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OST-2004-17486 - Ascend Aviation - Enforcement Proceeding

Ascend Aviation Group, LLC / Ascend Aviation Marketing and Sales, LLC / KCP Leasing and Services, LLC / Scot Spencer / George Warde

OST-2004-17486 - Enforcement Proceeding

Issued April 5, 2004

Notice of Enforcement Proceeding and Proposed Assessment of Civil Penalties

The attached complaint of the Office of the Assistant General Counsel for Aviation Enforcement and Proceedings alleges that Ascend Aviation Group, LLC, Ascend Aviation Marketing and Sales, LLC, KCP Leasing and Services, LLC, Scot Spencer, and George Warde, under the authority, direction, and control of Scot Spencer and George Warde, conducted unauthorized air carrier operations in violation of 49 U.S.C. 41101 and 41712 by engaging in air transportation as an indirect air carrier without the requisite economic authority from the Department. The Enforcement Office seeks an order directing Respondents to cease and desist from further such violations; assessing, jointly and severally against all Respondents, $1,000,000 in civil penalties; and permanently banning Scot Spencer from the aviation industry for the violations described in the complaint.

Counsel: Aviation Enforcement and Proceedings, Samuel Podberesky



April 15, 2004

Notice of Assignment Proceeding

This proceeding has been assigned to Administrative Law Judge Richard C. Goodwin. All future pleadings and other communications regarding this proceeding shall be served on him and the DOT Hearing Docket and the other persons named in the attached Service List.

By: Chief Administrative Law Judge, Ronnie Yoder



May 4, 2004

Motion of the Enforcement Office for Entry of Default Judgement

The Office of the Assistant General Counsel for Aviation Enforcement and Proceedings respectfully moves for entry of an order finding Respondents in default and directing all Respondents to cease and desist from further violations of 49 U.S.C. 41101 and 41712, assessing, jointly and severally, against all Respondents, $1,000,000 in civil penalties, and permanently banning Respondent Scot Spencer from the aviation industry for the violations described in the attached Notice of Enforcement Proceeding and Proposed Assessment of Civil Penalties and Enforcement Complaint.

The Enforcement Office’s Motion for Entry of a Default Judgment should be granted based on Respondents’ failure to submit an answer in accordance with 49 CFR 302.405 to the Complaint filed in this docket. Pursuant to 14 CFR 302.409 the Respondents are no longer entitled to a hearing and a default judgment may be entered against them. Thus, a Final Order finding the Respondents to be in default and directing each Respondent to cease and desist from further violations, assessing, jointly and severally, against all Respondents, $1,000,000 in civil penalties, and permanently banning Scot Spencer from the aviation industry is appropriate.

Counsel: Aviation Enforcement and Proceedings, Samuel Podberesky



May 13, 2004

Opposition of Respondents to the Enforcement Office's Motion for Entry of Default Judgement

In its Motion for Entry of Default, the Enforcement Office points to a case to support its contention that "Department precedent supports entry of a default judgment in cases where Respondents ignore the Department’s formal complaint process." Motion for Default at 2. That may be true, but those are not the circumstances of this case. Respondents have not ignored the complaint process. Respondents were caught offguard by having to retain counsel after Mr. Stalzer informed them he would not be representing them. Then Respondents attempted to get an extension of time through the Assistant General Counsel pursuant to 5 302.405(a), only to be denied and blind-sided by the Enforcement Office’s filing of a Motion for Entry of Default Judgment the day after Respondents told the Enforcement Office that they intended to respond and explained the extenuating circumstances involved. Now, Respondents are again complying with the Department’s formal complaint process via the instant series of motions.

Counsel: Chadbourne & Parke, Abbe Lowell, 202-974-5600


May 13, 2004

Motion for Extension of Time to Respond to the Enforcement Complaint

Pursuant to Section 302.408 of the Code of Federal Regulations, Ascend Aviation Group, LLC, Ascend Aviation Marketing and Sales, LLC, KCP Leasing and Services, LLC, Scot Spencer, and George Warde (collectively “Respondents”), hereby request an extension of time to respond to the Enforcement Complaint filed on April 5,2004 in the above-referenced action.

Counsel: Chadbourne & Parke, Abbe Lowell, 202-974-5600



May 14, 2004

Re: Omission of an Exhibit

Yesterday, on behalf of our client, Ascend Aviation Group, LLC et al., we filed an Opposition of Respondents to the Enforcement Office's Motion for Entry of Default Judgment in the above‑referenced proceeding. There were two exhibits attached to this pleading, but one of the two was inadvertently omitted, Exhibit A. Attached please find an original and five copies of Exhibit A to the pleading. This exhibit was attached to the service copies.

Counsel: Chadbourne & Parke, Abbe Lowell, 202-974-5600



May 26, 2004

Enforcement Office's Motion for Leave to File and Reply to Respondent's Opposition to the Enforcement Office's Motion for Default Judgement

The Respondents plainly did not act in a timely fashion to protect their rights to file an answer to the Complaint. Indeed, Respondents readily admit that they were informed within one week of the Complaint, or by April 12, 2004, that Thomas Stalzer would not represent them in this matter, yet they each waited three more weeks, which was 13 days after their answer was due, to contact the Enforcement Office. Interestingly, although Respondents now apparently are represented en masse, early in the Enforcement Office’s investigation of the Respondents’ conduct alleged to be unlawful, Mr. Stalzer made it clear that, while he continued to represent Ascend Aviation Group, LLC, he did not represent Mr. Spencer. Moreover, when the Respondents did contact the Enforcement Office regarding an extension to file an answer to the Complaint, that contact was made by a person, Ms. Sarita Kedia, who said that she did not represent any of the parties in the context of this proceeding.

