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As Long As You Hold An Airman Certificate You Must Report Motor Vehicle Actions To The FAA

If you hold an airman certificate you know, or at least you should know, that you are subject to the reporting requirements of 14 C.F.R. §61.15. That is, §61.15(e) requires an airman to report a motor vehicle action ("MVA") to the FAA Civil Aviation Security Division within 60 days. The written report must include: “(1) The person's name, address, date of birth, and airman certificate number; (2) The type of violation that resulted in the conviction or the administrative action; (3) The date of the conviction or administrative action; (4) The State that holds the record of conviction or administrative action; and (5) A statement of whether the motor vehicle action resulted from the same incident or arose out of the same factual circumstances related to a previously reported motor vehicle action.”

What is an MVA? According to the regulation an MVA is (1) a violation of any Federal or State statute relating to the operation of a motor vehicle while intoxicated by alcohol or a drug, while impaired by alcohol or a drug, or while under the influence of alcohol or a drug; (2) the cancellation, suspension, or revocation of a license to operate a motor vehicle, for a cause related to the operation of a motor vehicle while intoxicated by alcohol or a drug, while impaired by alcohol or a drug, or while under the influence of alcohol or a drug; or (3) the denial of an application for a license to operate a motor vehicle for a cause related to the operation of a motor vehicle while intoxicated by alcohol or a drug, while impaired by alcohol or a drug, or while under the influence of alcohol or a drug.

It is important to realize that this definition includes more than just being arrested for or convicted of a DWI, OWI etc. A civil action that often accompanies a DWI arrest in most states and that results in suspension of the driver's license is also considered an MVA. Thus, an arrest for DWI could create the obligation for an airman to provide multiple reports to the FAA depending upon how the civil and criminal cases proceed. And if an airman fails to report an MVA, §61.15(f) states that he or she could be subject to (1) Denial of an application for any certificate or rating for a period of up to 1 year after the date of the arrest; or (2) Suspension or revocation of any certificate or rating.

But what happens if you hold an airman certificate but you no longer hold a medical certificate, or you have "retired" from flying? Are you still subject to this reporting requirement? The short answer is "yes", as a recent NTSB decision explains. In Administrator v. Street, the airman was an experienced airline pilot who failed to report four MVAs arising from two DWIs. When the FAA found out, it issued an order suspending the airman's ATP certificate for 240 days. On appeal, the administrative law judge ("ALJ") agreed that the airman had violated sections 61.15(d) and (e) but determined that the sanction should only be a thirty day suspension.

Not surprisingly, the FAA was unhappy with that decision and appealed to the full Board. The FAA argued that the 240 days should stick and, of course, the airman argued that the ALJ's decision should stand. Specifically, the airman argued that at the time of the violations he did not have a medical certificate and was not actively flying, which should serve as mitigating factors in support of the lower sanction. However, the Board rejected that argument stating the reporting requirements of §61.15(e) are applicable to an airman who temporarily “retires” from flying. The Board explained that "[w]hile respondent testified that he did not plan to return to flying, his obligation to comply with the FARs continued regardless of whether he was actively flying at the time the MVAs occurred. Sections 61.15(d) and (e) are exclusively concerned with conduct outside the scope of an airman’s certificate. It is immaterial whether respondent was actively flying or had a medical certificate at the time the MVAs occurred because his status as an ATP certificate holder rendered the requirements of §§ 61.15(d) and (e) applicable to him."

So, the moral of the story is: If you hold an airman certificate, you need to be familiar with, and comply with, the requirements of §61.15. Until you no longer hold your airman certificate (whether the certificate has been surrendered, suspended or revoked) you will need to report any MVA to the FAA.

Waiver of Emergency Procedures in an NTSB Appeal Will Not Cure a Missed Deadline

Since the FAA began implementing its new compliance philosophy last year, fewer case are being appealed to the NTSB.  However, it appears that the cases that are being appealed the most are emergency orders of either suspension or revocation.  As you may recall from past articles, when a certificate holder appeals an emergency order to the NTSB, emergency procedures apply to the case which require that a hearing be held within 30 days after the appeal is filed.  Other deadlines are also much shorter under the emergency procedures than they are under the procedures for a non-emergency appeal.  The purpose for the accelerated hearing and deadlines is to ensure that a certificate holder whose certificate has been suspended or revoked on an emergency basis (i.e. the order is effective immediately) receives a hearing and decision as soon as possible to minimize the impact of the suspension or revocation if the NTSB administrative law judge ("ALJ") ultimately reverses the FAA's order.

