All posts tagged 'FAA registry'

How Long Does An Aircraft Mechanic's Lien Last?

I was recently asked the question "what happens to an aircraft mechanic's lien that isn't foreclosed upon within a certain period of time?" This person had been researching aircraft records at the FAA Registry and found several aircraft with liens that were recorded against the aircraft over 15 years ago. Not surprisingly, this made him wonder how long an aircraft mechanic's lien lasts.

Since aircraft mechanic's liens (also known as "artisan liens") are creatures of state statutes, the applicable state statute will govern the validity of and rights associated with an aircraft mechanic's lien. All but 7 states have aircraft mechanic's lien statutes. Although federal law requires that an aircraft mechanic lien be recorded with the Registry in order to be effective against a third party, state laws dictate the requirements for "perfecting" a mechanic's lien against an aircraft, and, once perfected, for enforcing the lien against the aircraft.

As long as the lien claim or lien statement contains the required information (e.g. name, address, description of work performed, last date of work and amount) and was filed within the time period allowed by the applicable state statute, the FAA Registry will record the lien and the recorded lien will be an encumbrance against the aircraft. At that point, the lien claim is "perfected." Unfortunately, neither the FAA Registry nor any aircraft title company will take a position regarding the validity/enforceability of an aircraft mechanic's lien once that lien is perfected.

Once perfected, the lien claimant will have to file a lawsuit to foreclose upon the lien within the time allowed by the applicable state statute. If that does not happen, the lien claimant will no longer be able to enforce the lien against the aircraft. The lien claimant may still have a claim against the aircraft owner, but the lien claimant would not be able to enforce that claim against the aircraft unless the lien claimant obtained a judgment against the aircraft owner for the amount owed and then recorded that judgment with the FAA Registry.

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However, simply because a lien claim is no longer enforceable against the aircraft under the applicable state law, that does not mean that the lien recorded at the FAA Registry is removed. The aircraft will only be released from the recorded lien at the FAA Registry in one of two ways: (1) if the lien claimant signs a release of the lien and the release is recorded with the FAA Registry; or (2) if a court order is obtained declaring the lien as either invalid or unenforceable and that order is then recorded with the FAA Registry. Thus, once recorded, a lien claim, whether enforceable under state law or not, remains an encumbrance against the aircraft until the lien is released, either voluntarily or by judicial order.

So, the short, and not particularly precise, answer is: an aircraft mechanic's lien could be a problem for an aircraft for a very long time.


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Understanding The FAA's New Aircraft Re-Registration And Renewal Requirements



On July 20, 2010 the FAA published a Final Rule amending the FAA's regulations regarding aircraft registration. As a result, if you own an aircraft that is registered with the FAA's Aircraft Registry (the "Registry") you are going to have to renew the registration for your aircraft.

Background

The Registry is responsible for developing and maintaining the system of registration for United States civil aircraft. One of the Registry's primary responsibilities is to maintain an electronic database for all U.S. registered aircraft. The database identifies each registered aircraft by its registration number (N- number), its complete description, and the name and address of its registered owner.

According to the FAA, "approximately one-third of the 357,000 registered aircraft records it maintains are inaccurate and that many aircraft associated with those records are likely ineligible for United States registration." Although the current regulations require aircraft owners to report the sale of an aircraft, the scrapping or destruction of an aircraft, or a change in the aircraft owner's mailing address, apparently many aircraft owners have not complied with these requirements. As a result, the FAA has implemented its Final Rule to improve the currency and accuracy of the Registry's database.

The Final Rule requires re-registration of all U.S. civil aircraft over a 3 year period in order to update the Registry's database and to enable the Registry to cancel the registrations of those aircraft that are not re-registered. Thereafter, aircraft owners will need to renew their aircraft registrations every 3 years.

