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Bombardier, Inc. v. United States Department of Labor

United States District Court, D. Columbia

November 12, 2015

BOMBARDIER, INC., Plaintiff,
v.
UNITED STATES DEPARTMENT OF LABOR, et al., Defendants

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[Copyrighted Material Omitted]

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          For Bombardier, Inc., Plaintiff: Matthew J. MacLean, Thomas G. Allen, PILLSBURY WINTHROP SHAW PITTMAN, LLP, Washington, DC USA.

         For United States Department of Labor, Thomas E. Perez, in his official capacity as Secretary of Labor, Defendants: Lisa Ann Olson, LEAD ATTORNEY, U.S. DEPARTMENT OF JUSTICE, Washington, DC USA.

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          Re Document Nos.: 16, 19

         MEMORANDUM OPINION

         Granting Defendants' Motion to Dismiss and Denying as Moot Plaintiff's Motion for Preliminary Injunction

         RUDOLPH CONTRERAS, United States District Judge.

         I. INTRODUCTION

         Plaintiff Bombardier, Inc., is a Canadian company currently embroiled in Department of Labor administrative proceedings. Bombardier's former employee initiated proceedings in the Department of Labor by charging the company with discriminatory discharge in violation of the whistleblower protection provisions of the Wendell H. Ford Aviation Investment and Reform Act for the 21st Century (AIR21), 49 U.S.C. § 42121. While proceedings in the Department were still pending, Bombardier filed suit in this Court to enjoin the Department from continuing its administrative adjudication. Seeking both declaratory and injunctive relief, Bombardier claimed that the Department acted ultra vires by exercising jurisdiction over

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Bombardier and thus giving impermissible extraterritorial application to AIR21.

         The Department moved to dismiss Bombardier's complaint, whereas Bombardier moved for a preliminary injunction. The Department argues that Bombardier failed to exhaust administrative remedies and therefore must complete AIR21 administrative procedures before obtaining judicial review. Bombardier contends that its suit is proper--and an injunction against the Department is necessary--because the Department's jurisdiction over Bombardier is ripe for review under the Administrative Procedure Act. The Department's reasoning has merit, whereas Bombardier's does not. Accordingly, the Court will grant the Department's motion to dismiss the complaint and deny as moot Bombardier's motion for a preliminary injunction.

         II. AIR21 ADMINISTRATIVE PROCEDURES

         This case challenges administrative proceedings under the whistleblower protection provisions of the Wendell H. Ford Aviation Investment and Reform Act for the 21st Century (AIR21), 49 U.S.C. § 42121.[1] It is useful at the outset to review the statutes and regulations authorizing those proceedings.

         A. AIR21's Whistleblower Protections

         49 U.S.C. § 42121 creates a detailed administrative regime to protect whistleblowers who inform their employers or the federal government about violations of federal laws relating to air carrier safety. It declares that

[n]o air carrier or contractor or subcontractor of an air carrier may discharge an employee or otherwise discriminate against an employee . . . because the employee . . . provided . . . to the employer or Federal Government information relating to any violation or alleged violation of any order, regulation, or standard of the Federal Aviation Administration or any other provision of Federal law relating to air carrier safety . . . .

49 U.S.C. § 42121(a). An " air carrier" is " a citizen of the United States undertaking . . . to provide air transportation." Id. § 40102(a)(2). Air carriers may be individual citizens of the United States, a partnership of citizens of the United States, or corporations or associations organized under the laws of the United States or any of the states. Id. § 40102(a)(15) (defining " citizen of the United States" ). A " contractor" is " a company that performs safety-sensitive functions by contract for an air carrier." Id. § 42121(e).

         B. Administrative Proceedings in the Department of Labor

         1. Complaint

         When someone believes that he or she has been discharged or otherwise discriminated against in violation of § 42121(a), the person has ninety days from the date of discharge or discrimination to file a complaint with the Secretary of Labor. Id. § 42121(b)(1); 29 C.F.R. § 1979.103(d). Department of Labor regulations oblige the complainant to file the complaint with the Occupational Safety and Health Administration (OSHA) of the United States Department of Labor. 29 C.F.R. § 1979.103(c).

         2. OSHA Dismissal, or OSHA Investigation and Findings

         OSHA then has sixty days to investigate whether reasonable cause exists to believe discrimination occurred. 49 U.S.C. § 42121(b)(2)(A); 29 C.F.R. § § 1979.104-1979.105. But if the complainant fails to

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make a prima facie showing that protected whistleblower behavior was a factor contributing to the employer's discriminatory action--or, if the employer shows, by clear and convincing evidence, that it would have acted the same in the absence of the complainant's whistleblower behavior--then no investigation is required, and the complaint will be dismissed. 49 U.S.C. § 42121(b)(2)(B); 29 C.F.R. § 1979.104(b)--(d).

