[00:00:02] Speaker 00:
Case number 11-11, excuse me, 15-1163, Dennis Latterbach, Senior Petitioner, versus Michael P. Horta, Administrator, Federal Aviation Administration at Elle.

[00:00:14] Speaker 00:
Mr. Zimmering for the petitioner, Ms.

[00:00:15] Speaker 00:
Gardner for the respondent.

[00:00:20] Speaker 05:
Good morning, Your Honors.

[00:00:22] Speaker 05:
Thank you for agreeing to hear this case.

[00:00:27] Speaker 05:
The FAA in this case has tried very hard to characterize our argument as being a challenge to the constitutionality.

[00:00:38] Speaker 05:
of the successive criminal and administrative sanctions applicable in these types of cases.

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And indeed, we are not challenging the constitutionality or even suggesting that it is improper to impose an administrative sanction of revocation followed by a criminal sanction or vice versa.

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That's not our issue.

[00:01:04] Speaker 05:
Our issue is a little more subtle.

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We believe the issue is the

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the successive administrative proceedings.

[00:01:12] Speaker 05:
This case started more than 11 years ago, and there have been no acts that have happened since the acts that were discussed back in 2004, latter part of 2004, early part of 2005.

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There was an administrative proceeding.

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The FAA sought to revoke under Section 44-726, which is the permanent revocation for a counterfeits part violation.

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The FAA chose not to.

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They moved forward.

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They chose not to revoke under 44-726 at that time.

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They made a determination that for whatever reason it wasn't appropriate to do so and indeed revoke under 44-709, which is their general revocation and suspension

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authority.

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The later criminal prosecution, again, we have no constitutional challenge.

[00:02:17] Speaker 05:
We raise no constitutional challenge with that.

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What we do believe, though, is now that they're going back and trying to revoke again under 44-726, it's that sub successive administrative

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revocation after having made a determination back in 2005 that it didn't apply.

[00:02:39] Speaker 02:
But Mr. Zimmering, it seems that both as a formal matter and as a matter of the purpose of the statute that you're missing what's important here.

[00:02:50] Speaker 02:
Formally, there is no prior preclusive determination under 44-726.

[00:02:57] Speaker 02:
There was a civil settlement and indeed

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It was a settlement under 7-44-709.

[00:03:03] Speaker 02:
And how could it be preclusive?

[00:03:07] Speaker 02:
It's a settlement.

[00:03:08] Speaker 02:
And it makes perfect sense that the statute is set up this way.

[00:03:12] Speaker 02:
It seems more a question not of preclusion, but of congressional intent.

[00:03:16] Speaker 02:
No, that Congress says,

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The government shouldn't have to stand back and wait for the most serious offenders to be criminally prosecuted.

[00:03:27] Speaker 02:
That wouldn't make any sense.

[00:03:29] Speaker 02:
The first step is the civil removal of certification.

[00:03:35] Speaker 02:
Then if somebody's criminally prosecuted, Congress also said, if somebody's successfully criminally prosecuted, we want that person to no longer be certified, and either as a mechanic or as a pilot.

[00:03:46] Speaker 02:
It seems to make perfect sense that there would be these three steps, precisely the steps that were taken against your client.

[00:03:52] Speaker 05:
Your Honor, I would argue that it's intended to be a one-two step.

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Either the criminal prosecution happens first, in which case the FAA follows and with the permanent revocation, or the FAA permanently revokes

[00:04:08] Speaker 02:
But Mr. Zimmering, why does that make sense?

[00:04:10] Speaker 02:
Given that the most serious cases are gonna be those that are criminally prosecuted and in a busy and crowded district like we see in Texas, this is gonna take a little bit of time.

[00:04:20] Speaker 02:
It wouldn't make any sense to say that the civil process, the administrative process is disabled, given the potential pendency of a criminal process.

[00:04:30] Speaker 02:
It doesn't make any sense.

[00:04:31] Speaker 05:
I'm not suggesting that it should be.

[00:04:33] Speaker 02:
I thought that's precisely what you were suggesting.

[00:04:37] Speaker 05:
The first administrative proceeding was a revocation under 44-7-26.