But in some situations, this expedited timeline can also be a problem for a certificate holder who may need more time to properly prepare for a hearing.  So, it is also possible to waive the emergency procedures in an appeal of an emergency order.  Whether the emergency procedures should be waived is a decision that will depend upon the circumstances of each case.  But the certificate holder must be sure to comply with the deadlines applicable to the case, whether under the emergency or non-emergency procedures.  Failure to comply can result in harsh consequences.  If a certificate holder is going to waive the emergency procedures, the waiver should occur before any applicable deadline has passed.  A recent decision by the NTSB illustrates the unfortunate consequences of an untimely waiver.

In Administrator v. Jimenez; the airman appealed an emergency order revoking his commercial pilot certificate.  The airman appealed the order to the NTSB, but failed to file his answer to the FAA's complaint within the five days required by the Board's emergency procedures.  As a result, the FAA subsequently filed a motion to deem the facts admitted and requesting summary judgment.  One day after the FAA filed its motion, the airman waived the emergency procedures and filed his answer which would have still been timely under the proceedures applicable to a non-emergency case.  In the absence of good cause for the late filing, the ALJ granted the FAA's motion based upon the airman's failure to timely file his answer.  The airman then appealed the ALJ's decision to the full Board.

On appeal, the airman argued that his answer was timely under the non-emergency procedures that were applicable to the case once the airman had waived the emergency procedures.  However, the Board rejected the airman's argument.  While the Board observed that Section 821.52(d) permits an airman to waive the the accelerated time limits applicable to emergency cases, it then referred to the rule's limitation that “such a waiver shall not serve to lengthen any period of time for doing an act prescribed by this subpart which expired before the date on which the waiver was made.”  Thus, the Board held that the express language of the rule precluded the airman's argument that the 20-day deadline, which would apply in a non-emergency case, was applicable because the airman did not waive the the emergency procedures until after the time to file his answer expired.

The rules for emergency and non-emergency cases can sometimes be confusing.  And, unfortunately, the consequences of failing to comply with the rules can be significant.  This case is yet another example of why it makes sense to have an experienced aviation attorney assist you with appeal of an FAA order of suspension or revocation. If you find yourself in this situation, make sure you get the help you need.

What Are You Allowed To Do Inside Your Aircraft Hangar At An AIP Airport?

What can you do inside of your aircraft hangar?  The lawyerly answer is “it depends.”  More specifically, it may depend in large part upon whether your hangar is on an airport that receives funds from the FAA through the Airport Improvement Program (“AIP”).  If your hangar is on an airport that does not receive AIP funds, then any restrictions or limitations on use of your hangar would likely be dictated within your lease with the airport owner or operator.

However, many airports receive AIP grant funds from the FAA for use in runway and taxiway construction/repair as well as various other airport improvement projects.  In exchange for its receipt of AIP grant funds, an airport sponsor agrees to certain grant assurances.  These grant assurances are contractual obligations that require the airport sponsor or owner to operate the airport in a certain way.

One of these AIP grant assurances requires the airport sponsor to make the airport property available for aviation or aeronautical uses.  Conversely, the airport sponsor also agrees that it will not allow airport property to be used for non-aeronautical uses unless it receives permission from the FAA.

One of the most common, and obvious, uses is aircraft hangar construction.  But, once an aircraft storage hangar is built on an AIP airport, how can the hangar be used?  If you were thinking “aircraft storage”, of course you are right.  But typically an aircraft doesn’t completely fill all of the space within a hangar.  So, what about storage of other items such as tools, equipment, automobiles, snowmobiles, etc.?  And can you build-out an office or personal living space inside the hangar?

In the past, the FAA has taken a very restrictive view regarding permitted hangar use.  However, the FAA recently issued a notice of final policy that clarifies what you can and cannot do within an aircraft storage hangar located on an AIP airport.