         When an investigation is warranted, OSHA must conclude the investigation and release written findings within the sixty-day period prescribed by statute. 49 U.S.C. § 42121(b)(2)(A); 29 C.F.R. § 1979.105(a). If OSHA concludes that reasonable cause exists to believe discrimination occurred, it must accompany its findings with a preliminary order providing relief to the complainant. 49 U.S.C. § 42121(b)(2)(B); 29 C.F.R. § 1979.105(a)(1).

         3. Objections and Request for Hearing

         If any party desires review, " including judicial review," of OSHA's findings (or of OSHA's dismissal of the complaint), that party must file objections and request a hearing on the record within thirty days after receiving the findings (or the dismissal). 29 C.F.R. § 1979.106(a); accord 49 U.S.C. § 42121(b)(2)(A). In cases where OSHA issued a preliminary order, the order becomes " a final order that is not subject to judicial review" if no party timely files objections and requests a hearing. 49 U.S.C. § 42121(b)(2)(A); 29 C.F.R. § 1979.106(b)(2).

         4. Hearing before an Administrative Law Judge

         Hearings on objections are held before Department of Labor administrative law judges, and must generally " commence expeditiously." 29 C.F.R. § 1979.107(b). Administrative law judges have broad discretion to limit discovery to expedite the hearing. Id. The hearings themselves are " hearings de novo, on the record," but in place of formal rules of evidence, the administrative law judge " may exclude evidence which is immaterial, irrelevant, or unduly repetitious" and will apply " rules or principles designed to assure production of the most probative evidence." Id. § 1979.107(b), (d).

         5. Decision and Order by the Administrative Law Judge

         After the hearing, the administrative law judge must issue a decision that includes findings, conclusions, and an order either prescribing remedies or denying the complaint. Id. § 1979.109(a).

         6. Review and Final Order by the Administrative Review Board

         If a party desires to seek review, " including judicial review," of the administrative law judge's decision, then that party has ten days to petition the Department of Labor's Administrative Review Board for review. Id. § 1979.110(a). If no party timely petitions the Board for review, then the administrative law judge's decision becomes a final order ten business days after the date of the decision. Id. § 1979.109(c). At that time, all proceedings before the administrative law judge are considered concluded. Id. § 1979.110(c). Even if a party has petitioned the Board for review within the ten-day period, the administrative law judge's order will still become a final order " unless the Board, within thirty days of the filing of the petition, issues an order notifying the parties that the case has been accepted for review." Id. § 1979.110(b).

         If the Board does accept a decision for review, it must issue its own final decision no more than 120 days after the conclusion of all proceedings before the administrative law judge. Id. § 1979.110(c); see also 49 U.S.C. § 42121(b)(3)(A) (" Not later than 120 days after the conclusion of a hearing . . . the Secretary of Labor shall

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issue a final order . . . ." ). The Board's final order must either order appropriate remedies or deny the complaint. 49 U.S.C. § 42121(b)(3)(A); 29 C.F.R. § 1979.110(d)--(e).

         C. Judicial Review in a United States Court of Appeals

         Only then does AIR21's statutory scheme contemplate judicial review. If a person is " adversely affected or aggrieved" by the final order of an administrative law judge or the Administrative Review Board, then that person has sixty days to file a petition for review " in the United States Court of Appeals for the circuit in which the violation [of the whistleblower protection provisions] allegedly occurred or the circuit in which the complainant resided on the date of such violation." 49 U.S.C. § 42121(b)(4)(A). If a party misses the sixty-day deadline, it may not seek later judicial review of the final order. Id. § 42121(b)(4)(B) (" An order . . . with respect to which review could have been obtained . . . shall not be subject to judicial review in any criminal or other civil proceeding." ).

         Bombadier, the plaintiff here, has brought this case seeking judicial review while still entangled within AIR21's complex statutory and regulatory framework. The Court now turns to the facts of the case at hand.

         III. FACTUAL AND PROCEDURAL BACKGROUND

         A. Mr. Sobhani's Employment and Termination

         According to the Complaint, Plaintiff Bombardier, Inc. is a Canadian company, and its operations are " substantially" conducted within Canada. Compl. ¶ ¶ 7, 14, ECF No. 1. Bombardier designs and manufactures aircraft; it does not provide air transportation to the public. Id. ¶ ¶ 13, 15.

         Bombardier employed Jeffrey A. Sobhani at the beginning of 2014 as an Engineering Specialist working out of the company's facilities in Toronto, Canada. Id. ¶ ¶ 18-19. On January 30, 2014, Mr. Sobhani sent an internal memorandum to Bombardier that raised concerns about the methodology used to interpret flight test data for Bombardier's Q400 aircraft. Id. ¶ 21. The data came from tests conducted in Wichita, Kansas in 1998, and the data were stored in Wichita afterward. Decl. Jeff Sobhani, Pl.'s Opp'n Defs.' Mot. Dismiss Ex. E, ECF No. 17-1. On March 7, 2014--five weeks after Mr. Sobhani released his memorandum--Bombardier terminated Mr. Sobhani's employment. Compl. ¶ 24. Bombardier contends that Mr. Sobhani's termination was part of Bombardier's worldwide reduction-in-force, in which Bombardier terminated approximately 1,700 employees. Id. ¶ 24.