While rigorous representation is to be expected in an adversarial proceeding, we find particularly troubling Respondents’ and their present counsel’s charges that the Enforcement Office acted in "bad faith" or in a "professionally questionable" manner, either in not acquiescing to Ms. Kedia’s request for an extension or in not advising Ms. Kedia that a Motion for Default Judgment had been prepared and would shortly be filed. On May 3, 2004, Ms. Kedia contacted the Enforcement Office seeking an extension to file an answer. Pursuant to 14 CFR 302.409, only the Department’s decisionmaker or the administrative law judge may grant permission to file an answer late. Thus, the Enforcement Office did not have the authority to grant Ms. Kedia’s request and the Enforcement Office properly instructed Ms. Kedia to file a motion with Your Honor.

Counsel: Aviation Enforcement and Proceedings, Samuel Podberesky



June 1, 2004

Respondent's Opposition to the Enforcement Office's Motion for Leave to File and Reply to Respondents' Opposition to the Enforcement Office's Motion for Default

It appears that the Enforcement Office's Motion for Leave to File and Reply was really nothing more than a thinly veiled opportunistic attack on Mr. Spencer in an attempt to prejudice these proceedings against him.' There is no legitimate reason to raise the specter of Mr. Spencer's past in a motion that is purportedly responding to an opposition for default judgment. Mr. Spencer has been involved in only one other Enforcement Proceeding, which the Enforcement Office ceased pursuing after its motion for partial summary judgment was summarily denied nearly six years ago. Had the Enforcement Office wished to pursue that case, it had ample opportunity to do so. These sorts of personal vindictive attacks should not be tolerated.

Counsel: Chadbourne & Parke, Abbe Lowell, 202-974-5600



June 7, 2004

Order of Administrative Law Judge

On April 5, 2004 the Assistant General Counsel for Aviation Enforcement and Proceedings served an Enforcement Complaint and an accompanying Notice of Enforcement Proceeding and Proposed Assessment of Civil Penalties, on Respondents: Ascend Aviation Group, LLC; Ascend Aviation Marketing and Sales, LLC; KCP Leasing and Services, LLC; Scot Spencer; and, George Warde. Respondents did not file an Answer to the Enforcement Complaint within 15 days after the date of service of the Complaint as required by 14 C.F.R. 6 302.408.* The undersigned was assigned to this proceeding by Notice of Assignment of Proceeding served April 15, 2004.

By: Administrative Law Judge, Richard Goodwin



June 15, 2004

Re: Respondents' Answer to Enforcement Complaint

Counsel: Chadbourne & Parke, Abbe Lowell, 202-974-5600, adlowell@chadbourne.com


June 15, 2004

Re: Notice of Appearance

PLEASE TAKE NOTICE that CHADBOURNE & PARKE LLP hereby appears as counsel on behalf of Respondents Ascend Aviation Group, LLC, Ascend Aviation Marketing & Sales, LLC, KCP Leasing and Services, LLC, Scot Spencer, and George Warde. Respondents request that a copy of all papers filed and noticed in this action be served at the addresses listed below.

Counsel: Chadbourne & Parke, Abbe Lowell, 202-974-5600, adlowell@chadbourne.com



June 24, 2004

Office of Aviation Enforcement and Proceedings' Response to the Order of Judge Richard C. Goodwin

The Enforcement Office has engaged in settlement negotiations with Ascend Aviation Group, LLC, and its related corporate companies through its previous legal counsel; however, we were unable to reach a settlement, and, therefore, the Enforcement Office initiated this enforcement action. We are willing to consider further negotiations. Mr. Spencer was not represented in his individual capacity, but prior to the Complaint being filed he passed along to the Enforcement Office through Ascend’s counsel one offer to settle. No further contact with Mr. Spencer with regard to settlement took place after the Enforcement Office’s response to Mr. Spencer through Ascend’s counsel.

Counsel: Aviation Enforcement and Proceedings, Damon Whitehead and Michael Nolan


June 25, 2004

Respondents' Statement of the Issues and Proposed Procedural Schedule

Respondents request a proposed hearing date no sooner than May 23, 2005. Respondents’ lead counsel currently has a multiple-month criminal trial scheduled for August 16, 2004. He has another multiple-month criminal trial scheduled for January 2005. In addition, he has and a third, smaller two to three week criminal trial likely to be scheduled prior to the end of this year or trailing the January case.

In order to avoid unnecessary delay of the hearing in the instant case, Respondents are proposing a schedule that takes into consideration Respondents’ lead counsel’s pre-existing trial schedule and allows counsel adequate time to prepare for the DOT hearing.

Respondents’ counsel conferred with AEP trial attorney Damon Whitehead and counsel agree that the hearing site should be Washington, DC. Counsel also agreed that future filings will be served upon each other via both facsimile and first-class mail.

Counsel: Chadbourne & Parke, Abbe Lowell, 202-974-5600, adlowell@chadbourne.com



July 15, 2004

Procedural Order of Administrative Law Judge

In order to expedite the hearing in this matter, the parties shall comply with the Procedural Schedule set forth hereinbelow. Pursuant to Section 556 of the Administrative Procedure Act, 5 U.S.C. 556(c)(8), each party shall be represented at each conference call or hearing by someone who has authority to negotiate concerning resolution of all issues in controversy.

