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What You Need To Know About FAA Civil Penalty Actions


In recent months we have seen the Federal Aviation Administration ("FAA") aggressively pursuing civil penalty actions against various air carriers and maintenance facilities. In some instances the penalties proposed by the FAA have been millions of dollars. And although the media has a field day each time the FAA announces proposed civil penalties, we usually don't hear anything else about the case until it is resolved with a civil penalty actually assessed against the targeted air carrier or maintenance facility. If the proposed penalty is withdrawn or if the air carrier or maintenance facility beats the charges, we rarely hear anything at all.

In this article I would like to fill in that gap in time by providing you with an overview of the processes and procedures that occur from the time the FAA proposes a civil penalty until the case is resolved.

The Civil Penalty Action


When the FAA believes a certificate holder (whether an airman, air carrier, repair station or otherwise), it may pursue enforcement action against the offending party. The action can be against the party's certificate, also known as a "Certificate Action." In this situation the FAA seeks to suspend or revoke the party's certificate. Alternatively, the FAA could seek to impose a civil penalty or fine against the party, also known as a "Civil Penalty Action."

Civil Penalty Actions are typically used against companies or entities, as opposed to individuals, that hold FAA certificates. However, the FAA will often bring a civil penalty action against an individual to avoid the six month limitation of the NTSB's stale complaint rule in a certificate action, and benefit from the longer 2 year limitation applicable to civil penalty actions. Thus, if the FAA fails to initiate a certificate action within six months of discovering an alleged violation, it will resort to a civil penalty action which allows the FAA 2 years within which to initiate the action.

The FAA determines the amount of the civil penalty using the Sanction Guidance Table in FAA Order 2150.3B, Appendix B, which provides ranges for civil penalties based upon the type and size of the certificate holder, the type of alleged violation and the number of alleged violations. If the amount of the proposed civil penalty is less than $50,000, then the FAA handles the action. However, if the proposed civil penalty is more than $50,000, then the United States Attorney's office handles prosecution of the action. (For purposes of this article we will assume a case is being handled by the FAA).

A Civil Penalty Action is initiated when the FAA serves the certificate holder with a "Notice of Proposed Civil Penalty (the "Notice"). The Notice recites the relevant facts (usually discovered by the FAA during an investigation, inspection or audit), the regulations the FAA believes the certificate holder has violated and the proposed civil penalty.

Options for Responding to the Notice


The Notice is accompanied by an explanation of options for responding to the Notice. The certificate holder has the choice of the following seven options:

  1. Pay the penalty as proposed by the FAA;

  2. Submit written information and evidence demonstrating that a violation of the regulations was not committed or that; if it was, the facts and circumstances do not warrant the proposed civil penalty. The FAA will then consider this information in determining whether a civil penalty should be assessed and the amount of any such civil penalty;

  3. Submit written information and records indicating that the certificate holder is financially unable to pay the proposed civil penalty, or showing that payment of the proposed penalty would put the certificate holder out of business;

  4. Request that a civil penalty be assessed in a specific amount less than that proposed in the Notice, or that no civil penalty be assessed and provide the reasons and support for the requested reduction. The FAA will then consider this information when it determines whether the reduced amount should be assessed. If the FAA accepts the reduced amount that constitutes the certificate holder's agreement that an Order Assessing Civil Penalty in that amount may be issued and the certificate holder waives its right to a hearing regarding the civil penalty;

  5. Request an informal conference during which the certificate holder can discuss the matter with an FAA attorney and present any information the certificate holder might otherwise have wanted to provide under options 1-4;

  6. Request that the FAA impose a civil penalty without making findings of violations, providing reasons and any supporting documentation along with the request. If the FAA accepts the request, that constitutes the certificate holder's agreement that a Compromise Order in that amount may be issued and the certificate holder waives its rights to a hearing; or

  7. Request a formal evidentiary hearing before a Department of Transportation administrative law judge ("ALJ") at which the ALJ will decide issues of fact and law and will determine whether, and in what amount, a civil penalty will be assessed against the certificate holder.

