Opinion for the Court filed by Circuit Judge BROWN.
Petitioner Jack Rondal Dillmon accuses the National Transportation Safety Board (Board) of hypocrisy — saying one thing while doing another. Dillmon argues the Board departed from its prior decisions without adequate explanation when it affirmed the Federal Aviation Administration’s (FAA’s) emergency revocation of his airman and medical certificates. We agree with Dillmon: the Board has failed to exhibit the reasoned decision making we require of agencies. We therefore grant his petition for review.
I
On February 26, 1997, a jury convicted Dillmon of ten counts of bribery of a public servant, a felony in the state where he was prosecuted. A month later, on March 28, 1997, Dillmon submitted to the FAA an application for a Third Class Medical Certificate. In filling out the medical application, Dillmon had to answer “Yes” or “No” to Question 18w, which asked whether he had any “[hjistory of nontraffic conviction(s) (misdemeanors or felonies).” FAA Form 8500-8 (7-92). Despite his recent felony bribery conviction, Dillmon answered “No.” In signing the form, Dillmon certified his answers were “complete and true to the best of [his] knowledge.” Id. On May 2, 2007 and March 17, 2008, Dillmon again filled out the application to *1088 renew his medical certificate. Each time he filled out the application, he answered Question 18w “No.”
In August 2008, the FAA Acting Administrator issued an emergency order revoking Dillmon’s medical certificate, as well as his private pilot certificate. The order explained the Administrator had concluded Dillmon’s answers to Question 18w in 1997, 2007 and 2008 violated Federal Aviation Regulation (FAR) provision 14 C.F.R. § 67.403(a)(1), which states: “No person may make or cause to be made ... [a] fraudulent or intentionally false statement on any application for a medical certificate.” Dillmon appealed the order to the Board and requested a hearing to challenge the FAA’s findings.
At an October 2, 2008 hearing before an administrative law judge (ALJ), the FAA submitted evidence of Dillmon’s bribery conviction and his “No” answers to Question 18w on his 1997, 2007 and 2008 medical applications. After the FAA’s presentation of evidence, the ALJ denied Dillmon’s motion to dismiss and ruled the FAA had made out a prima facie case for the regulatory offense of intentional falsification under FAR section 67.403(a)(1). The ALJ then allowed Dillmon to present evidence and testify in his defense.
Dillmon explained why he had answered “No” to Question 18w. He said, “I have always believed and have always understood ... any time this question has ever come up was that all [the FAA was] interested in was anything to do with drugs or alcohol.” Hearing Tr. at 56-57 (Oct. 2, 2008). Dillmon described how the FAA’s Aviation Medical Examiner (AME) had first informed him of this in 1990. Id. at 57, 76-77. He testified another AME, Dr. Van Den Berg, similarly advised him in 2007 and 2008 that Question 18w was only concerned with drug- or alcohol-related offenses. Id. at 66, 85-86. Dillmon submitted two letters from Dr. Van Den Berg to corroborate his testimony about their conversations in 2007 and 2008. Dillmon emphasized, “I never would have checked no if this was not the advice I was given by the designated examiner that helped me complete the form.” Id. at 66. Finally, he testified he was “painfully aware [his] life [was] an open book when it comes to a criminal conviction,” and he was “not proud of it,” but it was “not something [he] would lie about or try to hide.” Id. at 66-67.
On cross-examination by the FAA, Dillmon conceded he had never read the portion of the medical application which provided instructions for completing Question 18w until the day before the hearing. Hearing Tr. at 79. The instructions stated, “Letter (w) ... asks if you have ever had any other (nontraffic) convictions (e.g., assault, battery, public intoxication, robbery, etc.). If so, name the charge for which you were convicted and the date of conviction in the EXPLANATIONS box.” FAA Form 8500-8 (3-99). He also admitted that when he filled out the applications in 1997, 2007 and 2008, he “knew [he] had been convicted of a non-traffic offense.” Id. at 86-87. Finally, when asked by the ALJ how he would answer Question 18w “today,” Dillmon said, “Absolutely yes.” Id. at 88.
