Beauchamp v. Federal Aviation Administration , 384 F. App'x 259 ( 2010 )

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 09-1087
JAMES W. BEAUCHAMP,
Petitioner,
v.
FEDERAL AVIATION ADMINISTRATION,
Respondent.
On Petition for Review of an Order of the National
Transportation Safety Board. (330-EAJA-SE-18077)
Argued: May 13, 2010 Decided: June 23, 2010
Before TRAXLER, Chief Judge, WILKINSON, Circuit Judge, and
Samuel G. WILSON, United States District Judge for the Western
District of Virginia, sitting by designation.
Petition for review denied by unpublished per curiam opinion.
William Hunter Old, KAUFMAN & CANOLES, PC, Williamsburg,
Virginia, for Petitioner. Laura Jennings, FEDERAL AVIATION
ADMINISTRATION, Washington, D.C., for Respondent.
Unpublished opinions are not binding precedent in this circuit.
PER CURIAM:
James W. Beauchamp petitions for review of an order of the
National Transportation Safety Board (“NTSB”) reversing an ALJ’s
order awarding attorneys’ fees and costs to Beauchamp as a
result of an action that the Federal Aviation Administration
(“FAA”) pursued against him. Finding no error, we deny the
petition.
I.
In November 2005, Joel Clay agreed to buy Beauchamp’s Piper
Cherokee 180 aircraft on the condition that Beauchamp, an
aviation mechanic, would overhaul the engine prior to sale. By
entries in the plane’s engine logbook, Beauchamp represented
that he subsequently installed new parts, including a camshaft
and lifter bodies, and that he complied with the service
bulletins from the engine manufacturer in performing the
overhaul.
Clay took possession of the aircraft in February 2006 and
flew it for a total of approximately 26 hours through November
2006, apparently without difficulty. In November 2006, however,
Clay discovered a serious problem while performing the pre-
flight checklist—the aircraft was experiencing “magneto drop”–
i.e., the props would not spin at the required speed. Clay
hired Ron Davis, the mechanic at the Oklahoma bulk hangar where
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he kept the plane, to diagnose the problem. When Davis
disassembled the engine, he found the camshaft and lifter bodies
in such poor condition that he concluded they were used parts.
On November 15, 2006, based on Davis’s conclusions, Clay sent a
letter to the FAA requesting that it investigate whether
Beauchamp actually performed the overhaul and whether his engine
logbook entries were false. Clay attached digital pictures that
Davis claimed to have taken of the engine.
On January 27, 2007, the FAA sent inspectors to Oklahoma to
investigate Clay’s complaint. The inspectors found the engine
still disassembled, and Davis later certified that the
disassembled parts were the same ones he had removed when he was
trying to diagnose the problem. The FAA contacted Beauchamp
once during the investigation and Beauchamp responded by
providing digital photos that he claimed to have taken while
overhauling the plane and a receipt for a new cam shift/lifter
body kit that he represented he installed.
As a result of their investigation, the FAA inspectors
found discrepancies between Beauchamp’s logbook entries and the
actual condition of the engine parts presented to them: (1)
Beauchamp logged that he installed a new kit that he had
purchased containing camshaft and lifter bodies, but the FAA
inspectors observed that the lifter bodies were made by a
different manufacturer than the camshaft and that the lifter
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bodies appeared to have a significantly higher amount of wear
and tear than would new equipment; (2) Beauchamp entered that he
complied with the service bulletins, but the FAA inspectors
determined that he did not replace the thermostatic bypass valve
or the AC diaphragm fuel pump with new parts as the bulletins
required; (3) FAA inspectors concluded Beauchamp did not replace
composite floats in the carburetor with metal ones, as required
by the service bulletins; and (4) based on the fact that the
magnetos were dirty and the bearings were not lubricated,
inspectors determined that Beauchamp did not overhaul the
magnetos as he represented he had in the logbook.
In August 2007, the FAA issued an order revoking
Beauchamp’s airman mechanic certificate on the basis that
Beauchamp made intentionally false or fraudulent entries in his
logbook, in violation of 14 C.F.R. § 43.12(a)(1) (2009), and
that he failed to use the proper methods and practices
prescribed by the applicable manufacturer, in violation of 14
C.F.R. § 43.13(a) (2009).
Beauchamp then appealed the order to the NTSB. The case
was assigned to an ALJ, who conducted an evidentiary hearing.
