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May I please support

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My name is Jeanna Rine.

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I represent Korniski Group, LLC, doing business as aerial bearings.

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This appeal arises out of a certificate revocation for a repair station by the FAA.

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The first issue I'd like to address is the construction of the procedural statute, regulations and guidance.

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at issue in this case and the primary concern is that the process and technology employed by Aerobarings was approved and deemed acceptable after thorough documentation and inspection and this inspection was thoroughly documented.

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Then it was disapproved by a new inspector alleging regulatory violation for conduct that had previously been deemed to be in compliance

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And Errol Bearings had no information as to what that alleged compliance might be until the report was issued on the same day as the revocation.

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The ALJ based his decision that the technical data was insufficient on this new inspector's opinion, which the ALJ deemed as representative of the FAA.

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So Chevron deference to this interpretation is not appropriate.

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The second issue I'd like to address is the sufficiency of the data.

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The ALJ and the NTSB both determined that they did not determine that the mil-spec was insufficient data, and they did not determine that the OEM design data was required.

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Instead, both of these tribunals

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determined that the missing computer data was the basis for the technical data insufficiency.

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Interestingly, the FAA on page 39 of its brief said that the lost computer data is not the data required by the regs.

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But then the FAA persists in requiring the OEM design data, and they did not appeal the NTSB decision on this.

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The basis for this allegation that the technical data was insufficient was an expert opinion by the FAA's expert, I'll call him Dr. Q, I can't pronounce his name, that it was possible that the polishing process employed by aero bearings could remove too much material.

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He didn't take any measurements to make his determination

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that this could remove too much material.

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And he admitted that his opinion was based on a presumption.

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And so this formed the entire basis for this determination that there was an insufficiency of technical value supporting arrow bearings processes.

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In the FAA on page 39,

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said that how much material is removed is not an element of the regulations that issue in this case.

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But the NTSB and the ALJ have revoked, the NTSB revoked the certificate based on alleged insufficiency of data.

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They said that was, even if the falsification issue were

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were not there, this alleged insufficiency of technical data would support revocation.

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So the FAA is no longer asking for this material removal substantiation or the missing computer data, apparently, according to page 39.

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And they do extensively talk about the missing computer data in the context of credibility.

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But when it gets down to what they really want,

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The FAA wants the OEM design data.

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And the OEM design specs are not appropriate for a repair station.

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Design specs of a bearing are based on what would be appropriate for under Part 21 for building a new aircraft.

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the specifications would not allow for disassembly, which is a repair function, because part 21 entities are not allowed to do repairs.

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So that would explain why a design spec would say, well, you can't disassemble this.

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But the mill spec, the TO,

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102 mil spec describes in detail how to disassemble these bearings, and that's the basis that was approved by the FAA.

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But if the computer data was restored and there's no evidence in the record that supports the NTSB's decision that the computer data could not be restored,

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And if arrow bearings had any inkling that this was really the problem, and the FAA would have said, hey, please give us this computer data, restore this, they would have been happy to do so.

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But the computer data involves which polishing compound does not work, which grit size does not work, which time limit does not work, and how many iterations do not work.

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that there was data provided to the inspectors, and it's important to note that there's an error in the certification of the record.

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So that A6, FAA's Exhibit 6, is not listed, but the record page numbers are listed.

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And I've referenced this twice in my brief, and I didn't catch the error until after my brief was written, but A5 is the GE

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design spec to which my client did not have access, and that's two pages.

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And then A6 is the following, however number of pages, which is the engine manual to which my client did have access.

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So my client provided all of this technical data that's listed in my brief, and he also showed a graph of

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of test measured roller elements that were measured according to the ABMA standard spec which is approved by the FAA and this was discussed in the transcript.

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Dr. Q also had access to the NASA spec which supported the design of the equipment and the Stanford

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documentation and the Los Alamos documentation, all of which explained how this equipment was designed.

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None of that was deemed sufficient and he insisted upon the OEM spec

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This idea was rejected by the ALJ and the TSB because obviously the OEM design spec would not be appropriate, and the ALJ and the NTSB both said, okay, well, we'll revoke this based on missing computer data.

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But what needs to happen here, the problem is not insufficient data.

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The NTSB didn't even consider the technology.

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The problem is that the new PMI and the NTSB did not understand the technology and they need to do that in order to evaluate the sufficiency of the technical data.

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I would also like to address the issue of major repairs.

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Neither the ALJ nor the NTSB made a determination that this was a major repair.

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And for that reason, the noncompliance has not been proven.

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But on the merits of that issue, there are two prompts to the major repair argument in the briefing.

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One involves structural engine parts.

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Well, the idea of structural engine parts is only applicable on the issue of plating.

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There's no allegation in the complaint that plating was a problem, and the ALJ overruled evidence regarding any plating issues.

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So that aspect of the structural repair issue should not be considered by the support.