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It started as that, and the FAA made the determination that it was not appropriate in that case.

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There were no new acts.

[00:04:50] Speaker 06:
There's nothing new.

[00:04:51] Speaker 06:
Then the... Weren't there two things that the FAA could have done rather than proceed under 44-7-26?

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One, they could have saw the revocation that wasn't permanent under 44-7-09.

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or B, they could have suspended.

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would have sought to suspend rather than revoke his certification.

[00:05:13] Speaker 06:
Either one of those actions would have kept them from from operating, right?

[00:05:18] Speaker 05:
And actually indeed they did move under 44709 initially as well as 44726.

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They chose to in their initial order of revocation.

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They said you're revoked under 44726.

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You're also revoked under 44709.

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After litigation, ultimate settlement, they made the determination 44, 726.

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They must have made the determination that revocation under 44, 726 doesn't apply in that case because they withdrew it.

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Do you have in the record before us?

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Whatever the documentation was that resolved the 2006?

[00:06:02] Speaker 04:
Yes, it's the.

[00:06:17] Speaker 05:
There was the amended order of revocation, which in page 100 of the appendix, which was issued on October 26.

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And that was the resolution.

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And in fact, I would point out that in that amended order of revocation dated, where did I just say?

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The October 26, 2006, amended order of revocation, it does retain the fraudulent language statement that he engaged in fraudulent behavior and that the revocation was appropriate.

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As compared to the November 4, 2005 amended notice of proposed certificate action and the consolidated, the February 14th consolidated immediately effective order of revocation, which provided both under 720, excuse me, 709 and 726.

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So it was on the table.

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It was there they made the decision.

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What the FAA is now arguing is that the statute is mandatory.

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They're required to proceed in the manner that they are.

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Yet they were required then as well.

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So one of the determinations that they made was, well, maybe it's not as mandatory as it reads, because that's the determination that they made in 2006.

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And now they're going back and saying, well, no, we decided it's got to be mandatory in all cases.

[00:07:58] Speaker 06:
What do you think we should make of the language in 44, 726 subsection E that says that if you've been revoked under B1B, but there's a later criminal prosecution and you're acquitted, then the revocation under B1B has to be set aside.

[00:08:23] Speaker 06:
or it could be read that it's mandatory to set aside in some circumstances, but optional to set it aside in other circumstances.

[00:08:33] Speaker 05:
Well, I think that it would go to show that the

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I don't think it's applicable in this case because he wasn't acquitted, but you know.

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What does it show about how we should think about what is a claim or how we define the common nucleus of facts for your race to the cause?

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Well, I think that it, I think that's indicative that initially we are looking at the facts that the airman is accused of conducting.

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And that's what's controlling.

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It's the set of facts that he did.

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In their brief at page 18, the FAA cites the Lawler versus National Screen Services case on this issue of res judicata slash claim preclusion.

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And it says that it can't be applied when there's new conduct after the original order.

[00:09:31] Speaker 05:
That actually says a lot because there was no new conduct after the order.

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It was simply additional actions taken against him for the original conduct.

[00:09:45] Speaker 02:
I understand, Mr. Zimmerman, the equities of your position that we're talking here about from Mr. Lauterbach's position.

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one course of misconduct, and the government's treating it in one way civilly at the hands of the FAA, further treating it at the hands of the criminal prosecutors, and then there's a follow-on treatment by the FAA.

[00:10:07] Speaker 02:
And there's these three different layers.

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And I guess the question is, what prevents

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that kind of a, if we think that's what Congress intended is to allow the FAA to take the first crack, but if there's a prosecution that succeeds, then the FAA is directed to take further action and really the, you know,

[00:10:35] Speaker 02:
the further conduct, and I understand it's not your client's conduct, but the thing that's happened in the world is that he's been criminally convicted.

[00:10:43] Speaker 02:
And what prevents Congress, assuming that that's what we think Congress intended, from treating your client's single

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set of actions that way.

[00:10:56] Speaker 05:
Well, again, it's our belief that the intent was never for this one, two, three punch.

[00:11:02] Speaker 05:
It was only a one, two punch, civil and criminal.

