TRE Aviation Corporation et al v. Federal Aviation Administration

Filing 20

ORDER The court lacks subject matter jurisdiction to consider plaintiffs' petition and this case is transferred, pursuant to 28 U.S.C. § 1631, to the Ninth Circuit Court of Appeals. Signed by Judge H Russel Holland on 4/6/2015. (KMG)

WO
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF ARIZONA

TRE AVIATION CORP., a Delaware
Registry, LTD, and Robert C. Mace,

)
)
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Plaintiffs,
)
)
vs.
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FEDERAL AVIATION ADMINISTRATION, )
)
Defendant.
)
__________________________________________)

No. 2:14-cv-1852-HRH

ORDER
Motion to Dismiss
Defendant moves to dismiss plaintiff’s complaint.1 This motion is opposed.2 Oral
argument was not requested and is not deemed necessary.
Background
Plaintiffs are TRE Aviation Corporation and Robert Mace, the vice-president of TRE
Aviation. Defendant is the Federal Aviation Administration.

1

Docket No. 15.

2

Docket No. 18.
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Plaintiffs acquired a Bell 206B helicopter, N61PH, serial number 3282, in 2004 and
repaired it using parts, including a fuselage, from a salvage Bell 206B helicopter, serial
number 3570.3 Plaintiffs applied for and received a standard airworthiness certificate for
N61PH, and the helicopter was returned to service in November 2005.4 “In 2010, the
Scottsdale Flight Standards District Office (FSDO) launched an effort to revoke” the
“Standard Airworthiness Certificate”5 for N61PH. The Administrator of the FAA issued
an Order of Revocation on May 20, 2011.6 Plaintiffs appealed the Order of Revocation. A
hearing was held before a National Transportation Safety Board (NTSB) ALJ, who affirmed
the Order of Revocation. An appeal to the NTSB was taken and the NTSB remanded the
case for a new hearing, which was conducted before a different NTSB ALJ on June 18-19,
2013. On August 28, 2013, the second ALJ (ALJ Woody) issued a decision affirming the
Administrator’s Order of Revocation. ALJ Woody found that plaintiffs’
actions constituted a violation of 14 CFR Section 45.13(e), in
that [plaintiffs] impermissibly removed the data plate from one
aircraft and placed it into the fuselage of another, reconstructed
aircraft; thereby misidentifying the aircraft. Further [plaintiffs]
violated 14 CFR Section 43.3, in that [plaintiffs’] actions

3

Petition for Review [etc.] at 2, Docket No. 1.

4

Id.

5

Id.

6

The Administrator initially issued an Emergency Order of Revocation on March 29,
2011, but that order was withdrawn on April 1, 2011.
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constituted a rebuilding of aircraft N61PH without authority
to do so. Under Section 43.3(j) only a manufacturer may
rebuild an aircraft it has manufactured under a type or
production certificate.[7]
Another appeal to the NTSB was taken, and on June 20, 2014, the NTSB affirmed the
ALJ’s decision. In its order, the NTSB noted that plaintiffs “must physically surrender the
standard airworthiness certificate for N61PH to a representative of the FAA....”8 And, on
July 23, 2014, plaintiffs surrendered the airworthiness certificate for N61PH.9
On August 19, 2014, plaintiffs commenced this action by filing a “Petition for
Review” in which they seek review of the NTSB’s June 20, 2014 decision. Plaintiffs
“petition th[e] court for an evidentiary hearing and a full independent (de novo) review”
of the June 20, 2014 decision.10
Defendant now moves to dismiss plaintiffs’ petition.
Discussion
Defendant first argues that plaintiffs’ petition should be dismissed because this court
lacks subject matter jurisdiction. “Under Rule 12(b)(1), a defendant may challenge the

7

Written Initial Decision and Order at 11, attached to Petition for Review [etc.],
Docket No. 1.
8

Opinion and Order at 18 n.46, attached to Petition for Review [etc.], Docket No. 1.

9

Exhibit B, Opposition to Motion to Dismiss, Docket No. 18.

