The NTSB recently reversed an ALJ’s award of attorneys fees to a respondent in an enforcement action. In the underlying enforcement action upon which Application of Porterfield, Alava and Khoyan was based, the airmen were charged with falsification prohibited by 14 C.F.R. §§ 61.59(a)(1) and (2), and with lacking the good moral character required by § 61.153(c)4 of the holder of an airline transport pilot (ATP) certificate. The FAA alleged that “the three had conspired to obtain certified flight instructor (CFI) certificates for Porterfield and Alava that were approved and issued by applicant Khoyan (who was, at that time, an FAA inspector), when the required ground and flight tests were not given or were not given properly.” After a hearing, the ALJ reversed the FAA’s emergency revocation of the airmen’s certificates finding that the airmen had not intentionally falsified any documents. The ALJ also made the statement that the FAA should never have brought the case.
Although the FAA appealed the ALJ’s decision, the full Board upheld the ALJ’s findings. The Board’s decision was based upon the deference it is required to give to the credibility determinations made by the ALJ at the hearing. However, the Board also noted that its “decision not to overturn the law judge’s credibility assessment should not be read to suggest that we endorse his comment that the case ‘should never have been brought.'”
Subsequently, the airman submitted an application for attorneys fees under the Equal Access to Justice Act (“EAJA”). The ALJ granted fees and expenses finding that the FAA had pursued a “weak and tenuous” case, that the Administrator lacked substantial justification, and that she “had no facts or evidence to support her claim”. The FAA then appealed the ALJ’s award of fees.
On appeal, the Board held that the FAA had met the substantial justification test under which “the facts alleged must have a reasonable basis in truth, the legal theory propounded must be reasonable, and the facts alleged must reasonably support the legal theory.” It stated that “[g]iven the significant documentary evidence apparently indicating that applicants engaged in a scheme to obtain improper certificates, including the evidence that there was insufficient time for the ground and flight tests to have been completed properly, the Administrator was justified in proceeding to a hearing.” The Board concluded that the FAA had a reasonable basis in fact and law for each of the claims against each of the airmen.
Although Board member Hersman did not concur in the Board’s decision, she commented “I am concerned about the precedent we seem to be setting with respect to EAJA cases and credibility determinations. The ALJs are properly charged with evaluating all aspects of cases; therefore their judgment regarding credibility is a significant matter. However, I do not believe the EAJA awards in this case hinge on credibility, as evidenced by the decision of Chief Judge Fowler to award the EAJA fees to the respondents.”
Her comment highlights the fact that, absent a clear statement by the ALJ as to whether credibility was the sole basis for the ALJ’s decision, the Board is required to make that determination even though the Board did not participate in the hearing. In effect, the Board is required to “guess”. Perhaps the potential for this type of guessing and/or confusion could be reduced or eliminiated if the ALJ’s included a more specific explanation of the basis for their decision in their opinions? Or maybe the Board would continue to find ways to justify support for the FAA in spite of such statements? Time will tell whether the precedent