's action. The motion to dismiss (document n o . 11) is denied.

SO ORDERED.

Joseph A . DiClerico, J r . Chief Judge March 2 9 , 1995 cc: Patrick M . Walsh, Esquire John P. Kalled, Esquire