Counsel for the parties are expected to attempt to resolve any discovery disputes among themselves. If counsel come to an impasse they should immediately consult with the undersigned. Impasses may be resolved by formal or informal hearing and/or telephone conference.

By: Richard Goodwin



July 15, 2004

Procedural Order of Administrative Law Judge

In order to expedite the hearing in this matter, the parties shall comply with the Procedural Schedule set forth hereinbelow. Pursuant to Section 556 of the Administrative Procedure Act, 5 U.S.C. 556(c)(8), each party shall be represented at each conference call or hearing, by someone who has authority to negotiate concerning resolution of all issues in controversy.

Counsel for the parties are expected to attempt to resolve any discovery disputes among themselves. If counsel come to an impasse they should immediately consult with the undersigned. Impasses may be resolved by formal or informal hearing and/or telephone conference.

By: Richard Goodwin



July 20, 2004

Notice of Prehearing Conference

The above-captioned proceeding is scheduled for a Prehearing Telephone Conference on August 17, 2004, at 10:00 a.m., Eastern Time.

All parties should be prepared to discuss all issues and facts at issue All documents that have been exchanged and that have not already been provided to the Judge should be provided to him by July 27, 2004 Pursuant to Section 556 of the Administrative Procedure Act, U S.C. 5 556(c)(8), each party shall be represented by someone who has authority to negotiate concerning resolution of all issues in controversy.

By: Richard Goodwin



Served August 13, 2004

Postponement of Status Conference

The Prehearing Telephone Status conference scheduled for August 17,2004 at 1O:OO a.m. Eastern Time is hereby rescheduled until September 17,2004 at 10:30 a.m.

By: Administrative Law Judge, Richard Goodwin



September 15, 2004

Notice of Appearance

The Office of Aviation Enforcement and Proceedings respectfully request that the Court enter the appearance of Ann G. Gawalt, Lisa Swafford-Brooks, and Jonathan Dols, Senior Trial Attorneys, as counsel for the Enforcement Office and requests that their names be added to the service list. In addition, the Enforcement Office respectfully request that Troy Duncan and Karen Starring be removed as counsel of record in this matter and from the service list.

Counsel: Aviation Enforcement and Proceedings, Ann Gawalt, Lisa Swafford-Brooks, Jonathan Dols, Damon Whitehead


September 16, 2004

Motion for Leave to File and Motion to Modify Notice of Hearing and Proposed Schedule Order

The Office of Aviation Enforcement and Proceedings pursuant to 14 CFR 302.6(c) submits this Motion for Leave to File and Motion to Modify Notice of Hearing and Proposed Scheduling Order. The Enforcement Office has conferred with counsel for the Respondents and they are in 'agreement with the instant motions and have no opposition.

Absent modification of the present schedule for this proceeding, written discovery will close on November 19, 2004. Good cause exists to extend the deadline to complete written discovery and depositions due to the complex nature of the allegations, the Enforcement Office inability to schedule certain depositions until fiscal year 2005 begins because of Federal budget issues, the diverse locations of witnesses, as well as the rescheduling of the first status hearing in this case to September 17, 2004.

Counsel: Aviation Enforcement and Proceedings, Dayton Lehman, Jr., Ann Gawalt, Lisa Swafford-Brooks, Jonathan Dols, Damon Whitehead



September 15, 2004

Notice of Appearance

The Office of Aviation Enforcement and Proceedings respectfully request that the Court enter the appearance of Ann G. Gawalt, Lisa Swafford-Brooks, and Jonathan Dols, Senior Trial Attorneys, as counsel for the Enforcement Office and requests that their names be added to the service list. In addition, the Enforcement Office respectfully request that Troy Duncan and Karen Starring be removed as counsel of record in this matter and from the service list.

Counsel: Aviation Enforcement and Proceedings, Ann Gawalt, Lisa Swafford-Brooks, Jonathan Dols, Damon Whitehead


September 16, 2004

Motion for Leave to File and Motion to Modify Notice of Hearing and Proposed Schedule Order

The Office of Aviation Enforcement and Proceedings pursuant to 14 CFR 302.6(c) submits this Motion for Leave to File and Motion to Modify Notice of Hearing and Proposed Scheduling Order. The Enforcement Office has conferred with counsel for the Respondents and they are in 'agreement with the instant motions and have no opposition.

Absent modification of the present schedule for this proceeding, written discovery will close on November 19, 2004. Good cause exists to extend the deadline to complete written discovery and depositions due to the complex nature of the allegations, the Enforcement Office inability to schedule certain depositions until fiscal year 2005 begins because of Federal budget issues, the diverse locations of witnesses, as well as the rescheduling of the first status hearing in this case to September 17, 2004.

Counsel: Aviation Enforcement and Proceedings, Dayton Lehman, Jr., Ann Gawalt, Lisa Swafford-Brooks, Jonathan Dols, Damon Whitehead



September 20, 2004

Amended Procedural Order

Complainant has filed a Motion for Leave to File and Motion to Modify Notice of Hearing and Proposed Procedural Order dated September 16, 2004. Complaint represents that Respondents consent to the relief requested.

If the parties agree further amendments are necessary, they may file A Joint Motion and Order for consideration by the court.