[00:11:05] Speaker 05:
And that's why we're not, even if the initial actions of the FAA back in 2005, 2006, even if their initial determinations don't act as a complete bar to the new administrative proceeding,

[00:11:23] Speaker 05:
We're suggesting that the previous administrative proceeding shouldn't be taken off the table.

[00:11:30] Speaker 05:
The FA has taken the position that this story started with the conviction.

[00:11:35] Speaker 05:
All we're saying, at the very least, the previous to the conviction should at least be on the table for consideration.

[00:11:43] Speaker 02:
It's not a 123, it's a 12.

[00:11:45] Speaker 02:
Is there anything in the statute or in the legislative history that you would point to to illuminate that?

[00:11:51] Speaker 02:
Because you really briefed this as a as a preclusion case, not as a statutory.

[00:11:56] Speaker 05:
Well, I understand and I don't think there is, you know,

[00:12:00] Speaker 05:
Comparable to 44-7-10, which is an analogous statute, that seems to be the cases as well.

[00:12:08] Speaker 05:
The Zoukas case, which the FAA discusses in their brief, that was a challenge to the 1-2.

[00:12:17] Speaker 05:
And we're not making that.

[00:12:19] Speaker 05:
It's that 1 and 3 that we're challenging.

[00:12:22] Speaker 03:
Are you really making a race judicata argument here or are you just making a statutory analysis argument?

[00:12:32] Speaker 03:
Because it sounded like you were arguing that it was precluded.

[00:12:39] Speaker 03:
But now it doesn't sound like that's what you're arguing.

[00:12:42] Speaker 05:
Well, I think we've made both.

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We believe it should be preclusive, but we would concede that that could be a tough stretch as well.

[00:12:54] Speaker 03:
Well, because the problem here is how do you deal with this court's Drake decision, which says it can't be precluded if it hadn't happened yet?

[00:13:05] Speaker 05:
Right, and which illustrates the difficulty with this statute, and, you know, I don't know that it was ever intended to be applied this way, you know, because the Drake decision discusses, you know, the facts that occurred, but compared to the Lawler, where they used the word conduct,

[00:13:26] Speaker 05:
not facts and was the conduct of Mr. Lauterbach that is an issue we believe should be an issue.

[00:13:36] Speaker 05:
And so again, even if it's not preclusive, we just believe that the initial determinations that have been made back in 2005, 2006 should at least be available for consideration as the ALJ Mullins did in this case and considerate and in this case determined that the permanent revocation is not

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appropriate.

[00:13:59] Speaker 05:
So I did go over, I would like to reserve a small amount of time for rebuttal if possible.

[00:14:03] Speaker 04:
Thank you.

[00:14:15] Speaker 01:
May I please support?

[00:14:17] Speaker 01:
My name is Casey Gardner on behalf of the Federal Aviation Administration.

[00:14:21] Speaker 01:
This case is an appeal of the statutorily mandated revocation of Mr. Lauterbach's airman certificates.

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Mr. Lauterbach was criminally convicted of 18 USC section 38 for knowingly and with an intent to defraud

[00:14:34] Speaker 01:
making and using materially false records relating to the maintenance of two helicopter rotor blades that he later sold in commerce.

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On the basis of that conviction, FAA revoked Mr. Ladovac's airman certificates under the authority of 44726B1A, which requires the FAA to revoke the certificates of an individual who is convicted of violation of law relating to

[00:14:58] Speaker 01:
the sale of fraudulently represented aviation parts and materials.

[00:15:01] Speaker 06:
I'd like to get to the bottom of how the agency interprets 44726 B1B.

[00:15:10] Speaker 06:
You say in your brief at page 20 that you can establish, you can revoke a certificate based on proving the violation under B1B by preponderance of the evidence.

[00:15:28] Speaker 01:
That is correct.

[00:15:30] Speaker 06:
So how do you square that with what the FAA said in a rulemaking in 2005?

[00:15:38] Speaker 06:
Nobody cited this in their briefs, but it was a rulemaking where they said that under 44-726,

[00:15:51] Speaker 06:
The statute also permits the FAA to revoke a certificate absent a conviction if the agency determines that the individual has committed acts that would lead to a conviction if pursued criminally.