         B. Mr. Sobhani's Whistleblower Complaint Against Bombardier at the Federal Aviation Administration

         After his termination, Mr. Sobhani called on United States agencies for aid. He lodged a whistleblower complaint with the Federal Aviation Administration (FAA) and charged Bombardier with quality control problems in its Q400 flight testing. Id. ¶ 22; Letter from Dorenda D. Baker to David Trumbull 1, Pl.'s Opp'n Defs.' Mot. Dismiss Ex. B-2, ECF No. 17-1. But the FAA declined to investigate because it decided that investigating the matter would be beyond the FAA's jurisdiction: it determined that the quality control process in question was used for Canadian certification, and that " it is not within the jurisdiction of the FAA to investigate another country's certification program." Compl. ¶ 22.

         C. Mr. Sobhani's Discrimination Complaint Against Bombardier at the Department of Labor

         Around this time, Mr. Sobhani also initiated administrative proceedings with the

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Department of Labor, the defendant in this case.

         1. Complaint

         Invoking AIR21's whistleblower protection provisions, Mr. Sobhani filed a discrimination complaint on March 19, 2014 with the OSHA regional office in Kansas City, Missouri. Id. ¶ 26; Decision & Order Den. Resp't's Mot. Summ. Decision 1, Pl.'s Opp'n Defs.' Mot. Dismiss Ex. H, ECF No. 17-1. Mr. Sobhani alleged that Bombardier " discriminated against him by terminating his employment in retaliation for reporting safety of flight issues on the Q400 aircraft." Order Den. Dismissal Compl. Failure State Claim 3, Pl.'s Opp'n Defs.' Mot. Dismiss Ex. G, ECF No. 17-1.

         2. OSHA Dismissal

         OSHA dismissed Mr. Sobhani's complaint for lack of jurisdiction in early May 2014. Decision & Order Den. Resp't's Mot. Summ. Decision 2. It found that Bombardier was not covered under AIR21 because Bombardier was " not an air carrier within the meaning of 49 U.S.C. § 42121 and 49 U.S.C. § 40102(a)(2)" and because Mr. Sobhani likewise was " not an employee within the meaning of 49 U.S.C. § 42121." Compl. ¶ 28.

         3. Mr. Sobhani's Objections and Request for Hearing

         Mr. Sobhani timely objected to the dismissal and requested a hearing before an administrative law judge. Id. ¶ 29. He argued that, contrary to OSHA's views on the matter, AIR21 applied to Bombardier: Bombardier offered transportation to Wichita, Kansas in the United States and Bombardier conducted business with United States air carriers, so Bombardier was an " air carrier" or a " contractor" of an air carrier for AIR21 purposes. Order Den. Dismissal Compl. Failure State Claim 2. Similarly, Mr. Sobhani asserted that he merited AIR21 protections because he was an employee of an " air carrier" or a " contractor" of an air carrier. Id.

         4. Pre-Hearing Proceedings Before Administrative Law Judges

         a. Dismissal Denied

         Chief Administrative Law Judge Stephen L. Purcell issued a Notice of Docketing and Order to Show Cause on June 19, 2014. Compl. ¶ 30; Notice of Docketing and Order to Show Cause, Pl.'s Opp'n Defs.' Mot. Dismiss Ex. F, ECF No. 17-1. He ordered the parties to show cause within thirty days for why the case should not be dismissed for lack of jurisdiction. Notice of Docketing and Order to Show Cause 2 (" If Bombardier is not an employer and Sobhani is not an employee as defined by AIR21, then this case must be dismissed . . . ." ).

         Chief Judge Purcell ultimately declined to dismiss the complaint. Compl. ¶ 31. His July 31, 2014 order emphasized " the minimal pleading requirements" in Department of Labor whistleblower protection proceedings. Order Den. Dismissal Compl. Failure State Claim 5. The judge's written decision explained that Mr. Sobhani had stated sufficient facts to provide " fair notice" that, for AIR21 purposes, Bombardier is a contractor and Sobhani is an employee of a contractor. Id. The decision did, however, note that " [t]o the extent further development of the evidentiary record prior to trial shows that Sobhani's allegations are untrue, [Bombardier] is entitled to seek summary judgment." Id.

         b. Summary Decision Denied

         After the case was assigned to Administrative Law Judge Scott R. Morris, Bombardier proceeded to file a motion for summary judgment on October 2, 2014. Compl. ¶ ¶ 32-33. Judge Morris construed the motion as one for " summary decision," which is the relevant motion in hearings ...


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