[00:00:00] Speaker 03: Case number 20-1291, Warbird Adventures, Inc. [00:00:04] Speaker 03: and Tom Richard Petitioners versus Federal Aviation Administration. [00:00:09] Speaker 03: Mr. Wynton for the petitioners, Mr. Starcher for the respondents. [00:00:14] Speaker 03: Good morning. [00:00:15] Speaker 03: Mr. Wynton, you may proceed when you're ready. [00:00:17] Speaker 02: Thank you. [00:00:18] Speaker 02: Good morning, Your Honor. [00:00:19] Speaker 02: Good morning. [00:00:19] Speaker 02: May it please the court, counsel. [00:00:21] Speaker 02: My name is Gregory Wynton and I represent Warbird Adventures and Tom Richard, the petitioners in this matter. [00:00:28] Speaker 02: It's a very simple case, which is interesting because it involves 75 years of well-documented aviation history. [00:00:36] Speaker 02: And the FAA's Emergency Cease and Desist Order, which was basically issued against my client to stop them from immediately providing flight training in a limited category aircraft, which is a surplus military World War II aircraft, for flight training for hire [00:00:58] Speaker 02: without an exemption to the regulation. [00:01:00] Speaker 02: And so we have to look at the regulation history to determine whether the FAA ever intended to limit the provision of flight training for hire in these aircraft. [00:01:12] Speaker 02: Now the FAA's order must fail for two reasons. [00:01:14] Speaker 02: One, specifically, it's an abuse of discretion. [00:01:17] Speaker 02: It's not supported by any law and it's arbitrary and capricious, more significantly, [00:01:23] Speaker 02: It fails the substantial evidence test. [00:01:26] Speaker 02: Remember, the FAA's emergency authority and the emergency order in this case was based upon the finding by the administrator that an emergency exists related to safety and air commerce. [00:01:38] Speaker 02: What's the basis for the order? [00:01:40] Speaker 02: It's the failure to comply with the agency's interpretation. [00:01:44] Speaker 02: It was an interpretation, an anomalous interpretation issued by letter in 2014, which we call the Mars interpretation because it was written to Mr. Gregory Mars and that appears as JA-12 in the Joint Appendix. [00:01:56] Speaker 02: And what that said was the only way to provide flight training for hire in a limited category aircraft is pursuant to an exemption. [00:02:03] Speaker 02: Well, let's look at the history, right? [00:02:07] Speaker 02: And that's what I did. [00:02:08] Speaker 02: And many things were learned during that process, but most importantly, I found that even the FAA in issuing the Morris interpretation and the emergency order either didn't do the history research, which is concerning, or they did their history research and [00:02:26] Speaker 02: issued the order anyway, which is contrary to law. [00:02:28] Speaker 02: But what did I find out? [00:02:29] Speaker 02: 1946, the end of World War II, we had surplus military aircraft. [00:02:33] Speaker 02: Nobody knew that there was going to be a demand for these airplanes. [00:02:36] Speaker 02: So the CAB, Civil Aeronautics Board, predecessor to the FAA, [00:02:41] Speaker 02: actually enacted and promulgated a regulation, part nine, that said, okay, we'll allow civilians to use these surplus military aircraft, including those that were built specifically designed by the military for training purposes, high-performance military training. [00:02:57] Speaker 02: That's great. [00:02:58] Speaker 02: And so they issued the regulation, which had a limitation. [00:03:02] Speaker 02: I'll rate it. [00:03:03] Speaker 02: This part is for the purpose of making available to the public [00:03:06] Speaker 02: certain military surplus aircraft, which were originally designed for the military services of the United States for combat and other specialized purposes, IE flight training, and which experienced military service has shown to be safe for operation. [00:03:22] Speaker 02: However, there was a caveat. [00:03:23] Speaker 02: The CAP made these aircraft available to the public so long as the flights are neither for carrying passengers or cargo for hire. [00:03:35] Speaker 02: Okay. [00:03:36] Speaker 02: Didn't say anything about limiting flight training at that point. [00:03:38] Speaker 02: Now keep in mind in 1945, a year before the regulation was just enacted that I read, the FAA and CAB actually defined the term passenger, which was an occupant of the aircraft, other than a crew member. [00:03:50] Speaker 02: So there's a reason why the CAB said you can't carry a passenger. [00:03:54] Speaker 02: It didn't say you can't carry a crew member. [00:03:56] Speaker 02: And in fact, when the CAB enacted part nine, one of the certification requirements, which still holds true today was a placard prominently displayed in the passenger compartment of the aircraft. [00:04:08] Speaker 02: And by the way, this placard is still in Tom Richards' aircraft, 75, almost 80 years later. [00:04:13] Speaker 02: This is a military type aircraft, and under the civil air regulations shall not be used for the carriage of passengers or cargo for compensation of hire. [00:04:24] Speaker 02: Every year that aircraft is inspected and that placard has to remain in the aircraft and it remains there today. [00:04:30] Speaker 02: So 1949 the CAB continued to enact regulations and they said in that case student instruction shall not be considered the carriage of persons for compensation or hire. [00:04:43] Speaker 02: So there's an exclusion for crew members and there's an exclusion for flight instruction. [00:04:48] Speaker 02: There's no question about that. [00:04:49] Speaker 02: The FAA's inquiry into this issue should have stopped