Before the ALJ, Beauchamp argued that he installed the new
camshaft/lifter kit, and therefore that the ones inspected by
the FAA could not have been the same parts he installed; that he
indeed installed a new bypass valve and that any damage to it
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occurred when Davis was dismantling the engine; that the fuel
pump he installed was new; that he indeed put metal floats in
the carburetor as required and that the FAA must have been given
a different part to inspect; and that he cleaned the magnetos
and replaced every part, so that any damage to the magnetos must
have occurred while the plane was in Clay’s possession as a
result of nonuse or contaminated oil.
The ALJ reversed the order revoking Beauchamp’s airman
mechanic certificate and dismissed the charges, finding that
Beauchamp did not make false statements in the logbook regarding
the installation of new parts or the compliance with the
manufacturer’s service bulletins. The ALJ noted that the FAA
presented a sound case that Beauchamp installed used parts
instead of new ones but that Beauchamp likewise made a
convincing case that he had performed the work entered in the
engine log.
The ALJ acknowledged, “This case represents to me a bit of
a mystery as to how all of these used, worn, and inferior parts
were later found in this engine and taken out of the engine
almost a year after the engine had been overhauled by . . .
Beauchamp.” J.A. 855-56. The ALJ concluded that “it comes down
. . . in [the] final essence, to . . . who are you going to
believe?” J.A. 854. The ALJ found Beauchamp’s testimony that
he installed new parts to be very believable, that nothing was
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wrong with the plane at the time of delivery to Clay, and that
the plane thereafter was used very seldom and mostly sat dormant
in the hangar—which could have accounted for the engine
problems. Accordingly, the ALJ stated that he was “giving the
Respondent [Beauchamp] the benefit of the doubt.” J.A. 857.
The FAA later filed an appeal of the ALJ’s order but ultimately
withdrew it.
As the prevailing party in the proceeding, Beauchamp filed
a request for costs and attorneys fees under the Equal Access to
Justice Act (“EAJA”), see 5 U.S.C.A. § 504(a)(1) (West 2007)
(providing that in an adjudication before a federal agency, the
agency “shall award” fees and costs to the prevailing party
unless the “position of the agency was substantially
justified”). The ALJ noted that Beauchamp was eligible for a
fee award under the EAJA insofar as his status as a prevailing
party was undisputed. Thus, the only issue to be resolved was
whether the FAA’s position was “substantially justified”
throughout the proceedings. In contrast to his initial order on
the merits wherein he indicated that this was a close case, the
ALJ concluded that the FAA’s position following its
investigation was not substantially justified and that a
reasonable person would not have pursued the complaint:
From its inception the investigation in this
matter was an exercise gone awry. The FAA inspectors
were faced with a lack of sufficient reliable evidence
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from the beginning of their involvement in this
matter. The inspectors ignored the following several
large proof problems: (1) no one saw the engine taken
apart [by Davis at Clay’s request], which was two
months before the inspectors saw the engine; (2) the
engine oil and oil filter had been discarded; (3) the
cam shaft had been buffed and cleaned; (4) the engine
parts had been left unsecured in a bulk hangar for
more than two months and chain of custody was an
issue. None of these obvious problems adequately was
taken into account, nor was independently verifiable
rebuttal evidence provided by [Beauchamp] which would
have led a reasonable person to decide not to pursue
the complaint.
J.A. 1126.
The FAA appealed the fee award to the full NTSB, arguing
its actions were substantially justified. The NTSB reversed the
fee award, reasoning that the ALJ resolved the charges against
Beauchamp on the basis of a credibility determination—in other
words, there was no definitive proof that Beauchamp did or did
not install new parts or refurbished parts and the ALJ simply
had to decide between Beauchamp’s testimony and Davis’s. The
NTSB followed the rule that when credibility is a primary
component of the ALJ’s decision, a fee award under the EAJA is
not appropriate. The NTSB explained:
[T]he only manner in which the [ALJ] could have
resolved the apparent contradictions in the evidence
was to engage in an assessment of [Ron] Davis’s
credibility and [Beauchamp’s] credibility. Mr. Davis
asserted that the parts that he removed from the
aircraft and photographed were the same parts at issue
here, and that he kept the parts in the hangar until
[the FAA] Inspectors . . . requested [the parts be
sent to them].