The certificate holder must respond to the FAA with one of the seven options within 30 days after receiving the Notice. If the certificate holder selects any option other than option 7 and the case settles, either the case will be dismissed, which doesn't happen very often, or an order for a reduced civil penalty will be issued, which happens frequently. If the latter, then the certificate holder simply pays the penalty and the case is closed. If the case does not settle, or if the certificate holder elects option 7, then a hearing is held before an ALJ.

The Evidentiary Hearing


Prior to the hearing, the FAA issues a complaint that contains the same factual and regulatory allegations contained in the Notice. The certificate holder then submits an answer specifically admitting or denying the allegations contained in the FAA's complaint.

The certificate holder and FAA may also engage in discovery before the hearing. Discovery allows each party to ask the other to identify witnesses and produce evidence that will be introduced at the hearing and also provides an opportunity to depose witnesses. Through discovery, the certificate holder should be able to ascertain all of the facts and evidence upon which the FAA will be relying when it presents its case to the ALJ.

At the hearing, the FAA has the burden of proving its allegations by a preponderance of reliable, probative and substantial evidence. The FAA will present witness testimony and evidence and the certificate holder has the opportunity to cross-examine the FAA's witnesses and to present witnesses and evidence on its own behalf. At the end of the hearing, the ALJ will issue a decision regarding whether a civil penalty is supported by the facts and law, and if it is, the appropriate amount.

Appeal


If either the certificate holder or the FAA is unhappy with the ALJ's decision, that party may file a notice of appeal with the "FAA administrator." Yes, the same administrator responsible for the FAA. To make matters worse, the FAA Chief Counsel's office, which also prosecutes civil penalty cases, writes the decisions for the FAA administrator. If you are thinking this, at a minimum, appears unfair and biased, you are not alone. However, such is the system established by the current regulations.

The regulations require that the FAA administrator review the record, the briefs on appeal, and the oral argument, if any, and then issue the final decision and order of the FAA administrator on appeal. The FAA administrator may (1) affirm, modify, or reverse the initial decision of the ALJ; (2) make any necessary findings; or (3) remand the case for any proceedings that the FAA administrator determines may be necessary. If either party is unsatisfied with the FAA administrator's decision, that decision can be appealed to the United States Court of Appeals pursuant to a petition for review.

Conclusion


As you can see, a lot can happen after the FAA proposes a civil penalty against a certificate holder. Knowing the process and the options available, along with the assistance of an aviation attorney, can help you respond and successfully resolve an FAA civil penalty action.

FAA Proposes More Restrictive Interpretation Of Part 135 Flight And Rest Time Regulations

In a Notice of Proposed Interpretation published on December 23, 2010, the FAA is proposing to interpret the application of FAR 135.263 and the rest requirements of FAR 135.267(d) to a situation where an operator plans a flight that is anticipated to be completed within a 13.5-hour duty day but, unanticipated delays (e.g. late passengers, late cargo etc.) occur before the last leg of the flight, and these delays would extend the flight beyond a 14-hour duty day if the last leg is completed.

The FAA's current interpretation of these regulations, based upon legal interpretations issued in the 1990's, permits flight crewmembers to take off on flights that were scheduled to be completed within a 14-hour duty period even though circumstances beyond the crewmembers' control extended the actual duty time beyond the permissible 14-hour period. However, this interpretation is inconsistent with its current interpretation of the near identical language in
FAR 121.471(g) which would not permit the crewmembers to take off on the last leg of the flight.

The FAA's interpretation of the language of
FAR 121.471(g), which was upheld by the U.S. Court of Appeals for the DC Circuit, created an exception to pilot flight time limitations, but did not provide an exception for pilot rest requirements. In the Court of Appeals decision, the Court also stated that "[t]he substance of the rules in FAR Parts 121 and 135 is essentially the same and the rules are likewise interpreted." The FAA's interpretations of FAR 121.471(g) along with the Court of Appeals case have been known as the "Whitlow Letter line of interpretations."

According to the proposed interpretation, "[t]he FAA has determined that it is illogical that the nearly-identical regulatory language in sections 121.471(g) and 135.263(d) is interpreted in two different ways" and "the Whitlow Letter line of interpretations best reflects the FAA's current understanding of the pertinent regulatory language." As a result, under the proposed interpretation, if a flight crewmember knows at the time of departure on the last leg of the flight that he or she has not had the required rest,
FAR 135.267(d) would prohibit him or her from departing on the last leg of the flight.