right there in that, but it didn't. [00:04:55] Speaker 02: So what happened in 1962? [00:04:56] Speaker 02: The FAA amended part one definitions and they removed the term passenger. [00:05:03] Speaker 02: So now it's no longer a passenger can't be carried for hire, but they replace it with the word person. [00:05:08] Speaker 04: The FAA suggests- May I interrupt you for a second? [00:05:11] Speaker 04: I just want to be certain about this. [00:05:14] Speaker 04: You say the amendment to this regulation [00:05:18] Speaker 04: that changed the word passenger to persons happened in 1962. [00:05:22] Speaker 04: Correct. [00:05:23] Speaker 04: And so that presents a problem for you, doesn't it? [00:05:29] Speaker 04: Not at all, because you may. [00:05:33] Speaker 04: Well, actually, it's not a problem for you. [00:05:35] Speaker 04: It's a problem for the FAA. [00:05:36] Speaker 04: And the problem is this, that if you go to the Federal Register [00:05:42] Speaker 04: that you're talking about in that year, the preamble says that they were intending no substantive changes. [00:05:51] Speaker 04: Correct. [00:05:52] Speaker 04: Correct. [00:05:53] Speaker 02: In fact, the language. [00:05:54] Speaker 04: So the point is that if in fact that's when the amendment occurred, the amendment from passenger to person didn't change anything. [00:06:03] Speaker 04: The FAA relies on the idea that it's persons rather than passengers. [00:06:08] Speaker 02: Right. [00:06:09] Speaker 02: And specifically the language was in the Federal Register, this did not change any of the pre-existing regulatory requirements. [00:06:15] Speaker 02: Right. [00:06:16] Speaker 02: So anyway, look, then we have in 1998, the first exemption was granted, right, which meant specifically that the FAA CAB was aware from 1946 to 1998, 52 years, [00:06:30] Speaker 02: that the public was using this type of aircraft, this military trainer, to provide flight training for hire without an exemption. [00:06:41] Speaker 02: Makes no sense. [00:06:42] Speaker 02: Again, the increase should have stopped there. [00:06:44] Speaker 02: So the FAA either knew that there was no law to support this Morse interpretation and they issued it anyway. [00:06:51] Speaker 02: And then in 2020, the assistant chief counsel issued the emergency cease and desist order based on the anomalous interpretation or they just didn't do the research at all. [00:07:02] Speaker 03: Well, also based on information communicated to your client, [00:07:11] Speaker 03: that he was violating the regulation. [00:07:13] Speaker 03: I mean, even if he has an argument about that, going out and persisting in flying and advertising flight training in the face of that is scoff law behavior, is it not? [00:07:30] Speaker 02: Oh, not at all. [00:07:31] Speaker 02: Keep in mind, we have due process rights. [00:07:32] Speaker 02: And remember, the FAA, within a two or three week period, issued an order of suspension, issued a civil penalty against Warburg, and it issued this emergency cease and desist, all of which are presently under review by either the National Transportation Safety Board or this honorable court. [00:07:50] Speaker 02: So my client is not guilty until proven innocent. [00:07:54] Speaker 03: And has your client, since the briefing, requested an exemption [00:07:59] Speaker 03: proceeded through that process or no? [00:08:01] Speaker 02: We have not because the exemption is not applicable in this case. [00:08:05] Speaker 02: Specifically if you look at the original exemption granted to stallion which is the gold standard that the FAA presented to us and by the way the FAA didn't present the original stallion exemption, I did. [00:08:16] Speaker 02: It's exemption number 6811 in the reply addendum 9 and it said specifically [00:08:22] Speaker 02: The FAA assured Stallion 51 that because Stallion 51's aircraft have dual cockpits and fully functioning dual controls, and because the training would be considered a crew member and not a passenger, Section 91.315 would not apply. [00:08:40] Speaker 02: That's the FAA's position. [00:08:41] Speaker 02: We didn't make this up. [00:08:43] Speaker 02: So we're adopting the FAA's position, which is the correct position all along. [00:08:47] Speaker 02: I see that I've used my time. [00:08:48] Speaker 02: I'd like to reserve the rest for you. [00:08:50] Speaker 04: I have a couple of questions for you. [00:08:52] Speaker 04: First of all, what is the status of the regular administrative proceeding, not the emergency obvious? [00:09:00] Speaker 02: I'm glad that you asked, Judge. [00:09:02] Speaker 02: I asked that last week. [00:09:03] Speaker 02: And so the chief judge from the National Transportation Safety Board has been sitting on a motion to stay that was filed by the FAA three months ago. [00:09:12] Speaker 02: And the basis for the motion to stay by the administrator is [00:09:15] Speaker 02: This case is pending before the DC Circuit Court of Appeals. [00:09:19] Speaker 02: So they're waiting for you to put a hammer on the nail. [00:09:23] Speaker 04: We should be waiting for them because if they rule, then this case is moot. [00:09:27] Speaker 02: Well, not necessarily because if they rule against my client, I can appeal it and then it would wind up right back in the same chambers that we are today. [00:09:36] Speaker 02: With a different issue. [00:09:38] Speaker 02: Well, that's a good point, right? [00:09:41] Speaker 02: We're asking the court here to deny and vacate and set aside the FAA order, not only because it fails for lack of evidence concerning the emergency, but also that it is not supported by law, right? [00:09:54] Speaker 02: The emergency cease and desist