                              UNPUBLISHED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Petition for review denied by unpublished per curiam opinion.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Unpublished opinions are not binding precedent in this circuit.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

                                             5
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.


                                        8
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


                                              9
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



                                       10
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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