Petition for Writ of Certiorari — Emerson v. United States

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Supreme Court, U.S.

FILED

961901 MAY 271997

No. 9@4iCE OF THE CLERK

In The

Supreme Court of the United States

October Term, 1996

ALAN D. EMERSON, d/b/a

EMERSON AVIATION,

Petitioner,

UNITED STATES OF AMEPICA,

Respondent.

Petition For Writ Of Certiorari

To The United States Court Of Appeals

For The First Circuit

PETITION FOR WRIT OF CERTIORARI

JOHN PreRCE KALLED,

Counsel of Record

KaLLeD Law Offices

Courthouse Square

Route 171, P.O. Box 130

Ossipee, NH 03864-0130

603.539.2218

Counsel for The Petitioner

May 27, 1997

COCKLE LAW BRIEF PRINTING CO., (800) 225-6964

OR CALL COLLECT (402) 342-2831

QUESTIONS PRESENTED

I. The petitioner, Alan Emerson, claimed before trial] and

upon appeal that the civil penalty which the government

seeks to impose upon him is an excessive fine under the

Eighth Amendment of the United States Constitution,

and under 49 App. U.S.C. §1471(a)(1).

Did the United States court of appeals for the First

Circuit err by finding that the $185,000 civil penalty

imposed upon him by the district court is not excessive

under the Eighth Amendment of the United States Con-

stitution, or under 49 App. U.S.C. §1471(a)(1)?

II. The petitioner claimed before trial and upon appeal

that after the unusually aggressive enforcement action

brought against him by the Administrator of the FAA, the

civil penalty action which the government brought

against him is a violation of the Double Jeopardy clause

of the Fifth Amendment of the United States Constitu-

tion.

Did the United States court of appeals for the First

Circuit err by finding that the civil penalty action brought

against the petitioner is not a violation of the Double

Jeopardy clause of the Fifth Amendment?

TABLE OF CONTENTS

Page

oO ere nr ren i

Deen OE Goo ss oo ee eee ii

PT ere nm iii

Opinions and Orders Below ....................45. 1

DORRIT. ook snk a oo cas oe enn eee eee 1

Constitutional and Statutory Provisions Involved... 2

ahem OF Cae COOP... «oo s dsavnanaeneceeunecenen >

PRONE oon. 6 ae ven an boneabaeuee eee 10

RCO io kc kiss connevceeneenenp enn eee 30

PIERS 66.5 5.56 vs Snedns sasakevhwagneeeeee App. 1

A. Court of Appeals

1. February 26, 1997 Decision on

PINE, 565525 0 dened kame cae eee App. 1

B. District court

1. April 23, 1996 Order of District

RNG. voc dkcen ban eae App. 15

ili

TABLE OF AUTHORITIES

Page

CASES

Alexander v. United States, 509 U.S. 544, 113 S. Ct.

pe eS) 12

Allen v. Attorney General of Maine, 80 F.3d 56 (1st

EN I er 25

Austin v. United States, 509 U.S. 602, 113 S. Ct.

2801, 125 L.Ed.2d 488 (1993)........ 34, 32, i9, 144, 15

Browning-Ferris Industries v. Kelco Disposal, Inc., 42

U.S. 257, 109 S. Ct. 2909, 106 L.Ed.2d 219 (1989) .... 14

Department of Revenue of Montana v. Kurth Ranch,

511 U.S. 767, 114 S. Ct. 1937, 128 L.Ed.2d 767

tt hl a ei ana 29

FAA v. Landy, 566 F.Supp. 921 (S.D.N.Y. 1982)....... 18

FAA v. Landy, 705 F.2d 624 (1983)............000000. 18

Go Leasing, Inc. v. National Transportation Safety

Board, 800 F.2d 1514 (9th Cir. 1986)............... 22

Johnson v. Securities & Exchange Commission, 87

EME eee 27, 28

Pangburn v. Civil Aeronautics Board, 311 F.2d 349

ee icy y ea kek et ow ewes sees 22

Pioneer Inv. Servs. Co. v. Brunswick Assoc. Ltd. Part-

nership, 507 U.S. 380, 113 S. Ct. 1489, 123

I 16

United States v. Emerson, 107 F.3d 77 (1997)..... 12, 17, 25

United States v. Halper, 490 U.S. 435, 109 S. Ct.

1892, 104 L.Ed.2d 487 (1989)........ ii, 15, 23, 24, 29

TABLE OF AUTHORITIES - Continued

Page

United States v. Pilgrim Market Corp., 944 F.2d 14 |

EC aa AREER R PRA hed eae hare ees 18

Linited States v. Stoller, 78 F.3d 710 (1st Cir. 1996)

ee ee Pee eT COTO eT aE ty £0, af

United States v. Ursery & $405,089.23 in United

States Currency, ___ U.S. __, 116 S. Ct. 2135, 135

Lid SY EG oe Cb nv ee eG Cases ea sede 24, 25

CONSTITUTIONAL PROVISIONS

U.S. Constitution, Amendment 8.................. passim

U.S. Constitution, Amendment 5....... ao te ee Be ee

STATUTES

Se Wee IE fk CE ARN eves PoC eis a teknee 27

Be Mle EE & ons acc ss eee be oe bake coer 14, 15

Bh Re E555 Cor eRe ee NA SA er 24

Pe EE Fig ASE ie Foe TAT es eZee eee 28

aS Oe. ee ee ee Dy hy Gey OO

OF IR. WA. BE ED 46s 6 sib oe dee cca aiens passim

oF FD. USA BUG Re) css ioe sheen caneees 3, 4

REGULATIONS

ee: a Sa ee nor ye 19

BR a Pee eee eer Tr eee re 20

ge eer ere ee ee ee errr re > aay ae

er Gs SE Sowa eases eeeevneuedeeee ceaute cet 6

PETITION FOR WRIT OF CERTIORARI

Alan D. Emerson respectfully requests that a writ of

certiorari issue to review the judgment and opinion of the

United States court of appeals for the First Circuit entered

in this proceeding on February 26, 1997.

OPINIONS AND ORDERS BELOW

The court of appeals’ decision on appeal affirming

the district court’s order is reprinted in Appendix A

(“App.”) at pages A 1 through 14.

The district court’s published order granting the gov-

ernment’s request for a civil penalty adjusted to the

amount of $185,000.00 is reprinted in Appendix B

(“App.”) at pages A 15 through 31.

JURISDICTION

The Petitioner respectfully submits that this Court

should review this case on writ of certiorari for the rea-

sons that:

1. Pursuant to Supreme Court Rule 10(a), the court

of appeals has, by its decision in this case, so far departed

from the accepted and usual course of judicial proceed-

ings, or sanctioned such a departure by a lower court, as

to call for an exercise of this Court’s supervisory power,

and;

2. Pursuant to Supreme Court Rule 10(c), the court

of appeals has decided an important question of federal

law under 49 App. U.S.C 1471(a)(1) that has not been, but

should be, settled by this Court, and;

3. Pursuant to Supreme Court Rule 10(c), the court

of appeals has decided an important question of federal

law under the Eighth and Fifth Amendments of the

United States Constitution which petitioner submits is in

conflict with relevant decisions of this Court.

The court of appeals’ order in which it affirmed the

judgment of the district court was entered February 26,

1997. The Petitioner filed his Petition for Certiorari within

90 days of that order.

This Court’s jurisdiction is invoked under 28 U.S.C.

§1254(1).

CONSTITUTIONAL AND STATUTORY

PROVISIONS INVOLVED

U.S. Constitution, Amendment 8:

Excessive bail shall not be required, nor Excessive Fines

imposed, nor cruel and unusual punishments inflicted.

U.S. Constitution, Amendment 5:

No person shall be held to answer for a capital, or

otherwise infamous crime, unless on a presentment or

indictment of a Grand Jury, except in cases arising in the

land or naval forces, or in the Militia, when in actual

service in time of War or public danger; nor shall any

person be subject for the same offense to be twice put in

jeopardy of life or limb; nor shall be compelled in any

criminal case to be a witness against himself, nor shall

private property be taken for public use, without just

compensation.

Title 49 App. U.S.C. 1471(a)(1) and (a)(3)(C). Civil

penalties; notice and hearing; compromise; liens.

(a)(1) Any person who violates (A) any provision of

subchapter III, IV, V, VI, VIL, or XII of this chapter or of

section 1501 or 1514, or 1515(e)(2)(B) of this title, or rule,

regulation, or order issued thereunder, or under section

1428(i) of this title, or any term, condition, or limitation of

any permit or certificate issued under subchapter IV of

this chapter, or (B) any rule or regulation issued by the

United States Postal Service under this chapter, shall be

subject to a civil penalty of not to exceed $1,000 for each

such violation, except that a person who operates aircraft

for the carriage of persons or property for compensation

or hire (other than an airman serving in the capacity of an

airman) shall be subject to a civil penalty not to exceed

$10,000 for each violation of subchapter III, VI, or XII of

this chapter, or any rule, regulation, or order issued

thereunder, occurring after December 30, 1987, and

except that the amount of such civil penalty shall not

exceed $10,000 for each such violation which relates to

the transportation of hazardous materials and for each

such violation which relates to registration of recordation

of an aircraft under subchapter V of this chapter. If such

violation is a continuing one, each day of such violation,

or each flight with respect to which such violation is

committed, if applicable, shall constitute a separate

offense. The amount of such civil penalty which relates to

the transportation of hazardous materials shall be

assessed by the Secretary, or his delegate, upon written

notice upon a finding of violation by the Secretary, after

notice and an opportunity for a hearing. In determining

the amount of such penalty, the Secretary shall take into

account the nature, circumstances, extent, and gravity of

the violation committed and, with respect to the-person

found to have committed such violation, the degree of

culpability, any history of prior offenses, ability to pay,

effect on ability to continue to do business, and such other

matters as justice requires. The amount of any such civil

penalty for any violation of any provision of subchapter

IV of this chapter, or any rule, regulation, or order issued

thereunder, or under section 1482(i) of this title, or any

term, condition, or limitation of any permit or certificate

issued under subchapter IV of this chapter shall be

assessed by the Board only after notice and an oppor-

tunity for a hearing and after written notice upon a

finding of violation by the Board. Judicial review of any

order of the Board assessing such a penalty may be

obtained only pursuant to section 1486 of this title. This

subsection shall not apply to members of the Armed

Forces of the United States, or those civilian employees of

the Department of Defense who are subject to the provi-

sions of the Uniform Code of Military Justice, while

engaged in the performance of their official duties; and

the appropriate military authorities shall be responsible

for taking any necessary disciplinary action with respect

thereto and for making to the Secretary of Transportation

or Board, as appropriate, a timely report of any such

action taken.

[Nonpertinent portions omitted]

(3) Administrative assessment

courts

Notwithstanding subparagraph (A), the

United States district courts shall have exclusive

jurisdiction of any civil penalty initiated by the

Administrator -

(i) which involves an amount in con-

troversy in excess of $50,000;

(iv) in which a suit for injunctive relief

based on the violation giving rise

to the civil penalty has also been

brought.

Pub.L. 102-581, Title II, §208, Oct. 31, 1992, 106 Stat. 4895.

[Emphasis added].