order. [00:09:56] Speaker 02: If there's any question about the FAA's emergency authority, we all just saw it last Tuesday. [00:10:01] Speaker 02: when the FAA issued an emergency order against this triple seven Boeing triple seven, but not they didn't ground all airliners. [00:10:07] Speaker 02: They didn't ground all triple seven aircraft. [00:10:10] Speaker 02: They grounded only those with the Pratt and Whitney engine that had a problem. [00:10:12] Speaker 02: It was scientifically designed to that caused a problem. [00:10:17] Speaker 02: And the FAA pinpointed that was the emergency. [00:10:21] Speaker 04: OK, my second question, my second question is the is there anything in the record to indicate that your client [00:10:30] Speaker 04: during or after the negotiations with the FAA, in fact, continued to fly training pilots. [00:10:43] Speaker 04: The only thing I see is that your client advertised that it could do it. [00:10:48] Speaker 04: but did it in fact fly or train in-flight, do in-flight training? [00:10:55] Speaker 02: What's the answer? [00:10:59] Speaker 02: So the answer is no. [00:11:00] Speaker 02: When I got the letter from the FAA, I responded and said, look, the flight training itself, we don't believe is a violation of the regulation, but they are threatening to shut you down with an emergency cease and desist order and an emergency revocation of his pilot certificate. [00:11:17] Speaker 02: So that's why he shut down the entire air show season. [00:11:20] Speaker 04: There was no in-flight training after that period when you received the letter, but there was advertising. [00:11:27] Speaker 04: It was just advertising, right? [00:11:28] Speaker 02: Yeah, I had him take down the, yes, correct. [00:11:30] Speaker 02: He took down the website not long after that. [00:11:33] Speaker 02: What's the date on the letter? [00:11:35] Speaker 02: The letter to me was February, well, [00:11:38] Speaker 02: There were a series of letters between myself and the FAA. [00:11:44] Speaker 02: Pardon me. [00:11:45] Speaker 02: So Naomi Tsuda, July 20 of 2020 is when I wrote back to her. [00:11:51] Speaker 02: July 22, 2020, I wrote to her. [00:11:55] Speaker 03: And July- There was an April, 2019 notification from the FAA about its position that Warburg was violating 91.315. [00:12:09] Speaker 02: I'm looking at the joint appendix. [00:12:12] Speaker 02: For some reason, I have all of my response letters to her in sequence to Naomi Tsu, the Assistant Chief Counsel for Enforcement, but I don't have her initial letter. [00:12:20] Speaker 02: The only initial, I'm sorry, it was July 17, 2020, that she wrote. [00:12:25] Speaker 01: Mr. Winn, on JA6, which is on that page, paragraph 11, it says, honor about April 3rd, 2019, [00:12:39] Speaker 01: FAA inspectors advised Tom Richard that operating plane carrying persons for compensation constituted a violation of 91.315. [00:12:50] Speaker 01: Now that is to your credit, not a formal letter, I don't think. [00:12:59] Speaker 01: I think the formal letter that you're talking about comes in 2020. [00:13:04] Speaker 01: But there was that notification [00:13:08] Speaker 01: by the FAA. [00:13:10] Speaker 01: And then if you skip two paragraphs down to paragraph 13, on January 31st, 2020, Warbird operated the plane. [00:13:21] Speaker 02: Correct. [00:13:22] Speaker 02: Was there a question relating to those? [00:13:23] Speaker 03: Go ahead, Judge Walker. [00:13:27] Speaker 03: Please, Judge Miller. [00:13:31] Speaker 01: I'll do you, Judge Miller. [00:13:32] Speaker 03: So the point was just that FAA inspectors advised Richard as of April 2019 that carrying persons for compensation was a violation. [00:13:43] Speaker 03: And then there's a further allegation that after that communication that Warbird not only continued to advertise, but flew. [00:13:51] Speaker 03: And this is just relevant to Judge Randolph's effort to get clarification on whether the only continuing conduct that was the basis for an emergency order was advertised or whether it also included flying. [00:14:05] Speaker 03: And one way of reading this, it seems the clearest way of reading this is that after [00:14:11] Speaker 03: Warburg was on notice of the FAA's position. [00:14:14] Speaker 03: It did continue to fly with passengers, with people on board. [00:14:22] Speaker 02: Well, an inspector's notice of apparent violation, and that's all an inspector could do, versus a letter from the assistant chief counsel for enforcement at the FAA, which was JA 16, David, July 17, 2020, has a much different effect, right? [00:14:37] Speaker 02: An FAA inspector cannot come onto an airfield and stop a pilot from operating for an alleged violation, right? [00:14:46] Speaker 02: But they can put a stop order on an aircraft if they find it to be blatantly un-airworthy, which is not the case here. [00:14:51] Speaker 02: So, correct, we continue to fly after the inspector advised my client that he may be in violation, but after Naomi Tsuda from the FAA Assistant Chief Counsel's Office issued the July 17, 2020 letter, we did not continue offering flight training for hire in a limited category aircraft. [00:15:08] Speaker 03: And was that position that voluntary, you know, temporary acquiescence with the FAA's position ever communicated to the FAA? [00:15:16] Speaker 02: Oh, yes. [00:15:17] Speaker 03: In other words, if you're the FAA and you're thinking, I understand that Mr. Whitten's client has a different position on the law here. [00:15:26] Speaker 03: If the FAA's responsibility is to protect the public, what basis would the FAA have to believe that Warbird would not be flying during that period when Warbird was challenging? [00:15:46] Speaker 