[00:16:06] Speaker 06:
And then it repeats that same language elsewhere.

[00:16:09] Speaker 06:
And that language has been used in the NTSB decision that was cited, the application of Theron Wayne Law decision.

[00:16:24] Speaker 06:
So how do you square what you say in your brief with that?

[00:16:27] Speaker 01:
Well, subsection B1B requires the FAA to revoke the certificates of an individual when the administrator is able to make a finding that that individual has not only engaged in fraudulent activity, but also that that fraudulent activity is punishable by a law relating to the sale of fraudulently represented aviation parts and materials.

[00:16:46] Speaker 01:
So it has to prove by preponderance that the individual engaged in fraudulent activity and proved by a preponderance that that individual's conduct also is criminally punishable under a law relating to the sale of fraudulently represented aviation parts and materials.

[00:17:03] Speaker 01:
And that's what occurred here is that the attorney handling the case in 2006 determined that there wasn't enough evidence in the record as she reviewed it to make the finding that Mr. Lattaback had engaged in that activity punishable.

[00:17:16] Speaker 01:
So she was able to settle that 2006 case.

[00:17:18] Speaker 01:
And therefore, the only action that was available to the FAA in 2006, given that attorney's determination, was the general revocation authority under 44709, because Mr. Latterback still violated part 43 of the federal aviation regulations by his conduct.

[00:17:34] Speaker 01:
So to address the known safety concern at that time, which was his,

[00:17:38] Speaker 01:
regulatory violation.

[00:17:39] Speaker 01:
The FAA moved forward with an enforcement action under its general revocation authority.

[00:17:44] Speaker 06:
Let me make sure I understand what's an issue and what isn't.

[00:17:49] Speaker 06:
Are you disputing the argument that there was a final judgment with respect to the 44726 B1B claim in 2006?

[00:18:04] Speaker 01:
Well, there was no final judgment.

[00:18:06] Speaker 01:
with respect to the B1B claim in 2006 because that case was settled and it was never presented before the NTSB.

[00:18:13] Speaker 06:
So the FAA- You can settle something and there can be a judgment.

[00:18:16] Speaker 06:
The judgment can be that we're not pursuing this anymore and that claim is dismissed with prejudice.

[00:18:23] Speaker 01:
Right.

[00:18:23] Speaker 01:
So what occurred here was the party settled by mutual compromise.

[00:18:26] Speaker 01:
So the only evidence that we have in the record is the amended order of revocation on page 100 of the appendix.

[00:18:32] Speaker 01:
And that says that it's being issued pursuant to an agreement between the parties, and that Mr. Lutterback's certificate is only revoked pursuant to 44709.

[00:18:41] Speaker 06:
When I read your brief, and maybe I'm misreading something or missing something, but the only argument I see you making against race judicata is that it's not the same claim.

[00:18:53] Speaker 01:
That is correct.

[00:18:54] Speaker 06:
That you're not making, you didn't make an argument in your brief that there was no final judgment on the prior claim.

[00:19:02] Speaker 01:
With respect to race, you to cut.

[00:19:03] Speaker 01:
I guess the argument is that these are not the same claim because here there is a new fact and that new fact is the criminal conviction.

[00:19:10] Speaker 03:
Well, to follow up on Judge Wilkins question, would you be agreeing with Mr Zimmering if in fact there had been a final judgment under 44726?

[00:19:26] Speaker 03:
In other words, does it turn on that?

[00:19:28] Speaker 01:
No.

[00:19:29] Speaker 01:
Because even had the FAA brought the B1B action in 2006 and lost, it would still not preclude the FAA's action under B1A, because they raise different claims.

[00:19:41] Speaker 01:
They have different statutory elements, and they rely on separate factual predicates.

[00:19:45] Speaker 03:
Yes, but if they brought that B1B action and prevailed, in other words, they were able to show that, in fact,

[00:19:55] Speaker 03:
this conduct would have led to a conviction under a fraud provision.

[00:20:03] Speaker 03:
Would they still argue that the conviction would be a basis for an additional action?