After the hearing, the ALJ issued his decision. He noted the central question was, “What is in the man’s mind?” Hearing Tr. at 130. Of particular importance to the instant petition, the ALJ found Dillmon to be a credible witness: “My determination is that [Dillmon] was quite forthright and candid in his testimony. To me, there is quite a notable absence of any indication of an intentional falsehood ... when he signed the no to these questions in the three applications in question 18W.” Id. at 132. In light of Dillmon’s testimony *1089 and the documentary evidence he submitted, the ALJ ruled Dillmon had successfully rebutted the Administrator’s prima fade case of intentional falsification, concluding, “[I]t is clear to me that there’s no intention on the part of [Dillmon] to falsify, let alone be fraudulent in setting forth the answers that he did to this question, 18W.” Id. at 133. The ALJ therefore reversed the FAA’s emergency revocation order.
The FAA appealed the ALJ’s decision to the Board, which reversed the ALJ based on two purported errors.
Administrator v. Dillmon,
NTSB Order No. EA-5413,
II
We are bound by the Administrative Procedure Act when we review the Board’s decisions.
See Chritton v. NTSB,
Nevertheless, we have held that where an agency departs from its precedent, it must do so by “reasoned analysis.”
Ramaprakash v. FAA,
Dillmon argues the Board’s decision diverges from its precedent in two ways: first, by reversing the ALJ’s decision without addressing his credibility determination; and second, by applying an improper standard for the intent element of the offense of intentional falsification. We address these arguments in turn.
A
Dillmon argues the Board departed from its precedent when it reversed the ALJ without addressing his credibility determination in Dillmon’s favor. The Board’s precedent unambiguously requires it to defer to its ALJs’ credibility determinations. As we have observed, “the Board’s policy is not to disturb a credibility finding unless there is a compelling reason or the finding was clearly erroneous.”
Chirino v. NTSB,
This deferential standard of review stems from the function the ALJs perform in the adjudicative process: “As we have stated repeatedly, ... the law judge sees and hears the witnesses, and he is in the best position to evaluate their credibility.”
Daschle v. Taylor,
NTSB Order No. EA-4509,
The Board’s adherence to this precedent has been unwavering. For instance, in
Administrator v. Roarty,
NTSB Order No. EA-5261,
Turning to Dillmon’s petition, we are unable to reconcile the Board’s decision with its precedent concerning its review of an ALJ’s credibility determination. There is no question the ALJ made an explicit credibility finding in Dillmon’s favor. See Hearing Tr. at 132 (“My determination is that [Dillmon] was quite forthright and candid in his testimony.”). Dillmon’s credibility was a central issue at the hearing. In concluding Dillmon had rebutted the FAA’s prima facie case, the ALJ relied heavily on Dillmon’s testimony about what he thought Question 18w meant and about his conversations with the AME Dr. Van Den Berg in 2007 and 2008. But when it reversed the ALJ, the Board did not even acknowledge he had made a credibility finding.
The Board’s silence on this pivotal factual issue leaves us unable to determine whether it acted consistent with its precedent.
See, e.g., Exousia,
NTSB Order No. EA-5319, at *2;
Chirino,
The FAA essentially concedes the Board deviated from its precedent when it argues, “To the extent in so reversing the ALJ, the Board
implicitly
overturned any of his credibility determinations, the substantial evidence in the record establishes that the [Board] had the requisite basis to do so under the foregoing standard.” FAA Br. at 50 (emphasis added). The FAA thus admits the Board failed to explicitly overturn the ALJ’s credibility determination but asserts we should nevertheless interpret its decision to encompass this result. The FAA’s overturning-by-implication argument is itself inconsistent with the Board’s precedent. Moreover, if the Board were permitted to overturn the ALJ’s credibility finding implicitly, we still would be unable to ascertain whether the Board reviewed the finding under the appropriate standard or simply ignored it.