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The other aspect, both experts addressed the critical component aspect under the definition of major repair in 43 CFR 1.1.

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And that involves what happens if a bearing fails.

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And so the testimony is that this is not a major repair, because if a bearing fails, it doesn't affect the airworthiness of the aircraft.

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But because this issue was not determined by either Tri-Unit

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It should not be considered by this court.

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Thank you.

[00:10:52] Speaker 01:
We'll hear from the government.

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May it please the court?

[00:11:00] Speaker 04:
Chris Stevenson for the Respondent Federal Aviation Administration.

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In light of the petitioner's arguments, I think it might be most helpful for me to talk about what technical data is and why it's important here and what the FAA was asking for.

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Technical data is in the nature of the engineering information described in part 21.

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That's been established in a written FAA interpretation, the Collins interpretation.

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It was cited in the FAA brief.

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The reason that technical data is in the nature of engineering information is because

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When performing an overhaul as the petitioner was doing in these cases, when you're done having performed the overhaul, you need to be able to verify that the component that you were working on is in an appropriate condition.

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That technical data is going to tell you what the original design status of the component was.

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It's also going to tell you what the limitations on that are.

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For example, what sort of surface defect is still an acceptable surface defect to let the bearing operate in an appropriate condition.

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The FAA, when re-inspecting the petitioner in May of 2017, specifically asked the petitioner for what the technical data was that it was using to support these repairs.

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It asked again in a letter in January of 2018.

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In both cases, the petitioner was not able to produce any technical data.

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They produced an engine shop manual is all that they had at the time the FAA conducted the inspection.

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Alright, so

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The FAA does not assert that the original equipment manufacturer data is necessary.

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Technical data is necessary.

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The most straightforward way to get that is from the original equipment manufacturer.

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That is something that costs money.

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That is something that the repair station may have to go through a process with the original equipment manufacturer to get, but that's the most default way.

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As discussed in the record, you can also reverse engineer the component.

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That was something that the

[00:13:06] Speaker 04:
petitioner declined to do here.

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The reason that the what is now being called equipment design data becomes such a focus in the record at the hearing is because that is what the petitioner was pointing to at the hearing.

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Petitioner's owner indeed testifying about the data at the hearing talked about how like the quote is that everyone in this room

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knows that we needed that data.

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And that they specifically testified that they didn't have it anymore because the person who had access to that computer had passed away.

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Now, I don't know what was in that data.

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I don't know if what was in that data actually would have been appropriate technical data.

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But at hearing, that is focused on because that is what the petitioner was identifying.

[00:13:57] Speaker 01:
So from the end of the day, from the FAA's perspective, the point is that there had to be something.

[00:14:01] Speaker 01:
OEM would have been the easiest, but there had to be something, and from the agency's perspective, there was nothing.

[00:14:07] Speaker 01:
That's correct.

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And therefore, there's a problem with these regulations, with compliance with these regulations.

[00:14:12] Speaker 02:
Absolutely, Your Honor.

[00:14:12] Speaker 02:
Mr. Stephenson, let me, can I refocus you a little bit, because there are a couple of things that bother me.

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I'm curious to hear the government's answer.

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First of all, one of the charges is intentional falsification under 12A.

[00:14:26] Speaker 02:
Yes, Your Honor.

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In fact, the findings, as I read the record, were that there were some materials that may have been omitted, but the materials on that particular form were not false.

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They were accurate.

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There may have been more information that could have been added.

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There was another section in the regulations, 12B, which covers material omissions.

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I don't know how you get a 12A.

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intentional falsification on this record.

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Maybe material omissions, but that's not the charge.

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And I really, in reading the record and in reading the test you're using, I have no idea what you're talking about.

[00:15:08] Speaker 02:
Material falsification.

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There's nothing in the record that I see that confirms my understanding of an intentional falsification here.

[00:15:20] Speaker 04:
Thank you, Your Honor.

[00:15:22] Speaker 04:
There was an intentional falsification here because the approvals for return to service executed by the petitioner falsely conveyed that the petitioner omitted some things.

[00:15:34] Speaker 02:
That's what the record says.

[00:15:35] Speaker 04:
It is true that they omitted something, but the fact that they omitted something does not mean they didn't intentionally falsify it.

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I understand where you might go with that, but there is a specific regulation that talks about

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sanctioning for material omissions.

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And there's not, what is it that you think, with respect to their material omission, took it to a higher level of an intentional falsification?

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Because they're two different regulations.

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And it seems to me you've simply written 12b out of the regulations, because anytime, it sounds like you're arguing, anytime there is a material omission, which is covered,

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You're going to call it an intentional falsification.

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12B and 12A are not mutually exclusive, Your Honor.

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The fact that something was omitted does not mean that it cannot be an intentional falsification.

[00:16:31] Speaker 02:
I understand.

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I'm trying to figure out how you get there in this case.

[00:16:34] Speaker 04:
In this case, the

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Entries made by the petitioner are, they cite to OEM manuals, and they also cite to having done an overhaul.