STATEMENT OF THE CASE

On February 15, 1994, The Administrator of the FAA,

by the Office of the Assistant Chief Counsel, New Eng-

land Region, issued an emergency order of revocation of

Alan D. Emerson’s commercial pilot certificate. This

order was issued pursuant to the authority conferred

upon the Administrator under 49 App. U.S.C. §1429. The

Administrator’s order of revocation was issued based on

the allegations that between June 8, 1992 and February 8,

1994 Alan Emerson personally, or through an agent or

employee, conducted approximately thirty-two flights in

violation of various requirements set forth in 14 C.FR.

§135 et seq. (referred to generally as FAR).

By complaint dated March 30, 1994, The United

States, through the Department of Justice, Office of the

U.S. Attorney, District of New Hampshire, sought a civil

penalty against Alan Emerson and an unregistered, unin-

corporated and defunct trade name, Emerson Aviation, in

the amount of $320,000.00 pursuant to 49 App. U.S.C.

§1471(a)(1). This complaint was filed, and this civil pen-

alty was sought, on the basis of the same allegedly illegal

flights which formed the basis of the FAA’s February 15,

1994 emergency order of revocation. On May 10, 1994

Emerson issued his answer denying that he had violated

the FAR, and objected to the government’s request for a

temporary injunction. On May 23, 1994 he moved to

dismiss the government’s complaint on various grounds,

including lack of subject matter jurisdiction, the stale

complaint rule under 49 C.F.R. §821.33, excessive enforce-

ment under 49 App. U.S.C. §1471(a)(1) and for placing

Emerson in Double Jeopardy.

On June 8, 1994 a hearing was held on the plaintiff's

request for a preliminary injunction before U.S. Magis-

trate Judge William Barry. On August 31, 1994 the gov-

ernment issued its Motion to Amend Complaint wherein

it sought to add David Emerson, Alan Emerson’s son, as a

defendant, and added twenty one additional allegedly

illegal flights, which brought the civil penalty sought to

$530,000.00. To this motion, Emerson timely objected, but

the motion was granted by order of the district court on

January 31, 1995. On January 27, 1995 the Magistrate

Judge issued his report and recommendation granting the

temporary injunction.

On February 6, 1995 Alan Emerson moved for a stay

of the injunction and objected to the Magistrate’s report

and recommendation under F.R.Civ.P. 72. On February 7,

1995, Alan Emerson issued his Answer to the govern-

ment’s Amended Complaint. By orders dated February

I aceeeeenen cinerea nail

14, 1995, Chief Judge Joseph A. DiClerico, Jr. corrected

certain errors of fact in the Magistrate’s report and rec-

ommendation, declared that Emerson’s Motion for Stay is

moot, and clarified the scope of the temporary injunction.

By order dated March 29, 1995, Chief Judge DiClerico

denied Emerson’s Motion to Dismiss for lack of subject

matter jurisdiction.

By Motion dated April 4, 1995, Emerson sought

Relief from the March 29, 1995 order pursuant to

F.R.Civ.P. 60(b) on the grounds that: the Court’s order did

not take into consideration the government’s Motion to

Amend its Complaint nor Emerson’s objection to that

motion; the government was double-counting alleged

violations; the civil penalty action is contrary to the legis-

lative purpose of 49 App. U.S.C. §1471(a)(1), and violates

Mr. Emerson’s constitutional rights under the Double

Jeopardy Clause of the Fifth Amendment and the Exces-

sive Fines Clause of the Eighth Amendment of the United

States Constitution. The Court granted Emerson’s motion,

treating it as a motion to reconsider its March 29, 1995

order, but denied his motion to dismiss. The case against

David Emerson settled shortly thereafter.

The parties filed pretrial statements, requests for

findings of fact and rulings of law and pretrial motions

on March 7, 1996. In addition, the government filed a trial

memorandum, and Emerson filed a Second Motion to

Dismiss based upon Double Jeopardy and Excessive Fines

Clause grounds. Each party filed requests for findings of

fact and rulings of law. In addition, due to the

unavailability of what was hoped to be exculpatory docu-

mentation, the parties reached an agreement that certain

flight operations would be admitted by Mr. Emerson as a

violation in exchange for the government's dropping cer-

tain other flights from the complaint. By order dated

March 29, 1996, the district court denied Mr. Emerson’s

Second Motion to Dismiss, addressing only his Double

Jeopardy argument, concluding that the revocation of his

pilot certificate was remedial, not punitive. Therefore, no

jeopardy attached. The court made no analysis or men-

tion of his Excessive Fines Clause argument, or the limits

specified by Congress on penalties to be imposed under

49 App. U.S.C. §1471(a)(1).

The non-jury trial went forward before Chief Judge

DiClerico on the issue of the assessment of a civil penalty

only, beginning the morning of April 8, 1996. The evi-

dence closed on the afternoon of April 9, 1996. At trial

Mr. Emerson introduced uncontroverted evidence that his

income at that time was about $1,000 per month, and

liabilities exceeded his assets by approximately $88,000.

The district court issued its order on April 23, 1996.

(App. 15). The court’s findings of fact included the fol-

lowing: in some instances, the FAA’s published literature

was unclear or inconsistent on the types of flights Emer-

son could conduct; Emerson relied upon erroneous legal

advice from former Attorney Vincent Butler concerning

the legality of “private carriage” operations; discussions

with a charter operator colleague confirmed Mr. Emer-

son’s understanding of the “private carriage” exception;

Emerson’s ability to comply with the FAR was hampered

by a poor relationship with the FAA’s local Flight Stan-

dards District Office (FSDO); there is evidence that

Inspector Gary Readio personalized his oversight of

Emerson, and subjected him to unusually aggressive

enforcement activities; Emerson did not intentionally

“hold out” to the public as a charter operator by purchas-

ing yellow pages advertising at a time when he held the

proper FAA certifications; some of Emerson’s past viola-

tions were due to the actions or omissions of his

employees. Despite these findings, and the evidence of

Mr. Emerson’s clear inability to pay a large penalty, the

Court ordered a civil penalty in the amount of $185,000.

While the district court considered Emerson’s ability to

remain in business, it ruled that that was not a relevant

consideration since Emerson was now employed by Emer-

son Aviation, Inc. (App. 27) From that order, Mr. Emerson

appealed.

Mr. Emerson’s Notice of Appeal of the district court’s

order to the court of appeals for the first circuit was filed

May 23, 1996. The issues on appeal were: whether the

district court’s order imposing a $185,000 civil penalty

violated the Excessive Fines Clause of the Eighth Amend-

ment of the United States Constitution and the provisions

of 49 App. U.S.C. §1471(a)(1); and whether the bringing

of the civil action violated the Double Jeopardy Clause of

the Fifth Amendment of the United States Constitution.

The case was accepted, briefed and argued.

On the Excessive Fines Clause argument, the court of

appeals found that the district court “made no explicit

finding on the Excessive Fines issue.” (App. 3) The court

acknowledged that “ . . . precedent provides no precise

guideposts for evaluating a fine’s excessiveness, . a

(App. 5) and that “ . . . Emerson appears at present not to

have the resources to pay the entire penalty, . . . ”. (App.

8). Nevertheless, it concluded that ” . . . no barrier appar-

ently exists to his seeking amelioration from the district

court,” and affirmed the district court’s order, finding

“no constitutional error.” (App. 8).

On the Double Jeopardy argument, the court of

appeals acknowledged that the force of the argument

“ ... depends upon the particular circumstances of each

individual case,...”. (App. 9). After analyzing the FAA’s

revocation authority, it found that the district court’s

conclusion that the revocation of Emerson’s pilot certifi-

cate served a remedial, rather than a deterrent or punitive

purpose, is correct. Accordingly, it ruled that no jeopardy

attached, and affirmed.

ARGUMENT

THE CIVIL PENALTY ORDERED BY THE DISTRICT

COURT IN THE AMOUNT OF $185,000.00 IS AN

EXCESSIVE FINE

Excessive bail shall not be required, nor Exces-

sive Fines imposed, nor cruel and unusual pun-

ishments inflicted. U.S. Constitution,

Amendment 8.

In this case, the district court ordered that judgment

be entered in favor of the government against Alan Emer-

son requiring that he pay a $185,000 civil penalty. This is

in addition to a permanent injunction, and a more than

one-year revocation of his commercial pilot certificate.

For a person who flies for a living in northern New

Hampshire, a certificate revocation of that duration has

the practical effect of preventing him from earning a

living for more than a year. This was imposed upon a

Oooo

man whose assets before the fine were shown to be less

than his liabilities.

By his April 4, 1995 Motion for Relief from Order,

Emerson moved the district court to dismiss the case

against him on Excessive Fines, as well as Double Jeop-

ardy grounds, citing Austin v. United States, 509 U.S. 602,

113 S. Ct. 2801, 125 L.Ed.2d 488 (1993) and United States v.

Halper, 490 U.S. 435, 109 S. Ct. 1892, 104 L.Ed.2d 487

(1989). While the district court acknowledged that Emer-

son claims that the in personam penalties sought by the

government are “excessive,” in its analysis it addressed

only the Double Jeopardy grounds under Halper, stating,

The violation of such regulations would obvi-

ously be detrimental to public purposes. There-

fore, the court finds that the plaintiff’s civil

penalty claims against Alan Emerson and Emer-

son Aviation are remedial rather than punitive

and the Double Jeopardy clause is not impli-

cated by those claims. [Emphasis added].

The district court did not discuss or apparently consider

Emerson’s claim that the Excessive Fines Clause war-

ranted dismissal.

Just before trial, Emerson filed his Second Motion to

Dismiss, again on the grounds that the government's case

against him violated the Excessive Fines Clause of the

Eighth Amendment, and the Double Jeopardy Clause of

the Fifth Amendment of the U.S. Constitution. Again, it

did not discuss or apparently consider Emerson’s Exces-

sive Fines Clause grounds for dismissal when it denied

the motion. The Court did consider Emerson’s ability to

pay, which is an important consideration, but is not a

substitute for the Constitutional analysis of the Excessive

Fines Clause.

Upon appeal to the court of appeals, Emerson argued

that this failure of the district court is reversible error. But

the court of appeals simply concluded, without meaning-

ful Constitutional analysis, that the district court’s reduc-

tion of the penalty sought from $370,000 to $185,000 is a

“thoughtfully levied fine” which is not excessive, and

“does not offend the Constitution.” United States v. Emer- |

son, 107 F.3d 77, 81 (1997). (App. 8-9). The only authority

relied upon by the court in reaching that conclusion was

a passage from Justice Scalia’s concurring opinion in

Austin v. United States, 509 U. S. 602 (1993). Emerson, 107

F.3d at 80. (App. 5).

However, Justice Scalia was not considering the issue

here presented when he wrote the passage cited by the |

court of appeals. Instead, he was merely describing that

in the English Bill of Rights (the origin of the Eighth

Amendment), the touchstone of the “excessiveness anal-

ysis” is the value of the fine in relation to the offense.

Austin, 509 U. S. at 627. The petitioner is unaware of any

authority from this Court which stands for the proposi-

tion that the “excessiveness analysis” under the Eighth

Amendment is limited only to comparing the value of the

fine to the offense, and the court of appeals cited none.

The Excessive Fines Clause authority from this Court

pertinent to this case is set forth in two opinions: one

involving an in personam criminal forfeiture, and the

other involving a civil in rem forfeiture. In Alexander v.