See Fox Television,
The FAA offers two reasons why we should not vacate the Board’s order. First, the FAA argues the standard of review we should apply to the Board’s decision is found in
Singer v. Garvey,
In any event, Singer, while not controlling, is consistent with our holding today. The airman in Singer had argued the Board departed from precedent by overturning a statement by the ALJ that the airman contended was a credibility finding. Id. The court rejected this argument by noting the Board had “specifically addressed the ALJ’s statement ... and concluded that it did not amount to a credibility finding.” Id. The court concluded the Board’s action was consistent with its precedent because it had properly interpreted the ALJ’s statement as a legal conclusion rather than a factual finding based upon the witness’s reliability. Id. at 559 (“The ALJ did not render a credibility determination.”). As noted above, the ALJ’s statement about Dillmon’s testimony clearly constituted a credibility determination. Singer therefore does not resolve the question raised by Dillmon’s petition, and the FAA’s reliance on it is misplaced.
Second, the FAA argues the substantial evidence in the record provided the Board with the requisite basis for overturning the ALJ’s credibility determination, and, because the Board’s decision is supported by substantial evidence, it therefore should be affirmed. The flaw in the FAA’s argument is that the Board does not cite this same basis for reversing the ALJ. Instead, the Board reversed the ALJ purportedly because he erred by departing from the Board’s precedent in two respects — an explanation we will explore below. However, even if the ALJ had arbitrarily and capriciously departed from the Board’s precedent, this would not, by itself, vitiate his factual findings, including the credibility determination. The FAA’s substantial evidence argument is thus a thinly-veiled attempt to rehabilitate the Board’s decision by suggesting it reached the right destination, even though it chose the wrong path to get there. Although we will “uphold a decision of less than ideal clarity,” we do this only “if the agency’s path may reasonably be discerned,”
Chritton,
B
Dillmon’s second argument is that the Board departed from its precedent by applying an improper standard for the intent element of the offense of intentional falsification. The FAA revoked Dillmon’s certificates pursuant to FAR section 67.403(a)(1), which prohibits an airman from making an “intentionally false statement.” This provision is similar to another FAA regulation reviewed by the Ninth Circuit in
Hart v. McLucas,
On appeal, the Ninth Circuit disagreed, explaining the regulation identified two partially overlapping offenses — one for fraud and the other for intentional falsification. The fraud offense required proof of five elements: “(1) a false representation (2) in reference to a material fact (3) made with knowledge of its falsity (4) and with the intent to deceive (5) with action taken in reliance upon the representation.”
Id.
at 519 (quoting
Pence v. United States,
In his brief, Dillmon does not assert the Board completely ignored the intent element. Indeed, the Board acknowledged HaH’s three-prong standard in its decision affirming the FAA’s revocation of his air-man and medical certificates. See Dillmon, NTSB Order No. EA-5413, at *3. Instead, Dillmon contends the Board departed from its precedent by allowing the FAA to prove his intent by satisfying the lesser burden of showing negligence (he should have known his answer was false) rather than knowledge (he knew his answer was false). See Petitioner’s Br. at 18.
Despite the ALJ’s finding to the contrary, the Board concluded Dillmon had the requisite knowledge to satisfy the intent element of FAR section 67.403(a)(1): “Overall, [Dillmon] clearly knew that he had been convicted of a non-traffic offense.” Dillmon, NTSB Order No. EA-5413, at *3. The Board reached this conclusion primarily relying on Dillmon’s statement during his hearing testimony that, when he filled out the medical applications, he “knew he had been convicted of a non-traffic offense.” Id. at *2. But there is a step missing in the Board’s reasoning. Dillmon’s statement establishes he was aware when he answered Question 18w that he had been convicted of felony bribery. Standing alone, however, this does not establish he knew his answer to Question 18w was false. Although Dillmon freely admitted he knew about the conviction, he also testified he understood Question 18w only required him to report drug- and alcohol-related convictions. Hearing Tr. at 56-57 (“I have always believed and *1094 have always understood ... any time this question has ever come up was that all [the FAA was] interested in was anything to do with drugs or alcohol.”). Dillmon’s testimony, as credited by the ALJ, was that he did not know his answers were false because of his mistaken interpretation of Question 18w. The question for this court then is whether Dillmon’s subjective understanding of the questions in the medical application is relevant to the offense of intentional falsification. The Board’s precedent establishes it is, and that is the FAA’s position as well. See Oral Arg. Recording at 13:40-14:06.