03: the FAA's position. [00:15:47] Speaker 02: Well, I was in constant communication with the FAA throughout the process after these letters and even after the emergency cease and desist order was issued. [00:15:55] Speaker 02: And I let them know that we're not flying, right? [00:15:59] Speaker 02: But it begs the question as whether or not the operation of my client's aircraft for hire in the instructional setting is an emergency related to air safety. [00:16:11] Speaker 02: It's not. [00:16:12] Speaker 03: Well, I mean, there is [00:16:16] Speaker 03: basis in the record to think that unauthorized flight of this kind of plane does present a safety risk. [00:16:26] Speaker 02: Oh no, that's merely say so of the agency. [00:16:28] Speaker 02: There's absolutely no evidence to support that whatsoever. [00:16:31] Speaker 02: I mean, this aircraft was built designed for flight training to military specifications. [00:16:35] Speaker 02: When something is built to a mil-spec military specifications, that's like the gold seal of engineering. [00:16:42] Speaker 02: And the fact that this aircraft's been around, it's gonna be 80 years now, is still flying. [00:16:46] Speaker 01: I thought the FAA said that actually during World War II, we were understandably in something of a rush. [00:16:53] Speaker 01: to build as many planes as we could. [00:16:56] Speaker 01: And so we actually didn't require the same kind of safety standards that we later required and that we now require. [00:17:02] Speaker 02: No, there's no evidence of that whatsoever. [00:17:04] Speaker 02: Absolutely not. [00:17:05] Speaker 03: I mean, JA-17 is what I think we're thinking about, where the FAA says, you know, states its position. [00:17:13] Speaker 03: This planned operation could pose a significant risk to aviation safety. [00:17:18] Speaker 03: As you're aware, limited category aircraft were originally produced for the military. [00:17:22] Speaker 03: These military surplus were produced in the 40s and this one was manufactured in 42. [00:17:27] Speaker 03: They're generally older. [00:17:29] Speaker 03: They're not inspected and approved for airworthiness according to the same standards as civilian aircraft. [00:17:36] Speaker 03: There's serious public safety concerns because of increased public interest in these flights. [00:17:43] Speaker 03: And their conclusion is that these types of operations pose impermeable risks [00:17:52] Speaker 03: to air safety. [00:17:53] Speaker 03: And in your view, that's not enough to support a safety-based action on FAA's part. [00:18:00] Speaker 02: It's not true. [00:18:01] Speaker 02: Correct. [00:18:01] Speaker 02: It's not true. [00:18:02] Speaker 02: They are inspected in accordance with regulations. [00:18:04] Speaker 02: In fact, the FAA in their brief admits there are experimental certificated aircraft. [00:18:09] Speaker 02: The same airplane, the P-40 Warhawk, can be an experimental certificate on airworthiness or limited category. [00:18:15] Speaker 02: The FAA admits that the experimental is not as safe as the limited, but yet the FAA allows flight training for hire in an experimental version of the same. [00:18:24] Speaker 03: Where people have obtained [00:18:26] Speaker 03: the permission from the FAA. [00:18:28] Speaker 03: That's the issue. [00:18:28] Speaker 03: And you're saying, well, no, we have a right to do that, whether the FAA wants to, you know, whether we've gone through and gotten the authorization or not. [00:18:38] Speaker 03: Are you raising a discriminatory enforcement claim here? [00:18:45] Speaker 02: If that's what it is, yes, absolutely. [00:18:47] Speaker 02: Because remember, I just read to you the grant of exemption, the one and only first grant of exemption for the same type of aircraft. [00:18:54] Speaker 02: The FAA assured Stallion 51 that because the trainee would be considered a crew member and not a passenger, 91.315 would not apply. [00:19:03] Speaker 02: Again, that's the reply addendum, page 10. [00:19:07] Speaker 02: You can't make this up. [00:19:08] Speaker 02: This is the FAA's document. [00:19:09] Speaker 04: I have one more question that I was going to ask you. [00:19:13] Speaker 04: I just slipped my mind. [00:19:15] Speaker 04: Who owns this aircraft? [00:19:17] Speaker 02: It's owned by an LLC. [00:19:19] Speaker 02: That's, I guess, part owned by Tom Richard himself, which brings up a good question. [00:19:25] Speaker 02: Because if Tom Richard... I'm sorry, you cut out. [00:19:29] Speaker 02: Oh, sorry. [00:19:30] Speaker 02: Yeah. [00:19:30] Speaker 02: If you could repeat that. [00:19:33] Speaker 02: A separate entity, separate LLC, P-40 LLC, I think is the name of it. [00:19:37] Speaker 04: And your client, Mr. Richard, is that his name? [00:19:41] Speaker 04: Is the president of that company? [00:19:45] Speaker 02: I believe so, but I'm not absolutely sure. [00:19:47] Speaker 02: He is part owner, if not complete owner of that entity. [00:19:51] Speaker 04: The company. [00:19:51] Speaker 04: So if he goes up without a passenger, without no in-flight, he just operates the plane. [00:20:01] Speaker 04: I take it that [00:20:02] Speaker 04: And the corporation owns it. [00:20:04] Speaker 04: I take it that the corporation compensates him. [00:20:08] Speaker 04: Isn't that- It goes the other way around, actually. [00:20:10] Speaker 02: He has to compensate the corporation because the corporation is a shell company that owns an airplane, right? [00:20:16] Speaker 02: And so the only way the plane could fly is if Mr. Richard gives money to the corporation, which then that corporation has operated a limited category aircraft carrying Mr. Richard as a passenger or person, I should