[00:20:11] Speaker 01:
Well, no, because if the FAA had prevailed in 2006 under B1B, Mr. Latterback's certificates would be revoked permanently, and so there would be no certificates to revoke at this juncture.

[00:20:22] Speaker 06:
And that's kind of the understanding is that there's... But how do you square what you told me earlier as far as proving by preponderance with subsection E of the statute?

[00:20:33] Speaker 06:
because if Congress intended for you to be able to revoke permanently a certificate based on proving by preponderance that the certificate holder conducted himself in a way that was punishable by law,

[00:20:51] Speaker 06:
Why would Congress say that if they're acquitted later, then you can't sustain the revocation of the B1B?

[00:20:59] Speaker 06:
I mean, you could be acquitted because it wasn't proven beyond a reasonable doubt, but you could still be proven to have done it if by preponderance or by clearing convincing evidence.

[00:21:15] Speaker 06:
But Congress didn't seem to want that to be the outcome.

[00:21:19] Speaker 01:
That's correct.

[00:21:20] Speaker 01:
I think it's a reflection of the different burdens of proof.

[00:21:23] Speaker 01:
So it's a reflection that there may be certain circumstances where the FAA may be able to prove an activity where the criminal justice system can't and vice versa, which is what occurred here.

[00:21:35] Speaker 01:
The FAA didn't have the evidence.

[00:21:37] Speaker 01:
to prove it under B1B.

[00:21:40] Speaker 01:
So the FAA is relying on the criminal justice system, which had the additional resources to prove that Mr. Ladebeck engages activity.

[00:21:48] Speaker 01:
And B1A states that the FAA can rely exclusively on a criminal conviction to revoke an individual's certificate.

[00:21:57] Speaker 06:
Well, what's wrong with looking at if the issue of whether it's the common nucleus of fact turns on kind of determining what the issue and what the fact is.

[00:22:11] Speaker 06:
What's wrong with saying that if you look at B1A and B1B, what Congress was doing was defining the fact

[00:22:22] Speaker 06:
as whether the person committed an act that was punishable under the criminal law.

[00:22:30] Speaker 06:
That's the fact.

[00:22:32] Speaker 06:
And so the FAA can choose to go through door number one or door number two.

[00:22:38] Speaker 06:
Door number one is we can pursue a criminal conviction

[00:22:46] Speaker 06:
And if we want this person to not be able to operate during that, we can under 44709 revoke, or we can suspend because there's a provision for suspending certificates pending a criminal prosecution.

[00:23:03] Speaker 06:
It's right there in the criminal statute.

[00:23:07] Speaker 06:
Or you can go through door number two.

[00:23:10] Speaker 06:
and say, okay, there's not going to be a criminal prosecution, but we have to prove nonetheless that what this person did was punishable under the criminal law.

[00:23:21] Speaker 06:
I don't see any way of reading that other than saying that we have to establish that if there were a criminal trial, it would be proven beyond reasonable doubt.

[00:23:32] Speaker 01:
Well, there are two subsections of 44726B1, and they're disjunctive and they're not mutually exclusive.

[00:23:40] Speaker 01:
And the reason for that is that there may be certain circumstances where the FAA can't prove the underlying criminal activity, but the criminal justice system can, so the FAA can rely exclusively on that conviction to revoke his certificate.

[00:23:53] Speaker 06:
Then why proceed under

[00:23:56] Speaker 06:
And you wait for the, you shouldn't have brought it under B1B.

[00:24:00] Speaker 06:
You should use the other things at your disposal.

[00:24:02] Speaker 06:
But if you bring that claim, and it gets settled and dismissed, and there's an adjudication, then you don't get a second bite at the end.

[00:24:16] Speaker 01:
Well, the FAA initially brought a two-count action in 2006 under B1B and 44709.

[00:24:23] Speaker 01:
Before the parties even reached a hearing, the parties settled.

[00:24:27] Speaker 01:
And the B1B claimed, you know, did Ernie determine not to move forward with that action because she determined that there wasn't enough evidence.

[00:24:34] Speaker 01:
So the only action available to the FAA at that time to address a known safety issue was the 44709 action.