United States, 509 U.S. 544, 113 S. Ct. 2766, 125 L.Ed.2d

441 (1993) the Court considered the defendant’s Excessive

pn ie ti ee a nan eR an

Fines claim in the context of an allegedly disproportio-

nate in personam forfeiture of his businesses and real

estate after he was convicted of tax, obscenity and RICO

offenses in the district court of Minnesota. The defendant

complained that on top of being sentenced to six years in

prison and ordered to pay a $100,000 fine, he was also

improperly subject to the forfeiture of his property. The

Eighth Circuit court of appeals affirmed.

Upon appeal, this Court observed that the Excessive

Fines Clause “ . . . limits the government’s power to

extract payments, whether in cash or in kind, as punish-

ment for some offense.” Id., 509 U.S. at 558, citing Austin

v. United States, 509 U.S. 602, 113 S. Ct. 2801, 125 L.Ed.2d

488 (1993). The Court also observed that “[A]t the time of

the drafting and ratification of the [Eighth] Amendment,

the word ‘fine’ was understood to mean a payment to a

sovereign as punishment for some offense.” Id., 509 U.S.

at 558. Applying this analysis, the Court found that the in

personam forfeiture at issue was clearly a form of mone-

tary punishment no different, for Eighth Amendment

purposes, from a traditional “fine.” Id., 509 U.S. at 558.

The Court therefore held that the forfeiture in the case

should be analyzed under the Excessive Fines Clause,

and that the court of appeals should have considered

whether the forfeiture was excessive in light of the defen-

dant’s extensive criminal activities which he conducted

over a substantial period of time. Id., 509 U.S. at 559. The

Court vacated the judgment and remanded the case for

further proceedings.

In the sister case, Austin v. United States, 509 U.S. 602,

113 S. Ct. 2801, 125 L.Ed.2d 488 (1993), the Court consid-

ered whether the Excessive Fines Clause of the Eighth

Amendment applies to a civil in rem forfeiture of property

under 21 U.S.C. §881(a) following the defendant’s guilty

plea and sentencing for a charge of possession of cocaine

with intent to distribute in the U. S. district court of South

Dakota. While the Eighth Circuit court of appeals

affirmed below, it did so reluctantly, stating “[T]he princi-

ple of proportionality should be applied in civil actions

that result in harsh penalties,” Austin, 964 F.2d 814, 817

(1992), and that the government was “exacting too high a

penalty in relation to the offense committed.” Id., at 818.

This Court observed that it has previously deter-

mined that the purpose of the Eighth Amendment was

intended to prevent the government from abusing its

power to punish. Id., 509 U.S. at 605, citing Browning-

Ferris Industries v. Kelco Disposal, Inc., 42 U.S. 257, 109 S.

Ct. 2909, 106 L.Ed.2d 219 (1989). The Court rejected the

government’s argument that the Eighth Amendment

applies only to proceedings that are so punitive as to be

considered criminal. The Court ruled that the question is

whether the forfeiture is punishment, not whether it is

civil or criminal.

In considering this question, we are mindful of

the fact that sanctions frequently serve more

than one purpose. We need not exclude the pos-

sibility that a forfeiture serves remedial pur-

poses to conclude that it is subject to the

limitations of the Excessive Fines Clause. We,

however, must determine that it can only be

explained as serving in part to punish.

Austin, 509 U.S. at 607 [Emphasis added].

The Court analyzed and discussed at length the his-

tory of forfeiture under English common law and its own

SNR ic iii csi ci

cases, Id., 509 U.S. at 607-611, and concluded that forfei-

ture generally, and statutory in rem forfeiture in particu-

lar, have been understood, at least in part, as punishment.

Id., 509 U.S. at 611. Upon examination of the provisions of

21 U.S.C. §881(a) the Court concluded that because the

terms of the statute plainly focus upon the culpability of

the defendant, id., 509 U.S. at 612, and that the enactment

of the statute was in recognition of the fact that the

penalties of a fine and imprisonment alone are not ade-

quate to deter or punish violators of the drug laws, the

forfeiture involved is part remedial and part punitive.

[A] civil sanction that cannot fairly be said solely

to serve a remedial purpose, but rather can only

be explained as also serving either retributive or

deterrent purposes, is punishment, as we have

come to understand the term. [Emphasis

added].

Id., 509 U.S. at 613, citing United States v. Halper, 490 US.

435, 448, 109 S. Ct. 1892, 104 L.Ed.2d 487 (1989).

Following this analysis, the Court held that the for-

feiture under the statute is subject to the limitations of the

Excessive Fines Clause of the Eighth Amendment, and

reversed and remanded the case to permit the lower court

to consider the excessiveness of the penalty in the first

instance. Austin, 509 U.S. at 613.

Excessive Penalty Under 49 App. U.S.C. §1471(a)(1)

The government has proceeded against Alan Emer-

son under this civil penalty statute, the objective of which

is clear from the title itself -— civil penalties. This is a

substantive interpretation, based upon this Court’s com-

mon-sense rule requiring that,

[C]ourts properly assume, absent sufficient indi-

cation to the contrary, that Congress intends the

words in its enactments to carry their ordinary,

contemporary, common meaning.

Pioneer Inv. Servs. Co. v. Brunswick Assoc. Ltd. Partnership,

507 U.S. 380, 388, 113 S. Ct. 1489, 1495, 123 L.Ed.2d 74

(1993). But the punitive purpose behind 49 App. U.S.C.

§1471(a)(1) is unambiguously tempered by terms which

plainly restrain the government’s power to punish the

defendant.

In determining the amount of such penalty, the

Secretary shall take into account the nature, cir-

cumstances, extent, and gravity of the violation

committed and, with respect to the person

found to have committed such violation, the

degree of culpability, any history of prior

offenses, ability to pay, effect on ability to continue

to do business, and such other matters . .

[Emphasis added].

49 App. U.S.C. §1471(a)(1).

The question of whether the penalty imposed in this case

is “excessive” must be addressed according to the defen-

dant’s ability to pay and to remain in business. This

requires a fair and common sense analysis of the evidence

in the record showing the defendant’s net worth and his

reasonably probable business prospects. But the court of

appeals did not do that. It acknowledged that the district

court “made no explicit finding on the Excessive Fines

issue,” and that “ .. . Emerson appears at present not to

have the resources to pay the entire penalty, ... ”

UST i

Emerson, 107 F.3d at 80 & 81. (App. 3 & 8). Yet it merely

accepted at face value the district court’s reduction of the

penalty sought to $185,000 as a “thoughtfully levied fine”

which is not excessive. Id., 107 F.3d 77 at 81. (App. 7).

Emerson submits that the court of appeals erred by

failing to hold the district court to the express limits of

the statute. By affirming the district court’s order, the

court of appeals is permitting the government to not only

impose a penalty which Emerson cannot pay, and which

will surely put him out of business, it is permitting the

government to use 49 App. U.S.C. §1471(a)(1) to finan-

cially destroy him. There is nothing in the statute or its

history which suggests that Congress granted power of

this magnitude, or intended such a ruinous result. Even

the court of appeals seems unsure of the soundness of its

decision when it observed that

. if Emerson’s future prospects become more

clearly limited, and the fine becomes more

clearly onerous, no barrier apparently exists to

his seeking amelioration from the district court.

Emerson, 107 F.3d at 81. (App. 8). Emerson submits that a

penalty which will financially ruin him, and which will

surely put him out of business cannot become more clearly

onerous.

The statutory terms requiring consideration of the

defendant's ability to pay and the effect on his ability to

continue to do business also invite an inquiry into

whether the penalty is disproportionate to other penalties

imposed in similar cases.

In FAA v. Landy, 566 F. Supp. 921 (1982), affirmed 705

F.2d 624 (1983), a jury found that defendant Landy con-

ducted forty-three flights in three Boeing 707’s which he

owned in violation of the FAR, resulting in 1,162 separate

violations. The evidence showed that he was a man of

“considerable wealth.” His codefendant, International

Aircraft Leasing, Inc. was jointly involved in the viola-

tions. The evidence showed that IAL, Inc. made as much

as $60,000 cn any one of the forty-three flights involved.

The civil penalty imposed against this wealthy man was

$378,000, and the civil penalty against IAL, Inc. was

$189,000.

The latter penalty is nearly identical to that imposed

in the present case. But Mr. Emerson submits that when

comparing the scope and size of his operations, his busi-

ness, his “profits” and his ability to pay with that of

Landy and IAL, Inc., there is a wide disparity between

them. None of his flight operations, sales or other ser-

vices generate anywhere near $60,000 per transaction,

and there is insufficient evidence in the record to fairly

justify the disproportionality of the penalty imposed

upon him.

In United States v. Pilgrim Market, Corp., 944 F.2d 944

(1991), the First Circuit court of appeals considered

whether a $200,000 fine imposed for the crime of selling,

storing and transporting adulterated meat products

under various sections of title 21 U.S.C. violated the

Excessive Fines Clause. In its review of the fine and the

record, the court of appeals considered the defendant's

income, earning capacity, financial resources and the bur-

den that a fine would impose upon the defendant. Id., 14

F.2d at 22, 23. Because the evidence at trial showed that

the defendant company had gross returns of $739,500 in

1989, and $961,651 in 1990, the court affirmed.

By comparison, the evidence in this case plainly

shows that during the relevant time period Emerson did

not have annual gross income even approaching nearly a

million dollars.

The misdeeds which gave rise to this $185,000 pen-

alty are Emerson’s conduct of flights under what he

believed was a recognized exception to the requirements

of 14 C.F.R. §135 et seq. Sometime in 1992, Emerson

inquired about what type of passenger-carrying flight

operations he could legally perform without a charter

certificate. AOPA, an aviation trade association, provided

at his request FAA Advisory Circular 120-12A which

describes how a person can conduct passenger or prop-

erty carrying flight operations legally without meeting

the extensive requirements of 14 C.F.R. §135. As a long-

time commercial pilot he was familiar with 14 C.F.R.

§61.139, which states, in pertinent part,

The holder of a commercial pilot certificate may:

(a) Act as pilot-in-command of an aircraft car-

rying persons or property for compensation or

hire;

(b) Act as pilot-in-command of an aircraft for

compensation or hire; .. . .

Emerson spoke to other operators in the industry

about his plans to conduct private carriage seeking their

advice. In combination, the information he obtained sup-

ported the proposition that he could legally conduct such

passenger or property carrying operations as long as he

had exclusive agreements with a limited number of cus-

tomers. He also acted as an agent for charter operators

who would fly the trip for an Emerson customer, wherein

Emerson would be paid a commission for arranging the

trip. There.is no dispute that this practice is legal, and

this was confirmed at trial by the testimony of FAA

Inspector Readio. Later on, in an incident unrelated to the

present case, Mr. Emerson received legal advice from a

well-known aviation attorney who gave him an oral opin-

ion that flights under such circumstances are permissible

14 C.F.R. §91 et seq. flight operations.

Mr. Emerson’s formal education included only high

school and a week-long course for his Inspectors Author-

ity certificate as an adjunct to his airframe and pow-

erplant certificate. Most of his knowledge has come from

on-the-job training. His wife, Brenda Emerson, the office

manger who took care of the billing, telephone and corre-

spondence, has a ninth grade education.

