Size-of-Violator Component of the Penalty

Mr. Trotter calculated the penalty increase for the “size-of-violator” to be $62,500 to take into account Mr. Friedman’s net worth.

Mr. Trotter arrived at this increase by applying the guidance of the General CAA Penalty Policy suggesting incremental increases in the amount of the penalty based on the violator’s net worth and by utilizing a discretionary limit equal to 50% of the preliminary deterrence amount of the penalty. The preliminary deterrence amount is the sum of the gravity-based penalties for each violation, the economic benefit component, and the size-of-violator component. Where the discretionary 50% limit is applied, the size-of-violator component should not exceed one-half of this sum.

Based on Mr. Friedman’s substantial net worth, the Region reasoned that the General CAA Penalty Policy would ordinarily authorize a penalty increase of more than $70,000 for the “size of business” component. However, since the other components of the Region’s proposed preliminary deterrence penalty equaled $62,500, Mr. Trotter testified that he calculated the “size of business” component as limited to $62,500 consistent with the General CAA Penalty Policy’s guidance that the size-of-violator component may be limited to 50% of the preliminary deterrence amount.