[00:24:41] Speaker 01:
But the facts giving rise to the FAA's revocation in 2006

[00:24:46] Speaker 01:
are not present here.

[00:24:47] Speaker 01:
The only operative fact relevant to the FAA's 2013 revocation action is the criminal conviction.

[00:24:53] Speaker 02:
Let me ask you, Ms.

[00:24:54] Speaker 02:
Gardner, would the agency have the authority, would it have had the authority in this situation looking at

[00:25:05] Speaker 02:
its judgment in the prior civil enforcement action and looking at the result of the criminal proceeding.

[00:25:13] Speaker 02:
Does it have discretion under 44726B1A to decline to revoke?

[00:25:24] Speaker 01:
No.

[00:25:25] Speaker 01:
No discretion.

[00:25:26] Speaker 01:
Absolutely.

[00:25:27] Speaker 01:
Correct.

[00:25:27] Speaker 01:
There is no discretion because the statute itself is mandatory.

[00:25:30] Speaker 01:
It says the administrator shall revoke an individual's certificate when the administrator finds that that individual has been convicted.

[00:25:38] Speaker 01:
There are substantive standards in that statute that constrain the agency's use of discretion.

[00:25:42] Speaker 02:
And you can't just decline to even bring the civil enforcement proceeding.

[00:25:46] Speaker 01:
Well, no, because the reason that the statute is mandatory is that it embodies the judgment that people who engage in this type of criminal activity pose a serious threat to aviation safety.

[00:25:59] Speaker 02:
And is there, on the front end, after the settlement here under 44709,

[00:26:08] Speaker 02:
Is there a referral requirement or practice that FAA notifies the U.S.

[00:26:14] Speaker 02:
Attorney of the potential for criminal investigation?

[00:26:18] Speaker 01:
There isn't necessarily a referral requirement, but it is the agency's practice to refer cases through I think it's our Office of Inspector General when there may be some potential criminal activity.

[00:26:31] Speaker 02:
And is there anything in the record about whether that was done here?

[00:26:33] Speaker 01:
There isn't anything in the record, but given that it's the agency's practice, I would presume that is one possible avenue as to how it got to the criminal stage.

[00:26:42] Speaker 01:
At the time that the FAA brought the 2006 action, it had no way of knowing whether there would ever be a future criminal action, much less whether that criminal action would even be meritorious.

[00:26:52] Speaker 02:
Because here- And it's unclear whether this is the kind of case that the FAA would have referred, right?

[00:26:57] Speaker 02:
Because in fact, they found that it wasn't enough evidence to proceed under 44726B1B, meaning they didn't even have the civil version of the criminal case in hand.

[00:27:12] Speaker 01:
That is correct.

[00:27:12] Speaker 01:
That's the determination that the attorney made at that time in 2006.

[00:27:15] Speaker 06:
I don't understand your argument though, counsel, because if you're saying that it was mandatory and they had no choice, the administrator has no choice but to revoke when there's a conviction,

[00:27:30] Speaker 06:
then it's still mandatory to revoke if the administrator believes that the person committed an act that's punishable by law.

[00:27:39] Speaker 06:
I mean, if B1A is mandatory, then B1B is mandatory.

[00:27:43] Speaker 01:
That's correct.

[00:27:44] Speaker 01:
Both provisions are mandatory.

[00:27:45] Speaker 06:
And the board said back in the Theron Wayne law decision on reconsideration in 2010 that the way that the statute is supposed to work is that it requires a showing that the certificate holder could have been convicted of a crime.

[00:28:05] Speaker 01:
That's correct.

[00:28:06] Speaker 01:
But the attorney handling the case in 2006 reviewed the evidence available and determined that there wasn't enough evidence for the administrator to make that finding.

[00:28:15] Speaker 06:
But that's the point with race judicata is that if you pursue a claim that requires proof of a fact, here the fact that he committed an act that would be punishable by law,

[00:28:33] Speaker 06:
and you don't have the evidence for it, and you drop it, and it's dropped finally, you don't get to re-bring the claim because you find some evidence later that allows you to prove that fact all of a sudden.

[00:28:49] Speaker 06:
I mean, if that were the case, we wouldn't have raised you the cut.