10

Petition for Review [etc.] at 3, Docket No. 1.
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plaintiff's jurisdictional allegations in one of two ways.” Leite v. Crane Co., 749 F.3d 1117,
1121 (9th Cir. 2014). A defendant may make a facial attack or a factual attack. Id. Here,
defendant is making a facial attack. “A ‘facial’ attack accepts the truth of the plaintiff’s
allegations but asserts that they ‘are insufficient on their face to invoke federal jurisdiction.’” Id. (quoting Safe Air for Everyone v. Meyer, 373 F.3d 1035, 1039 (9th Cir. 2004)).
“The district court resolves a facial attack as it would a motion to dismiss under Rule
12(b)(6): Accepting the plaintiff’s allegations as true and drawing all reasonable inferences
in the plaintiff's favor, the court determines whether the allegations are sufficient as a legal
matter to invoke the court’s jurisdiction.” Id.
Plaintiffs allege that the court has jurisdiction pursuant to Section 2(d) of the Pilot’s
Bill of Rights (PBR).11 Section 2(d) of the PBR provides:
Upon a decision by the National Transportation Safety Board
upholding an order or a final decision by the Administrator
denying an airman certificate under section 44703(d) of title 49,
United States Code, or imposing a punitive civil action or an
emergency order of revocation under subsections (d) and (e) of
section 44709 of such title, an individual substantially affected
by an order of the Board may, at the individual's election, file
an appeal in the United States district court in which the
individual resides or in which the action in question occurred,
or in the United States District Court for the District of Columbia. If the individual substantially affected by an order of the
Board elects not to file an appeal in a United States district
court, the individual may file an appeal in an appropriate
United States court of appeals.
11

Petition for Review [etc.] at 2, Docket No. 1.
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PL 112-153, August 3, 2012, 126 Stat 1159.
Whether Section 2(d) of the PBR provides this court with subject matter jurisdiction
is a question of statutory construction. “[T]he first step ... is to determine whether the
language has a plain and unambiguous meaning with regard to the particular dispute.”
Hawkins v. Franchise Tax Bd. of Calif., 769 F.3d 662, 666 (9th Cir. 2014).

The court

“‘examine[s] not only the specific provision at issue, but also the structure of the statute as
a whole, including its object and policy.’” Id. (quoting Children’s Hosp. & Health Ctr. v.
Belshe, 188 F.3d 1090, 1096 (9th Cir. 1999)). “If the plain language is unambiguous, that
meaning is controlling, and [the court’s] inquiry is at an end.” Id. If the statutory language
is ambiguous, then [the court] consult[s] legislative history.” Id.
Defendant contends that Section 2(d) of the PBR applies to only appeals involving
airman certificates while plaintiff contends that Section 2(d) applies to appeals involving
airman certificates as well as other certificates, including airworthiness certificates. On its
face, Section 2(d) provides for district court review of NTSB decisions upholding any of the
following: 1) the denial of an airman certificate under 49 U.S.C. § 44703(d), 2) an order
imposing a punitive civil action, and 3) an emergency order of revocation under 49 U.S.C.
§§ 44709(d) and (e). Plaintiffs argue that the orders referred to in number two and three
above do not necessarily have to be orders involving airman certificates.

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While Section 2(d) might appear to be ambiguous, when the purpose of the PBR and
the structure of the statute is considered as a whole, there is no ambiguity. Rather, it is
clear that Section 2(d) was intended to only apply to appeals involving airman certificates.
First, limiting Section 2(d) to appeals involving airman certificates is in keeping with the
purpose of the PBR, which was enacted “to provide rights for pilots, and for other
purposes.” PL 112-153, August 3, 2012, 126 Stat 1159 (emphasis added). Second, the other
provisions in Section 2 of the PBR all have to do with airman certificates. Section 2(a)
provides that “[a]ny proceeding conducted under subpart C, D, or F of part 821 of title 49,
Code of Federal Regulations, relating to denial, amendment, modification, suspension, or
revocation of an airman certificate, shall be conducted, to the extent practicable, in
accordance with the Federal Rules of Civil Procedure and the Federal Rules of Evidence.”
Id. Section 2(b) governs the information that must be made available to an “individual who
is the subject of an investigation relating to the approval, denial, suspension, modification,
or revocation of an airman certificate....” Id. Section 2(c) makes specific amendments to
three provisions of title 49 of the United States Code, two of which pertain specifically to
airman certificates. Third, Sections 3 and 4, the other two substantive sections of the PBR,
both pertain to issues involving airman certificates. Section 3 requires the FAA administrator to begin a Notice to Airmen Improvement Program, and Section 4 addresses the FAA’s
process for determining an airman’s eligibility for a medical certificate.

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Because this appeal does not involve an airman certificate, this court lacks subject
matter jurisdiction.12 Plaintiffs’ argument to the contrary is meritless. Plaintiffs argue that
this court has jurisdiction because Mace is an individual who holds an airman certificate
and he has been substantially affected by the NTSB’s order affirming the ALJ’s Order of
Revocation for N61PH. But, Mace’s airman certificate was not the subject of the NTSB
proceedings at issue here. This appeal involves the revocation of an airworthiness
certificate. The fact that Mace may hold an airman certificate does not mean that this court
has subject matter jurisdiction over an appeal of any NTSB order that substantially affects
him.
But even if the court were to construe Section 2(d) as applying to appeals involving
certificates other than airman certificates, the court would still lack subject matter
jurisdiction. As set out above, Section 2(d) provides for district court review of NTSB
decisions upholding any of the following: 1) the denial of an airman certificate under 49
U.S.C. § 44703(d), 2) an order imposing a punitive civil action, and 3) an emergency order
of revocation under 49 U.S.C. §§ 44709(d) and (e). Although this case does not involve an
airman certificate, plaintiffs argue that it does involve an order imposing a civil action or
an emergency order of revocation.