say, according to the FAA. [00:20:29] Speaker 02: That doesn't work. [00:20:30] Speaker 04: And the limited liability- That's where I was going. [00:20:34] Speaker 04: Right. [00:20:34] Speaker 04: Because it means that that nobody a plane operated or owned by a separate corporate entity, nobody can fly it. [00:20:44] Speaker 04: One of these this type of aircraft without an exemption. [00:20:49] Speaker 02: Correct. [00:20:50] Speaker 02: Right. [00:20:51] Speaker 02: The FAA actually calls that a corporate flight department when you set up a company just to own an aircraft. [00:20:55] Speaker 02: And it's got to be legally done in a commercial setting. [00:20:58] Speaker 02: But this is flight training. [00:20:59] Speaker 02: So it's different. [00:21:01] Speaker 04: OK. [00:21:04] Speaker 02: I have nothing more. [00:21:05] Speaker 02: I'd like to reserve some time for rebuttal. [00:21:06] Speaker 02: Thank you. [00:21:09] Speaker 03: Thank you. [00:21:09] Speaker 03: We'll give you two minutes for rebuttal. [00:21:11] Speaker 03: Mr. Starcher. [00:21:14] Speaker 00: Good morning, Your Honors, and may it please the Court, Jack Starcher, on behalf of the Federal Aviation Administration. [00:21:20] Speaker 00: As was discussed in the other side's argument, the FAA, during the course of more than a year, repeatedly communicated to petitioners that their conduct ran afoul of the plain text [00:21:34] Speaker 00: of section 91.315. [00:21:37] Speaker 00: And despite that ongoing back and forth during which time, as sort of documented in the administrative record, during which time petitioners raised many of the same points that they now raised before this court, FA responded by pointing petitioners not only to the text of 91.315 as it currently exists, but also to the text of various neighboring regulations. [00:22:00] Speaker 00: which which which use materially similar language referring to a caring of persons or property for compensation or higher in a way that is that is totally inconsistent with petitioners proposed reading of section 91315 and petitioners really provide no [00:22:16] Speaker 00: response to what in petitioners view these other regulations mean if flight training is not included in the in the concept of carrying persons or property for compensation or hire if if that phrase [00:22:33] Speaker 03: Just to go back, he claims that this change from passenger person was 1962. [00:22:41] Speaker 03: And I had the impression in my own review that there was a December 1950 federal edition notice that came down for us. [00:22:49] Speaker 03: Because he's citing to something that he says at the time, contemporaneous with that, they did not mean to exclude training at all. [00:22:58] Speaker 00: Right, so in 1946, you have the enactment of the predecessor that would eventually become what is now section 91315, and that is the time at which that predecessor used the term passengers. [00:23:15] Speaker 00: But just a few years later, as you say, I have the same federal registry notice from December 15th, 1950, which is it's 15 Fedreg 8895. [00:23:28] Speaker 00: And it was at that time, so just a few years after this 1946 passenger's use, that the regulation changed. [00:23:38] Speaker 00: To be sure, in that regulation, there is a sort of preamble that says, in most significant respects, this part does not attempt to change current procedures or practices. [00:23:53] Speaker 00: But then the regulation goes on to, in fact, [00:23:57] Speaker 00: A change to this to this regulation. [00:24:00] Speaker 00: So it's, you know, so the one thing we do know about this change is that it is a change from the word passengers to the word persons and just sort of on its face. [00:24:09] Speaker 00: The word persons is is a broader more capacious term than than the term passengers, just as a matter of sort of natural English language use and so so from 1950 until today, the various iterations of this regulation. [00:24:26] Speaker 00: culminating in what is now 14 CFR 91 315 have continually used the phrase, you know, persons or property for compensation or hire, which is materially different from regulations, other regulations that FAA still has on the books that continue to use to refer to passengers. [00:24:44] Speaker 00: Those regulations that use the word passengers are almost all or all have to do [00:24:50] Speaker 00: with certification requirements for pilots, whereas here we're talking about certification requirements for an aircraft itself. [00:24:59] Speaker 00: And so it makes sense that those terms are different. [00:25:03] Speaker 04: And again, I do just want to underscore, as pointed out in our briefing, and again, petitioners really have- I don't really understand the certification for pilots versus certification for the aircraft. [00:25:19] Speaker 04: Can you explain that? [00:25:21] Speaker 00: Yes, so the FAA regulates both pilots and planes and regulates those things separately. [00:25:28] Speaker 00: So any aircraft that is operating in the United States today must be certified in a specific category by the FAA saying this is a plane that is airworthy to perform the following set of functions and is safe to perform the following set of functions. [00:25:46] Speaker 00: And there are different categories. [00:25:48] Speaker 00: There's the standard category, which has various subcategories, and that's where most sort of commercial airplanes exist. [00:25:54] Speaker 00: And then there's the land of special category certificates, which is where we are now. [00:25:59] Speaker 00: That whole scheme is sort of separate from another scheme that FAA has to make sure that the people flying any aircraft. [00:26:08] Speaker 04: Well, let