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In response to [the FAA’s] evidence, [Beauchamp]
. . . testified that all of the parts that he used . .
. were either brand new or were freshly overhauled.
This testimony directly contradicts that of Mr. Davis
. . . . [Beauchamp] attempted to assert that Mr.
Clay’s use of the aircraft explained the appearance of
the parts, and implied that Mr. Davis may have
exchanged the newer parts in the aircraft for used
parts during [Davis’s] inspection. Given that
[Beauchamp] did not provide any extrinsic evidence to
support these assertions, but instead relied on his
own testimony, we find that the [ALJ] was required to
resolve this case predominately on the basis of
credibility.
J.A. 1180-82 (citation omitted).
Beauchamp now petitions for review of the NTSB order
reversing the ALJ’s fee award.
II.
On appeal, Beauchamp repeats his contention that the FAA’s
pursuit of the complaint against him was not substantially
justified. We conclude that substantial evidence supported the
NTSB’s contrary decision. See Hess Mech. Corp. v. NLRB, 112
F.3d 146, 149 (4th Cir. 1997) (explaining that our review of an
agency decision under the EAJA is for substantial evidence).
Under the EAJA,
[a]n agency that conducts an adversary adjudication
shall award, to a prevailing party other than the
United States, fees and other expenses incurred by
that party in connection with that proceeding, unless
the adjudicative officer of the agency finds that the
position of the agency was substantially justified or
that special circumstances make an award unjust.
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5 U.S.C.A. 504(a)(1). In this context, “substantially
justified” means “justified to a degree that could satisfy a
reasonable person.” Pierce v. Underwood, 487 U.S. 552, 565
(1988). And, an agency does not necessarily act unreasonably
simply by relying on the credibility of a witness whose
testimony the factfinder ultimately declines to credit. See
EuroPlast, Ltd. v. NLRB, 33 F.3d 16, 17-18 (7th Cir. 1994).
We conclude that substantial evidence in the record
supports the NTSB’s conclusion that the FAA reasonably decided
to revoke Beauchamp’s airman mechanic certificate. Such
evidence included:
• testimony of Davis, a certified, experienced
airplane mechanic, that the parts inspected by the FAA
were the same ones he took from the plane during his
inspection; that he found composite floats in the
carburetor instead of metal; that the cam shaft and
lifter bodies were worn beyond what a new engine would
have been; and that numerous other parts were not in
an overhauled state;
• photographs taken by Davis of the parts removed
during his inspection that depicted various parts in a
dirty state inconsistent with a recent engine
overhaul; and
• testimony and notes from the FAA inspectors that the
logbook was not consistent with the appearance and
wear of various engine parts.
In response, Beauchamp provided the FAA with a statement
certifying that he did everything noted in the logbook, and
provided photos of his overhaul process and receipts for the
parts purchased. The FAA, however, was not required to take
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Beauchamp’s statements at face value. Thus, it was justified in
temporarily revoking the certificate.
Beauchamp contends that the ALJ correctly ruled that the
FAA failed to account for four major problems with its proof:
(1) that Davis disposed of the oil and oil filters before anyone
could see (implying that Davis was trying to hide the fact that
the oil was contaminated because Clay did not maintain the
engine properly and could have caused the parts to exhibit wear
and tear); (2) the camshaft was cleaned and buffed (implying
that Davis was trying to cover up contaminated oil that would
have been on the camshaft); (3) the parts were left in an
unsecured bulk hangar for two months; and (4) no one from the
FAA saw Davis or anyone else take apart the engine.
We conclude, however, that the FAA’s information in each
instance adequately addressed these issues. Davis testified
that he did not polish the camshaft or alter any of the parts,
and the FAA presented substantial evidence that the condition of
the rest of the engine was not consistent with the presence of
contaminated oil. As for the fact that the parts were left in
an unsecured hangar for two months, Davis testified that he had
never had anyone tamper with parts he was using at the hangar.
And finally, the observation that no one from the FAA saw Davis
or anyone else disassemble the engine would be significant only
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if the FAA had reason to doubt Davis’s veracity, which it did
not.
For all of these reasons, we hold that substantial evidence
supported the NTSB’s conclusion that despite the fact that the
FAA did not ultimately prevail in its case against Beauchamp, it
was substantially justified in proceeding as it did.
III.
In sum, finding no error by the NTSB, we deny the petition
for review.
PETITION FOR REVIEW DENIED
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