According to the FAA, permitted aeronautical uses for hangars include:

1.          Storage of active aircraft;

2.          Final assembly of aircraft under construction;

3.          Non-commercial construction of amateur-built or kit-built aircraft.  In expanding its policy to include all amateur/kit-built construction rather than just final assembly, the FAA recognized that “[i]t may be more difficult for those constructing amateur-built or kit-built aircraft to find alternative space for construction or a means to ultimately transport completed large aircraft components to the airport for final assembly, and ultimately for access to taxiways for operation”’

4.          Maintenance, repair, or refurbishment of aircraft, but not the indefinite storage of non-operational aircraft.  The FAA does not establish an arbitrary time period beyond which an aircraft is no longer considered operational. Rather, the FAA leaves it to the airport sponsor to decide whether a particular aircraft is likely to become operational in a reasonable time; and

5.          Storage of aircraft handling equipment (e.g. towbars, glider tow equipment, workbenches, and tools and materials used in the servicing, maintenance, repair or outfitting of aircraft).

Non-aeronautical use within a hangar that is used primarily for aeronautical purposes, may still be permitted provided that use does not interfere with the aeronautical use of the hangar.  What does that mean?  The FAA will consider certain uses to be interfering with the aeronautical use if they:

1.          Impede the movement of the aircraft in and out of the hangar or impede access to aircraft or other aeronautical contents of the hangar;

2.          Displace the aeronautical contents of the hangar.  The hangar owner may park a vehicle inside the hangar while he or she is using the aircraft and the FAA will not consider that to be displacing the aircraft;

3.          Impede access to aircraft or other aeronautical contents of the hangar; or

4.          Are stored in violation of the airport sponsor’s rules and regulations, lease provisions, building codes or local ordinances.

But what about that “pilot lounge” or “man/woman cave” within the hangar?  Is that a permitted use?  Unfortunately, the FAA’s policy does not provide a “bright line” answer.  According to the policy, the FAA “differentiates between a typical pilot resting facility or aircrew quarters versus a hangar residence or hangar home. The former are designed to be used for overnight and/or resting periods for aircrew, and not as a permanent or even temporary residence.”

Although the FAA then goes on to state that a hangar may not be used as a residence, it does not explain what that means.  As a result, in the absence of a clear definition, it is likely that this type of determination would be made on a case-by-case basis.  So, while some form of pilot lounge or office is likely permitted, at what point that area within the hangar becomes an unpermitted, non-aeronautical use will likely be decided based upon the facts of each case.

Keep in mind that the FAA’s policy on aeronautical use of hangars applies regardless of whether you lease the hangar from the airport sponsor or if you constructed the hangar at your own expense where you hold a ground lease with the airport sponsor for the hangar pad.  Once the airport sponsor receives AIP grants and airport land designated for aeronautical use is made available for construction of hangars, the hangars built on the land are subject to the airport sponsor's obligation to use the land for aeronautical purposes.

But at least now we have a little more guidance with respect to use of an aircraft hangar at an AIP airport.  Construction of an amateur-built or kit-built aircraft is allowed.  Residing in the hangar is not allowed.  Other uses may be allowed if they do not interfere with the aeronautical use.  And although some gray areas remain, the current policy does at least provide some additional clarification and guidance for aircraft hangar use.

 

The Difference Between "Wet" and "Dry" Aircraft Leases

Many times an aircraft owner who is not fully utilizing the owner’s aircraft will lease the aircraft to maximize the use of the aircraft and to recover some of the aircraft owner’s expenses. One of the areas about which aircraft owners and operators are frequently confused is the difference between a “wet” lease and a “dry” lease. I’ll give you a hint: It’s not about the fuel.

The “Wet” lease

14 C.F.R. §110.2 defines a “wet lease” as “any leasing arrangement whereby a person agrees to provide an entire aircraft and at least one crewmember.” (Note no reference to fuel)

Ordinarily, the parties entering into wet lease arrangements are certificated air carriers such as airlines operating under 14 C.F.R. Part 121 and charter operators conducting operations under 14 C.F.R. Part 135. This makes sense since these air carriers have the authority to use aircraft and crew to carry passengers and property for compensation or hire. Non-air carrier aircraft operators conducting operations under Part 91 are prohibited from carrying passengers and property for compensation or hire except in very limited circumstances.

However, 14 C.F.R. § 91.501(c) does provide for certain timesharing and interchange arrangements in which both the aircraft and crew are provided together. And although these arrangements are considered wet leases because they include both aircraft and crew, they are Part 91 operations in which the parties to the transactions do not need to be air carriers.

The “Dry” lease

In a dry lease arrangement, the aircraft owner is providing the aircraft to the lessee without crew. (Here again, whether the aircraft is provided with or without fuel has no bearing on the type of lease) Neither the lessor nor the lessee is required to hold an air carrier certificate in a dry lease arrangement, although nothing prohibits either party from being an air carrier.

