As you may recall from previous articles, if the FAA pursues an enforcement or civil penalty action and then loses, the Equal Access to Justice Act (“EAJA”) allows a certificate holder or target of the civil penalty action to seek reimbursement from the FAA for the attorney’s fees and expenses incurred by the certificate holder or target of the civil penalty action to defend against the claims asserted by the FAA. The EAJA is found at 5 U.S.C. 504 and is implemented in 49 CFR 826.
According to 49 CFR 826.1,
The Equal Access to Justice Act, 5 U.S.C. 504 (the Act), provides for the award of attorney fees and other expenses to eligible individuals and entities who are parties to certain administrative proceedings (adversary adjudications) before the National Transportation Safety Board (Board). An eligible party may receive an award when it prevails over the Federal Aviation Administration (FAA), unless the Government agency's position in the proceeding was substantially justified or special circumstances make an award unjust.
In order to award EAJA fees to a certificate holder or target of a civil penalty action who is requesting reimbursement of fees (the “Applicant”), one of the issues an administrative law judge ("ALJ") must decide is whether the fees were actually “incurred” by the Applicant. In a situation where the Applicant has paid an attorney for representation throughout the enforcement process out of the Applicant’s own pocket, this is easy. Conversely, when an Applicant’s employer or union pays the fees then the Applicant did not incur the fees for purposes of EAJA. However, if the employer advances the fees and the Applicant is obligated to repay those fees regardless of the outcome of the action, then the Applicant would also be considered to have incurred the fees.
Also, it may be possible for an Applicant to incur fees by retaining an attorney on a contingent fee basis under which the attorney would only receive payment in the event of an EAJA recovery. However, this type of arrangement must be documented at the time the attorney is retained in order for it to qualify under EAJA. In general, documentation of the payment of, or obligation for, the fees is critical to recovery under EAJA.
But what if an applicant doesn't have documentation to show an agreement to pay or be responsible for payment to the attorney who represented the Applicant before the Board? Well, a recent decision by the United States Court of Appeals in the District of Columbia addressed this very issue.
In Roberts v. National Transportation Safety Board the Court was asked to review a decision by the Board affirming an ALJ's rejection of Mr. Roberts' EAJA application on the basis that Mr. Roberts had not actually "incurred" attorney's fees. The ALJ found that Mr. Roberts' attorney also represented his employer and, in the absence of any written agreement between Mr. Roberts and either his employer or the attorneys to the contrary, the ALJ concluded that Mr. Roberts' employer had paid the attorneys. As a result, the ALJ held that Mr. Roberts had not personally incurred the attorney's fees as required by EAJA. The Board then affirmed the ALJ's decision, even though it reversed the ALJ's earlier finding that the employer had agreed to pay for Mr. Roberts' attorney's fees.
On appeal to the Court of Appeals, Mr. Roberts argued that the Board's determination that he had not personally incurred the fees was arbitrary and capricious. The Court agreed and found that the Board's refusal to consider that Mr. Roberts may have been obligated to pay attorney's fees under a quantum meruit theory (also called an implied contract theory) was arbitrary and capricious. The Court observed that Alabama law (the state law applicable to any relationship Mr. Roberts had with his attorney) implies a promise to pay compensation for services rendered to another that are knowingly accepted even in the absence of a valid written contract. The Court went on to observe that the Board's conclusion that Mr. Roberts had not proven that he was responsible for attorney's fees because the attorney's invoices didn't clearly say so defied logic. And the Court determined the Board's reliance upon the absence of an express contract as dispositive was in error.
However, although the Court held that Mr. Roberts had incurred attorney's fees, it noted that all of the fees and expenses claimed by Mr. Roberts may not necessarily be eligible for reimbursement. The Court remanded the case back to the NTSB for it to consider which submitted fees and expenses were supported by sufficient documentation and whether any reduction in award is appropriate.
This decision will certainly help anyone applying for an EAJA award after having to defend themselves against an unjustified certificate or civil penalty action. However, properly documenting both the obligation to pay fees, as well as the amount of the fees is still recommended. But at least the Court's decision provides the opportunity for an applicant to claim fees have been incurred even in the absence of a written agreement. And that's a "win" in my book.
