All posts tagged 'enforcement' - Page 2

FAA Needs Specific Proof For An Independent Violation of FAR 91.13(a)


Recently the NTSB remanded a case back to the administrative law judge ("ALJ") for a hearing on an independent charge of violating FAR 91.13(a) (careless and reckless). In the case, Administrator v. Hollabaugh, the FAA suspended the airman's airline transport pilot certificate for alleged violations of FARs 135.263(a) and 135.267(d) (flight and duty time regulations), as well as FAR 91.13(a) which the FAA alleged was a residual violation based upon the other violations. Based upon the airman's admission of all allegations except the careless and reckless charge, the FAA moved for summary judgment on all counts.

In response to the FAA's motion, the airman argued that the residual FAR 91.13(a) charge was inappropriate since violations of FARs 135.263(a) and 135.267(d) were not operational violations. The FAA then filed an "errata" to its motion which stated that reference to the FAR 91.13(a) violation as a residual charge was an error "because the factual allegations in the [c]omplaint effectively charge [r]espondent with an independent charge of carelessness under FAR 91.13(a). The ALJ accepted the errata and then granted the FAA's motion on all counts.

On appeal to the full Board, the airman again argued that "granting summary judgment on the FAR 91.13(a) charge was inappropriate because FAR 91.13(a) only applies to operational violations" and since neither FAR 135.263(a) nor FAR 135.267(d) is an operational violation, his admissions concerning those violations did not prove that he also violated FAR 91.13(a). Recognizing that the Board had not faced this issue before, it initially reiterated that the FAA needs "to plead explicitly in the complaint whether a charge under FAR 91.13(a) is residual or independent."

However, accepting that the charge against the airman was an independent charge, the Board then determined that the FAA had failed to produce facts supporting an independent violation of FAR 91.13(a) and, as a result, summary judgment was inappropriate. The Board observed that the FAA's "correction" to allege an independent violation did not operate to the prejudice of the airman because the independent charge then required "a higher threshold of evidence than a residual charge." Consequently, since the FAA had not provided proof, the Board remanded the case to the ALJ to hold a hearing solely on the independent FAR 91.13(a) charge.

Nice to see the FAA's untimely attempt to fix its pleading error backfire in favor of the airman. At least now the FAA will have to prove the independent violation of FAR 91.13(a) rather than simply tacking it on, although I don't know that the hearing will result in a different outcome since it will still be in front of Judge Geraghty. However, hopefully the FAA will at least take note of the Board's admonition and draft careless and reckless allegations more accurately in the future.

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 Relaxes, Slightly, The Prohibition On Company Reimbursement For Part 91 Flights By Certain Officers/Employees



As you may recall, back on July 8, 2010 the FAA published a Proposed Interpretation seeking public comment regarding a proposal to modify the FAA's broad prohibition on pro-rata reimbursement for the cost of owning, operating and maintaining a company aircraft when used for routine personal travel by senior company officials and employees. After receiving comments, and in response to the National Business Aviation Association's ("NBAA") request that the FAA modify its longstanding prohibition, on December 10, 2010 the FAA issued a Modified Interpretation in which it agreed that, under certain circumstances, it would allow "a company to be reimbursed for the personal travel by an individual whose position merits such a high level of interference into his or her travel plans."

What does that mean? Well, for those limited number of employees who are so important to a company that they can be called back to work at any time upon a moment's notice, even during personal travel, then the FAA will consider their travel on the company aircraft as "within the scope of and incidental to the business" of the company operating the aircraft. However, the Modified Interpretation warns that not all personal travel will meet the conditions for reimbursement, such as "when the high-level employee or official may have personal travel plans that are unlikely to be altered or cancelled, even for compelling business reasons." By way of example, and for purposes of guidance, the FAA cites travel for a significant event, such as a wedding or funeral of a close family member, or for necessary or urgent medical treatment, as instances of personal travel that would not likely qualify for reimbursement.

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It is important to note that this interpretation applies to reimbursement under FAR 91.501(b)5 which specifically regulates "large airplanes of U.S. registry, turbojet-powered multi-engine civil airplanes of U.S. registry, and fractional ownership program aircraft of U.S. registry that are operating under FAR 91 Subpart K in operations not involving common carriage." However, companies operating other aircraft may be able to take advantage of the regulation under the NBAA's Exemption 7897, as amended. Exemption 7897, or the "Small Aircraft Exemption" as it is called by NBAA, allows NBAA Members to operate small civil airplanes and helicopters of U.S. registry under the operating rules of FARs 91.503 through 91.535.

