Manin v. National Transportation Safety Board

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued October 8, 2010 Decided January 14, 2011

No. 09-1157

MICHAEL GEORGE MANIN,

PETITIONER

v.

NATIONAL TRANSPORTATION SAFETY BOARD AND FEDERAL

AVIATION ADMINISTRATION,

RESPONDENTS

On Petition for Review of an Order

of the Department of Transportation

Kathleen A. Yodice argued the cause and filed the briefs for

petitioner.

Agnes M. Rodriguez, Senior Attorney, Federal Aviation

Administration, argued the cause and filed the briefs for

respondent.

Before: SENTELLE, Chief Judge, WILLIAMS and RANDOLPH,

Senior Circuit Judges.

Opinion for the Court filed by Chief Judge SENTELLE.

SENTELLE, Chief Judge: Michael George Manin petitions

for review of a National Transportation Safety Board (“NTSB”

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or “Board”) order affirming the Federal Aviation

Administration’s (“FAA”) emergency revocation of his airline

transport pilot, flight instructor, flight engineer, and first class

airman medical certificates for failure to provide correct

information about his criminal history on a series of applications

for renewal of his medical certificate. Because the NTSB’s

decision departed from agency precedent without explanation

and was inconsistent with recent case law in this circuit, we

vacate the Board’s order and remand for further proceedings

consistent with this opinion.

I.

Petitioner Michael Manin had for several years before the

events under review held various FAA certificates, including a

first class airman medical certificate, which is a certification by

a physician that the pilot meets medical standards for aircraft

operation. A first class airman medical certificate must be

renewed periodically: every year for pilots under the age of 40

and every six months for pilots aged 40 and older.

The application for renewal of this medical certificate

includes questions regarding the applicant’s criminal history.

The FAA revoked Manin’s airline transport pilot certificate and

his medical certificate in 1994 for intentional falsification of a

medical application, after discovering that he had failed to

disclose a March 1992 conviction for making a false statement

on a passport application. Manin made the proper disclosure on

his next application and was issued a medical certificate in

February 1995. He regularly applied for and received renewals

of his certificate in succeeding years.

On December 14, 1995, Manin was convicted in the

Barberton, Ohio, Municipal Court of disorderly conduct, which

is classified as a “minor misdemeanor” under Barberton’s

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municipal code. He next applied for a medical certificate on

June 1, 1996. Question 18(w) on the application asks: “Have

you ever had or have you now any . . . [h]istory of nontraffic

conviction(s) (misdemeanors or felonies).” Manin answered

“yes” and wrote “previously reported, no change.” His lawyer

confirmed during the administrative proceedings that this

disclosure referred only to the 1992 conviction. On April 8,

1997, Manin was again convicted in Barberton Municipal Court

of disorderly conduct. On subsequent medical certificate

applications, Manin repeatedly failed to disclose either the 1995

or 1997 convictions.

In late 2007, the FAA discovered Manin’s two disorderly

conduct convictions. On June 20, 2008, it issued an emergency

order immediately revoking his flight certificates and his first

class airman medical certificate because of his “multiple

falsifications” on airman medical certificate applications in

violation of 14 C.F.R. § 67.403. Manin filed an answer to this

emergency revocation order, which doubled as an administrative

complaint, and in his answer he asserted the affirmative defenses

that the complaint was stale under NTSB regulations and that

the equitable doctrine of laches applied. He also asserted that he

“belie[ved] that the disorderly charge was a minor summary

offense, [and] would not have to be reported.” The parties filed

cross-motions for summary judgment with the ALJ assigned to

hear the case. The ALJ initially denied both motions, finding

that material issues of fact remained in dispute.