Operational control

One of the key issues that distinguishes a “wet” lease from a “dry” lease is “who has operational control.” 14 C.F.R §1.1 defines operational control as “the exercise of authority over initiating, conducting or terminating a flight.” In a “wet” lease situation, since the lessor is providing both aircraft and crew, the lessor maintains operational control of all flights. In a “dry” lease situation, the lessee provides its own crew and the lessee exercises operational control of its flights.

If the lease is for private use or commercial, non-Part 135 use, typically each party will have operational control of the aircraft when it is in that party’s possession. Oftentimes in this situation, operational control will revert to the lessor during the times when the lessee is not using or possessing the aircraft.

What’s The Issue?

So, why is this distinction between “wet” and “dry” leases so important? Well, in the absence of a specific exemption (such as under 14 C.F.R. § 91.501(c)) the lessor who is operating an aircraft under a wet lease will need to have an air carrier certificate and operate under the regulations that govern air carriers (e.g. Part 121 or Part 135). This means the lessor will have to comply with regulations that are stricter than Part 91 including regulations relating to the types of airports the lessor may utilize, crew qualifications, crew rest and duty times, maintenance requirements etc. And those regulations increase the lessor’s cost to operate. Additionally, the lessor under a wet lease is required to remit federal excise tax (“FET”) on the amount charged to the lessee.

A lessee operating under a dry lease is permitted to operate under Part 91 and is not required to comply with many of the more restrictive and costly requirements of Parts 121 or 135. And federal excise tax is not due on the amounts paid by the lessee to the lessor, although sales tax is often assessed on the lease rate. For private operators, these are significant advantages. However, they also need to be weighed against the responsibilities, and potential liability, that goes along with having operational control of a Part 91 dry lease operation.

The situation may get confusing when parties decide they want the best of both worlds. Unfortunately, these Part 134 ½ operations, as I call them, are usually FAA enforcement actions waiting to happen. For example, if the lessor provides the lessee with the aircraft under a dry lease and that same lessor also supplies the crew under a separate agreement the FAA will likely view that as a wet lease arrangement since the lessor is providing both aircraft and crew. If the lessor does not hold an air carrier certificate then the FAA will consider those flights to be illegal charter flights. Additionally, the IRS would also probably assess FET on those flights.

A similarly improper arrangement occurs if the lessor leases the aircraft to the lessee and then requires that the lessee obtain the crew for the flights either from a specified source, usually affiliated with or controlled by the lessor. If the lessor does not hold an air carrier certificate, the FAA would also consider this a wet lease arrangement. Since the aircraft and crew are coming from closely related or affiliated sources, the FAA views them as both coming from the lessor.

It is important to keep in mind that the FAA will look beyond the actual written agreements to determine the relationships between the parties and how the arrangement is actually being conducted. Although a lease is written as a dry lease and says “Dry Lease” at the top of the agreement, for example, that doesn’t mean that the FAA can’t take the position that the arrangement is really being conducted as a wet lease. And if the FAA takes that position when the lessor who is actually operating the aircraft for the lessee does not have an air carrier certificate, then that will be a problem for the lessor, and potentially for the lessee as well.

Conclusion

The distinction between “wet” and “dry” leases isn’t always clear to aircraft owners and operators. However, it is important to understand the difference because each situation has separate regulatory obligations and requirements. Failure to comply with the legal requirements applicable to the chosen lease structure can result in problems for both the lessor and the lessee.

Additionally, as with all written agreements, it is essential that you carefully review all of the provisions of any aircraft lease before you sign. Consultation with an experienced aviation attorney beforehand can help you protect yourself, whether lessor or lessee. By taking the time to understand the terms of the aircraft lease and the applicable regulatory requirements, both parties can ensure that their expectations are met and their interests protected.

Drone Operators Beware: Drone Operations Are Subject To FAA Enforcement

So, you just purchased a fancy new drone (“unmanned aircraft system” or “UAS”) and you have been flying it around. About a week later, you receive a phone call from an FAA inspector in which the inspector tells you that you have been operating your drone in violation of the Federal Aviation Regulations (“FARs”). And now you are wondering what’s going on and what can you expect?