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This conveys to a mechanic looking at this maintenance entry that the overhaul was performed in accordance with the OEM manual, which is not accurate.

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And that

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is why the statement is intentionally false.

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But what that tells you is that it's inaccurate at best.

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As Judge Edwards recounts the regulation, so it has a

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a false statement provision and an omission provision.

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And let's just say for purpose of this question, I'm accepting your argument that those can overlap.

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And then there's an overlay that has to be intentional.

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So you could have a material omission that's unintentional, you could have a false statement that's unintentional, but for you to win, you have to show that there was intentionality.

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And with intentionality, I guess what confused me is that the ALJ never got to that question because the ALJ said that there's no falsity.

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And so the ALJ never even gets to the question of whether there's intentional falsehood.

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And so then it goes up to the NTSB.

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And when the NTSB looks at it, I didn't see anything in the opinion that would have resuscitated an intentional falsehood determination that was never made.

[00:18:00] Speaker 01:
Because as I understand the board's decisions that come from our decisions, there has to be a determination that there was a subjective intention to mislead.

[00:18:10] Speaker 01:
And in order to do that, you have to show that even though the person has an explanation for why they were confused about the question, they actually intentionally misled with their answer.

[00:18:20] Speaker 01:
And I didn't see anything in the NTSB order that would show me that the NTSB found, even though there was an innocent explanation put forward, there was actually an intentional misleading.

[00:18:30] Speaker 04:
Well, in these cases, Your Honor, the FIA does not need to show an intent to mislead.

[00:18:37] Speaker 04:
There is an intent element, but the intent element is satisfied by knowledge of falsity, not if we were to charge a fraud.

[00:18:45] Speaker 04:
So in this case, the question is, did they know what they were writing was false?

[00:18:49] Speaker 01:
Here, as I've mentioned... Did they intend to make a false statement?

[00:18:54] Speaker 02:
By omission, not what they were writing.

[00:18:56] Speaker 02:
By omission, what they wrote was not false.

[00:19:00] Speaker 02:
I mean, the point made in the record is what was there was not false.

[00:19:05] Speaker 04:
The individual, if you take a sentence in isolation out of there, it might be true, but the statement as a whole is false.

[00:19:14] Speaker 04:
If I took this out of the maintenance context for a second, the example I think of this is, for whatever reason, your Honor asked me, Mr. Stevenson, how many children do you have?

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And my answer was, I have a son.

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And that was the totality of my answer.

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You would, I imagine, leave this conversation having concluded... No, no, I would have said I asked you how many, not whether you had a son.

[00:19:34] Speaker 02:
Yes.

[00:19:34] Speaker 02:
That's not what I'm... I understand what you're saying.

[00:19:36] Speaker 02:
That's not what I'm getting from this record here.

[00:19:39] Speaker 04:
But that is the statement that they used a particular manual and they did an overhaul.

[00:19:45] Speaker 02:
What does material mission mean then?

[00:19:48] Speaker 04:
Sorry, well, a material admission would go beyond that because a material admission might include the complete absence of a record entry at all.

[00:19:56] Speaker 04:
If a mechanic performed maintenance and did not make a record entry as required by the regulations, that can't be a false statement because there's literally no statement.

[00:20:07] Speaker 04:
But if a repair station, because the regulation in question only applies to a repair station, if a repair station omits

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and just entirely leaves out a maintenance record entry for the purposes of misleading, that is going to fall under 14512B and could not fall under 14512A.

[00:20:26] Speaker 03:
Can I back you up a little bit?

[00:20:29] Speaker 03:
I thought I understood this case and now I'm wondering whether I really do.

[00:20:35] Speaker 03:
I look at the entry and it's number 12 in the authorized release

[00:20:43] Speaker 03:
And the company says that it performed an overhaul in accordance with section 43.2, right?

[00:20:51] Speaker 03:
Yes.

[00:20:51] Speaker 03:
43.2 means that they disassembled the bearing and put it back, right?

[00:20:57] Speaker 03:
But it also, as I understand, it also says that it requires that, for that statement to be true, that the bearing was then tested in accordance with approved standards and technical data.

[00:21:11] Speaker 03:
Is it your argument that they didn't test it in accordance with technical data?

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Is that the point?

[00:21:19] Speaker 04:
They did not test it in accordance with technical data at all.

[00:21:26] Speaker 04:
However, that was not

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That was not an argument that was advanced to the NTSB, and so at this time it couldn't form the basis for the NTSB's decision.

[00:21:35] Speaker 04:
But your honor, I think it's correct in identifying that they asserted that they had followed up 43.2 and they didn't.

[00:21:42] Speaker 03:
But the falsification that went... Well, why didn't they?

[00:21:47] Speaker 03:
If you're not contesting that they tested it in accordance with approved standards and technical data, if you've accepted that, then where's the false statement in there?