At a hearing before the ALJ on September 16, 2008, the

FAA renewed its motion for summary judgment. The ALJ

granted the motion and affirmed the emergency revocation

order. Manin appealed to the full Board, which affirmed. In its

opinion, the NTSB piggybacked its unelaborated rejection of his

laches defense on its longer discussion of why the stale

complaint rule is inapplicable, stating that the Board has “long

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held that the doctrine of laches is relevant to Board cases only

in the context of the stale complaint rule.” Adm’r v. Manin,

NTSB Order No. EA-5430, 2008 WL 5972912, at *3 (April 13,

2009). The Board also rejected Manin’s protestations that he

did not commit an intentional falsification because he did not

know that he was required to report a conviction for a “minor

misdemeanor.” It stated that “a respondent’s own interpretation

of the requirements of a medical certificate” was not relevant to

a determination of intentional falsity. Id. at *4.

Our review of the Board’s opinion and order is governed by

the Administrative Procedure Act, which instructs us to uphold

the NTSB’s decision unless it is “arbitrary, capricious, an abuse

of discretion, or otherwise not in accordance with law.” 5

U.S.C. § 706(2)(A).

II.

A.

Laches is “an equitable defense that applies where there is

(1) lack of diligence by the party against whom the defense is

asserted, and (2) prejudice to the party asserting the defense.”

Pro Football, Inc. v. Harjo, 565 F.3d 880, 882 (D.C. Cir. 2009)

(internal quotation marks omitted). Manin asserted the laches

defense in the administrative proceedings against him, arguing

that (1) over 12 years had passed since the time of his first

conviction for disorderly conduct, and (2) this passage of time

prejudiced his defense, because witnesses and relevant files

were no longer available and his own memory of the events in

question had faded. In addition, he said, the FAA had delayed

for longer than six months after discovering Manin’s previous

convictions before revoking his certificates. Manin also invoked

the NTSB’s stale complaint rule, which provides for the

dismissal of a complaint stating allegations that occurred more

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than six months prior to the FAA’s advising the respondent of

the reasons for the complaint. 49 C.F.R. § 821.33. If the

complaint alleges that an airman lacks the qualifications to hold

a certificate, the stale complaint rule does not apply. 49 C.F.R.

§ 821.33(b).

The ALJ found any delay in the FAA’s commencement of

its action against Manin to be “inconsequential,” because the

FAA “proceeded diligently” once it became aware of Manin’s

previous convictions. Manin challenged this decision in his

appeal to the Board. The Board held that the stale complaint

rule was inapplicable because under Board precedent an

allegation of intentional falsification amounts to an allegation of

a lack of qualifications. Manin, 2008 WL 5972912, at *3 (citing

Adm’r v. Brassington, NTSB Order No. EA-5180, 2005 WL

2477524, at *6 (Oct. 5, 2005)). Stating that it had “long held

that the doctrine of laches is relevant to Board cases only in the

context of the stale complaint rule” – and citing three cases to

illustrate its point – the Board also rejected Manin’s laches

defense. Id. at *3.

As the FAA now acknowledges, the Board’s statement

describing the “long held” limitation on the applicability of the

doctrine of laches was simply not accurate. Board case law

establishes that the laches defense may be available even when

the stale complaint rule is inapplicable. “The Board has

indicated on several occasions that, notwithstanding the fact that

a complaint may survive dismissal under the stale complaint

rule, it might still be subject to attack if an airman could

establish actual prejudice in his defense which is attributable to

the Administrator’s delay.” Adm’r v. Wells, 7 N.T.S.B. 1247,

1249 (1991); see also Adm’r v. Peterson, 6 N.T.S.B. 1306, 1307

n.8 (1989). In stating the contrary and failing to offer any

explanation for its departure from its own precedent, the NTSB

acted arbitrarily and capriciously. See Ramaprakash v. FAA,

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346 F.3d 1121, 1124 (D.C. Cir. 2003) (“Agencies are free to

change course as their expertise and experience may suggest or

require, but when they do so they must provide a reasoned

analysis indicating that prior policies and standards are being

deliberately changed, not casually ignored.” (internal quotation

marks omitted)).