These are the circumstances of his actions which gave

rise to the $185,000 civil penalty. Mr. Emerson acknowl-

edges that these actions were inadequate to ensure that

his operations did at all times comply with the FAR. In

addition, he acknowledges that his actions, and those of

others in his company over whom he had control, in

failing to keep clear and complete records of his transac-

tions are a contributing cause to his current legal trou-

bles. For these things, Mr. Emerson accepts responsibility,

and accordingly, reached an agreement with the govern-

ment before trial wherein he accepted responsibility for

the majority of the flights in question. But he submits that

the penalty imposed by the district court and affirmed by

the court of appeals is much harsher than the severity of

his violations warrant, and are much harsher than the

terms of 49 App. U.S.C. §1471(a)(1) allow.

Based upon the forgoing, and the well-reasoned

authorities cited above, Mr. Emerson submits that the

civil penalty in this case violates the limitations of the

Excessive Fines Clause of the Eighth Amendment, and

the terms and legislative purpose of 49 App. U.S.C.

§1471(a)(1). Accordingly, he submits the order of the

court of appeals should be reversed.

THE CIVIL ACTION BROUGHT BY THE GOVERN-

MENT SEEKING A $530,000.00 CIVIL PENALTY IS IN

VIOLATION OF THE DOUBLE JEOPARDY CLAUSE

OF THE FIFTH AMENDMENT OF THE UNITED

STATES CONSTITUTION

The February 1994 Emergency Order of

Revocation as “Punishment”

The FAA Administrator revoked Mr. Emerson’s com-

mercial pilot certificate under 49 App. U.S.C. §1429 by

emergency order dated February 15, 1994 based on the

claim that between June 8, 1992 and February 8, 1994,

Alan Emerson, either personally or by another, conducted

a number of flights in violation of 14 C.F.R. §135 et seq.

On the heels of this order, the U. S. Attorney for the

District of New Hampshire brought the instant civil pen-

alty action on the basis of the same alleged violations of

14 C.F.R. §135 et seq. That complaint is dated March 30,

1994.

Mr. Emerson submits that because of the deteriorat-

ing relations he has had with the local FAA officials, and

the circumstances of this revocation, the revocation order

was carried out principally for purposes of deterrence

and punishment.

The court of appeals for the Ninth Circuit reviewed

the constitutionality of the FAA Administrator’s author-

ity under 49 App. U.S.C. §1429, and described the author-

ity to suspend or revoke an FAA commercial operator

certificate as “disciplinary.” Go Leasing, Inc. v. National

Transportation Safety Board, 800 F.2d 1514, 1521 (9th Cir.

1986). In Go Leasing, the appellant argued that federal law

requires the FAA to first present to a commercial operator

a list of violations, and to permit the commercial operator

to propose “remedial action” as a condition precedent to

suspension or revocation. The Ninth Circuit held that

remedial action, a lesser sanction available at the discre-

tion of the Administrator, need not be offered by the

Administrator as a condition precedent to the imposition

of a “disciplinary” suspension or revocation. Go Leasing,

Inc., 800 F.2d at 1522.

The court of appeals for the First Circuit considered a

petition to review an order of the Civil Aeronautics Board

(predecessor to the NTSB) affirming the order of the FAA

Administrator suspending a person’s pilot certificate

under 49 App. U.S.C. §1429. Pangburn v. Civil Aeronautics

Board, 311 F.2d 349 (1st Cir. 1962). In Pangburn, the

Administrator’s order was based upon a finding that the

petitioner “failed to exercise the degree of care, skill,

judgment and responsibility required of an airline trans-

port pilot while operating an aircraft in scheduled air

transportation.” Pangburn, 311 F.2d at 351. The petitioner

challenged the decision of the Board on three grounds,

only one of which is pertinent to this analysis: that the

FAA did not have the statutory authority to suspend his

eR i i cis

pilot certificate unless the evidence showed that the peti-

tioner’s lack of technical qualifications indicated that

“safety in air commerce or air transportation and the

public interest” required the suspension. However, the

court held that quite apart from the qualifications or

competency of a pilot, the Board may order revocation as

a “sanction” for “disciplinary Purposes.” Id., 311 F.2d at

354.

The meaning of the word “discipline” or “disciplin-

ary” has several meanings, depending on the context of

its use, but it includes, “ . correction, chastisement,

punishment, penalty.” Blacks Law Dictionary, (5th Ed.

1979); “. .. 5. treatment that corrects or punishes.” Webs-

ter’s New World Dictionary, 401 (1970).

The Double Jeopardy Clause has been found to pro-

tect against three distinct abuses: a second prosecution

for the same offense after acquittal; a second prosecution

for the same offense after conviction; and multiple pun-

ishments for the same offense. Linited States v. Halper, 490

U.S. 435, 440, 109 S.Ct. 1892, 104 L.Ed.2d 487 (1989).

Historically, the government, and some courts, have

avoided the impact of the Double Jeopardy Clause by

classifying the prosecution or the sanction to be imposed

as “remedial” or as a non-punitive “civil” sanction. But

this artificial classification has been largely eliminated

since Halper.

Simply put, a civil as well as criminal sanction

constitutes punishment when the sanction as

applied in the individual case serves the goals of

punishment. [Emphasis added].

Halper, 490 U.S. at 448. After reviewing sanctions which

serve “remedial” goals and those which serve “punitive”

or “retributive” goals, and after recognizing that “punish-

ment” often serves the twin aims of retribution and deter-

rence, this Court concluded that,

From these premises, it follows that a civil sanc-

tion that cannot fairly be said to serve a reme-

dial purpose, but rather can only be explained

as also serving either retributive or deterrent

purposes, is punishment, as we have come to

understand the term.

Halper, 490 U.S. 435, 448. Thus, the Court held that the

Double Jeopardy Clause requires that a defendant who

has already been the object of a criminal prosecution may

not thereafter be subjected to a civil sanction when the

latter cannot fairly be characterized as remedial, but only

as a deterrent or retribution.

Before trial, Mr. Emerson relied upon United States v.

Halper, and cases which had interpreted it up to that time,

to support his Double Jeopardy Clause argument set forth

in his Motions to Dismiss. Nearly two months after the

trial in this case this Court decided United States v. Ursery

& $405,089.23, __ U.S. __, 116 S. Ct. 2135, 135 L.Ed.2d

549 (1996). In reviewing its Double Jeopardy Clause case

law, the Court ruled that forfeitures under 21 U.S.C. §881

& 981 are in rem proceedings which are primarily aimed

at the remedial purposes of removing contraband from

circulation and discouraging unlawful commerce. Ursery,

.. US. at _., 116 S. Ct. at 2147, 135 L.Ed.2d:- at __.

Because these proceedings were not punishment against

the defendants, the Court reasoned that the Double Jeop-

ardy Clause was not implicated. Id.__ U.S. at ___, 116 S.

Ct. at 2149, 135 L.Ed.2d at __.

In this case, Emerson submits the first “jeopardy” in

which he was placed is the revocation of his pilot certifi-

cate. The second “jeopardy” is the civil penalty action,

which is not in dispute. United States v. Emerson, 107 F.3d

77, 81 (1997) (“There is no contention that the civil fine is

not punitive.”) (App. 9) The district court takes the view

that the FAA’s certificate revocation was “remedial” in

nature because it did not include a fine, and was appro-

priately tailored to serve the goals of safety in air com-

merce. In reaching this conclusion, the district court was

guided by the decisions in United States v. Stoller, 78 F.3d

710 (1st Cir. 1996) and Allen v. Attorney General of Maine,

80 F.3d 56 (1st Cir. 1996).

Emerson submits that this Court’s decision in United

States v. Ursery & $405,089.23, ___ U.S. __, 116 S. Ct. 2135,

135 L.Ed.2d 549 (1996) has in no way diminished the

vitality of Halper with respect to cases involving a fixed

civil penalty provision. And Ursery offers little, if any,

guidance on the question of whether the FAA’s enforce-

ment actions here constitute a predicate for Double Jeop-

ardy purposes.

To be sure, a review of 49 App. U.S.C. §1429 alone

suggests that the purpose behind the powers granted to

the FAA are only to ensure air safety and airman compe-

tence — goals which are not punitive. But the punitive

nature of the FAA’s most severe enforcement actions are

reflected in the progressive forms of enforcement options

available to it. See FAA General Order 2150.3A. The puni-

tive nature of the FAA’s actions against Alan Emerson in

particular are reflected in the terms of the Administra-

tor’s revocation order itself: i.e., that Emerson is a recidi-

vist offender who requires especially heavy enforcement

measures. It is also reflected in the manner in which he

was treated and investigated by the local FAA inspectors.

The Administrator’s General Order 2150.3A, Compli-

ance and Enforcement Program sets forth the wide discre-

tion the FAA is given in selecting enforcement

procedures, aims and objectives.

The program ranges from educational and reme-

dial efforts, including administrative action, to

punitive legal enforcement remedies, including

criminal sanctions in the most serious cases.

[Emphasis added].

In discussing the recommended approach to enforcement

by FAA personnel, the Administrator states,

FAA personnel should consider whether appli-

cation of progressive discipline will achieve the

desired compliance. In some circumstances, for

example, it may be appropriate to address a

first-time violation with a letter of correction.

... Should that approach prove to fail, it may be

necessary to impose a punitive legal enforce-

ment action, i.e., a civil penalty or certificate

suspension, to produce an adequate deterrent to

future violations. Repetitive violations by a cer-

tificate holder may even demonstrate a lack of

qualification warranting certificate revocation.

[Emphasis added].

General Order 2150.3A, §204, pp. 18-19. Thus, it is plain

that the FAA Administrator has instructed his people to

apply his enforcement powers with punitive and deterrent

measures when prior efforts have failed, and in the most

serious or repetitive offender cases. Emerson submits that

that describes his case. Therefore it is punishment and

deterrence which motivated the revocation of his pilot

certificate in the February 15, 1994 order of revocation.

The First Circuit court of appeals relied upon its

decision in United States v. Stoller, 78 F.3d 710 (1st Cir.

1996) in ruling against Emerson. He acknowledges that

Stroller is grounded on facts which share some sim-

ilarities to those in this case, (a debarment order under 12

U.S.C. §1818(e)(1) is superficially similar to a certificate

revocation), but there was no evidence that the FDIC had

interpreted and applied its powers in the same way the

FAA has in this case, and the defendant Stoller did not

have the same history of personal animosity with the

government’s inspectors as Emerson has had with the

local FAA inspectors. This is an important distinction. As

the court of appeals observed, in analyzing a Double

Jeopardy claim such as this, the court must

[S]hine the light of [its] gleaned understanding

on the particular sanction imposed under the

particular circumstances on the particular

defendant in order to ascertain [the sanction’s]

character.

Stoller, 78 F.3d at 720.

The D. C. Circuit in Johnson v. Securities and Exchange

Commission, 87 F.3d 484 (1996) applied a similarly partic-

ularized approach in a non-Double Jeopardy case to

determine whether an SEC proceeding resulting in a cen-

sure and a six-month disciplinary suspension of a securi-

ties industry supervisor was a proceeding for the

enforcement of a civil fine, penalty, or forfeiture, pecuni-

ary or otherwise, within the meaning of 28 U.S.C. §2462.