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Comments to the proposed interpretation are due on or before January 24, 2011. If you have any questions regarding the proposed interpretation or would like further information, you may contact Alex Zektser, Attorney, Regulations Division, Office of Chief Counsel, Federal Aviation Administration, 800 Independence Avenue, SW., Washington, DC 20591; telephone: (202) 267- 3073; e-mail: [email protected].

This proposed interpretation could have a potentially significant impact on the operations of Part 135 on-demand air carriers. I encourage all Part 135 operators and pilots who fly for those operators to submit comments to the proposed interpretation.  Your comments are most welcome as we all learn through open dialogue.

Are we losing our sovereignty and freedom in all things commercial, business and general aviation?

Even though this past year in aviation legislation has been a quiet one, there has been a discernable undercurrent of change seeping into the foundation of the commercial, business and general aviation industry these past several years. The changes that have been slowly seeping in under most of our ‘news radars’, and when viewed as a composite, are so significant that we all now need to take immediate action before our worst fears become an industry reality.

The changes that I am referring to, and a lot of them are not caused by the Department of Homeland Security (DHS) or Transportation Security Administration (TSA), are as follows:

Establishment of an International Aircraft Registry in March 2006. This program is mandated by the FAA, whereby a seller cannot warrant ‘Free and Clear Title’ to his or her aircraft, unless it has registered with the I.R. The treaty resulted from a diplomatic conference held in Cape Town, South Africa in 2001. The conference was attended by 68 countries and 14 international organizations. In all, 53 countries signed the resolution proposing the treaty. It took effect when ratified by eight countries: Ethiopia, Ireland, Malaysia, Nigeria, Oman, Panama, Pakistan and the United States.

Failed attempt to introduce Aviation User Fees in June 2007. Proposed by Sen. Jay Rockefeller, along with the then-ranking minority committee member Sen. Trent Lott, and wrapped up in Senate Bill S.1300. The airlines were all for this, because they saw an opportunity to deflect public scrutiny away from their intensely bad ways of managing their respective companies, while firing media shots at business and general aviation. This caused so much division within both houses of Congress that the FAA was put on probation starting in September 2007. Ever since then, the FAA has been on a month-to-month, and sometimes quarter-to-quarter basis for funding.

Failed attempt to introduce the Large Aircraft Security Program (LASP) in October 2008. This regulation would require all U.S. operators of aircraft (both Part 135 and 91) that exceed 12,500 pounds maximum take-off weight to implement security programs that would be subject to compliance audits by TSA. The proposed regulation would also require operators to verify that passengers are not on the No Fly and/or Selectee portions of the federal government's consolidated terrorist watch list.

Failed attempt to introduce an FAA Certified Repair Station (CRS) Security Plan in November 2009. Repair stations on and off airports are so different that it wouldn’t be possible to create a security plan and audit system to fit all of the stations. However, this plan required that all CRS facilities to implement security procedures and infrastructure such as access controls to the facility or aircraft, and a means to identify those who should have access to the facility. Additionally, there would have to be procedures established for challenging unauthorized people who are trying to get access to the facility, along with a security awareness training program for all employees.

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The Introduction of Plastic Airmen Certificates in April 2010. The paper to plastic conversion is in response to the Drug Enforcement Assistance Act of 1988, which directed the FAA to modify the system used to issue airmen certificates to help prevent abuses, including the use of counterfeit and stolen airman certificates, as well as the submission of unidentifiable names on aircraft registration applications.

Implementation of an Emissions Trading Scheme, with mandatory Annual Carbon Emissions Monitoring in September 2009. This European-mandated program is spearheaded by the ICAO and EASA and will lead to an Eventual Carbon Cap and Trade Program. At the close of its 37th assembly last Friday, the International Civil Aviation Organization (ICAO) agreed to what it characterized as the first global approach to reducing air transport's impact on climate change. Under the resolution, ICAO committed to achieving a 2 percent annual fuel-efficiency improvement until 2050, as well as a global framework for the development and deployment of sustainable alternative aviation fuels and a world standard covering carbon dioxide limits for aircraft engines. The resolution also calls for the creation of a global market-based measures scheme. But with the ink barely dry on the document signed by the UN body's 190 member states, opinion remains divided as to whether the development weakens or strengthens the European Union's emissions trading scheme. The EU has always said it will exempt non-European operators from its ETS if its own national governments have implemented a comparable system. However, the EU has made it clear that it will not defer ETS implementation while it waits to see if such alternatives ever materialize.