The FAA argues that the Board’s order should be affirmed

despite its unexplained departure from precedent because Manin

failed to establish a genuine issue of material fact concerning

whether the FAA’s alleged delay in revoking his certificates

resulted in actual prejudice to his defense. However, we cannot

affirm on that basis. It is true that the Board will not give an

airman the benefit of a laches defense when he makes only

“conclusory allegations . . . that delay has adversely affected

[his] ability to locate witnesses or produce evidence,” because

such allegations are “insufficient to establish that an airman has

in fact been prejudiced in defending against a charge.”

Peterson, 6 N.T.S.B. at 1307 n.8; see also Adm’r v. Shrader, 6

N.T.S.B. 1400, 1403 (1989) (“It is not sufficient . . . simply to

claim . . . that the passage of time has or may have affected the

availability of documents or witnesses or the strength of the

latters’ memories.”). It is also true that Manin made his

assertions of prejudice in vague and conclusory terms: He never

identified particular people he was hoping to find or specific

details he had forgotten. Nor did he explain how any people,

files, or memories that he can no longer access would enhance

his ability to defend against the revocation of his airman

certificates. Therefore, if the Board had considered the merits

of Manin’s laches defense at the summary judgment stage, it

may well have ruled just as it did. But, with limited exception,

the law does not allow us to affirm an agency decision on a

ground other than that relied upon by the agency. See SEC v.

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Chenery Corp., 318 U.S. 80, 87-88 (1943); America’s Cmty.

Bankers v. FDIC, 200 F.3d 822, 835 (D.C. Cir. 2000).1

When an agency departs from its prior precedent without

explanation, as the NTSB did here, its judgment cannot be

upheld. “[W]e do not require an agency to grapple with every

last one of its precedents, no matter how distinguishable . . . . At

the same time, we have never approved an agency’s decision to

completely ignore relevant precedent. . . . [A]n agency’s failure

to come to grips with conflicting precedent constitutes ‘an

inexcusable departure from the essential requirement of

reasoned decision making.’” Jicarilla Apache Nation v. Dep’t

of the Interior, 613 F.3d 1112, 1120 (D.C. Cir. 2010) (internal

citations and quotation marks omitted). Because the NTSB

incorrectly construed its own case law as allowing consideration

of a laches defense only in the context of the stale complaint

rule, and rejected Manin’s assertion of laches on that basis, we

remand to the agency for reconsideration of Manin’s defense.

We reiterate that we are not suggesting that the Board could not

have properly reached the same conclusion on a different basis,

only that we cannot accept that basis as a post hoc justification

when the reason offered by the Board does not withstand review.

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The FAA invokes the harmless error doctrine, which derives from the

APA. See 5 U.S.C. § 706. We have previously held that “[w]hen ‘there is not

the slightest uncertainty as to the outcome of a proceeding’ on remand,

courts can affirm an agency decision on grounds other than those provided

in the agency decision.” Envirocare of Utah, Inc. v. Nuclear Regulatory

Comm’n, 194 F.3d 72, 79 (D.C. Cir. 1999) (quoting NLRB v. Wyman-

Gordon, 394 U.S. 759, 766 n.6 (1969)). We cast no doubt on the validity of

this doctrine but find only that the FAA has not met the standard here.

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B.

Manin also defended on the merits against the charge of

intentional falsification. Intentional falsification of an airman

medical certificate, as prohibited by 14 C.F.R. § 67.403(a)(1),

has three elements: “(1) a false representation (2) in reference to

a material fact (3) made with knowledge of its falsity.”

Singleton v. Babbitt, 588 F.3d 1078, 1082 (D.C. Cir. 2009) (per

curiam) (quoting Hart v. McLucas, 535 F.2d 516, 519 (9th Cir.

1976)). The FAA accused Manin of committing intentional

falsification when he repeatedly failed to disclose his 1995 and

1997 convictions for disorderly conduct in response to the query

whether he had ever had a “history of nontraffic conviction(s)

(misdemeanors or felonies).” Manin maintained that the agency

failed to prove the third element of the offense. He denied ever

making a knowing and intentionally false statement, insisting

that “to the best of his knowledge and belief [he] was never

arrested or convicted for a non traffic Misdemeanor or Felony.”