The Court reviewed in detail the meaning of the word

“penalty,”

In common usage, a penalty is “the suffering in

person, rights or property which is annexed by

law or judicial decision to the commission of a

crime or public offense.” Webster’s Third New

International Dictiona: | 1668 (1976). For at least

a century’s legal dictionaries have similarly

defined penalty. See Black’s Law Dictionary,

1020 (5th Ed. 1979) (“A punishment imposed by

statute as a consequence of the commission of

an offense.”); Ballentine’s Law Dictionary 948,

(1930) (“An exaction in the nature of a punish-

ment for the nonperformance of an act, or for

the performance of an unlawful act, and involv-

ing the idea of punishment, whether enforced

by a civil or criminal action or proceeding.”); 2

Burrill’s Law Dictionary (1871) (“A punishment;

a punishment imposed by statute as a conse-

quence of the commission of a certain act.”); 2

Bouvier’s Law Dictionary 323 (1866) (“By pen-

alty is understood, also, the punishment inflic-

ted by law for its violation. . . . ”). [Emphasis

added].

Johnson, 87 F.3d at 487. Finding that the statute in ques-

tion was not intended solely to seek damages for com-

pensation of an injury suffered, the court held that a

“penalty” as used in 28 U.S.C. §2462 is a form of punish-

ment imposed by the government. Id., 87 F.3d at 488.

This Court made it clear that in determining whether

non-monetary penalties run afoul of the Double Jeopardy

Clause, the Halper analytical approach does not work

well, and the “totality of the circumstances” approach

developed in Department of Revenue of Montana v. Kurth

Ranch, 511 U.S. 767, 114 S. Ct. 1937, 128 L.Ed.2d 767 (1994)

is appropriate to evaluate whether the Double Jeopardy

Clause is implicated.

One of the important circumstances in the case is the

effect the certificate revocation has had upon Emerson.

For more than a year, this commercial pilot was unable to

fly, when his only business activity is aviation. For all

practical purposes, this has meant that for more than a

year he was unable to effectively earn a living.

Another circumstance is the objective of the revoca-

tion. It is clear from the FAA’s General Order 2150.3A that

only an aviator who committed serious regulation viola-

tions, or who violated the regulations many times would

likely qualify for the uniquely harsh combination of sanc-

tions which have been visited upon Emerson. He is not

being “educated” or “trained” to become a better aviator

by these sanctions. If his understanding of certain regula-

tions is faulty, as it does appear from the record, or if he

lacks the skill or qualification to conduct certain commer-

cial operations, none of the harsh sanctions the FAA has

placed upon him will have “remediated” any such short-

comings. Emerson submits that this examination of the

objectives of this particular certificate revocation against

this particular person leads to one reasonable conclusion:

deterrence and punishment are its primary goals.

CONCLUSION

Mr. Emerson submits that the instant civil penalty

action has resulted in a monetary penalty against him

which exceeds by a wide margin his ability to pay, or his

ability to remain in the only business that he has known

as a working adult - commercial aviation. It is not pro-

portional to the violations committed, or to other fines

imposed in similar cases. As such, this civil penalty in

“excessive” under the Eighth Amendment of the United

States Constitution and under 49 App. U.S.C. §1471(a)(1).

Emerson submits further that the FAA’s emergency

order of revocation, issued only one and one-half months

before this civil penalty action was brought, is “punish-

ment” for purposes of the Double Jeopardy Clause of the

Fifth Amendment of the United States Constitution, and

accordingly, the judgment of the court of appeals should

be vacated, and this action should be dismissed with

prejudice.

Respectfully submitted,

ALAN D. EMERSON

JOHN Pierce Katitep (NH Bar 1302)

Counsel of Record

KatLtep Law Offices

Courthouse Square, Route 171

P. O. Box 130

Ossipee, NH 03864-0130

603.539.2218

Email:kalleds@worldpath.net

App. 1

UNITED STATES COURT OF APPEALS

For the First Circuit

No. 96-1627

UNITED STATES OF AMERICA,

Plaintiff, Appellee,

ALAN EMERSON, INDIVIDUALLY, AND

D/B/A EMERSON AVIATION,

Defendant, Appellant.

APPEALS FROM THE UNITED STATES DISTRICT

COURT FOR THE DISTRICT OF NEW HAMPSHIRE

[Hon. Joseph A. DiClerico, U.S. District Judge]

Before

Cyr, Circuit Judge,

Coffin, Senior Circuit Judge,

and Lynch, Circuit Judge.

John P. Kalled for appellant.

Patrick M. Walsh, Assistant United States Attorney,

with whom Paul M. Cagnon, United States Attorney, was

on brief for appellee.

February 26, 1997

App. 2

COFFIN, Senior Circuit Judge. Appellant Alan D.

Emerson has been ordered to pay a civil penalty of

$185,000 for numerous violations of federal aviation law.!

He claims that the assessment violates both the Excessive

Fines Clause of the Eighth Amendment and the Double

Jeopardy Clause of the Fifth Amendment. We find no

constitutional error, and therefore affirm.

I. Factual and Procedural Background

On February 15, 1994, the administrator of the Fed-

eral Aviation Administration (FAA) issued an emergency

order revoking Emerson’s commercial pilot certificate.

The action was based on allegations that Emerson was

responsible for more than thirty unlawful flights. About a

month later, on March 29, 1994, the United States filed the

complaint that underlies this appeal, seeking civil penal-

ties based on the same conduct that triggered the FAA

order, namely, the operation of charter flights after FAA

authorization to conduct such flights had been revoked.?

1 The complaint in this case also was filed against Emerson

d/b/a Emerson Aviation. Emerson Aviation no longer exists as

an enterprise, and we refer throughout this opinion to Emerson

individually as the sole defendant/appellant. We note,

additionally, that a corporation named Emerson Aviation, Inc.

was formed in 1994 after the violations at issue in this case. The

“New Emerson” acquired many of Emerson Aviation’s

operations, assets and liabilities, though no compensation

passed from one entity to the other. Appellant’s wife is

president of New Emerson, and he testified at trial that he is an

employee without any role as officer or shareholder.

2 In May 1992, the FAA had revoked Emerson’s “Airman

Certificate” and Emerson Aviation’s “ Air Taxi Certificate,” both

of which were required for appellant to operate charter flights.

App. 3

The complaint sought a $10,000 penalty for each alleged

violation. An amended complaint later increased the

number of asserted violations to fifty-three.

Emerson filed several motions seeking to dismiss the

complaint, arguing, inter alia, that requiring him to

defend the same allegations in both the administrative

and civil proceedings constituted a violation of the Dou-

ble Jeopardy Clause of the Fifth Amendment. He also

claimed that the monetary penalties sought were in viola-

tion of the Excessive Fines Clause. The district court

denied the motions, finding that the FAA’s administrative

action was remedial in nature, rather than punitive, and

that double jeopardy principles therefore were not impli-

cated. The court made no explicit ruling on the excessive

fines issue.

In March 1996, Emerson and the United States stipu-

lated to the district court that twenty-six of the flights

alleged to be unlawful were operated in violation of

applicable federal aviation law and regulations. Eleven of

those were round-trip flights, and thus were counted as

two separate violations, bringing the total number of

In its 1°92 order, the FAA found that Emerson ” ... lack[s] the

required care, judgment and responsibility . . . ” to hold an

Airman Certificate. It determined, inter alia, that Emerson had

operated an aircraft that was not in airworthy condition, having

failed to repair a crack that he knew about and that rendered the

aircraft unairworthy. The FAA found that an emergency in air

safety existed, and it ordered an immediate revocation of both

certificates. On appeal, the National Transportation Safety

Board upheld the revocations.

App. 4

admitted violations to thirty-seven.* The stipulation left

for trial only the issue of the appropriate penalty.

A two-day bench trial was held in April 1996. The

court rejected Emerson’s claim that he held a good-faith

belief that the flights were lawful, and imposed a civil

penalty of $5,000 per violation, for a total of $185,000. In

reducing the penalty from that requested by the govern-

ment (at that point, $8,500 per violation, or $314,500), the

court noted Emerson’s limited financial ability to pay the

higher amount. It also found, however, that a significant

civil penalty was appropriate in light of the nature, cir-

cumstances, extent and gravity of Emerson’s violations,

his knowledge or reckless disregard of the law, his exten-

sive enforcement history, and the effect of a large penalty

in deterring future violators and fostering respect for and

compliance with the law.4

This appeal followed. Emerson again asserts that

imposition of the civil penalty subsequent to the FAA

administrative action violates the Double Jeopardy

Clause, and contends that the amount of that penalty

transgresses the Excessive Fines Clause.

3 Emerson argued before the district court that each round-

trip flight constituted only a single violation. The government

contended that the applicable precedent required them to be

counted as two separate violations. Emerson does not raise this

argument on appeal, and we therefore do not consider it.

4 The court also issued a permanent injunction that, inter

alia, barred Emerson and Emerson Aviation from performing

any aviation-related acts without proper FAA authority to do

so.

| ™"

App. 5

II. Excessive Fines Issue5

The Excessive Fines Clause protects individuals

against abusive penalties imposed by the government. See

generally Austin v. United States, 509 U.S. 602, 606-12

_ (1993); id. at 627 (Scalia, J., concurring in part and concur-

ring in the judgment); Browning-Ferris Industries v. Kelco

Disposal, Inc., 492 U.S. 257, 266-68 (1989). Although prece-

dent provides no precise guideposts for evaluating a

fine’s “excessiveness,” Justice Scalia has observed that

“the touchstone is value of the fine in relation to the

offense,” Austin, 509 U.S. at 627 (Scalia, J., concurring).

See also Harmelin v. Michigan, 501 U.S. 957, 978 n.9 (1991)

(opinion of Scalia, J.) (assuming for the sake of argument

that “excessive fines” means “disproportionate fines”).

Here, the court imposed a fine one-half the size of

that permitted by the relevant statute, assessing $5,000

for each of Emerson’s thirty-seven admitted violations

rather than the statutory maximum of $10,000 per viola-

tion. See 49 U.S.C. § 46301(a)(2).© We are persuaded that

this penalty, though substantial, is constitutionally per-

missible. Cf. United States v. Pilgrim Market Corp., 944 F.2d

5 The government contends that Emerson waived this issue

by failing to raise it after the district court imposed a specific

fine, asserting only an abstract claim in pretrial motions that the

maximum penalty permitted by statute was excessive. We have

doubts that the claim was preserved, but nonetheless choose to

consider it briefly. See Cheffer v. Reno, 55 F.3d 1517, 1523 (11th

Cir. 1995) (“[C]hallenges under the Excessive Fines clause

are . . . generally not ripe until the actual, or impending,

imposition of the challenged fine.”).

6 At the time of Emerson’s violations in 1992 and 1993, this

provision was codified at 49 U.S.C.App. § 1471.

App. 6

14, 22 (1st Cir. 1991) (upholding penalty against Eighth

Amendment challenge where fine was less than half the

statutory maximum and one-half of the government's

recommendation).

We note initially that the district court thoroughly

explored Emerson’s explanation for the underlying viola-

tions, as well as his enforcement history, and found a

pattern of persistent disregard of government regulation.