me stop on the certification. [00:26:11] Speaker 04: This plane has not been grounded, has it? [00:26:14] Speaker 00: Not to my, you know, I think this easiness disorder is limited to flights in violation of this regulation, which means that you could, you know, that this flight could still be operated in conformance with this regulation. [00:26:26] Speaker 00: In other words, for any, for private, for recreational uses, as long as it's not being, you know, used to carry persons or property for compensation or higher. [00:26:40] Speaker 00: So yes, that's correct. [00:26:43] Speaker 00: But again, just to underscore this, as explained in the briefing, multiple other regulations that are very close in proximity to 91-315 and that place very similar limitations on other kinds of special category aircraft use identical or materially similar phrasing and refer to this prohibition against carrying of persons or property for compensation or higher. [00:27:11] Speaker 00: And then move on to in various ways, say, despite or carving out from that prohibition, flight training. [00:27:20] Speaker 00: And if the carriage of persons or property for compensation or hire doesn't include flight training, as petitioners suggest, then all of these other regulations that expressly provide ways for people to provide flight training, notwithstanding that prohibition, just simply don't make any sense. [00:27:37] Speaker 00: And again, I don't think there's any response to that. [00:27:41] Speaker 01: Mr. Starcher, let me ask about something that I think Judge Randolph was asking about when Mr. Winton was speaking. [00:27:50] Speaker 01: The official letter from the FAA told a petitioner on July 17th, 2020, it's illegal for you to do what you're doing. [00:28:06] Speaker 01: Yes, an inspector had mentioned a year earlier, but anyone who's dealt with [00:28:12] Speaker 01: you know, for example, a building code inspector while doing a home renovation, you know, knows that sometimes, you know, a random inspector doesn't always speak officially and with the full authority of an agency. [00:28:27] Speaker 01: So the agency itself said, did not say what you're doing is illegal in an official authoritative way until July 17th, 2020. [00:28:37] Speaker 01: And then I see nothing in the record and certainly nothing in the emergency order. [00:28:43] Speaker 01: that provides any evidence, substantial evidence that the petitioner was in violation of the law after he received that letter on July 17, 2020. [00:28:57] Speaker 01: So tell me why we shouldn't say this. [00:29:01] Speaker 01: There's no substantial evidence that petitioner was in violation of the law when the emergency order was issued. [00:29:09] Speaker 00: So two responses, first a factual. [00:29:11] Speaker 00: So if you look at JA 13, there were discussions that that's the first, I think, formal letter you have from the FAA. [00:29:20] Speaker 00: This is from February 14, 2020. [00:29:22] Speaker 00: That's a letter memorializing a meeting that was had with petitioners in the FAA. [00:29:28] Speaker 00: So there was, even before July, there was an official sort of. [00:29:32] Speaker 01: But Mr. Starcher, that February 14 letter is after January 31. [00:29:37] Speaker 01: And January 31 is the last time that the petitioner flew the airplane, at least the last time we know based on anything in this record. [00:29:51] Speaker 00: If you look at the July 22 letter, which is this is j 24 to 25 and particularly I'm looking at j 25 here during that back and forth that happened in July, which was which was spurred by FAA becoming aware of Facebook advertisements. [00:30:10] Speaker 00: That were posted to Facebook soliciting people inviting people to come and fly this in this aircraft at upcoming flight exhibition shows. [00:30:19] Speaker 00: there's this paragraph on page J25 saying, again, commemorating, memorializing FAA's view on this and saying, accordingly, I ask that you respond to this letter stating whether your clients intend to charge persons to carry them in flights in the P40 as the website and advertisements indicate. [00:30:35] Speaker 00: And if your response does not provide sufficient assurances that your clients do not intend to do this, then at that point, the cease and desist order would be issued. [00:30:44] Speaker 00: And so FAA was making [00:30:47] Speaker 00: very clear its position that this was unlawful. [00:30:50] Speaker 00: It gave petitioners the chance to say, I think, exactly what you had in mind, which is, no, no, we're not doing this. [00:30:56] Speaker 00: We haven't been doing this. [00:30:57] Speaker 00: We don't intend to do this. [00:30:59] Speaker 00: And if you look at their response, their response continued to essentially rely on the same theory that they presented this court, which is presumably that, no, no, we don't intend to do this because we're intending only to take people up in the air for flight training. [00:31:15] Speaker 01: Is that how substantial evidence works, Mr. Starcher, that an agency can say to a person, prove to us that you're not violating the law. [00:31:30] Speaker 01: And if you don't prove it to us, then we conclude you are violating the law. [00:31:36] Speaker 00: So to be clear that, you know, I guess first up that the season disorder is only preventing [00:31:42] Speaker 00: petitioners from flying this aircraft in violation of the regulation. [00:31:45] Speaker 00: So to the extent that the state of the world was that petitioners never intended to do that and never intended to operate this plane in violation of the regulation, then it's a cease and desist order that does nothing. [00:31:58] Speaker 01: And that goes to Judge Randolph's