12

Because the court lacks subject matter jurisdiction, it need not consider defendant’s
alternative Rule 12(b)(6) and Rule 8 arguments.
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Plaintiffs argue that this case involves a “punitive civil action” because they had to
forfeit their property, but this argument is meritless. No civil penalties, i.e, monetary fines,
were imposed against plaintiffs. Rather, the certificate of airworthiness for N61PH was
revoked. The revocation of a certificate is considered a remedial measure, not a civil
penalty. Coghlan v. National Transp. Safety Bd., 470 F.3d 1300, 1305 (11th Cir. 2006).
Plaintiffs’ argument that this case now involves the equivalent of an emergency
order of revocation is also meritless. That plaintiffs had to surrender the certificate of
airworthiness within 30 days of the NTSB’s final decision does not turn the order of
revocation into an emergency order of revocation. As noted above, the Administrator’s
initial order of revocation was issued as an emergency order, but that order was
subsequently withdrawn and a non-emergency order of revocation was issued. The
Administrator later moved to amend the order of revocation to designate it as an
emergency order, but ALJ Woody denied that motion.13 Further evidence that this case
does not involve an emergency order of revocation can be found in the cover letter
plaintiffs sent to the NTSB when they submitted the certificate, in which plaintiffs refer to
this as a “non emergency case....”14

13

Written Initial Decision and Order at 11, attached to Petition for Review [etc.],
Docket No. 1.
14

Exhibit B, Opposition to Motion to Dismiss, Docket No. 18.
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If the court lacks subject matter jurisdiction, which it does, then plaintiffs request
that this matter be transferred to the Ninth Circuit Court of Appeals.15 When a district
court lacks jurisdiction over a civil action, Section 1631 permits it “to transfer [the] case if
(1) the court to which the action is to be transferred would have had jurisdiction ‘at the time
[the action] was filed,’ and (2) ‘it is in the interest of justice’ to transfer.” Munns v. Kerry,
--- F.3d ---, 2015 WL 1260709, at *8 (9th Cir. 2015) (quoting 28 U.S.C. § 1631).
At the time plaintiffs filed their petition, the Ninth Circuit Court of Appeals had
jurisdiction pursuant to 49 U.S.C. § 1153(a)16 or 49 U.S.C. § 46110(a).17 It is also in the

15

“Defendant does not oppose plaintiffs’ request for a transfer. Defendants’ Reply
to Plaintiffs’ Response to Motion to Dismiss at 10, Docket No. 19.
16

49 U.S.C. § 1153(a) provides:
The appropriate court of appeals of the United States or the
United States Court of Appeals for the District of Columbia
Circuit may review a final order of the National Transportation
Safety Board under this chapter. A person disclosing a
substantial interest in the order may apply for review by filing
a petition not later than 60 days after the order of the Board is
issued.

17

49 U.S.C. § 46110(a) provides:
Except for an order related to a foreign air carrier subject to
disapproval by the President under section 41307 or 41509(f) of
this title, a person disclosing a substantial interest in an order
issued by the Secretary of Transportation (or the Under
Secretary of Transportation for Security with respect to
security duties and powers designated to be carried out by the
(continued...)
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interest of justice to transfer this matter. See Phillips v. Seiter, 173 F.3d 609, 610 (7th Cir.
1999) (“A compelling reason for transfer is that the plaintiff[s’ case] will be time-barred if
his case is dismissed and thus has to be filed anew in the right court”).
Conclusion
The court lacks subject matter jurisdiction to consider plaintiffs’ petition and this
case is transferred, pursuant to 28 U.S.C. § 1631, to the Ninth Circuit Court of Appeals.
DATED at Anchorage, Alaska, this 6th day of April, 2015.
/s/ H. Russel Holland
United States District Judge

17

(...continued)
Under Secretary or the Administrator of the Federal Aviation
Administration with respect to aviation duties and powers
designated to be carried out by the Administrator) in whole or
in part under this part, part B, or subsection (l) or (s) of section
114 may apply for review of the order by filing a petition for
review in the United States Court of Appeals for the District of
Columbia Circuit or in the court of appeals of the United States
for the circuit in which the person resides or has its principal
place of business. The petition must be filed not later than 60
days after the order is issued. The court may allow the petition
to be filed after the 60th day only if there are reasonable
grounds for not filing by the 60th day.
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