The court was unimpressed with Emerson’s evidence that

he held a good-faith belief that the flights were lawful,”

and found “particularly unpersuasive” evidence of

reliance on advice from counsel. It further rejected Emer-

son’s contention that the large number of admitted viola-

tions and the record of his past regulatory problems

overstated the severity of his actual conduct:

It is of no moment that many of the violations

involved record-keeping or other technical func-

tions and that none resulted in serious personal

injury. The federal aviation laws safeguard pub-

lic safety as a collective whole and compliance

with the entire regulatory scheme, and not just

the rules governing matters that have an imme-

diate and direct effect on life and limb, is pre-

sumed. The maintenance of proper records and

like tasks is a crucial component in the preven-

tion of accidents and, as such, the failure to

comply cannot be viewed as a benign violation

7 The court felt that his explanations were based on

“convenient interpretations” of federal regulations that

“strain[ed] reason and common sense”. Opinion at 11.

App. 7

simply because of the clerical or technical nature

of the violated regulations.

Opinion at 13-14.

We detect no flaw in the court’s reasoning that even

technical air safety rules are important, and no clear error

in its finding that Emerson did, in fact, engage in

repeated, highly culpable conduct. See Sullivan v. Young

Bros. & Co., 91 F.3d 242, 246-47 (1st Cir. 1996). With this

supportable foundation, the conclusion the court drew -

that the latest series of violations warranted a significant

penalty - is equally unassailable. Moreover, the court

recognized that a substantial penalty would be important

as a deterrent to potential violators, since “aviation safety

rests in large part on voluntary compliance by those who,

in all probability, will never face the regulatory scrutiny

encountered by the defendants.” Opinion at 15.

Despite these conclusions inclining it toward a pen-

alty at or near the magnitude requested by the govern-

ment, the court did not order such a fine. It gave

offsetting effect to Emerson’s limited financial resources.

Although he continues to earn income from an aviation

business and has ownership interests in various real

estate and airplanes, the evidence indicated that the

properties are heavily mortgaged and that Emerson also

owes a substantial tax debt. Based on his economic cir-

cumstances alone, the court reduced the penalty from the

government’s proposed $8,500 per violation to $5,000 per

violation, producing the total fine of $185,000.

We are hardpressed to see the “excessiveness” in this

thoughtfully levied fine. First, as noted earlier, the

“touchstone” is the value of the fine in relation to the

App. 8

particular offense, not the defendant’s means. Moreover,

though Emerson appears at present not to have the

resources to pay the entire penalty, he is employed and,

still in his early 50s, should have longterm future earning

potential.® In addition, the continuing nature of the oblig-

ation has significance beyond the amount; the fact that

the debt will remain with Emerson for some time to come

is a sobering reality that should discourage him (and

deter others) from committing future violations. Addi-

tionally, if Emerson’s future prospects become more

clearly limited, and the fine consequently becomes more

clearly onerous, no barrier apparently exists to his seek-

ing an amelioration from the district court.

In short, the district court’s judgment reflects a care-

ful balance between Emerson’s means and the justifiable

punishment for these latest violations. Thus, the fine

bears a reasonable relationship not only to the offense but

also to the offender. Consequently, it does not offend the

Constitution.?

8 Emerson testified at trial that New Emerson offers

various aviation services to the public, including scenic flights,

aircraft maintenance, hangar services, mechanic’s work, and

flight instruction. Although, as noted earlier, Emerson presently

has no ownership interest in the company, New Emerson

acquired all of Emerson Aviation’s affairs and his future

relationship with the company therefore remains to be seen.

9 Emerson argues that in determining excessiveness we

must consider whether the penalty imposed here is

disproportionate to such penalties in similar cases, and offers in

comparison several cases involving regulatory violations that

he claims demonstrate the unfairness of his punishment. We

note, firstly, that the proportionality concern in an excessive

fines case is generally considered to be a question of “whether

App. 9

Ill. Double Jeopardy Issue

Emerson alternatively seeks to invalidate the fine

under the Double Jeopardy Clause, claiming that it con-

stituted double punishment in light of the earlier admin-

istrative sanction of decertification. There is no

contention that the civil fine is not punitive; the issue is

the nature of the FAA penalty that preceded it. If the

certificate revocation is remedial, rather than punitive,

the later fine is permissible.

We recently have established that, in determining

whether an administrative action constitutes punishment

for double jeopardy purposes, a court must consider

the totality of the circumstances, including the

source of the authority under which the debar-

ment is imposable, the goals underpinning the

authorizing statute, the order itself, the pur-

poses it serves, and the circumstances attendant

to its promulgation.

United States v. Stoller, 78 F.3d 710, 721 (Ist Cir. 1996)

(administrative debarment by FDIC); see also Allen v.

Attorney General of State of Maine, 80 F.3d 569, 573 (1st Cir.

1996) (driver’s license suspension). We have recognized

that “the force of a double jeopardy claim depends upon

the particular circumstances of each individual case,” id.

the fine imposed is disproportionate to the crime committed,”

Harmelin v. Michigan, 501 U.S. 957, 1009 (1991) (White, J.,

dissenting), not whether a given fine is disproportionate to

other fines imposed on other defendants. Although review of

penalties in similar cases may be instructive in evaluating the

range of penalties appropriate for a given crime, we think it of

limited assistance in judging whether a given fine exceeds

constitutional bounds.

App. 10

at 576, and have identified “[t]he pivotal question” to be

“whether the sanction, as applied, exacts rough remedial

justice,” id. at 576-77 (footnote omitted).

The district court thoroughly explored the double

jeopardy question within this framework. See Order of

March 29, 1996. We see no need to revisit its conclusion

that the FAA’s authority and goals are anchored in a

concern for air safety. See Order at 6-7; see also, e.g., 49

U.S.C.A. § 44701 (previously 49 U.S.C. App. § 1421).!°

The court further examined whether the FAA’s speci-

fic enforcement action in this case was tailored to the

remedial goals of federal aviation law, and determined

that it was. The court noted that the FAA’s investigation

of Emerson revealed a number of unsafe and unlawful

practices, and observed that the decision to limit the

defendant's flying privileges was a “logical[ ]” response.

It further noted that Emerson was not subject to a mone-

tary fine, which, in some instances, would suggest a

punitive goal.

10 This section, inter alia, directs the FAA Administrator to

“promote safe flight of civil aircraft in air commerce” by

prescribing minimum standards “in the interest of safety” for

the design and construction of aircraft, regulations “in the

interest of safety” for inspecting and servicing aircraft, and

minimum safety standards for air carriers. 49 U.S.C.A.

§ 44701(a), (b). When prescribing regulations and standards, the

Administrator must consider “the duty of an air carrier to

provide service with the highest possible degree of safety.” Id. at

(d)(1). The Administrator is further charged with acting “in a

way that best tends to reduce or eliminate the possibility or

recurrence of accidents in air transportation.” Id. at (c).

App. 11

Analogizing the FAA’s action here to the administra-

tive decision in Allen to suspend the driver’s license of an

individual arrested for drunk driving, see 80 F.3d at 574,

the district court noted our holding that the license sus-

pension “ ‘represents a reasonable effort to protect the

public from motorists who have demonstrated a dan-

gerous propensity to drink before they drive.’” It then

continued:

The safety concerns underlying federal aviation

laws, no less than those which give rise to state

motor vehicle laws, strongly suggest that “[t]he

sanction [of certificate or license revocation]

therefore is principally in service to a remedial

goal.”

Order at 9.

We share the district court’s perspective that the

FAA's actions here were driven by its remedial respon-

sibilities. Indeed, the specific language of the agency’s

order reflects this focus on considerations of air safety

rather than on punishment:

By reason of the foregoing facts and circum-

stances, the Administrator has determined that

you are not qualified to hold an Airman Certi-

fication, in that you lack the required care, judg-

ment, and responsibility. Therefore, the

Administrator finds that the safety in air com-

merce or air transportation and the public inter-

est require the revocation of your Airman

Certificate No. 2130849, with all its ratings and

privileges. Furthermore, the Administrator finds

that an emergency exists and safety in air com-

merce or air transportation requires the immedi-

ate effectiveness of this Order.

App. 12

FAA’s Emergency Order of Revocation at 5. The “facts

and circumstances” to which the order referred included

both details of the current violations and a listing of prior

violations. Although it unquestionably is true that a gov-

erning authority might view this record of unlawful con-

duct as warranting punishment, the emphasis here is not

on slapping Emerson’s wrist but on preventing him from

continuing to present a safety risk. He is deprived of his

Airman Certification not as punishment for bad conduct,

but because he is “not qualified.” The immediate imple-

mentation of the order further buttresses the judgment

that it originated out of a concern for safety, not retribu-

tion.

Emerson acknowledges that the language of the stat-

ute authorizing the license revocation, 49 U.S.C.A.

§ 44701, suggests that the FAA’s only purposes are non-

punitive: to ensure safety and competence in aviation. He

contends, however, that the most severe of the available

enforcement options — including decertification — are, in

fact, punitive, and he cites in support a 1994 memoran-

dum describing aspects of the FAA’s “Compliance and

Enforcement Program.” See App. at 311-314. The docu-

ment notes that the FAA’s program ranges from educa-

tional and remedial efforts to “punitive legal enforcement

remedies, including criminal sanctions.” Id. at 312. He

cites in particular a section of the memorandum that

describes “progressive discipline,” starting with a letter

of correction to a first-time violator and culminating in “a

punitive legal enforcement sanction, i.e., a civil penalty or

certificate suspension,” for offenders who fail to sustain

compliance with the law. Id. at 313-14.

i iii pn iil iat

App. 13

On the basis of this memorandum, Emerson points

out that the FAA Administrator plainly views his enforce-

ment power to include punitive and deterrent measures,

and he maintains that it was this punitive power that was

used against him in the revocation order. We addressed a

somewhat similar argument in Allen, 80 F.3d at 574,

where the petitioner contended that the increasing length

of a driver’s license suspension based on the number of

offenses reflected a punitive aim. We acknowledged there

that tying the severity of a penalty to the number of

offenses may indicate a retributive intent, but pointed out

that it also may reflect a protective intent. The escalating

suspensions, we observed, reflected a desire to protect

the public from those who, on average, present the great-

est safety hazard - recidivist drunk drivers.

So, too, here. Following the reference to “punitive

legal enforcement sanction[s]” in the FAA memorandum

stressed by Emerson, see id. at 314, the document states

that, “Repetitive violations by a certificate holder may

even demonstrate a lack of qualification warranting certifi-

cate revocation.” (Emphasis added.) This is precisely the

basis given for revocation of Emerson’s certificate. See

supra at 10 (“[T]he Administrator has determined that

you are not qualified to hold an Airman Certification, in

that you lack the required care, judgment and respon-

sibility.”). Thus, making our conclusion even more com-

pelling than in Allen, the remedial nature of the

administrative sanction is explicit.

Characterizing the sanction as primarily remedial

does not, of course, mean that we must conclude that it

has had neither deterrent nor punitive effect. Unques-

tionably, the loss of his license has had a severe impact on

App. 14

Emerson and his aviation business. It is equally apparent

that the FAA’s more serious enforcement measures are

designed with deterrence at least partially in mind. Yet,

we previously have recognized that “the fact that some-

thing akin to punishment occurs along with, and inciden-

tal to, a sanction’s overriding remedial purpose will not

transform a permissible civil penalty into a prohibited

multiple punishment,” Stoller, 78 F.3d at 724. Likewise,

the fact that deterrence is among the objectives underly-

ing a civil sanction “is merely one factor to be taken into

account in the decisional calculus,” Allen, 80 F.3d at 576

(citing Bae v. Shalala, 44 F.3d 489, 494 (7th Cir. 1995)).