[00:28:54] Speaker 06:
because it would be often the case that maybe you dropped something because you don't think that you can prove it, the parties think that the matter's settled, and then you find some new evidence later.

[00:29:06] Speaker 01:
Well, that's correct, but the 2006 action and the 2013 action don't bring the same claim because they're not based on the same facts.

[00:29:14] Speaker 06:
If you look at the 2013 order... But if we define fact as whether he committed an act that was punishable by law, then they are based on the same fact.

[00:29:24] Speaker 01:
Well, the only fact is whether or not he was criminally convicted.

[00:29:27] Speaker 01:
And that's a distinct question of whether or not his conduct is punishable by a criminal law.

[00:29:33] Speaker 06:
But doesn't B1B require a showing that he could be convicted if a prosecution were brought?

[00:29:41] Speaker 01:
It requires a showing that that activity is punishable by a law relating to the sale of fraudulently represented aviation parts or materials.

[00:29:49] Speaker 06:
Why did the board say that it requires a showing that he could have been convicted?

[00:29:54] Speaker 01:
I guess that's a different way of saying the same thing, that if those facts were present in a criminal case, he could be convicted.

[00:30:02] Speaker 01:
But the statute itself, the language says,

[00:30:04] Speaker 01:
The administrator must show that he's engaged in an activity punishable by a law relating to the sale of fraudulently represented aviation parts and materials.

[00:30:12] Speaker 01:
But again, that's not the question that's dispositive in the 2013 action.

[00:30:18] Speaker 01:
The only operative question of fact in 2013 is whether or not he was criminally convicted, and here he was by the district court in Texas.

[00:30:27] Speaker 01:
And that question was neither raised nor relevant in 2006 because the FAA was required to prove the underlying fraud, not the conviction.

[00:30:37] Speaker 01:
And the FAA, you know, is not precluded from bringing an action that it had no opportunity to bring in 2006.

[00:30:44] Speaker 01:
DRAKE stands for the proposition that Restoradacada doesn't preclude a litigant from bringing an action that it had no opportunity to bring in the past.

[00:30:52] Speaker 01:
And FAA could not have brought a B1A action in the past because the criminal conviction, that's the very heart of the 2013 action, post-states the resolution of the 2006 action by almost five years.

[00:31:04] Speaker 01:
So if you look at these as pragmatically,

[00:31:07] Speaker 01:
they don't form the same series of events, and they don't form a convenient trial unit.

[00:31:12] Speaker 01:
So they're not the same claim under the standard of res judicata.

[00:31:16] Speaker 06:
That's if you view the conviction as I guess establishing some sort of a claim outside of

[00:31:29] Speaker 06:
the core of B1B, which is whether he committed an act that's punishable under the criminal statute.

[00:31:41] Speaker 06:
That seems like you're slicing the baloney off the thin here.

[00:31:45] Speaker 03:
I guess I have something of the same question, and I'm just trying to understand what the government's position is here.

[00:31:55] Speaker 03:
I thought you said that if you had prevailed under B1B, that is, if you could have shown this by a preponderance, then you wouldn't have acted under B1A, or did I misunderstand you?

[00:32:14] Speaker 01:
Yes, that's correct, because the revocation under B1B is permanent, so it permanently revokes all of his certificates.

[00:32:20] Speaker 01:
And the point of a revocation action is to make sure that an individual certificate holder can't continue to jeopardize aviation safety.

[00:32:27] Speaker 01:
So had the FAA prevailed in 2006 and permanently revoked his certificates, we wouldn't need to be here because he wouldn't have any.

[00:32:34] Speaker 03:
So both of these would result in a permanent revocation.

[00:32:37] Speaker 01:
That's correct.

[00:32:38] Speaker 01:
Both B1B and B1A are permanent revocations, and that's

[00:32:41] Speaker 01:
an understanding of the importance of making sure that people who engage in this type of conduct and who are willing to put unsafe parts into the stream of commerce no longer have a continued ability to jeopardize aviation safety.

[00:32:54] Speaker 02:
So just to tie that up, for example, if you had proceeded under 44726, B1B, and then for whatever reason, squishy evidence wanting to get the case

[00:33:08] Speaker 02:
closed so you could put resources elsewhere, had settled that case for a 20-year revocation as a matter of settlement.