By: Administrative Law Judge, Richard Goodwin


September 22, 2004

Respondent's Responses and Objections to the Government's Request for Production of Documents

Counsel: Chadbourne & Parke, Abbe Lowell, 202-974-5600, adlowell@chadbourne.com



September 30, 2004

Transcript of Pre-Hearing Telephone Conference before the Honorable Richard C. Goodwin

By: Helen Keeler



October 7, 2004

Order of Administrative Law Judge Correcting Transcript of Prehearing Conference

By: Richard Goodwin



October 28, 2004

Motion to Compel the Production of Documents

The Office of the Assistant General Counsel for Aviation Enforcement and Proceedings by and through its undersigned attorneys, moves for an order compelling Ascend Aviation Group, LLC, Ascend Aviation Marketing and Sales, LLC, KCP Leasing and Services, LLC, Scot Spencer; and George Warde to: (1) produce immediately all of the documents within their possession that are responsive to the Enforcement's Office's document request and to supplement its answers as set forth in Federal Rules of Civil Procedure (FRCP) 26(e); (2) to produce documents in a manner that is organized in the course of ordinary business or that associates the produced documents with a specific request; and (3) produce the documents responsive to Requests No 19-22 and 30-31 withheld in response to the Enforcement Office's Request for Production of Documents. Pursuant to FRCP 37(a) and procedures agreed to by the parties, Respondents were required to produce documents on or before September 20, 2004, which they have failed to do.

Counsel: Deputy Assistant General Counsel, Dayton Lehman, Jr.



November 5, 2004

Application for the Issuance of a Subpoena for Documents and Things

Counsel: Chadbourne & Parke, Abbe Lowell, 202-974-5600, adlowell@chadbourne.com



November 8, 2004

Respondents' Opposition to the AEP's Motion to Compel the Production of Documents and Motion for Protective Order

The AEP, at a minimum, has mischaracterized the facts, and in so doing has created the appearance of disagreement where Respondents had believed very little existed. Respondents have produced and continue to search their files for documents responsive to virtually all of the requests contained within AEP's First Request for Production of Documents. Contrary to the AEP's assertions, Respondents have agreed to respond without limitation to 22 of the AEP's 31 requests. Despite Respondent's conveyed willingness to produce documents responsive to these requests, the AEP dedicates the majority of its 28-page Motion to arguments on general and specific objections that, to Respondents' belief, had already been resolved by the parties. Accordingly, most of the AEP's protracted Motion unnecessarily burdens this Court with statements on law and fact that are simply irrelevant.

Counsel: Chadbourne & Parke, Abbe Lowell, 202-974-5600, adlowell@chadbourne.com



November 12, 2004

Order of Administrative Law Judge

On the morning of November 12, 2004, Complainant telephonically requested a prehearing conference on the matter, since the parties planned to fly out for the depositions this weekend. The Judge held an informal prehearing conference at 2:30 p.m. on that date. Since the prehearing conference was held on short notice and no court reporter could be secured, it was held off the record. For the most part, the parties summarized their arguments in their pleadings and discussed settlement and legal ethics.

By: Administrative Law Judge, Richard Goodwin



November 18, 2004

Motion of Aviation Enforcement and Proceedings' Motion for Leave to File and Reply to Respondents' Opposition to Its Motion to Compel the Production of Documents and Motion for Protective Order

Counsel: DOT, Samuel Podberesky



Application for an Order to Depose Scot Spencer, George Warde, and Corporate Representatives for Ascend Aviation Group, LLC, Ascend Aviation Marketing and Sales, LLC, and KCP Leasing and Services, LLC

The Office of the Assistant General Counsel for Aviation Enforcement and Proceedings files this application to depose the following individuals; (1) Scot Spencer; (2) George Spencer , and (3) corporate representatives for Ascend Aviation Group, LLC, Ascend Aviation Marketing and Sales, LLC, and KCP Leasing and Services, LLC. On November 12, 2004, Your Honor held an informal prehearing conference by telephone regarding Respondents’ request to postpone the 30(b)(6) depositions of representatives of Ryan International Airlines, Inc. scheduled for November 16 and 17, 2004. Your Honor issued an Order that day stating that Your Honor “will not consider Respondent's request to postpone the depositions at issue or compel such depositions” because neither party had complied with 14 CFR 302.26 in scheduling the depositions. The Enforcement Office files this application for depositions in compliance with 14 CFR 302.26 and in accordance with Your Honor’s order dated November 12, 2004.

Counsel: Aviation Enforcement and Proceedings, Ann Gawalt, Lisa Swafford-Brooks, Jonathan Dols, Damon Whitehead



December 15, 2004

Respondents' Opposition to AEP's Application for an Order to Depose Scot Spencer, George Spencer, and Corporate Representatives for Ascend Aviation Group, Ascend Aviation Marketing and Sales, and KCP Leasing and Sales

Pursuant to 14 C.F.R. § 302.26 and 302.6, Respondents Ascend Aviation Group, LLC, Ascend Aviation Marketing and Sales, LLC, KCP Leasing and Services, LLC, and Scot Spencer hereby oppose the Office of Aviation Enforcement and Proceedings' Application for an Order to Depose Scot Spencer, George Spencer, and Corporate Representatives for Ascend, Ascend Marketing, and KCP. Respondents respectfully request the Court dismiss AEP's Application as deficient and for not providing reasonable notice under this Court's rules.