[00:21:58] Speaker 04:
we're going to be happy it does not accept that the petitioner tested it in accordance with the proof technical data but that the full statement is you have an argument

[00:22:08] Speaker 04:
That was not advanced to the NTSB.

[00:22:13] Speaker 04:
It was not advanced to the NTSB that they failed to comply with 43.2.

[00:22:16] Speaker 04:
However, it is the case that they failed to comply with 43.2.

[00:22:22] Speaker 04:
For the falsity, one has to look at the entire statement.

[00:22:26] Speaker 04:
And if you look earlier in the statement, they talk about the work being performed

[00:22:30] Speaker 04:
in accordance with, and there's a manual citation to something that, it's a different citation for each of the 8130-3s because it's a different kind of bearing, but what they're citing to is that original equipment manufacturer manual.

[00:22:45] Speaker 04:
when you have a citation to the original equipment manufacturer manual for the work performed and then you say that you have performed an overhaul, that conveys to a mechanic reading this maintenance entry that you performed the overhaul in accordance with that original equipment manufacturer manual.

[00:23:06] Speaker 03:
Are you referring to the sentence

[00:23:10] Speaker 03:
Long-term preservation performed IAW, the OEM manual on the date the certificate was prepared.

[00:23:19] Speaker 03:
Is that the sentence you were referring to?

[00:23:21] Speaker 03:
No, Your Honor.

[00:23:21] Speaker 04:
It would be a sentence earlier in the... What is IAW?

[00:23:30] Speaker 04:
IAW is Mechanic Speak for In Accordance With.

[00:23:33] Speaker 04:
Oh.

[00:23:37] Speaker 04:
But again,

[00:23:38] Speaker 04:
In the manual, it's in the maintenance entry, it doesn't say OEM manual when it's talking about work performed in accordance with earlier, and that is because it is providing a citation to a specific provision.

[00:24:03] Speaker 04:
So the particular one I'm looking at is Joint Appendix 68.

[00:24:11] Speaker 04:
Block 12 starts off by saying, work performed in accordance with GECF6-80C2 engine manual.

[00:24:23] Speaker 04:
And it goes on to say varying inspection section.

[00:24:24] Speaker 04:
And it gives another particular citation.

[00:24:27] Speaker 04:
That is an OEM manual.

[00:24:30] Speaker 04:
for that particular bearing.

[00:24:32] Speaker 04:
That particular bearing on that particular work order is a GE.

[00:24:35] Speaker 04:
It was manufactured by GE.

[00:24:36] Speaker 03:
Are you saying that statement is false?

[00:24:40] Speaker 04:
That statement is false as describing an overhaul.

[00:24:46] Speaker 04:
The entry in Block 12 is false.

[00:24:52] Speaker 01:
I thought your point.

[00:24:55] Speaker 01:
Correct me if I'm wrong.

[00:24:56] Speaker 01:
I thought your theory, I'm not sure it carries the day, but I thought your theory is that it says work performed, now I know, in accordance with

[00:25:05] Speaker 01:
engine manual and appoints a particular section.

[00:25:08] Speaker 01:
And the idea is, okay, that tells us if you look at that section that there was an inspection performed pursuant to that section.

[00:25:15] Speaker 01:
But what it doesn't tell you is that there was a bunch of other stuff done, too, like disassembly and other things.

[00:25:21] Speaker 01:
And it's the omission of those other things that's problematic from your perspective because somebody looking at this wouldn't understand that that other work was done.

[00:25:30] Speaker 01:
Yes, and in conjunction with the assertion that there was an overall.

[00:25:35] Speaker 01:
Was your answer yes?

[00:25:37] Speaker 01:
Is that your theory, or am I getting it wrong?

[00:25:40] Speaker 01:
I thought that was the omission that renders this false, but maybe I don't have it right.

[00:25:48] Speaker 04:
It does leave that sort of detailed information out, but it's also that 12... No, it doesn't.

[00:25:55] Speaker 03:
Stop right there.

[00:25:56] Speaker 03:
How does it leave out that information when in fact they cite to 43.2, which is the overhaul and an overhaul requires disassemblies.

[00:26:09] Speaker 03:
So anybody reading this knows that the bearing was disassembled and put back together.

[00:26:15] Speaker 04:
And they would conclude that that was performed in accordance with the original equipment manufacturer manual that was cited.

[00:26:25] Speaker 01:
Excuse me.

[00:26:29] Speaker 01:
Please, Council is appearing before us.

[00:26:31] Speaker 01:
We're not going to have comments from the audience.

[00:26:35] Speaker 04:
And a mechanic looking at this downstream after this component leaves the petitioner and goes to a parts broker and then goes to an air carrier who's going to decide whether or not to put it on an airplane, they would look at that and they would conclude that that was performed in accordance with

[00:26:53] Speaker 04:
The disassembly, what is that?