[00:33:18] Speaker 02:
Could you even do that?

[00:33:20] Speaker 02:
You couldn't, that's why you go over to 709?

[00:33:22] Speaker 01:
That's correct.

[00:33:23] Speaker 02:
Okay, so there's no such thing as a B1B that isn't a lifetime revocation.

[00:33:30] Speaker 02:
That's correct.

[00:33:30] Speaker 02:
And therefore, once B1B has been invoked, your obligations under B1A

[00:33:37] Speaker 02:
don't exist, even though there may be good reason to prosecute criminally.

[00:33:42] Speaker 01:
That's correct.

[00:33:43] Speaker 01:
Subsection A of 44726 says that the administrator will never grant an additional certificate.

[00:33:50] Speaker 01:
So not only is the certificate revoked, but if they reapply, the administrator is without authority to issue a new certificate.

[00:34:01] Speaker 01:
I've gone over my time, if there are no further questions.

[00:34:04] Speaker 01:
Thank you.

[00:34:06] Speaker 01:
Thank you.

[00:34:10] Speaker 03:
Mr. Zimmerman, you had no time remaining, but we'll give you two minutes if you need it.

[00:34:21] Speaker 05:
I don't think it follows that the FAA, even under the law, the NTSB's decision, Wayne Law, would have to prove a B1B matter beyond a reasonable doubt.

[00:34:34] Speaker 05:
It's still a preponderance of the evidence.

[00:34:38] Speaker 05:
It would be a proceeding brought before an NTSB ALJ and ultimately the NTSB.

[00:34:43] Speaker 05:
So even though the language says

[00:34:49] Speaker 05:
an activity punishable under law, I don't think it follows that it would have to be proven by the FAA beyond a reasonable doubt.

[00:34:56] Speaker 05:
It would still be the preponderance of the evidence standard.

[00:34:59] Speaker 06:
So what does it mean when they say that he could have been convicted?

[00:35:05] Speaker 05:
In their belief, there are facts that would sustain the elements of one of the criminal convictions that would trigger this, like the one he was ultimately convicted of.

[00:35:18] Speaker 05:
Just because there is enough evidence that could sustain it doesn't mean it has to be proven in every proceeding beyond a reasonable doubt.

[00:35:26] Speaker 05:
Much like an indictment, there has to be enough evidence to show that it could pass the jury doesn't necessarily have to be beyond a reasonable doubt.

[00:35:35] Speaker 05:
that there wasn't enough evidence to proceed under this B1B.

[00:35:48] Speaker 05:
The record is very clear, and indeed, the FAA has admitted in the record, there's no new evidence.

[00:35:54] Speaker 05:
There's nothing, there's not a single piece of new evidence that was uncovered or placed before any tribunal after the 2006 final order.

[00:36:04] Speaker 02:
Did Mr. Lauterbach appeal the criminal conviction for insufficiency of the evidence?

[00:36:10] Speaker 05:
No.

[00:36:11] Speaker 05:
Not that I'm aware of.

[00:36:12] Speaker 05:
My father is the other lawyer on this brief.

[00:36:17] Speaker 05:
Neither of us were involved with the

[00:36:19] Speaker 05:
the criminal proceedings.

[00:36:20] Speaker 05:
To the best of my knowledge, he did not.

[00:36:22] Speaker 05:
And then finally, the FAA's position is basically boiled down to we couldn't punish him for the actions that we believe he did in 2004, 2005, so we didn't punish him.

[00:36:34] Speaker 05:
However, somebody else punished him, that being the Department of Justice and District Court.

[00:36:39] Speaker 05:
Now it's their position that they get to punish him simply because he was punished by somebody else.

[00:36:43] Speaker 02:
Not that they get to, but that they actually have no discretion.

[00:36:46] Speaker 05:
That's our position.

[00:36:47] Speaker 05:
Thank you.

[00:36:48] Speaker 05:
Thank you.

[00:36:48] Speaker 02:
Thank you.

[00:36:49] Speaker 02:
The case will be submitted.