mootness inquiry, right? [00:32:02] Speaker 01: It's possible that this emergency order [00:32:04] Speaker 01: dispute would be moot, and then the merits would be fully litigated at the agency level before coming to us. [00:32:13] Speaker 00: I don't believe that's correct. [00:32:14] Speaker 00: So the issues presented in the two proceedings that are still going on in the sort of agency level are specific enforcement actions against both petitioners separately, Richards and Warbird, [00:32:29] Speaker 00: And I believe my understanding of those is those are both based on showing proven past violations. [00:32:36] Speaker 00: And so those really are more, I think those are based on past proven, again, I'm not as intimately familiar with those with those two proceedings, but the issue presented in this petition is whether or not this cease and desist order, which continues to have effect, is lawful. [00:32:52] Speaker 00: And so I think regardless of what happens in those administrative proceedings, [00:32:55] Speaker 00: this court still has a live question before it in any event about whether or not this cease and desist order is lawful. [00:33:02] Speaker 03: And is there a proceeding pending for obtaining certification or there isn't because Warbird doesn't think it needs that? [00:33:12] Speaker 00: There's no pending exemption petition. [00:33:15] Speaker 00: So Warbird has never, petitioners have never sought the kind of exemption that Stallion 51 Corporation has and that numerous other [00:33:24] Speaker 00: entities have received, which allow those entities to conduct flight training or living history or other kinds of operations in these limited category aircraft for compensation. [00:33:35] Speaker 03: And I had the impression that the FAA was relying on the continued advertising as circumstantial evidence that there were training flights going on. [00:33:44] Speaker 03: Is that wrong? [00:33:45] Speaker 00: No, that's correct. [00:33:46] Speaker 00: I mean, there was a system [00:33:50] Speaker 00: You know, I think on on on on warbirds website where you can sort of click through and through an online portal sign up for. [00:33:56] Speaker 00: flight trainings and I think I think more more concretely, you know. [00:34:01] Speaker 00: Warbird that this plane was scheduled to be at specific flight exhibition shows you know sort of at specific dates, I think, coming up shortly around the time the the. [00:34:12] Speaker 00: emergency season justice order was issued. [00:34:15] Speaker 04: Wait a minute. [00:34:16] Speaker 04: That would have been perfectly legal. [00:34:18] Speaker 04: If what what this order prohibits is carrying somebody else in the aircraft. [00:34:27] Speaker 04: I mean, it could go to a flight show. [00:34:30] Speaker 04: And the president of the company can pilot the plane and there's nothing indicating that that is in any violation. [00:34:38] Speaker 04: Isn't that right? [00:34:39] Speaker 00: That's correct. [00:34:40] Speaker 00: Sorry, to complete that, I sort of sort of led with this and at those flight shows that they were, you know, there were advertisements that I think the Facebook advertisement that took this all off was, you know, sign up for a flight in this plane at the upcoming. [00:34:53] Speaker 04: Right. [00:34:54] Speaker 04: And the only evidence that I've found is, is of advertisements, not of flights after July. [00:35:01] Speaker 00: Right. [00:35:01] Speaker 00: And to be clear. [00:35:03] Speaker 04: In flight training, I'm sorry. [00:35:07] Speaker 00: Sorry. [00:35:07] Speaker 00: And to be clear, that is, you know, the reason why these sorts of cease and desist orders are so uncommon is because it is sort of an uncommon circumstance that FAA found itself in here where it saw advertisements [00:35:19] Speaker 00: where someone was saying, I am going to go out and conduct flights, or I'm offering to the public flights that are in violation of a regulation. [00:35:27] Speaker 00: That's the way in which this case is really like the Ickes case from the Third Circuit. [00:35:31] Speaker 00: It just doesn't happen that often that FAA learns in concrete or sort of has good reason to believe that a violation is going to take place before it happens. [00:35:43] Speaker 00: again, it's uncommon for people to make advertisements about conduct that FAA has already told them. [00:35:49] Speaker 04: Is there an inconsistency within the agency, on the one hand, allowing this plane to go up with Mr. Richards piloting it and go to shows and so on and so forth, but not to go up with somebody that's getting trained to be a pilot? [00:36:11] Speaker 00: No, Your Honor, this distinction between compensation or higher paid flights, commercial flights. [00:36:19] Speaker 04: No, I understand that. [00:36:20] Speaker 04: I'm not questioning about the regulation. [00:36:24] Speaker 04: I'm talking about the emergency order. [00:36:26] Speaker 04: If it's supposedly based on safety, then how do you explain the FAAs not doing anything about the plane when it shows with lots of people watching and so on and so forth? [00:36:41] Speaker 00: Oh, it's a danger, potential danger to like people on the ground. [00:36:45] Speaker 00: So, you know, there are lots of regulations that FA has in place that have to do and that this is at issue in Ickes was regulations that are concerned with sort of like people watching air shows or present air shows. [00:36:57] Speaker 00: I'm not super familiar with those, but this regulation is really focused on the safety of [00:37:02] Speaker 00: of being in the aircraft and being on board the aircraft and the aircraft's, you know, sort of, you know, the danger it poses to people on