[00:26:55] Speaker 04:
Yes, that the overhaul, the disassembly, the repair, if necessary the repair in this case being the polishing, the reassembly, the overhaul, they would conclude that the overhaul was performed in accordance with that OEM manual because there is no other provision cited for

[00:27:13] Speaker 04:
the basis for the overhaul.

[00:27:15] Speaker 04:
It is absolutely the case that it cites 43.2, but 43.2 is essentially the definition of overhaul.

[00:27:23] Speaker 04:
It's like saying, to say I overhauled in accordance with 43.2 is to say I overhauled it properly, but that's... What's the intentional falsehood as opposed to no mission?

[00:27:35] Speaker 02:
I'm still missing it.

[00:27:36] Speaker 02:
I mean, I'm further away now than I was when I first asked you.

[00:27:40] Speaker 02:
We're talking about an intentional mission.

[00:27:41] Speaker 02:
That's big time.

[00:27:43] Speaker 02:
I'm intending to do something that's bad, and I know it's bad, and I'm going to go ahead and do it.

[00:27:49] Speaker 02:
What was that?

[00:27:51] Speaker 04:
Yes, and I think one of the strongest pieces of evidence that the falsity of the statement was intentional is to look at the underlying work orders, as the petitioners have asked this Court to do repeatedly.

[00:28:02] Speaker 04:
If you look at those underlying work orders, which are not charged as a separate falsification, but are relevant to the subjective understanding,

[00:28:09] Speaker 04:
of the petitioner at the time they were making these statements.

[00:28:12] Speaker 04:
In those work orders, which in the Joint Appendix literally immediately follow each of the falsified 8130-3s, in their own forms, the petitioner has the option to check this binary checkbox that you can check milspec, or you can check OEM tech data.

[00:28:31] Speaker 04:
And over and over again, the petitioner, as the basis for the work that it's performing, checks OEM tech data.

[00:28:39] Speaker 03:
Where is it?

[00:28:39] Speaker 03:
On what page are you on?

[00:28:45] Speaker 03:
I'm looking at the work orders.

[00:28:47] Speaker 03:
Thank you, Your Honor.

[00:28:51] Speaker 03:
I'm looking at the work order for the first, the one dated, whatever it is.

[00:29:04] Speaker 03:
The first one that begins at page 68.

[00:29:08] Speaker 04:
Thank you, Your Honor.

[00:29:13] Speaker 04:
For example, on Joint Appendix page 75, there is a page that's titled Inspection and Findings Report.

[00:29:24] Speaker 04:
And there's a section that's titled Approves Tech Data.

[00:29:27] Speaker 04:
And it's your approving in accordance with, and they can check either OEM tech data or mil-spec.

[00:29:33] Speaker 04:
And what is checked is OEM tech data.

[00:29:37] Speaker 04:
And again, it's undisputed in the record that they did not have OEM tech data.

[00:29:44] Speaker 04:
Their own expert at hearing testified that they had... Is that because of the missing computer?

[00:29:49] Speaker 04:
Well, the OEM tech data itself is not would have... OEM tech data is short for Original Equipment Manufacturer Technical Data.

[00:29:56] Speaker 04:
What could have been on the computer, whatever it was, could never have been OEM tech data.

[00:30:03] Speaker 04:
conceivably could have been technical data, but it would never have been original equipment manufacturer technical data.

[00:30:09] Speaker 04:
Why not?

[00:30:10] Speaker 04:
Because the original equipment manufacturer technical data is something that is created by the company that produced the part.

[00:30:17] Speaker 04:
And the testimony at hearing was that the data that would have been on this computer was something that was developed by the petitioner when they were coming up with their own polishing process.

[00:30:31] Speaker 04:
Again, we don't

[00:30:32] Speaker 04:
know what was actually on there, but that's what they testified about it being.

[00:30:37] Speaker 03:
Are you saying they didn't have the original equipment manufacturer's manual?

[00:30:44] Speaker 04:
They did not have the original equipment manufacturer's manual necessary to do an overhaul.

[00:30:50] Speaker 04:
They had what was called and what is referred to as an engine shop manual.

[00:30:57] Speaker 04:
So they had

[00:30:59] Speaker 03:
an OEM manual that would have allowed them to perform this stylus inspection for surface defects, and that... So suppose, I don't understand a lot of this technical, but suppose that the original equipment manufacturer's manual had some instructions about how to insert the ball bearings in the ring.

[00:31:23] Speaker 03:
Okay?

[00:31:24] Speaker 03:
And so when they finished the overhaul, they pulled the bearings out and they polished them and they're putting them back and they go to the original equipment manufacturer and follow the instructions on reinserting the bearings.

[00:31:38] Speaker 03:
Now, if that is what happened, this statement would be true and the statement also in B-12 would be true.

[00:31:47] Speaker 04:
Well, that is not what happened.

[00:31:49] Speaker 04:
They did not have the OEM manual necessary to disassemble and reassemble the bearing.