In order to take advantage of this interpretation, the company will need to make a written determination that the flight in question was of a routine personal nature. The FAA also advises that the company should maintain a list of individuals whose position with the company require him or her to routinely change travel plans within a short time period. The company must then provide that list to the FAA upon request.

With the proper documentation, companies will be able to provide their select few executives with personal travel on the company aircraft and receive reimbursement while still operating under Part 91. Not a big move by the FAA, but certainly a move in the right direction.

 

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D.C. Circuit Affirms NTSB's Rejection Of EAJA Fees When FAA Dismisses Its Complaint Before A Hearing



In a recent decision, Turner and Coonan v. National Transportation Safety Board, the D.C. Circuit Court of Appeals has affirmed the NTSB's refusal to allow two airmen to recover under the Equal Access to Justice Act ("EAJA") when the FAA dismissed its complaints before the cases can be heard by an NTSB administrative law judge ("ALJ"). The case began when the FAA suspended the airmen's airline transport certificates for their alleged operation of an aircraft that was in an unairworthy condition in violation of FAR 91.7(a). The airmen appealed the suspensions and their cases were assigned to the same ALJ who scheduled hearings for June 2008.

In April 2008 the ALJ granted motions to continue the cases and re-scheduled the hearings for August. However, after the continuance was granted, the FAA withdrew the complaints against the airmen, stating only: "The Administrator hereby withdraws its [sic] complaint in this matter." The ALJ then terminated the proceedings against the pilots with an short order that, unfortunately, did not specify whether the termination was with or without prejudice. The airmen then applied for an award of attorney's fees and expenses under EAJA.

The Equal Access to Justice Act

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 determine whether EAJA fees are available, the key inquiries for an "applicant" (a certificate holder or target of a civil penalty action who is applying for an award of fees) are: (1) Is the Applicant a "prevailing party"? (2) Was the Applicant involved in an "adversary adjudication"? (3) Was the FAA’s position "substantially justified"? and (4) Were the fees actually "incurred" by the Applicant?

The Case Before The ALJ And The Board

The ALJ granted the airmen's EAJA requests finding that the airmen were prevailing parties as a result of the FAA's total withdrawal of all of the charges against the airmen. He also determined that the FAA was not substantially justified because it had "proceeded on a weak and tenuous basis with a flawed investigation bereft of any meaningful evidence." The FAA then appealed the decision to the full Board who reversed the ALJ's award. The Board concluded that the airmen did not satisfy the prevailing party standard because the airmen did not receive an enforceable judgment on the merits of their case, nor did they obtain a court-ordered consent decree that resulted in a change in the legal relationship between the airmen and the FAA.

Specifically, the Board found that the airmen did not prevail on any portion of the merits of the case because the FAA withdrew the charges before the ALJ could hold a hearing. It further noted that the ALJ's order dismissing the case merely accepted the FAA's withdrawal of the charges against the airmen and was not the same as a court-supervised consent decree. Finally, the Board observed that the ALJ did not dismiss the case with prejudice or in any way alter the relationship between the FAA and the airmen. The Board then concluded that "[w]e believe ourselves compelled to find that the Administrator’s withdrawal of the complaint does not confer prevailing party status on applicants under the EAJA."

The Court Of Appeals Affirms

On appeal to the D.C. Circuit Court of Appeals, the airmen argued that they were, in fact, the prevailing parties and entitled to the EAJA award granted by the ALJ. However, the Court concurred with the Board and concluded that the airmen were not prevailing parties. The Court found that the ALJ dismissed the cases without prejudice (meaning that the withdrawal did not prevent the FAA from trying to pursue its cases against the airmen at a later time). As a result, the Court held that the airmen did not receive any sort of "judicial relief." According to the Court, when the FAA unilaterally withdrew its complaints, the FAA ended its adversarial relationship with the airmen and the airmen were left in the same position they were in before the enforcement actions began.

Conclusion

In my opinion, this case is bad law. It places procedure before substance and is contrary to the legislative intent behind EAJA. Rather than deterring frivolous and unsubstantiated litigation by the FAA, the Court's decision certainly makes it more difficult to ensure that the FAA is justified in pursuing its cases. The decision also ignores the realities of litigation. To say that the airmen were simply in the same positions after withdrawal as they were before initiation of the action overlooks the time and expense necessarily incurred by the airmen in defending themselves in the case.

EAJA was enacted to allow recovery of those attorney's fees and expenses. Unfortunately, both the Board and the D.C. Circuit Court of Appeals have significantly impaired EAJA's deterrent effect, for now.

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