The Re-Registration/Renewal Process

Under the Final Rule, aircraft registrations will now be limited to a 3-year period. At the end of each 3-year interval, an aircraft's registration will expire and the aircraft will need to be re-registered. This rule establishes the expiration of registration for all aircraft registered before October 1, 2010, and provides for the re- registration of all aircraft over a 3-year period according a schedule contained in the rule.

For aircraft registered on or after October 1, 2010, the aircraft registration's expiration date will be printed on the registration certificate and will be 3 years from the last day of the month in which registration or re-registration occurred. Once renewed, an aircraft's registration will expire 3 years from the previous expiration date. Replacement registration certificates issued on or after October 1, 2010, will display the same expiration date that was shown on the replaced registration certificate. If the replaced registration certificate did not display an expiration date, the replacement certificate will display an expiration date from the above-schedule based on the month of issue of the replaced registration certificate.

The FAA will issue replacement certificates after an address update, an N-number change, or when a certificate is reported as lost or mutilated. However, it is important to note that a replacement registration certificate will not constitute re-registration or renewal. Similarly, the replacement certificate will not change the registration expiration date applicable to the aircraft at the time the replacement registration certificate is issued.

When an aircraft's registration is approaching expiration, the Registry will send an aircraft owner two reminder notices. The first reminder notice will be sent 180 days before an aircraft's registration is scheduled to expire. This notice will identify the aircraft, its expiration date, and the 3-month filing window during which a registration or renewal application should be submitted. It will also provide instructions for completing the registration or renewal process.

In order to receive a new registration certificate before the old certificate expires, an aircraft owner will need to file the re-registration or renewal application within the assigned window. However, once an aircraft has completed re-registration and is approaching a required renewal, the aircraft owner may submit the required renewal information as soon as the first reminder notice is received.

The Registry will send a second reminder notice at the end of the 3-month filing window if the aircraft owner has not yet re-registered or renewed the aircraft's registration. The 3- month filing window will close 2 months prior to the scheduled expiration date for the aircraft's registration to allow the Registry sufficient time to process the application and mail the new certificate. If an aircraft owner files an applications after the filing window has closed, the application will still be processed; however, the new certificate may not arrive until after the current certificate has expired.

To avoid confusion between the normal registration process and the re-registration process, the Aircraft Registration Application, AC Form 8050-1, will not be used for re-registration. The Registry has created a separate application form that will be available online, here. Aircraft owners should be aware that the re-registration/renewal application does not grant any temporary authority for operation of an aircraft, unlike that provided by retaining the pink copy of Form 8050-1. As a result, if a re-registration/renewal application is filed late and a new registration certificate is not received by the time the current registration certificate expires, the aircraft owner would not be able to operate the aircraft between the time when the current certificate expires and when the new certificate is received.

The Final Rule provides for both online re-registration and renewal when no changes are required. However, if changes to the registration are required (e.g. address change, etc.), then the re-registration/renewal application may not be submitted online and must be mailed to the Registry. According to the Final Rule, the Registry will post information on its website identifying aircraft as they move through the various stages of re-registration and renewal so aircraft owners and other interested parties can track the process.

Aircraft owners will need to pay $5.00 to re-register their aircraft and then another $5.00 each time the aircraft's registration is renewed. (Although this doesn't seem like a lot of money, unfortunately the registration and administrative fees may increase over time, depending upon whether the latest version of the FAA reauthorization bill passes. Under that bill, the FAA would be required to increase fees to $130 for initial registration and $45 for renewals.)

Consequences For Failure To Re-Register/Renew

If an aircraft owner fails to re-register or renew an aircraft's registration, the registration will not end immediately. Rather, the Registry will wait 30 days to ensure that any late filed requests from the aircraft owner have been processed. In the absence of such requests, and assuming the Registry has a good address on file for the aircraft owner, the Registry will then send a letter to the aircraft owner providing notice of the pending cancellation of the aircraft's registration. The aircraft owner will then have 60 days within which to reserve the N-number or register the aircraft. If the Registry does not receive a reply within 60 days, the aircraft's registration will then be cancelled. If the Registry does not have a good address for the aircraft owner, cancellation of the aircraft's registration will be scheduled for no sooner than 90 days from the date of expiration. Once an aircraft's registration is cancelled, the N-number will be unavailable for assignment for a period of 5 years.