[00:31:56] Speaker 04:
They also did not have the OEM tech data, which is, the OEM tech data is not going to have instructions for taking the bearing apart and putting it back together.

[00:32:06] Speaker 04:
It's going to have information on what the condition needs to be after you're done polishing it.

[00:32:13] Speaker 04:
The petitioner in this case, presumably,

[00:32:16] Speaker 04:
was based on their arguments on petition for review, they would have been using the mil-spec, the military specifications for the assembly and disassembly.

[00:32:28] Speaker 04:
Now that doesn't get them in compliance with the technical data issues because the mil-spec is not technical data.

[00:32:35] Speaker 04:
It relies on you checking with the OEM technical data.

[00:32:39] Speaker 04:
But again, when you go back to what they're writing in their own work orders,

[00:32:43] Speaker 04:
Their claim in their petition for review is that we were following the mil-spec, that the mil-spec was our tech data.

[00:32:50] Speaker 04:
But literally in their own work orders, they were checking, they were not checking mil-spec, they were checking OEM tech data, which they did not have, and which they knew that they didn't have.

[00:33:00] Speaker 01:
So when I hear this, just to abstract away from the ground level technicalities of it, what it sounds like is that you've got a case that

[00:33:12] Speaker 01:
the responses to the questions were incorrect.

[00:33:16] Speaker 01:
But what you have to show in order to show intentional falsification is that they were incorrect and the person filling it out knew they were incorrect.

[00:33:25] Speaker 01:
And what I'm missing from the record is there's testimony from the company that the company thought that this is all that question 12 was asking.

[00:33:35] Speaker 01:
And so what you need to have is an agency determination that when the company gives that response, they know that that response is incorrect.

[00:33:43] Speaker 01:
In fact, it has to be that there was intentional incorrectness in the responses.

[00:33:48] Speaker 01:
Don't get that from the ALJ because the ALJ never gets to intent.

[00:33:51] Speaker 01:
Then when you get to the NTSB, I don't see anything in the NTSB's order that resuscitates the absence of

[00:33:58] Speaker 01:
a knowledge-based credibility determination of the kind that the agency has said you need to show intentional falsification.

[00:34:06] Speaker 04:
Well, here, the knowledge at issue is the knowledge of the falsity of the statement.

[00:34:11] Speaker 04:
And I understand the court will pass on whether or not my point carries today as to whether it was false.

[00:34:16] Speaker 04:
But if we take it for the moment that it was false, then the falsity that's being conveyed is that is an overhaul in accordance with original equipment manufacturer manuals.

[00:34:27] Speaker 04:
The petitioner knew that it was not overhauling in accordance with original equipment manufacturer

[00:34:36] Speaker 04:
manuals.

[00:34:36] Speaker 04:
It didn't have them.

[00:34:37] Speaker 04:
It knew it didn't have them.

[00:34:39] Speaker 04:
It knew that it was relying on, for the process, not the data, but for the process, it knew that it was relying on the mil-spec, and yet all that it wrote down was OEM manual citations.

[00:34:50] Speaker 04:
It wrote down nothing about the mil-specs, and so it knew that

[00:34:56] Speaker 04:
the statement that was being conveyed was false.

[00:34:58] Speaker 04:
It knew, it was, the statement is conveying that they performed an overhaul in accordance with the OEM manuals.

[00:35:04] Speaker 04:
They knew that they were not performing the statements in accordance with the OEM manuals.

[00:35:10] Speaker 04:
Now, I understand that the

[00:35:14] Speaker 04:
that at hearing, the petitioner asserted that it thought that what it was doing was OK.

[00:35:20] Speaker 04:
But that's not quite the same thing.

[00:35:23] Speaker 04:
If the petitioner, for whatever reason, believed that it was OK, if it knew that the statement was false, but it erroneously believed that it was OK to write that statement down anyway, that does not excuse them from the intentional falsification.

[00:35:37] Speaker 04:
That's where the distinction, it could get them out of, if we had charged them with a fraudulent statement,

[00:35:42] Speaker 04:
that would be a defense because an additional element to fraud might be an intent to deceive.

[00:35:48] Speaker 04:
But here, all you have to have is a knowledge of the falsity.

[00:35:53] Speaker 04:
Additionally, of course, the board, the only support for the notion that this was not an intentionally false statement is the testimony of petitioner's owner, Mr. Galel.

[00:36:07] Speaker 04:
The NTSB made an explicit credibility determination

[00:36:11] Speaker 04:
and found him not credible.

[00:36:13] Speaker 04:
And that is a credibility determination that was supported by substantial evidence.

[00:36:19] Speaker 04:
And given that credibility determination,

[00:36:22] Speaker 04:
the board is free to disregard the evidence that this somehow would have not been intentional and look at the other, as we must usually do for intent and knowledge-based requirements, look at the circumstantial evidence, which includes, as we've discussed extensively here, these underlying work orders and what they... A lot of that is you're making an argument to us that just doesn't appear to be in the NTSB determination.