 

Re-Registration and Registration Renewal of U.S. Aircraft in October 2010. Now all aircraft registrations will expire in the next three years, possibly as early as March 31, 2011.  The FAA has issued a final rule that took effect on October 1, 2010, that requires all aircraft owners to renew their registrations by December 31, 2013 and then re-register every three years thereafter.  The purpose of the rule is to maintain an accurate aircraft registry database; a goal not achieved by the Triennial Aircraft Registration Report.  The FAA estimates that one-third of the 357,000 aircraft registrations currently on file are inaccurate.  The FAA uses the database for ownership determination and response to an overdue flight or downed aircraft report.  Law enforcement and other government agencies use the database for their own purposes.  The federal register’s summary of the rule mentions inclusion of registry information and status on a display depicting each flight operating on a flight plan in the national airspace system.

Implementation of the International Civil Aviation Organization (ICAO) International Standards of Business Aviation Organization (ISBAO) Safety Management System (SMS) Requirement mandated for enforcement, Nov. 18, 2010. While the FAA has filed a “difference” explaining that it does not have a formal safety management system (SMS) rule for aircraft operators, despite ICAO's Nov. 18 deadline, it is in the process of SMS rulemaking. The FAA is already sponsoring voluntary SMS implementation by Part 121, 135 and 145 organizations to provide learning and experience for both industry and the FAA in SMS development, implementation and oversight. The FAA is also considering SMS regulations for Part 135 operators and Part 145 repair stations. There are reports of Part 135 operators being denied entry into various international airports and/or airspace due to lack of an approved SMS manual and/or FOQA which stands for Flight Operations Quality Assurance; a flight-data analysis program has been an ICAO requirement since 2005. Starting on Nov. 19, 2010, Bermuda was the first nation to officially require that all foreign operators of business aircraft with an MGTOW of more than 12,500 pounds have an SMS and meet other requirements under ICAO Annex 6.2.3. For U.S. operators, this includes both Part 91 and 135 operators. Compliance with the ICAO annex is monitored by random ramp inspections at the L.F. Wade International Airport. Operators discovered to be not compliant will be refused entry to Bermuda until they can demonstrate compliance. Besides the precedent-setting SMS requirement, affected operators will also need an operations manual, fatigue management program, MMEL, Type 1A flight data recorder and crew microphone-based communication system. Additionally, aircraft with an MGTOW exceeding 59,400 pounds are required to have a Type 1 FDR and a cockpit voice recorder. On the other side of the Atlantic Ocean, French civil aviation authorities now require foreign operators to demonstrate they have an SMS and a FOQA program before they grant traffic rights. In fact, for the past two years, France’s aviation authority (DGAC) has mandated that foreign operators flying commercially or operating an aircraft weighing more than 27 metric tons (59,500 pounds) have a flight data analysis program (FDAP). The requirement is independent of any EASA regulation, with the DGAC maintaining it is enforcing ICAO standards. The EASA’s remit does not include foreign operator monitoring yet; the agency will manage technical authorizations (possibly including question forms) at the European level beginning in 2012. States will retain authority of commercial authorizations, such as traffic rights.

European Aviation Safety Agency (EASA) Proposition to eliminate Third-Country Aircrew and Aircraft Licensing validity, details released in October, 2010. If passed into law, the proposal would adversely affect U.S. flight schools that train foreign pilots, as well as pilots coming to the United States for training. Pilots who complete their flight training in the United States would be required to repeat the majority of their training upon their return to Europe. The FAA instrument rating would be considered useless in Europe. EASA has made no secret of the fact that it wants to get third country aircraft – and specifically the N-register – out of Europe by ensuring that there are no advantages to being on the N-register. The flight crew licensing proposal is only the first stage in EASA’s move against the N-register, with more to come in proposals on Operations in 2011.