Counsel: Chadbourne & Parke, Abbe Lowell, 202-974-5600, adlowell@chadbourne.com



January 7, 2005

Motion for Stay of Proceedings

The Office of Assistant General Counsel for Aviation Enforcement and Proceedings, pursuant to 14 CFR 302.11, respectfully requests a stay until January 26 of further proceedings in this matter and that the deadline for concluding written discovery be extended until February 18, 2005. In support of this motion, the Enforcement Office states as follows:

Several of the parties have reached agreement with the Enforcement Office to settle this matter and the requested stay will permit the parties to focus on concluding these negotiations, reducing their agreement to writing and submitting the agreement to Your Honor for approval in accord with 14 CFR 302.417. Grant of the requested stay and extension of the written discovery deadline is in the public interest because, among other things, settlement of the proceeding will conserve the scarce resources of the parties and the Office of Hearings.

The Enforcement Office has conferred with counsel for Respondents, including Scot Spencer and George Warde, and they do not object to this motion. For these reasons, the Enforcement Office respectfully requests a stay until January 26 of further proceedings in this matter and that the deadline for concluding written discovery be extended until February 18, 2005.

Counsel: Dayton Lehman, Jr.



January 10, 2005

Re: Notice of Withdrawal of Counsel

This letter serves to inform Your Honor and all parties that Chadbourne & Parke, LLP no longer represents Ascend Aviation Group, LLC, Ascend Aviation Marketing, KCP Leasing and Services, LLC, and Scot Spencer. Accordingly, Chadbourne will not be participating in this proceeding on behalf of Respondents, and we request that Chadbourne’s name be removed from the service list.

Counsel: Chadbourne & Parke, Abbe Lowell, 202-9974-5678, adlowell@chadbourne.com



February 9, 2005

Motion for Rulings, or in The Alternative, for a Hearing on Pending Matters and Motion to Extend Discovery

Because the Enforcement Office cannot assure Your Honor that this matter will be settled in the immediate future, we request an extension of time to complete all discovery matters. Specifically, we request that the deadline to conduct written discovery and depositions be extended until 60 days after Your Honor rules on this Motion. The grant of this extension to complete discovery is critical to the proper conduct of this case because the Enforcement Office has not been able to proceed with its investigation and preparation for a hearing without guidance on our pending discovery motions and requests for subpoenas. Respondents have either failed to comply or produce complete responses or have objected to most of the Enforcement Office's discovery requests. Good cause exists for grant of the requested extension in discovery dates since the Enforcement Office has been diligent in seeking approval from Your Honor for subpoenas and directives for compliance with its discovery requests, while at the same time seeking to settle this matter. Moreover, the public interest will be served by ensuring the parties adequate time to prepare to address the complex nature and seriousness of the allegations.

Counsel: Samuel Podberesky and Damon Whitehead, 202-366-9342



February 28, 2005

Order Granting Stay of Proceedings

By: Administrative Law Judge, Richard Goodwin


February 26, 2005

Second Amended Procedural Order

By: Administrative Law Judge, Richard Goodwin



March 1, 2005

Order Granting Enforcement Office's Motion to Compel and Enforcement Office's Application

By: Administrative Law Judge, Richard Goodwin


March 1, 2005

Memorandum

Both parties have filed Subpoenas with return dates, which have expired. The court has issued a Stay of Proceedings until May 1, 2005.

Any party who wants to renew their subpoena should forward the subpoena to the Presiding Judge who will process them in a timely manner.

By: Administrative Law Judge, Richard Goodwin



Served April 20, 2005

Notice of Hearing Dates

By: Richard Goodwin


Served April 20, 2005

Notice of Pre-Hearing Conference

By: Richard Goodwin



July 25, 2005

Joint Motion for Approval of Proposed Settlement

Terms of Settlement: In order to avoid litigation and without admitting or denying the alleged violations, agrees to the issuance of this order to cease and desist from further violations of 49 U.S.C. § 41101 and 41712 and to the assessment of $30,000 in compromise of potential civil penalties. Of this amount, $15,000 shall be due and payable within 30 days after the service date of this order and the remaining $15,000 of the assessed penalty shall be suspended for one year following the service date of this order and forgiven after that time if Mr. Warde complies with the payment provisions of this order and commits no further violations of the Department's regulations during that period.

By: Richard Goodwin



August 8, 2005

Notice of Appearance

The Office of Aviation Enforcement and Proceedings respectfully request that your Honor enter the appearance of William J. Wagner as counsel for the Enforcement Office and requests that his name be added to the service list. In addition, the Enforcement Office respectfully requests that Ann G. Gawat and Jonathan Dols be removed as counsel of record in this matter and from the service list.

By: William Wagner


August 8, 2005

Motion for Default Judgment - Bookmarked

The Office of Assistant General Counsel for Aviation Enforcement and Proceedings by and through its undersigned attorneys, moves for an order finding Ascend Aviation Group, LLC; Ascend Aviation Marketing and Sales, LLC; KCP Leasing and Services, LLC, and Scot Spencer to be in default and assessing the civil penalties and relief requested in the Enforcement Complaint, dated April 5, 2004. In the alternative, the Enforcement Office requests that Your Honor find Respondents to be in violation of Your Honor's order compelling discovery (Order Granting Enforcement Office's Motion To Compel and Enforcement Office's Application, dated March 1, 2005; Exhibit 1) and impose the following sanctions: (1) issuance of an order finding that the facts the Enforcement Office was seeking to prove through use of the materials ordered to be provided are deemed to have been admitted by Respondents and (2) issuance of an order assessing, jointly and severally against Respondents, civil penalties of $2,500 for each day subsequent to the June 1, 2005, return date for the documents that Respondents failed to produce such documents in response to Your Honor's order, up to and including the date of Your Honor's order ruling on this motion.