He initially argued to the agency that he believed the two

convictions to be “minor summary offenses” that did not need

to be reported. (Elaborating on this defense before the Board,

Manin’s counsel explained that although Ohio classified

disorderly conduct as a “minor misdemeanor,” it would in other

jurisdictions be called a “minor summary offense.”). Counsel

explained further that Manin understood his offense to be “a

very, very minor infraction,” in a separate category from the

“misdemeanors” requested on the medical certificate

application. Manin offered no further explanation as to why he

believed the term “misdemeanor” did not include all

“misdemeanors,” including those designated as “minor.”

The ALJ and the NTSB both rejected Manin’s defense. The

Board, citing several cases, declared that it had “previously

rejected a respondent’s own interpretation of the requirements

of a medical certificate.” Manin, 2008 WL 5972912, at *4. It

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concluded that Manin’s assertions that he believed he did not

have to report the convictions did not create a genuine issue of

material fact.

After the Board issued its opinion, we decided two cases

emphasizing that, under Board law, “a pilot’s understanding of

a question is not irrelevant to whether he offered an intentionally

false answer under § 67.403(a)(1).” Singleton, 588 F.3d at

1082; see also Dillmon v. NTSB, 588 F.3d 1085, 1093-94 (D.C.

Cir. 2009). In Dillmon and Singleton, decided the same day, we

stressed that the FAA is required to prove not only that an

airman knew that he had been convicted of an offense in the

past, but also that he knew that he was required to report that

offense in his response to question 18(w). See Dillmon, 588

F.3d at 1093-94; Singleton, 588 F.3d at 1082. In other words,

the FAA must “prove the airman subjectively understood what

the question meant.” Dillmon, 588 F.3d at 1094. Our analysis

in these cases drew on the Board’s own interpretation of the

intent element of intentional falsification. See id. As we noted,

the Board declared in Administrator v. Reynolds that a

determination of whether the intent element had been met

“necessarily hinged on respondent’s understanding of what

information the question was intended to elicit.” Id. (quoting

Adm’r v. Reynolds, NTSB Order No. EA-5135, 2005 WL

196535, at *4-5 (Jan. 24, 2005)).

“Having announced this interpretation of the intent element

in Reynolds, the Board was obligated to apply it consistently.”

Id. It did not do so in Manin’s case, instead treating Manin’s

subjective understanding of the requirements of question 18(w)

as irrelevant. The FAA now argues that the decision of the

Board was correct because Manin failed to offer any proof in

support of his assertion that he misunderstood the question: He

did not testify before the ALJ or the NTSB, and the record does

not contain any statement whatsoever from Manin himself

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explaining his contemporaneous understanding of the question.

Because Manin did not create a genuine issue of material fact,

the FAA concludes, the Board’s decision should be affirmed.

We decline once again to affirm the decision of the Board

on an alternate basis. See Chenery, 318 U.S. at 87-88. The

Board rejected Manin’s knowledge argument without

considering the adequacy of the proof offered in its support

because it incorrectly treated Manin’s own interpretation of the

requirements of question 18(w) as irrelevant. As our decisions

in Dillmon and Singleton made clear, Board precedent requires

consideration of a pilot’s subjective understanding of questions

on a medical certificate application. The Board’s unexplained

failure to adhere to this precedent renders its action arbitrary and

capricious. See Ramaprakash, 346 F.3d at 1124. We remand to

the agency for further consideration of Manin’s assertion that he

did not understand question 18(w) to require him to report his

1995 and 1997 convictions for disorderly conduct. As with the

laches defense, we make clear that we are not rejecting the

possibility of the Board employing on remand the reasoning the

FAA has asserted in its briefing before us. We reject that

reasoning not necessarily because it lacks merit, but because it

was not relied upon in the decision under review.

III.

We generally may not uphold agency action on a basis other

than that relied upon by the agency. In affirming the revocation

of Michael George Manin’s airman certificates, the NTSB

departed from its own precedent twice, without explanation.

Accordingly, we vacate the Board’s decision and remand for

further proceedings consistent with Board precedent and the

precedent of this Court.

So Ordered.