[00:36:49] Speaker 01:
And all we have before us is what the NTSB said.

[00:36:52] Speaker 04:
Yes, Your Honor.

[00:36:54] Speaker 04:
What we have before us is what the NTSB said.

[00:36:56] Speaker 04:
However, as this court has held, the underlying decision being reviewed does not have to be a model of clarity, as long as the finding is there and the court can ascertain it.

[00:37:07] Speaker 04:
An explanation from the parties is part of it.

[00:37:10] Speaker 03:
What page is the finding that the company didn't have the original equipment manufacturer's manuals?

[00:37:18] Speaker 03:
What page can I look at to find that?

[00:37:22] Speaker 04:
I do not know off the top of my head, Your Honor, if there is a specific finding about that that the NTSB makes, and if there is, I don't know.

[00:37:32] Speaker 03:
There are several manuals involved in these work orders, right?

[00:37:40] Speaker 03:
Within a given first order... The first one is GE, the second one is Pratt & Whitney,

[00:37:48] Speaker 03:
The third one is something ESMCFMI.

[00:37:54] Speaker 03:
I don't know what that is.

[00:37:56] Speaker 03:
And the fourth one is the same, CFMI.

[00:38:05] Speaker 03:
So there are at least three different manuals involved, right?

[00:38:10] Speaker 04:
Yes, Your Honor, yes.

[00:38:12] Speaker 04:
Each of the four work orders, there were four different bearings that were specifically charged in the FAA's complaint.

[00:38:19] Speaker 04:
Each of those was a different kind of bearing from a different manufacturer and had its own, so it would have its own original equipment.

[00:38:27] Speaker 03:
Okay, so I'll come back to, you know, you have asserted that the statement is false because they didn't have

[00:38:34] Speaker 03:
the OEM manual.

[00:38:36] Speaker 03:
So where do I find a finding with respect to these three different manufacturers?

[00:38:43] Speaker 04:
Well, I apologize, Your Honor, I don't have a citation to that off the top of my head.

[00:38:48] Speaker 04:
It was not disputed at hearing that they didn't have these.

[00:38:53] Speaker 04:
The first time that it was disputed

[00:38:57] Speaker 04:
that it was suggested that the petitioner might have actually had some sort of manual like this was in their final brief on the petition for review.

[00:39:05] Speaker 04:
And so I don't know that citation off the top of my head, but I don't believe that there's an extensive discussion from the NTSB about how they don't have these manuals because it was never contended that they did.

[00:39:21] Speaker 04:
But I can provide a supplement to the court with a follow-up citation and discussion of that if that's desired.

[00:39:29] Speaker 02:
Where's the finding on major repair?

[00:39:33] Speaker 04:
The board found that the board did not adopt the ALJ's unusual determination with regards to major repair, but the board did find that there was a violation of 14 CFR

[00:39:47] Speaker 04:
145201C2, which is the pertinent regulation for the major repair violations.

[00:39:54] Speaker 04:
And so necessarily the board found that there was a major repair.

[00:39:59] Speaker 04:
It's unsurprising that again, this is not discussed extensively because there was no evidence whatsoever at hearing contradicting the assertion that the petitioner was performing a major repair.

[00:40:11] Speaker 04:
I know I'm out of time, so I don't want to go into an extensive thing on that, but I would note that the issue there was, is it a structural repair of an engine component?

[00:40:21] Speaker 04:
Critical does not play into the question of whether or not it's a major repair, so there was evidence from the FAA expert that it was a major repair, no evidence by the respondent that it wasn't, so again, not surprising that the NTSB did not delve into a deep analysis on that point.

[00:40:40] Speaker 04:
Thank you.

[00:40:42] Speaker 01:
Thank you, Council.

[00:40:43] Speaker 01:
Thank you.

[00:40:49] Speaker 01:
Two minutes for rebuttal.

[00:40:52] Speaker 00:
Thank you, Your Honor.

[00:40:55] Speaker 00:
With regard to the intentional falsification and the intent element, there is objective evidence in the record that the previous PMI did a thorough study which included

[00:41:08] Speaker 00:
with 8130-3 requirements.

[00:41:20] Speaker 00:
And he reviewed them all two years' worth and said they were fine.

[00:41:25] Speaker 00:
And also, the FAA guidance supports

[00:41:30] Speaker 00:
the, my client should be able to rely on FAA guidance that gives step by step, block by block instructions on how to fill out this 8130-3.

[00:41:41] Speaker 00:
And so that negates the intent element.

[00:41:48] Speaker 00:
The idea that they do not have OEM technical data, they had OEM

[00:41:54] Speaker 00:
inspection manuals, and that's what they cited.

[00:41:57] Speaker 00:
They said inspection was performed in accordance with these stated OEM inspection manuals, and those inspection manuals... No, it says work.