In a recent opinion issued by the National Transportation Safety Board ("NTSB"), the Board affirmed the findings of violations issued by an administrative law judge ("ALJ"). The case, Administrator v. Haddock arose following the crash of an experimental helicopter operated by an airman shortly after his purchase of the helicopter. After investigating the accident, the FAA issued an order alleging that the airman had not properly registered the helicopter and, at the time of the accident, the helicopter did not comply with its experimental operating limitations because it did not have a current condition inspection. According to the order, the airman's operation of the helicopter violated FARs 91.403(a) (owner or operator responsible for maintaining aircraft in an airworthy condition), 91.13(a) (prohibiting operation of an aircraft in a careless or reckless manner), and 47.3(b) (prohibiting operation of an aircraft unless registered or using temporary registration). The airman appealed the order to the NTSB and requested a hearing before an ALJ.
After a hearing, the ALJ determined that the prior owner of the helicopter had used the wrong language to indicate he had completed the required condition inspection and thus the ALJ found that the helicopter was not airworthy at the time of the accident. However, the ALJ did not make a specific finding as to whether the airman had relied upon the prior owner's verbal statements to him regarding the condition inspection and the airworthiness of the helicopter. The ALJ also found that the airman hadn't produced any documentation to show that the aircraft registration had actually been submitted to the FAA Registry prior to the accident flight. But the ALJ did reduce the sanction from 90 days to 60 days based upon evidence that the airman had apparently made a “substantial attempt” to register the aircraft.
The airman appealed the ALJ's decision and the Board remanded the case back to the ALJ for more detailed findings on certain issues. The ALJ obliged, and issued an order again affirming the findings of violations, but providing further explanation regarding most of the issues with which the Board was concerned. The airman then appealed the ALJ's order on remand back to the Board.
On appeal, the airman argued that the ALJ erred in determining the helicopter was not properly registered at the time of the accident. He also contended that the ALJ improperly concluded he was responsible for operating the helicopter when it was in an unairworthy condition because the prior owner had, in fact, completed a condition inspection before the accident and he had reasonably relied upon the prior owner's verbal statements to that effect.
With respect to the registration issue, the Board first noted that the ALJ had not addressed its question concerning the paperwork required to register an aircraft pursuant to FAR 47.3(b). However, rather than remanding to the ALJ a second time, the Board relied upon the ALJ's credibility finding in favor of the two FAA inspectors who testified at the hearing to support the Board's own conclusion regarding the documentation required under FAR 47.3(b).
Since one of the inspectors opined the helicopter was not registered to the airman until he sent the registration to the FAA, sometime after the accident, the Board considered that opinion to be an interpretation of FAR 47.3(b) to which it must defer. When it combined that interpretation with the inspector's testimony, which the ALJ found more credible and to which the Board also had to defer, the Board agreed that the pink copy of the application for registration needed to be present in the aircraft on the date of the accident in order for the airman to have complied with the requirements of FAR 47.3(b). As a result, based upon the inspector's testimony that the pink slip was not in the cockpit at the time of the accident, the Board concluded that the helicopter had not been properly registered.
With respect to the airworthiness issue, the Board rejected the airman's defense based upon the doctrine of reasonable reliance. Since the prior owner was neither the airman's copilot nor crew member, as required by that defense, the airman, as owner and operator of the helicopter, had a duty to ensure that the helicopter complied with its type certificate and was in a safe condition for operation.
The Board found that the airman could have "reviewed the maintenance log and compared it with the requirements of the experimental operating limitations applicable to the aircraft, which explicitly provide the language necessary to indicate the aircraft underwent a satisfactory condition inspection." If he had done so, the Board reasoned, he would have discovered that the prior owner had not used the language to properly document a condition inspection. The Board concluded that the airman's reliance upon the prior owner's statements that the helicopter was airworthy was not reasonable under the circumstances and did not excuse his violations of FARs 91.403(a) and 91.13(a).
This decision highlights the responsibility pilots have for confirming the airworthiness of their aircraft before they fly. If pilots, or aircraft buyers, are going to trust representations by others, as the airman did in this case, they will also need to take reasonable steps to confirm those representations. Similarly, aircraft owners need to comply with the requirements of the aircraft registration regulations on a timely basis to ensure proper registration of their aircraft while they are flying. Although the requirements are simple and straightforward, they need to be met to avoid the consequences suffered by the airman in this case.