As you may be aware, the FAA considers both UAS and model aircraft subject to regulation (although two civil lawsuits are pending disputing the FAA’s position, at least as it relates to “model aircraft”). And with that regulation also comes the responsibility for compliance and enforcement of the FARs applicable to UAS and their operation.

With the proliferation of UAS operations within the United States, the FAA is concerned about the safety risk posed by UAS operations that may be contrary to the FARs. To address these concerns, the FAA has stated that it “will use its resources to educate UAS operators about regulatory compliance and, when appropriate, use administrative and legal enforcement action to gain compliance.”

How Does a UAS Operator Violate the Regulations?

What does this mean for UAS operators? It means the operator of a UAS is now subject to the FAA’s compliance and enforcement procedures in the event that the UAS operator violates applicable FARs or other statutory requirements when the operator is operating its UAS. For example, if the UAS is being operated for hobby or recreational purposes and the operation “endangers the safety of the National Airspace”, the FAA may cite the operator for violation of operational FARs such as §§ 91.13-91.15, 91.113, 91.126-135, 91.137-145, and 14 C.F.R. Part 73.

If the UAS is operated for commercial purposes (e.g. other than for hobby and recreational purposes) and the operator does not have FAA authorization for the operation in the form of a Certificate of Authorization (“COA”), an exemption or an airworthiness certificate and civil aircraft COA, then the FAA could cite the operator for lack of the appropriate authorizations such as pilot and aircraft certification as well as any applicable operational FARs. Or if the UAS operator does have a COA or exemption but operates contrary to the operational requirements associated with the authorizations then the operator could be cited for violating those requirements.

How Will the FAA Respond to Violations?

In order to determine what type of action the FAA will take to respond to violations by a UAS operator, the FAA will analyze

  • Whether the violation was a first-time and inadvertent violation;

  • Whether the violation involves repeated or intentional violations; and

  • Whether the safety risk resulting from the operation in terms of actual or potential endangerment to the National Airspace was low/medium/high.

If the UAS operator’s violation is a first-time, inadvertent violation and education or counseling by the FAA will ensure future compliance, then the case will be resolved as a “compliance action” using education or informal counseling. When a situation involves a first-time, inadvertent violation by a UAS operator that poses a low actual or potential risk to safety but the FAA determines compliance cannot be gained through education, then the FAA will pursue administrative action using a warning notice or letter of correction with possible remedial training. And if the FAA determines that a UAS operator’s violation poses a medium or high actual or potential risk to safety, then the FAA will pursue legal enforcement action through a certificate or civil penalty action.

So, when will a UAS operator’s conduct subject the operator to legal enforcement action? One example would be when a UAS operator’s conduct has a medium or high risk of endangering the operation of another aircraft or endangering persons or property on the ground. Another example would be when the UAS operator’s conduct involves repeated or intentional violations.

What Type of Sanction Will the FAA Impose?

Once the FAA decides that legal enforcement action is necessary or appropriate, it must next determine what sanction it should impose for the violation. The sanction will vary depending upon whether the operator is an individual or an entity and, if an entity, what size of entity. FAA Order 2150.3B, Appendix B (the sanction guidance table) identifies a range of sanctions.

If a UAS operator’s violation poses a medium actual or potential risk to safety then the FAA may seek to impose a civil penalty in the minimum to moderate range. Alternatively, a violation by a UAS operator that poses a high actual or potential risk to safety would likely result in assessment of a civil penalty in the maximum range. And, not surprisingly, if a UAS operator repeatedly or intentional violates the regulations then the FAA would impose a civil penalty in the applicable maximum range.

UAS operators who also hold airman certificates (e.g. a pilot, mechanic or other certificate) are at even greater risk. The FAA has stated “[f]or a deliberate, egregious violation by a certificate holder, regardless of whether the certificate holder is exercising the privileges of the certificate in connection with the violations associated with a UAS operation, certificate action, may be appropriate. Such certificate action may be in addition to a civil penalty.” So, not only could an airman operating a UAS be subject to a civil penalty, but his or her airman certificate could also be at risk if the FAA thinks the airman’s UAS violation was serious enough.

Conclusion

For the operator of the shiny new UAS I mentioned above, my advice is to proceed with caution. How the operator was operating the UAS as well as what the operator tells the FAA will have a significant impact upon how the FAA views the case and what action it feels is necessary to deal with any regulatory violations. Knowing what to expect can help UAS operators be prepared to respond to the FAA appropriately.