 

Picture I.D. Requirements for Pilot Certificates. NPRM out for comment until Feb. 17, 2010. This proposal responds to section 4022 of the Intelligence Reform and Terrorism Prevention Act (IRTPA). The FAA previously required all pilots to obtain a plastic certificate (excepting temporary certificates and student pilot certificates). This proposal furthers the fulfilment of IRTPA by requiring a photo of the pilot to be on all pilot certificates. The new certificates shall remain valid for only 8 years, and then they must be replaced with a new one featuring a recent photograph. 

 

Part 25 Airworthiness Requirements Harmonization with EASA. NPRM out for comment until Feb. 17, 2010. The FAA tasked the Aviation Rulemaking Advisory Committee (ARAC) through its Flight Test Harmonization Working Group to review existing regulations and recommend changes that would eliminate differences between the U.S. and European performance and handling characteristics standards by harmonizing to the higher standards. This proposed rule is a result of this harmonization effort.

 

Significant escalation in the frequency of occurrences, and the penalty amounts levied in fines against U.S. Operators and Businesses by the FAA. In light of the problems that the FAA has had in receiving a consistent operating budget from Congress, President Obama’s administration is more actively looking and willing to bring about civil penalties against the aviation industry. All money collected by the federal government goes into the general fund.

 

The U.S. aviation industry has lead the rest of the world for more than a century, and effectively it is this system that has firmly established the U.S.A. as the ideal model which has caused more than 75 percent of the world’s civil aircraft fleet to be based here. Maintaining a healthy, safe and prosperous aviation industry takes government support and funding. The lion's share of the costs of running this national transportation system, are eaten up by the air-traffic and navigational infrastructure. The need for a near autonomous, free-flowing and independent on-board traffic guidance, avoidance and clearance system has been on the FAA’s books for more than a decade now. They call it NextGen, while it has also been named “Free-Flight.”

Unfortunately we, the users of this system, are not able to make our voices heard, because the past two governments have chosen to strangle the FAA and force it to step down as the leader of aviation safety oversight, all because of the lack of a proper and appropriate funding budget.

In fact, the FAA’s FY 2010 portfolio of goals document states that: “There is no budget associated with this performance target, as the global support that the ATO provides in support of NextGen is assumed by the specific program offices or paid for by international civil aviation authorities or air navigation service providers through the execution of reimbursable bilateral technical assistance agreements. However, political will, cultures, foreign policy, and other government budgets can be significant factors in the success of the NextGen performance target.”

I worry that the U.S. aviation industry is being forced to the back of the ‘special bus’, thus allowing organizations like the ICAO and EASA to run amok with biased, politically based legislation that is calculated to seize the balance of power in aviation oversight – and ultimately cause the global aviation industry to contract due to the financial burdens that these socialist based systems shall levy against us all. Couple this trend with the willingness that governments have in using the spectre of terrorism as a means to further cheapen and ultimately enslave free societies; we are all in for a very dark future indeed.

 

The International Civil Airworthiness Organization (ICAO) and its subsidiary, the International Business Aviation Council (IBAC), are both based in Montreal. The European Aviation Safety Agency (EASA) is based in Cologne. EASA has taken over from the Hoofddorp-based Joint Aviation Authorities (JAA.) The International Aircraft Registry (IAR) is based in Dublin, while the Aviation Rulemaking Advisory Committee (ARAC) is still based in Washington, D.C. This all leaves me to wonder when the Federal Aviation Administration shall be disbanded and all governance moved to Cologne. It is time to start writing to our representatives in Washington, I think. What say you on this matter of sovereignty?

Is A U.S. Senator Subject To FAA Enforcement Action For Landing On A Closed Runway?

According to an Article in the Tulsa World, the United States Senator from Oklahoma, James Inhofe, landed his Cessna 340 on a closed runway at the Port Isabel-Cameron County Airport in Texas. At the time, the closed runway was marked with large X's to protect a crew that was working on the runway and a corresponding NOTAM regarding the runway closure had been issued.