Conclusion

The Final Rule is effective October 1, 2010. Thus, all aircraft owners will need to comply. How can you minimize the hassle associated with the Final Rule? First, since the re-registration notice will be sent to the address on file with the Registry, verify now that your address in the Registry is correct. If you need to update the information, you can do that directly with the Registry or through an aviation attorney. Second, submit your application as early as possible once you receive your first reminder notice to allow the Registry time to process and mail your new registration.

If you follow these steps, hopefully the re-registration/renewal process will be nothing more than a minor inconvenience. And, as always, if you have problems contact an aviation attorney for help.

FAA Enforcement Case Update

This month I thought I would provide you with another update regarding some of the recent NTSB cases involving FAA enforcement actions. They are instructive because they not only show you the FAA's and NTSB's positions regarding some of these issues, but they also provide some examples of problem areas a prudent airman should avoid.

NTSB Dismisses FAA Appeal For Untimely Filing Of Appeal Brief

In a recent NTSB case in which an administrative law judge awarded attorney's fees and costs to an airman under the Equal Access to Justice Act ("EAJA"), the Board dismissed the FAA's appeal of the EAJA award for failure to timely file an appeal brief. In Application of Hayes, the FAA timely filed its notice of appeal. However, the FAA did not then file an appeal brief by the deadline required by 14 C.F.R. 821.48(a). Although the FAA's appeal brief was dated the last day allowed by the rule and the certificate of service stated the brief was served by overnight mail on that date, the Federal Express tracking data indicated a pickup date of three days after the deadline for filing the brief.

Based upon the untimely filing, the airman subsequently filed a motion with the Board to have the FAA's appeal dismissed. The FAA did not respond to the motion within the time allowed, but did later file a notice of withdrawal. The Board ruled that the FAA's failure to show good cause for its untimely appeal brief, or to request, before the appeal brief was due, leave to file the appeal brief out of time, required dismissal of its appeal. As a result, the Board deemed the FAA's withdrawal of its appeal as moot.

Nice to know that, at least with respect to timing requirements for filing of appeals, the Board will treat the FAA the same as airmen.

ATP Receives 90-Day Suspension For Failure To Find Suitable Landing Site For Hot Air Balloon

In Administrator v. Chemello, the airline transport pilot landed a hot air balloon in a high school parking lot in the morning shortly before the start of classes. Of course, the balloon attracted a lot of attention from the teachers, students, local law enforcement and, not surprisingly, the FAA. The FAA investigated the incident and subsequently issued an order suspending the airman's ATP certificate for 90 days for alleged violation of FARs 91.119(b) (prohibiting operation of an aircraft over congested area below an altitude of 1,000 feet above the highest obstacle within a horizontal radius of 2,000 feet of the aircraft) and 91.13(a) (careless and reckless). The airman appealed the suspension to the NTSB.

After an evidentiary hearing, an administrative law judge ("ALJ") affirmed the suspension. Relying upon his determination of the witnesses' credibility, the ALJ held that the school parking lot was a "congested area" at the time of the landing and that no emergency was present that would have prevented the airman from landing the balloon in a different, suitable location. The airman appealed the ALJ's decision to the full Board arguing that the ALJ's credibility determinations were contrary to the evidence.

The Board initially observed that an airman's "selection of a suitable landing site for a balloon is dependent upon the balloon's proximity to power lines, buildings, and trees, and the availability of alternative landing sites." It also noted that, in addition to generally deferring to an ALJ's credibility determinations, the Board will specifically defer to an ALJ's "credibility determinations with regard to whether a respondent believes that he or she must land a balloon in a certain area due to wind conditions." The Board concluded that the airman had not presented any evidence to compel it to disregard the ALJ's credibility determinations. As a result, the Board affirmed the ALJ's decision.