Indeed, deterrence should be an anticipated byproduct of

aggressive safety enforcement.

We note, finally, Emerson’s reliance on Pangburn v.

Civil Aeronautics Bd., 311 F.2d 349, 354-55 (1st Cir. 1962),

where we held that the Civil Aeronautics Board could

order revocation as a sanction for “disciplinary pur-

poses,” apart from the qualifications or competency of a

pilot. Having such authority does not mean, however,

that it is wielded in every case of revocation. Here, as we

have explained, the evidence persuades us that the sanc-

tion “displays colors more consistent with the remedial

end of the spectrum,” Stoller, 78 F.3d at 721. Conse-

quently, the district court did not err in refusing to dis-

miss the civil action on double jeopardy grounds.

Affirmed.

App. 15

UNITED STATES DISTRICT COURT FOR THE

DISTRICT OF NEW HAMPSHIRE

United States of America

V. Civil No. 94-152-JD

(Filed April 23, 1996)

Alan D. Emerson, Individually

And d/b/a Emerson Aviation

OPINION

The plaintiff, the United States of America, has

brought this action against the defendants, Alan Emerson

d/b/a/ Emerson Aviation (“Emerson Aviation”) and

Alan Emerson, individually, to recover a civil penalty for

past violations of federal aviation law and to perma-

nently enjoin future violations. On March 29, 1996, the

parties stipulated that the defendants are liable for the

operation of a number of specifically identified flights.

On April 8 and 9, 1996, the court presided over a bench

trial to determine whether and to what extent it should

grant the government's request for a monetary fine and

permanent injunctive relief.

Rulings of Law

1. The parties have stipulated that this action is

governed in part by 49 App. U.S.C. § 1471, a civil penalty

statute which was in force at the time this action was filed

in March 1994.

2. The parties also have stipulated that the follow-

ing flights were operated by the defendants as charter

flights which carried passengers from one point to

another for compensation in violation of 49 App. U.S.C.

App. 16

§ 1471 and 14 C.F.R. Part 135:

Date Customer Details

December 4, 1992 Pike Industries Round Trip

December 15, 1992 Pike Industries Round Trip

April 20, 1993 Pike Industries Round Trip

June 16, 1993 Pike Industries Round Trip

March 11, 1993 Wickers Sportswear

March 12, 1993 Wickers Sportswear

March 25, 1993 Wickers Sportswear

March 26, 1993 Wickers Sportswear

April 14, 1993 Wickers Sportswear

April 15, 1993 Wickers Sportswear

April 28, 1993 Wickers Sportswear

April 29, 1993 Wickers Sportswear

May 1, 1993 Wickers Sportswear

May 18, 1993 Wickers Sportswear

May 24, 1993 Wickers Sportswear

May 25, 1993 Wickers Sportswear

June 8, 1992 Franklin Brush Co. Round Trip

September 10, 1992 Franklin Brush Co. Round Trip

October 29, 1992 Franklin Brush Co. Round Trip

March 8, 1993 Franklin Brush Co. Round Trip

April 5, 1993 Franklin Brush Co. One Way

May 3, 1993 Franklin Brush Co. Round Trip

June 1, 1993 Franklin Brush Co. Round Trip

July 16, 1993 Franklin Brush Co. Round Trip

Joint Stipulation on Liability, 3/29/96

3. The court finds that, based on a common sense

reading of the unambiguous statute, a round-trip flight

conducted in violation of the federal aviation laws consti-

tutes two separate violations for purposes of calculating

App. 17

damages. See 29 App. U.S.C.A. § 1471(a)(1) (1994) (“If

such violation is a continuing one, each day of such

violation, or each flight with respect to which such viola-

tion is committed, if applicable, shall constitute a sepa-

rate offense.”). This ruling is consistent with the view

that an unlawful trip from a place of origin to an ultimate

destination constitutes a single violation but that inter-

mediary stops or flights legs, such as those required for

refueling, are incidental and do not constitute additional

violations. See F.A.A. v. Landy, 566 F. Supp. 921, 924

(S.D.N.Y. 1982) (for purpose of imposing civil penalties,

court did not count “the leg of a continuous trip,” to an

ultimate destination, i.e., each takeoff and landing, as a

separate violation), aff'd, 705 F.2d 624 (2d Cir. 1983).

4. Thus, as a matter of law, the stipulated unlawful

operation of eleven round-trip flights and fifteen one-

way flights collectively constitute thirty-seven separate

violations subject to a civil penalty.

5. The parties agree that the maximum civil penalty

for each violation is $10,000. 49 App. U.S.C.A. § 1471(a)(1)

(West 1994).

6. The court’s calculation of an appropriate civil

penalty requires a fact-specific inquiry:

Penalties should reflect the nature, circum-

stances, extent, and gravity of the violation; the

culpability, history of prior offenses, ability to

pay, and effect on the ability to continue to do

business of the person fined; and “other matters

as justice may require.”

F.A.A. v. Landy, 705 F.2d 624, 635 (2d Cir. 1983) (quoting

and adopting considerations from 49 U.S.C. § 1471(a)(1)).

App. 18

The court finds that the deterrence of other potential

violators is an implicit goal of the civil penalty provi-

sions, and therefore a proper penalty consideration, given

the government’s obvious concern with aviation safety

and its heavy reliance on voluntary compliance with avia-

tion laws. See United States v. Emerson, No. 94-152-JD, slip

op. at 6 (D.N.H. 3/29/96) (noting the aviation statutes’

“heavy emphasis” on promoting safety); accord Landy, 705

F.2d at 637 (Van Graafeiland, J., dissenting) (noting that

“air safety ranks somewhere in pecking order between

motherhood and the American flag”).

7. The parties also agree that the government is

entitled to request a permanent injunction as an addi-

tional, equitable remedy for the stipulated violations. The

relevant statute in force at the time this action was filed

provides that the

Attorney General . . . may apply to the district

court of the United States . . . for the enforce-

ment of such provision of this chapter, rule,

regulation, requirement, order, term, condition,

or limitation; and such court shall have jurisdic-

tion to enforce obedience thereto by a writ of

injunction or other process, mandatory or other-

wise, restraining such person, his officers,

agents, employees, and representatives from

further violation.

49 App. U.S.C.A. § 1487(a) (West 1994).

Findings of Fact

Based on the documentary evidence, trial testimony,

and the stipulations submitted by the parties, the court

makes the following findings of fact:

{thes abit Ale as ALO dst aa

App. 19

A. Enforcement History

1. The defendants’ admitted liability in this action is

based in part on prior FAA enforcement actions. The

defendants agree that they were subject to the following

sanctions:

a. On May 12, 1992, the government revoked

on an emergency basis Alan Emerson’s airman

certificate for lacking the care, judgment, and

responsibility required of certificate holders.

The revocation was effective immediately and

was upheld on appeal by tne National Transpor-

tation Safety Board (“NTSB”) on June 24, 1992.

b. On May 12, 1992, the government revoked

on an emergency basis Emerson Aviation’s air

taxi certificate (“ATCO”) for operating an air-

craft which was not in an airworthy condition,

failing to repair aircraft defects, and failing to

report aircraft defects to the FAA or the manu-

facturer. The revocation was effective imme-

diately and was upheld on appeal by the NTSB

on June 24, 1992.

c. Following these revocations, the defendants

repeatedly violated the federal aviation laws by

operating the flights identified in the joint stipu-

lation on liability, listed supra.

2. The defendants also have been subject to a

number of FAA enforcement actions prior to those giving

rise to the instant litigation. At trial the defendants

acknowledged that the enforcement history includes the

following:

a. On November 2, 1990, the government sus-

pended Alan Emerson’s airman certificate for 90

App. 20

days for entering restricted airspace near Pitts-

burgh, Pennsylvania without proper authoriza-

tion. The suspension was upheld on appeal by

the NTSB.

b. On August 9, 1991, the qovernment revoked

Alan Emerson’s flight instructor certificate for

making false endorsements in student flight

>— records. The revocation was upheld on appeal

by the NTSB.

c. On March 9, 1992, the government retroac-

tively suspended one of Emerson Aviation’s air

taxi certificates for 365 days for numerous viola-

tions of federal aviation regulations.

B. Evidence of Mitigation

3. At trial the court granted the defendants consid-

erable latitude in introducing evidence to mitigate or

otherwise explain their admitted violations of the federal

law. This evidence included the following:

a. In some instances the FAA’s published liter-

ature was not entirely clear or consistent on the

type of flights the defendants could operate fol-

lowing the revocation of their ATCO. For exam-

ple, the FAA Advisory Circular distributed on

April 24, 1986, and relied upon by the defen-

dants appears to support a limited private car-

riage exception to the requirement that air

carriers possess a Part 135 ATCO.

b. The defendants relied on erroneous legal

advice from attorney Vincent Butler concerning

the legality of certain flights operated without

proper FAA authorization. This advice, which

was rendered in connection with the Norman

Waal flight from Keene, New Hampshire to

——————

a en eae

Shel leat cid Wi

App. 21

Newark, New Jersey, confirmed the defendants’

understanding of the private Carriage exception.

c. Discussions with Joseph (“Charlie”) Smith,

the owner of Charter ME., Sanford, Maine, also

confirmed the defendants’ understanding of the

private carriage exception.

d. The defendants’ ability to comply with fed-

eral regulations was hampered by a poor rela-

tionship with government officials. In particular,

FAA safety inspector Gary Readio may have

personalized his oversight of the defendants’

activities and, in turn, may have subjected

Emerson Aviation to an unusually aggressive

enforcement effort.

e. The defendants’ purchase of advertising in

the yellow pages and other media was not an

intentional effort to hold Emerson Aviation out

as a charter provider. The advertising was ini-

tially purchased and designed at a time when

the defendants were properly certified and this

marketing effort was merely continued follow-

ing revocation.

f. Some of the defendants’ past violations

resulted from the failure of the defendants’

employees to properly maintain company

records as instructed.

g- Although involved in at least a few acci-

dents, including the emergency landing of a sce-

nic flight, the defendants’ admitted violations of

federal law have not directly resulted in serious

personal injury.

h. Alan Emerson is a self-educated pilot and

mechanic who possesses more than thirty years

experience in the New Hampshire aviation

industry. He operated Emerson Aviation as a

App. 22

sole proprietor from 1976 to 1988 without sanc-

tion from the FAA.

C. Evidence of Defendants’ Ability to Pay

4. Defendant Emerson Aviation, Alan Emerson’s

sole proprietorship, no longer performs aviation-related

businesses. !

5. Emerson Aviation, Inc. (“New Emerson”) was

incorporated by the New Hampshire Secretary of State in

March 1994. The president of New Emerson is Alan Emer-

son’s wife, Brenda. Alan Emerson is an employee but not

an officer or shareholder of the corporation.

6. New Emerson has succeeded to many of Emerson

Aviation’s business operations, assets, and liabilities.

New Emerson has never compensated Emerson Aviation

for whatever assets or goodwill it acquired from Emerson

Aviation.