[00:42:06] Speaker 03:
I may not have them in front of me any longer, but it says work was performed in accordance with whatever the manual is, Pratt & Whitney or GE.

[00:42:15] Speaker 03:
It says work was performed, not inspection.

[00:42:18] Speaker 00:
Okay, work was performed in accordance with OEM inspection manual, and then three of the four work 8130s say... I don't think it said inspection.

[00:42:30] Speaker 03:
Let me just take a look.

[00:42:38] Speaker 03:
Oh, you're right.

[00:42:39] Speaker 03:
Yeah, it's just the Barry inspection section.

[00:42:42] Speaker 03:
Okay, yeah.

[00:42:43] Speaker 00:
And then three of the documents say, and other data acceptable to the administration.

[00:42:49] Speaker 03:
Yeah, the first one doesn't.

[00:42:50] Speaker 00:
The first one doesn't, and if you look down through the work order, there is a return to service documentation that documents that this 8130-3 was performed, and it said there are customer instructions on how these are performed, and

[00:43:07] Speaker 03:
Well, is it accurate to say that it was uncontested that the company didn't have these original manufacturer manuals?

[00:43:19] Speaker 00:
They did have the original, and it's in evidence.

[00:43:25] Speaker 00:
these manuals are exhibits in this complaint.

[00:43:30] Speaker 03:
I thought I heard, maybe I misheard, the FAA counsel say that the company didn't have them so it couldn't have performed work in accordance with them because it didn't have the manuals.

[00:43:41] Speaker 00:
Well, the transcript describes that the

[00:43:47] Speaker 00:
Dr. Q and the PMI reviewed these manuals, actually said, and now I'm going to talk about review of the manuals.

[00:43:54] Speaker 03:
Can you say they're in evidence?

[00:43:56] Speaker 00:
They're in evidence, and the manuals themselves are exhibits to the... He had the inspection manuals, not the Omaha manuals.

[00:44:05] Speaker 00:
Well, the inspection manuals, but he did not have access to the OEM design specs, and that's undisputed, but the design...

[00:44:16] Speaker 00:
the tasks that he was performing were approved based on the mil specs and those are in the op specs and they list 61 pages, two pages of op specs of what the FA approved for him to use with the mil spec and other approved data and then 61 pages of a list of the bearings by manufacturer that he was authorized

[00:44:41] Speaker 00:
to perform these tasks on.

[00:44:46] Speaker 00:
In addition to the technical data that was admitted in evidence, the transcript describes other data that was discussed and provided to the inspectors.

[00:45:02] Speaker 00:
So the idea that there was no technical data does not make sense, except they seem to be arguing on appeal that

[00:45:11] Speaker 00:
The mil-spec is not technical data because it requires OEM information, but the mil-spec was approved by the FAA and cited in the op-specs, and the mil-spec refers the

[00:45:31] Speaker 00:
122, that TO 122 refers to TO 102, which provides explicit instructions on how to assemble and disassemble.

[00:45:40] Speaker 00:
And that was the basis for this activity.

[00:45:43] Speaker 03:
Tell me what your understanding of the falsity charge is.

[00:45:50] Speaker 00:
Well, the inspector admitted that the statement was not false.

[00:45:55] Speaker 00:
And so the ALJ determined that that violation

[00:46:00] Speaker 00:
was not supported by evidence.

[00:46:02] Speaker 00:
And then the NTSB, on its own, alleged that this was an omission, but omission is not alleged in the complaint.

[00:46:11] Speaker 03:
So I don't think... What is your understanding of the alleged omission?

[00:46:17] Speaker 03:
What was omitted?

[00:46:19] Speaker 00:
Inspector Petticora thought that all of... And the NTSB said that all of the maintenance work

[00:46:26] Speaker 00:
that was performed by arrow bearings should be set forth in Block 12.

[00:46:33] Speaker 00:
And that's the first time anyone has ever, and that's contrary to FAA guidance.

[00:46:39] Speaker 00:
There are other blocks that have the word overhaul, which there's a list of ways to fill out that block.

[00:46:47] Speaker 00:
in the FAA guidance, and that provides a definition of what that word means, and it says put overhaul in the box, and it means this definition.

[00:46:56] Speaker 03:
There's not that much room.

[00:46:58] Speaker 03:
There's not that much room in block 12.

[00:47:01] Speaker 00:
Right.

[00:47:02] Speaker 00:
So he followed FAA guidance.

[00:47:05] Speaker 00:
He had an attorney advising him on how to fill out these forms, and also the PMIs were approving an Infector Pettacora

[00:47:15] Speaker 00:
had reviewed during the time of his time on the job, had reviewed these and said they were okay, and then all of a sudden they weren't okay.

[00:47:26] Speaker 00:
So I don't think there was any falsity on these documents, and that was admitted by Mr. Petticora.

[00:47:37] Speaker 01:
Thank you, Council.

[00:47:38] Speaker 01:
Council, the case is submitted.