The Senator stated that he only saw the X's about 20 seconds before he landed, which, according to him, was too late to change course. However, he was able to land on a part of the runway that was away from the location where the work was being performed. When asked about the NOTAM, the Senator stated "I did not know it because it was not given to me." Later, when the Senator wanted to leave, he used the airport's taxiway to take off.

What is interesting about this incident is that, after apparently notifying the FAA soon after landing and then talking with the FAA several days later, the Senator "expressed assurance that the agency will not take any action against him." I find that hard to believe.

Any other airman would be looking at an enforcement action alleging, at a minimum, violations of FARs 91.103 (requiring a pilot to become familiar with all available information concerning a flight), 91.139(c) (requiring compliance with a NOTAM) and 91.13(a) (careless and reckless) and seeking suspension of the airman's pilot certificate for a period of at least 30-90 days based upon FAA Order 2150.3B Appendix B (the FAA's Sanction Guidance Table).

[more]Don't get me wrong, I am not trying to encourage an enforcement action against the Senator. After all, he has always been a stalwart supporter of general aviation. Also, as we all know, stories reported in the media never include all of the facts. Perhaps the Senator has some viable defenses. However, it seems to me that the Senator should be subject to the same regulatory enforcement as every other airman. No more, no less.

It will be interesting to see what, if anything, happens. If the FAA does pursue an enforcement action, I hope the Senator filed his NASA/ASRP Form, and hires a good aviation attorney to defend him!

Why You Need To Read The Questions On An FAA Medical Application Before Answering

An airman recently found out the hard way that failure to read the questions on an FAA medical application was not a defense to a charge of intentional falsification under FAR 67.403(a)1. In Administrator v. Cooper, the FAA alleged that the airman checked "No" in response to question 18(v) on the medical application which asks about convictions and/or administrative actions relating to the applicant's driver's license. However, the airman's driver's license had, in fact, been suspended in connection with an alcohol related motor vehicle action.

As a result, the FAA issued an emergency order revoking the airman's airline transport pilot (ATP), certified flight instructor (CFI), and second-class medical certificates based upon alleged violations of FARs 67.403(a)(1) (prohibiting an airman from making fraudulent or intentionally false statements on an application for a medical certificate), 67.403(c)(1) (providing that the making of an incorrect statement in support of an application for a medical certificate may serve as a basis for suspending or revoking a medical certificate) and 61.15(e) (requiring an airman to provide a written report of each motor vehicle action to the FAA, Civil Aviation Security Division within 60 days).

The airman appealed and presented a number of arguments at the hearing. Although the airman admitted that he failed to answer question 18v correctly, he argued that he did not intentionally falsify the application because he had simply failed to read the question or the instructions that accompanied the medical application before answering. Rather than reading the questions, the airman stated that he had just copied his answers from a previous application. However, he also admitted that, if he had read question 18(v), he would have answered "Yes."

The administrative law judge ("ALJ") determined that the airman's incorrect answer was "inadvertent," and that the FAA had not shown that the airman had an intent to falsify the application. As a result, the ALJ dismissed the FAR 67.403(a)1 charge. However, because the airman did answer question 18(v) incorrectly, the ALJ concluded that revocation of the airman's medical certificate was appropriate for violation of FAR 67.403(c)1. The FAA appealed the ALJ's decision to the full NTSB, arguing that the ALJ erred in finding that the airman had not intentionally falsified the application simply because he did not read it.

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The Board initially observed that an airman must read the questions on a medical application carefully before answering them. It went on to state that an airman who does not read the questions on a medical certificate application "should be determined to have intended that whatever answer he gave be utilized in the review of his qualifications." Finally, the Board concluded that "failure to read a question before answering it renders the entire medical certificate application process pointless, and does not provide a defense to a charge of [FAR] 67.403(a)(1)." As a result, the Board granted the FAA's appeal and affirmed its revocation of all of the airman's certificates.

This case is different from other recent cases that have held that an airman's confusion about a question may present a defense to an intentional falsification charge. Here the airman admitted to not reading the question, rather than not understanding the question. As a result, the defense of "failing to read the question" is no longer a legitimate defense. However, the defense of "confusion" or "misunderstanding" of a question remains a viable defense which an ALJ may or may not find credible, although it is still not a particularly strong defense.

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