Tough to get a decision reversed when it is based upon the ALJ's credibility determinations. Unfortunately, this is typically the situation when a case involves a factual dispute, as opposed to a case involving a determination of whether undisputed facts support a violation. The key is to convince the ALJ at the hearing. But that, too, is easier said than done.

NTSB Affords Airman With Second Hearing After 9th Circuit Court of Appeals' Rebuke

After getting its proverbial wrist slapped by the 9th Circuit Court of Appeals, the NTSB has afforded an airman a second hearing. In Administrator v. Klaber, the FAA charged the airman with violations of FARs 135.293(a)2 and (b) (requiring written/oral test and competency check within preceding 12 months), 135.299(a) (requiring line check within preceding 12 months), and, of course, the ever present residual violation of FAR 91.13(a) (the ever present careless and reckless). The FAA ordered a 90 day suspension of the airman's airline transport certificate as a sanction for the alleged violations. The airman appealed the order to the NTSB and, after a hearing, the administrative law judge ("ALJ") affirmed the FAA's order, but reduced the suspension from 90 to 85 days. The airman then appealed to the full NTSB.

On appeal to the full board, the airman argued that the ALJ made a mistake when he prevented the airman from cross-examining an inspector, the FAA's primary witness, regarding a number of issues including the definition "for compensation or hire", the inspector's understanding of flight maintenance logs, the inspector's internal deliberations concerning his investigation into the airman's conduct, and the inspector's experience. The Board rejected the airman's appeal, finding that the ALJ had not abused his discretion nor did any alleged errors result in prejudice to the airman.

The Board specifically found that neither the inspector's understanding of "compensation or hire," nor his general perception of flight maintenance logs, were directly relevant to the evidence that he reviewed concerning the airman's alleged violations. It also concluded that the inspector's opinions during the course of his investigation or his discussions with other investigators were not relevant to the issue of whether the airman violated the regulations as charged by the FAA. As a result, the Board affirmed the ALJ's decision.

The 9th Circuit Court of Appeals disagreed with the Board. In its unpublished decision, Ferguson v. FAA, the Court determined that the Board had abused its discretion in upholding the ALJ's decision and that abuse of discretion was prejudicial to the airman. The Court initially observed that "[t]he Rules of Practice in Air Safety Proceedings provide that each party has the right to 'conduct such cross examination as may be required for a full and true disclosure of the facts." However, because the inspector "was the FAA's lone witness as to the revenue-generating nature of the disputed flights," the Court determined that the ALJ erred in not allowing cross-examination of the inspector on the many aspects of his testimony regarding that central issue. The Court stated that the ALJ's "reliance on [the inspector's] testimony, particularly as to the contents of the flight logs, makes clear that the error was prejudicial." The Court vacated the Board's decision and sent the case back to the Board for further action.

Although clearly not happy with the Court's decision, the Board complied with the decision, stating "[d]espite our well-established precedent with regard to our law judges' evidentiary rulings, and the reasoning that forms the basis for our deference to such rulings, we recognize that the Ninth Circuit believes that the law judge should have allowed respondent's counsel to question [the inspector] more fully in this case. As such, we are compelled to remand this case to the law judge so that he may oversee an additional hearing at which respondent's counsel may again cross-examine" the inspector."

It is unfortunate that the airman had to appeal all the way to the 9th Circuit in order to get his full day in court. However, you have to wonder whether the additional information that will be obtained through a full cross examination at the new hearing will change the ALJ's mind or provide a sufficient basis for appeal if he doesn't. We'll just have to see how it plays out.

Conclusion

As airmen, we should always be learning. We can learn from current NTSB cases. The obvious lesson is to not do what these airmen did. These cases also reveal what an airman may be able to expect from both the FAA and the NTSB in these situations. Forewarned is forearmed.

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