By: Dayton Lehman



Issued and Served August 12, 2005

Consent Order

This consent order concerns alleged unauthorized air carrier operations by Mr. George Warde. Specifically, between June 2002 and September 2003, George Warde allegedly, at the direction of Scot Spencer, and through Ascend Aviation Group, LLC, a parent/holding company, and two of its operating subsidiaries, Ascend Aviation Marketing and Sales, LLC, and KCP Leasing and Services, LLC engaged in air transportation as an indirect air carrier without economic authority from the Department. These operations allegedly violated the Department's licensing statute, 49 U.S.C. § 41101, and constituted an unfair and deceptive trade practice and an unfair method of competition in violation of 49 U.S.C. § 41712. This consent order assesses a compromise civil penalty of $30,000 against George Warde personally and directs him to cease and desist from further violations of 49 U.S.C. §41101 and 41712.

By: Richard Goodwin


Issued and Served August 12, 2005

Order of Administrative Law Judge

By its "Notice of Withdrawal as Counsel" served January 10, 2005, Chadboume & Parke LLP requests leave to withdraw as counsel for Ascend Aviation Group, LLC, Ascend Aviation Marketing and Sales, LLC, KCP Leasing and Services, LLC, and Scot Spencer. Complainant stated at the August 12, 2005, prehearing conference that it does not oppose Chadbourne's request for leave to withdraw. Upon consideration, Chadbourne's request for leave to withdraw is granted.

By: Richard Goodwin



August 18, 2005

Report to Administrative Law Judge Regarding Service of Motion and Request for Issuance of Order - Bookmarked

Pursuant to Your Honor's request during the August 12, 2005, Prehearing Conference in this proceeding, the Office of Aviation Enforcement and Proceedings files this supplement to its Motion for Default Judgment regarding its service and a draft order implementing the Enforcement Office's request for relief in that motion.

By: Dayton Lehman



August 22, 2005

Transcript of Pre-Hearing Conference before Richard Goodwin, Administrative Law Judge - Bookmarked

By: DOT



August 23, 2005

Order Entering Default Judgement

The Enforcement Office's previous Motions having been read and considered, and Scot Spencer and the other Respondents having failed to comply with Orders issued in this proceeding, it is ORDERED as followed:

1. The Enforcement Office's Motion dated August 8, 2005, is granted; 2. Ascend Aviation Group, LLC; Ascend Aviation Marketing and Sales LLC; KCP Leasing and Services, LLC, and Scot Spencer, personally, be and are hereby DEEMED to have admitted to all of the allegations in the Enforcement Office's Complaint, dated April 5, 2004.

2 While Scot Spencer did make an appearance at the appointed place as required by the subpoena, he refused in general to answer relevant questions.

3. We find that Ascend Aviation Group, LLC; Ascend Aviation Marketing and Sales, LLC; KCP Leasing and Services, LLC, and Scot Spencer, personally, have violated 49 U.S.C. § 41101 by operating as an indirect air carrier without the requisite authority from the Department.

4. We find that by engaging in the violation described in paragraph 3, supra, Ascend Aviation Group, LLC; Ascend Aviation Marketing and Sales, LLC; KCP Leasing and Services, LLC, and Scot Spencer, personally, have engaged in an unfair and deceptive practice and unfair method of competition in violation of 49 U.S.C. § 41712.

5. We order Ascend Aviation Group, LLC; Ascend Aviation Marketing and Sales, LLC; KCP Leasing and Services, LLC, and Scot Spencer, personally, and their successors and assigns to cease and desist from violating 49 U.S.C. § 41 101 and 41712 by engaging in the conduct described above.

6. We assess civil penalties against Ascend Aviation Group, LLC; Ascend Aviation Marketing and Sales, LLC; KCP Leasing and Services, LLC, and Scot Spencer, personally, jointly and severally, of $1,000,000 for the violations described in this complaint.

7. We order Scot Spencer, personally, to permanently cease and desist from further marketing or other involvement in air transportation operations so that he is banned from the aviation industry for the violations described above.

By: Richard Goodwin



September 13, 2005

Application for Reconsideration of Default Judgement and Motion for Extension of Time to Supplement Motion with Additional Materials

Pursuant to Section 302.14 of the Code of Federal Regulations, Ascend Aviation Group,LLC, Ascend Aviation Marketing and Sales, LLC, KCP Leasing and Services, LLC, and Scot Spencer hereby move for reconsideration, rehearing and/or reargument of the Order entering Default Judgment against Respondents dated August 23,2005. Respondents also seek an extension of time pursuant to Section 302.14 (2) to supplement this motion with additional arguments and a more in depth explanation.

This firm was just recently retained by Respondents. As we have just been retained, we have not yet had a sufficient opportunity to review the entire matter in detail with our clients. Nonetheless, we submit this application at this time in order to comply with the 20-day deadline set forth 14 CFR 5 302.14.

The default judgment dated August 23, 2005, should be vacated because Respondents did not receive proper notice. We have been advised that Respondents did not receive notice of the Motion for Default Judgment, purportedly served on them on August 8, 2005, until August 25, 2005. Although the Motion for Default Judgment was served on Scot Spencer’s New Jersey address, Scot Spencer was not at that location at any time during the month of August. Rather, he was in California on business and traveling elsewhere. The motion was sent by federal express and marked to be left at the home without signature. The package simply sat at the New Jersey address for weeks.