The Board previously has stated it considers the airman’s subjective interpretation of the meaning of a question to be relevant: “The law judge correctly noted that the third requirement of an intentional falsification charge is that the statements must have been made ‘with knowledge of their falsity.’ Therefore, his finding on this element necessarily hinged on respondent’s understanding of what information the question was intended to elicit.”
Administrator v. Reynolds,
NTSB Order No. EA-5135,
Returning to Dillmon’s petition, the Board diverged from its precedent by refusing, without adequate explanation, to accept his testimony that he subjectively thought Question 18w did not require him to report his felony bribery conviction. Furthermore, Dillmon’s defense was based, in part, on his claim the AMEs told him what Question 18w meant, and he relied on that advice. Thus, before the Board could discount Dillmon’s defense, it should have addressed the role of the FAA’s AMEs in the application process.
See
Oral Arg. Recording at 20:46-21:20 (agreement by FAA counsel that AME’s advice is relevant to airman’s intent);
cf. Administrator v. Culliton,
NTSB Order No. EA-5178,
The Board reversed the ALJ on the ground he erroneously departed from its precedent in two respects. However, we conclude it was the Board, not the ALJ, that applied precedent incorrectly. The first error the Board identified was that the ALJ improperly accepted Dillmon’s defense about his understanding of Question 18w.
Dillmon,
NTSB Order No. EA-5413, at *4. The Board explained it rejected Dillmon’s argument because it had stated in
Administrator v. Boardman,
NTSB Order No. EA-4515,
The Board’s reliance on Boardman and Sue to reject Dillmon’s defense is misplaced. Dillmon testified about what he subjectively believed Question 18w required him to disclose. Reynolds establishes the relevance of Dillmon’s subjective understanding, and neither Boardman nor Sue contradicts this principle. Boardman stands for the proposition that the airman must read the question carefully before answering it. Dillmon appears to have done so here — he testified he discussed Question 18w with the AME on three occasions. Sue stands for the proposition that *1095 the questions on the medical application are not inherently too vague to support a finding of intentional falsification. But even in Sue, the Board relied on the ALJ’s finding that the airman “did know ... that what they were asking on the form he should have said yes to.” Sue, NTSB Order No. EA-3877, at *1.
The second error the Board identified was that the ALJ departed from precedent by requiring the FAA to prove Dillmon had the specific intent to deceive the Administrator when he answered Question 18w.
Dillmon,
NTSB Order No. EA-5413, at *4. The Board claimed the ALJ contravened its decision in
Administrator v. McGonegal,
NTSB Order No. EA-5224,
We conclude with a caution. Although we hold the Board departed from its precedent in two respects, we do not suggest the Board must reinstate Dillmon’s medical and airman certificates. On remand, the Board still must decide whether the ALJ’s decision in Dillmon’s favor was correct. Under its precedent, the Board may reverse the ALJ’s credibility determination, so long as it does so pursuant to the appropriate standard of review. The Board may even modify this standard, but only if it does so by reasoned decision making. Furthermore, the Board is entitled to weigh the evidence and make factual determinations different from those made by the ALJ, if supported by substantial evidence. Finally, the FAA may revisit its interpretation of the intent element of FAR section 67.403(a)(1) and decide it rejects the airman’s subjective interpretation of the questions in the medical application.
See Garvey v. NTSB,
So ordered.