board the aircraft, I guess. [00:37:10] Speaker 04: This is a total aside that had nothing, my question has got nothing to do with this case, but I'm curious, this regulation doesn't apply in Alaska, does it? [00:37:20] Speaker 00: I don't know. [00:37:21] Speaker 00: I don't think it does, yeah. [00:37:24] Speaker 00: It might not. [00:37:30] Speaker 00: But I'm not aware of that, so I can't say yes or no. [00:37:34] Speaker 00: But it applies in Florida, which is where the petition is based. [00:37:38] Speaker 00: And if there are no further questions, we ask that the petition for review be denied. [00:37:46] Speaker 03: Just to double-check, Ickes is really the case you rely on for [00:37:54] Speaker 03: validity of the exercise of FAA's emergency authorities? [00:37:57] Speaker 03: Is there anything else you think we should look at? [00:38:00] Speaker 00: I mean, I think if you just look at the text of the statute itself, the text of the statute itself speaks about, you know, if any time in the opinion of the administrator of the flight of the Federal Aviation Administration, that phrasing, in the opinion of, is the sort of phrasing that in other contexts courts, I think, have consistently found expresses an intent by Congress to give pretty broad authority [00:38:23] Speaker 00: to ensure safety in aviation. [00:38:30] Speaker 00: But I think the Ickes case is the case, again, these emergency cease and desist orders are not that common. [00:38:36] Speaker 00: So perhaps it's not surprising that there aren't a lot of cases dealing with these things. [00:38:42] Speaker 00: But that is the case that I think is the most analogous to what we have here. [00:38:47] Speaker 03: And the administrative proceedings, that's not something that your office has any control over, their decision to wait [00:38:52] Speaker 03: versus proceed? [00:38:54] Speaker 00: That's correct. [00:38:55] Speaker 00: We haven't had any involvement of those. [00:38:58] Speaker 00: And my understanding is that they are essentially in a holding pattern waiting on this case, I think. [00:39:05] Speaker 00: But again, I don't have any insight into that beyond what's in publicly available documents. [00:39:11] Speaker 03: Thank you. [00:39:12] Speaker 00: Thank you. [00:39:16] Speaker 03: Mr. Whitten, I think you used up your time, but we'll give you two minutes for rebuttal. [00:39:21] Speaker 02: Thank you very much. [00:39:22] Speaker 02: So just to get back to Judge Randolph's question about the aircraft not being grounded, you know, obviously it's still flying. [00:39:30] Speaker 02: In fact, the FAA at respondents brief page five says, any person who wants to fly in a limited category aircraft, and I quote, is afforded that privilege absent financial consideration. [00:39:40] Speaker 02: That means that the FAA is allowing my client to provide flight training in his aircraft as long as no compensation is exchanged. [00:39:48] Speaker 02: So if somebody buys him a hamburger after the flight training, that's compensation all of a sudden in the ICFA. [00:39:54] Speaker 02: That same flight training scenario becomes unsafe, makes absolutely no sense, isn't supported by evidence in the record. [00:40:01] Speaker 02: First of all, we have to understand something. [00:40:02] Speaker 02: Flight training never has been and never can be [00:40:07] Speaker 02: considered carrying, flight training for hire, considered carrying a person for compensation. [00:40:13] Speaker 02: It would turn the entire industry upside down. [00:40:15] Speaker 02: I'll give you an example. [00:40:16] Speaker 02: I have access to an airplane in the airport. [00:40:18] Speaker 02: I've been a flight instructor for 35 years. [00:40:20] Speaker 02: If George Randolph says to me, let's go to Ocean City to have a hamburger, I can't fly him there if I wasn't going anyway. [00:40:25] Speaker 02: I could give him a lesson. [00:40:27] Speaker 02: We could stop in Ocean City, have a hamburger. [00:40:29] Speaker 02: I can give him a lesson, come back, charge him for flight training, sign his log book, and we have just, [00:40:34] Speaker 02: done what we wanted to set out to do. [00:40:36] Speaker 02: But if he is a person being carried for compensation, I would need to have an air carrier certificate issued by the FAA, which was the FlightNow case, which is another one of my cases before this court. [00:40:47] Speaker 02: You cannot operate an aircraft for compensation carrying a person without an air carrier certificate. [00:40:52] Speaker 02: That would make every flight instructor in the United States have to get a flight instructor air carrier certificate. [00:40:58] Speaker 02: And to answer your question, Judge Randolph about Alaska, [00:41:03] Speaker 02: You quoted a great statement by Holdsworth English law that those regulated by an administrative agency are entitled to know the rules by which the game will be played, right? [00:41:15] Speaker 02: My client didn't know that there was a rule out there that said he couldn't provide flight training for compensation because it's nowhere in the history of the FAA. [00:41:23] Speaker 02: We ask that you vacate and set aside the emergency order, but not only because it's not supported by substantial evidence concerning the safety concern, but because 91.315 of the regulation is contrary to law. [00:41:38] Speaker 02: Otherwise, you're going to see me here again making the same arguments in a year and a half from now. [00:41:42] Speaker 02: And that's just a waste of judicial resources. [00:41:46] Speaker 02: Thank you for your time. [00:41:47] Speaker 02: I appreciate it. [00:41:49] Speaker 03: Thank you, counsel. [00:41:50] Speaker 03: The case is submitted.