7. According to a January 17, 1995, financial state-

ment, the defendants have an ownership interest in, inter

alia, several aircraft, business real estate, including air-

craft hangers and office space, located at the Laconia,

New Hampshire airport, and residential real estate in

1 For purposes of this opinion and the assessment of the

civil penalty Alan Emerson and his sole proprietorship, Alan

Emerson d/b/a Emerson Aviation, are treated as the same

financial entity, with the assets and liabilities of the business

chargeable to the individual. See Black’s Law Dictionary at 1392

(6th ed. 1990) (“sole proprietor is soley liable for all the debts of

the business”); see also In re San Juan Dupont Plaza Hotel Fire

Litig., 45 F.3d 569, 573 (1st Cir. 1995) (relying on law dictionary

definition of sole proprietorship).

App. 23

Gilford, New Hampshire and in Stuart, Florida. At the

time, Alan Emerson listed the cash value of his assets as

$611,500, an amount which included modest accounts

receivable and a $15,000 debt owed by A.B.C. Aircraft &

Leasing. Most if not all of Emerson’s assets are encum-

bered by mortgages or liens which approach or exceed

the total value of the assets. Alan Emerson listed a

monthly salary of $1,000.

8. Christopher Tierney, the defendants’ accountant,

testified that in 1994 his company, A.B.C. Aircraft Leas-

ing, Inc., purchased various aircraft from the defendants

for approximately $120,000, $100,000 of which was paid

in cash and $20,000 of which Tierney paid in the form of

forgiveness for an outstanding professional services debt.

9. Tierney testified that the defendants’ financial

situation has deteriorated since January 1995, in part

because the IRS has filed a blanket lien on all assets for an

amount in excess of $160,000.

10. New Emerson owns virtually no assets beyond

three aircraft, two of which are currently airworthy and

readily saleable and all of which are encumbered to some

extent by creditors. New Emerson’s business has deterio-

rated since 1994, in part because of an unprofitable opera-

tion in Keene, New Hampshire, adverse publicity related

to the instant action, and delays securing FAA approvals

and receiving agency guidance for repairs undertaken on

behalf of its customers.

App. 24

Conclusions

The government urges the court to assess a civil

penalty of $8,500 for each of the thirty-seven violations,

for a total penalty of $314,500 and to elevate the current

temporary injunction to permanent status. The govern-

ment justifies its request as necessary to penalize a sea-

soned violator who has repeatedly threatened public

safety in the face of the FAA’s enforcement activities. The

government also seeks to deter other aviators from

engaging in like conduct.

The defendants request leniency on the grounds that

their violations are not nearly as egregious “as stated on

the cold page of the complaint.” The defendants rely

heavily on evidence of mitigation and emphasize their

limited ability to pay a monetary fine. The defendants

also argue that a permanent injunction is unnecessary

because they are currently in compliance with the law.

Considering the law and the facts, the court orders

the defendants to pay a civil penalty of $5,000 for each of

the thirty-seven violation [sic], for a total penalty of

$185,000. This penalty is based on the following findings

and rulings:

1. The defendants repeatedly violated 49 App.

U.S.C. § 1471 by operating the stipulated flights despite

the emergency revocation of Alan Emerson’s airman cer-

tificate and of Emerson Aviation’s ATCO. The defendants

were fully aware of the revocation and the continued

flight operations were either intentional violations of fed-

eral law or, at a minimum, were conducted with a reck-

less disregard of the aviation laws.

App. 25

2. Prior to the enforcement actions which underlie

the stipulated violations, the defendants repeatedly were

sanctioned for violations of federal aviation laws. This

enforcement history is significant and, based on the evi-

dence before it, the court considers the defendants to be

habitual offenders who view the government’s regulation

of their business with a troubling degree of contempt.

3. The defendants’ evidence of the circumstances

surrounding their violations has not in any meaningful

way mitigated their liability or otherwise discounted the

gravity of the stipulated violations for a variety of rea-

sons. The defendants’ claim that they believed they oper-

ated under a private carriage exception to Part 135 is

unavailing. The court considers this and other explana-

tions based on convenient interpretations of federal regu-

lations and the reliance on the advice of counsel and

other pilots to strain reason and common sense. The

defendants’ evidence of their reliance on counsel is par-

ticularly unpersuasive. There is no evidence of any writ-

ten advice provided by counsel concerning the legality of

certain activities prior to the time the defendants engaged

in the activities. For example, the defendants have intro-

duced the November 3, 1993, correspondance from attor-

ney Vincent Butler to the FAA in which Butler states his

opinion that the Norman Waal flight from Keene, New

Hampshire, to Newark, New Jersey, was a legal personal

flight. However, such a letter cannot establish reliance

because it plainly was written in response to a govern-

ment investigation and not as a prophylactic effort on the

defendants’ behalf to establish the legality of contem-

plated future conduct. In any event, to the extent the

defendants may have secured and relied upon oral legal

App. 26

advice concerning their conduct, the record contains little

if any evidence as to what information counsel was pro-

vided prior to the rendering of the advice. Naturally, an

attorney’s opinion is only as good as the accuracy and

completness [sic] of the information upon which it based.

Moreover, the defendants’ good faith reliance argument

is particularly unconvincing given Alan Emerson’s con-

siderable aviation experience, his awareness that the FAA

was watching him closely and interpreting rules strictly,

and the fact that he lied to his son concerning the legality

of certain flights.

4. It is evident that the defendants’ strained rela-

tionship with the FAA magnified the dispute between the

parties and may have led the government to proceed

against the defendants with unusual vigor. Moreover, the

testimony of Alan Emerson, Charlie Smith, and Gary

Readio supports the conclusion that the relationship

between Mr. Readio and Mr. Emerson became hostile.

Finally, the government has repeatedly acknowledged

that the instant prosecution is designed, in part, to deter

future violations. Nonetheless, the court squarely rejects

the theory that the civil penalty should be reduced

because the defendants were unjustly singled out as an

enforcement target. The defendants operated in a heavily

regulated industry in which compliance with a myriad of

regulations, some of which to them may appear trivial, is

essential to the overall goal of aviation safety. The defen-

dants — not subordinates, attorneys, or other pilots — are

responsible for full compliance and such a duty is never

excused by the regrettable fact that they had a hostile

relationship with Mr. Readio whose responsibility it was

to enforce the governmental regulations in question. To

App. 27

the extent the defendants believed they had been mis-

treated by Readio, there were other avenues of relief that

may have proven fruitful. Failure to comply or simply

refusing to engage in a dialogue with the government is

not an acceptable response.

5. The court rejects the defendants’ contention that

the volume of the admitted violations and the past

enforcement history overstates the severity of their actual

conduct. It is of no moment that many of the violations

involved record-keeping or other technical functions and

that none resulted in serious personal injury. The federal

aviation laws safeguard public safety as a collective

whole and compliance with the entire regulatory scheme,

and not just the rules governing matters that have an

immediate and direct effect on life and limb, is presumed.

The maintenance of proper records and like tasks is a

crucial component in the prevention of accidents and, as

such, the failure to comply cannot be viewed as a benign

violation simply because of the clerical or technical

nature of the violated regulations.

6. The defendant Alan Emerson is currently

employed by New Emerson. The defendant Emerson Avi-

ation is no longer a going concern to the extent that it

does not perform any aviation services. Thus, in this case

the defendants’ ability to continue to do business is not a

relevant penalty calculation factor.

7. The defendants’ financial resources are minimal

in view of their considerable indebtedness. The court

finds that the defendants maintain an equity position in a

variety of real estate and capital assets such as aircraft,

even though most if not all of these assets are securing

App. 28

the defendants’ outstanding debts. It is also plain that the

FAA’s enforcement activities in general, the instant law-

suit in particular, and the attendant negative publicity

have seriously impaired the defendants’ and, by virtue of

the apparent association, New Emerson’s ability to attract

and retain customers. Finally, Alan Emerson draws a

modest income as an employee of New Emerson and, at

age 52, may reasonably be expected to continue working

in some capacity for a number of years. In light of these

circumstances, the court finds that the defendants’ lim-

ited ability to pay factors heavily in the civil penalty

calculus.

8. The court finds that the FAA lacks the resources

to effectively monitor the activities of the many individ-

uals and business entities that fall within its regulatory

sphere. As a result, aviation safety rests in large part on

voluntary compliance by those who, in all probability,

will never face the regulatory scrutiny encountered by

the defendants. However, the instant litigation under-

scores the critical importance of the aviation laws and the

serious consequences which befall those who violate

them. A significant civil penalty will deter potential vio-

lators and, in turn, foster respect for and compliance with

the law.

9. The court is inclined to award a civil penalty at or

near the magnitude requested by the government given

the nature, circumstances, extent, and gravity of the

defendants’ violations, their high level of culpability,

extensive enforcement history, and the high potential to

deter future violations. However, the court must take

cognizance of the defendants’ limited ability to pay the

requested penalty and, based on this consideration alone,

App. 29

will reduce the amount from $8,500 per violation as

requested by the government to $5,000 per violation, for a

total penalty of $185,000 (37 violations x $5,000).

10. With respect to the request for injunctive relief,

the court orders that the terms and conditions of the

temporary injunction entered on February 14, 1995, be

extended as provided herein. It is the opinion of the court

that, given the considerations addressed in conjunction

with the civil penalty assessment, supra, coupled with the

critical goal of aviation safety, such an injunction is neces-

sary to “enforce obedience” with the federal aviation

laws. See 49 App. U.S.C. § 1487(a). The court notes that in

this instance the requested injunction is not unduly bur-

densome because it merely mirrors the prior FAA

enforcement actions by prohibiting the defendants from

engaging in any activities for which their FAA licenses or

certificates have been revcked and from exceeding the

bounds of whatever certificates and licenses they may

currently possess. However, the court vacates its Febru-

ary 14, 1995, order to the limited extent that the earlier

order required “the defendants to provide a copy [of that

order] to each Emerson Aviation employee and to each

individual who boards an airplane owned or operated by,

or in conjunction with, Emerson Aviation.” The defen-

dants are no longer under any duty imposed by this court

to inform others of the instant action.

The court is required to describe in reasonable detail

the acts to be restrained by an injunction. Fed. R. Civ. P.

65(d). The court enters the followirig permanent injunc-

tion:

App. 30

A) Alan Emerson, as an individual, shall not

perform any aviation-related acts unless and

until he validly possesses the proper FAA

authority to do so; and

B) Emerson Aviation, as an entity, shall not

perform any aviation-related acts unless and

until it validly possesses the proper FAA author-

ity to do so. This prohibition includes any con-

duct which would require an air taxi certificate

under 14 C.FR. § 135 et seq.;

C) Both defendants shall comply immediately

with all regulations, policies, and orders pro-

mulgated by the FAA or other regulatory agen-

cies; and

D) This injunction is binding on the defendant

Alan Emerson, as an individual, and defendant

Alan Emerson d/b/a Emerson Aviation, an

entity, and its officers, agents, employees and

others in active concert or participation with it

as provided by Fed. R. Civ. P. 65(d).

Summa

The clerk shall enter judgment in the government’s

favor. The defendants shall pay a civil penalty of $185,000

and shall at all times adhere to the permanent injunction

described supra.

The February 14, 1995, order is vacated to the extent

described by this order.

SO ORDERED.

/s/ Joseph A. DiClerico, Jr.

Joseph A. DiClerico, Jr.

Chief Judge

App. 31

April 23, 1996

cc: Patrick M. Walsh, Esquire

John P. Kalled, Esquire

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.