Counsel: Krantz & Berman, Marjorie Berman, 212-221-0009, mberman@krantzberman.com



September 23, 2005

Answer in Opposition to Respondant's Application for Reconsideration of Default Judgement and Motion for Extension of Time to Supplement Motion with Additional Materials

The Office of Assistant General Counsel for Aviation Enforcement and Proceedings files this answer in opposition to the Application For Reconsideration of Default Judgment and Motion for Extension of Time to Supplement Motion With Additional Material filed with Your Honor by Ascend Aviation Group, LLC; Ascend Aviation Marketing and Sales, LLC; KCP Leasing and Services, LLC, and Scot Spencer.

By: DOT Aviation Enforement, Dayton Lehman



Served September 27, 2005

Order Dismissing Motion

Respondents' Application for Reconsideration of Default Judgment and Motion for Extension of Time to Supplement Motion with Additional Materials is dismissed on account of lack of jurisdiction. My authority in this matter terminated upon issuance of default judgment, served August 23, 2005 (14 CFR 302.17(a)(4)).

By: Richard Goodwin



October 12, 2005

Motion of Ascend Aviation for Vacating of Initial Decision

Ascend Aviation Group, LLC, Ascend Aviation Marketing and Sales, LLC, KCP Leasing and Services, LLC, and Scot Spencer, request that the Initial Decision of the Administrative Law Judge, dated August 23, 2005, which became a Final Order on September 22, 2005 be vacated on the grounds that the Initial Decision was procedurally defective and therefore void.

Counsel: Krantz & Berman



October 12, 2005

Motion for Vacating of Initial Decision and Final Order...

Ascend Aviation Group, LLC, Ascend Aviation Marketing and Sales, LLC, KCP Leasing and Services, LLC, and Scot Spencer, request that the Initial Decision of the Administrative Law Judge, dated August 23,2005, which became a Final Order on September 22,2005 be vacated on the grounds that the Initial Decision was procedurally defective and therefore void.

In the alternative pursuant to Section 302. 9(2) of the Code of Federal Regulations, Respondents, for good cause shown, hereby seek permission to file, out of time, Exceptions to the Initial Decision of the Administrative Law Judge dated August 23, 2005 . Permission is warranted because the Initial Decision was procedurally defective for multiple reasons, including, but not limited to, its failure to notify respondents of critical and expressly mandated information, including “the time within witch exceptions to, or petitions for review of, such decision may be filed. . .”. 302.3 1 (c). Assuming such permission is granted, Respondents set forth their Exceptions to the Initial Decision herein.

If permission to file Exceptions out of time is denied, Respondents move, in the alternative, for permission to file, out of time, a Petition for Discretionary Review of the Initial Decision of the Administrative Law Judge dated August 23,2005. Permission is warranted because the Initial Decision was procedurally defective for multiple reasons, including, but not limited to, its failure to notify respondents of “the time within with exceptions to or petitions for review of, such decision may be filed. . .”. 302.3 1 (c). Assuming such permission is granted, respondents’ Petition for Discretionary Review is set forth below.

To the extent that Respondents’ application to file Exceptions is granted or respondents’ application to file a Petition for Discretionary Review is granted, respondents request that the Final Order in effect be stayed until a decision is rendered with respect to the Exceptions or the Petition for Discretionary Review is heard.

To the extent that both of the above motions are denied, Respondents, in the second alternative, hereby move, pursuant to 14 CFR 302.14, for reconsideration, rehearing and/or reargument of the Default Judgment dated August 23,2005, which became a Final Order on September 22, 2005.

Counsel: Krantz & Berman, Marjorie Berman, 212-661-0009, mberman@krantzberman.com


October 12, 2005

Affidavit of Scot Spencer

I am an individual respondent in the above-referenced action and an authorized corporate representative of Ascend Aviation Group, LLC, Ascend Aviation Marketing and Sales, LLC, and KCP Leasing and Services, LLC. I submit this affidavit in support of [add title] to demonstrate to the DOT that I did not respond to the Motion for Default Judgment or attend the DOT August 12 conference because I did not receive notice of either event. In light of this, I now seek the opportunity to do so.

I previously resided at 10 E. 29th Street, New York, New York. However, I moved from that address prior to April 20, 2005, the date on which the Notice of Pre-Hearing Conference was apparently mailed to that address. Thus, I never received the Notice of Pre- Hearing conference and I was otherwise unaware of the August 12,2005 conference. The sole reason that I did not appear at the August 12, 2005 conference is because I was unaware of it.

I did not receive the Motion for Default Judgment until August 25, 2005, after the Order of Default had already been entered. I learned about the Motion and the Order through a third party who had obtained the records through DOT Dockets.

Upon learning of the Default Order, I immediately took steps to retain counsel. However, due to August vacation schedules, it was some time before I was able to secure counsel. Immediately after bringing counsel on board, they took steps to address this situation.

Neither I or the corporate respondents would have simply ignored the Motion for Default Judgment or a conference about which we were aware. Had we timely received the motion, we would surely have answered it.

Counsel: Krantz & Berman, Marjorie Berman, 212-661-0009, mberman@krantzberman.com



October 21, 2005

Answer of the Office of Aviation Enforcement and Proceedings Opposing Motions and Petitions

Respondents argue first that the default judgment entered by Administrative Law Judge Richard C. Goodwin on August 23, 2005, should be vacated because, they assert, it is procedurally flawed. In the alternative, Respondents argue that they should be afforded the opportunity to file out of time exceptions to Judge Goodwin’s default judgment order. If that request is denied, Respondents ask to be able to file a petition for discretionary review of the default judgment order. Finally, if any of the above relief is not granted, Respondents move pursuant to 14 CFR 302.14 for reconsideration, rehearing and/or reargument of the August 23, 2005, default judgment order, which became a Final Order of the Department on September 22, 2005.

Scot Spencer has demonstrated he has no respect for the Department or its processes and his repeated recalcitrant conduct when faced with having to bear responsibility for his unlawful actions should not be rewarded by offering him second and third chances to further delay justice. The Department should reject all of Respondents’ requests for relief and allow Judge Goodwin’s August 23,2005, default judgment order to remain the final order of the Department.

Respondents’ blunderbuss pleading is composed largely of broad, conclusory statements that are devoid of legal analysis or citation to case law and unsupported by the true factual record of this proceeding or any other credible facts. When stripped of the excessive verbiage, all three alternative requests for relief make essentially the same arguments: (1) Judge Goodwin’s August 23, 2005, default judgment order was procedurally defective; (2) Respondents did not receive notice of the Prehearing Conference in this proceeding or the Enforcement Office’s Motion for Default Judgment and did not realize the time within which they had to appeal Judge Goodwin’s August 23,2005, order granting default judgment; (3) Judge Goodwin lacked a proper basis for issuing his default judgment order; and (4) the Department and its administrative law judges lack the authority to impose upon Respondents the cease and desist order and the civil penalties contained in Judge Goodwin’s order.

Because the purported failure of Respondents to receive notice of matters involving this proceeding are, if true, of its own making, Respondents’ various requests for review of Judge Goodwin’s order out of time should be denied. If Respondents’ request for review of the August 23, 2005, default judgment order out of time is granted, the Department should treat the request as a Petition for Reconsideration and find that Respondents have failed to show good cause for finding legal or factual error in the findings and conclusions set forth in that order.

By: Aviation Enforcement and Proceedings, Dayton Lehman



January 29, 2006

Motion to Expedite Proceeding

The Office of Aviation Enforcement and Proceedings hereby moves that the Department expedite its decision on the motions and petitions filed in this case on October 12, 2005, by Ascend Aviation Group, LLC; Ascend Aviation Marketing and Sales, LLC; KCP Leasing and Services, LLC; and Scot Spencer. Under Department rules, the decision of Administrative Law Judge Richard C. Goodwin in this case became a final order of the Department 30 days after it was issued, i.e., on September 22, 2005. Under the order, the Respondents were jointly assessed civil penalties of $1,000,000 and Respondent Scot Spencer was permanently banned from marketing or other involvement in air transportation operations.

The reason for the instant motion relates to a separate formal enforcement proceeding being conducted before Chief Administrative Law Judge Ronnie A. Yoder. In the matter of Travel Group, Inc., d/b/a Republic Air Travel and Scot Spencer, Docket OST-1995-272. Chief Judge Yoder, by order served on January 19, 2006, has set a schedule for holding a hearing in that case. It is the primary objective of AEP in that case to permanently ban Scot Spencer from involvement in air transportation operations. It would be a tremendous waste of AEP, Office of Hearings and other Department resources (e.g., witness travel expenses, reporting service costs) to continue to litigate the Republic case if Mr. Spencer's ban resulting from the Ascend Case were to be upheld.

Accordingly, AEP asks that the Department expedite its ruling on the Respondents' motions and petitions filed on October 12. 2005, in this case.

By: Office of Aviation Enforcement and Proceedings, Samuel Podberesky



OST-1995-272 - Enforcement Proceeding
OST-2004-17486
- Enforcement Proceeding

February 28, 2006

List of Attorney Assignments

By: Blane Workie


 

November 4, 2021

Motion to Set Hearing on Pending Motion

Respondent Scot Spencer hereby requests that the Department of Transportation set a hearing on his motion that has been pending since it was filed in October 2005 in the above-entitled matter. Respondent Spencer, along with Respondents Ascend Aviation Group, LLC, Ascend Aviation Marketing and Sales, LLC, KCP Leasing and Services, LLC, filed their Motion requesting the following relief, in the alternative: (1) that the final order issued in the pending matter be vacated for procedural defectiveness; (2) for permission to file exceptions to the initial decision of the Department; (3) for permission to file a petition for discretionary review of the initial decision; or (4) reconsideration, rehearing, and re-argument of the default judgment. This relief was requested on multiple grounds, as set forth in Respondents' moving papers. The Office of Aviation Enforcement and Proceedings timely submitted its answer to Respondents' Motion. After not receiving any ruling from this Department for two months, the Enforcement Office requested that this Department expedite the hearing on the pending Motion. No action has been taken by the Department. Accordingly, Respondent Spencer now requests that the pending Motion be set for hearing before the
Department so that the matter may be finally resolved.

Counsel: Larson LLP, Stephen Larson


 

December 28, 2021

Amended Motion of Scot Spencer to Set Hearing on Pending Motion

Respondent Scot Spencer hereby requests that the Department of Transportation set a hearing on his motion that has been pending since it was filed in October 2005.

Respondent Spencer has been left in a procedural purgatory for the last 15 years, with his pending Motion left unresolved. The challenged order issued by the Department stood to severely interfere with Respondent Spencer's right to earn a living, was procedurally defective, and should have been reconsidered, as outlined in the Motion. And, until the pending Motion is resolved, Respondent Spencer cannot seek review by the district court.

Respondent Spencer respectfully requests that after 15 years, he be given the opportunity to be heard on this pending Motion, and that the Department render a decision in accordance with its obligations under the Federal Administrative Procedure Act.

Counsel: Stephen Larson


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