All Aviation Articles By Greg Reigel

NTSB Allows Airmen To Waive Exclusion Of ASAP Report From Enforcement Action


In a recent decision by the NTSB, Administrator v. Austin and McCall, the Board determined that an administrative law judge ("ALJ") should have admitted into evidence two Aviation Safety Action Program ("ASAP") reports offered by two airmen in an enforcement hearing. ASAP programs are governed by FAA Advisory Circular 120-66B and typically provide that an airman flying for an air carrier has the option of submitting a voluntary report concerning an incident. Once submitted, the ASAP event review committee (ERC) may review the report, accept the reporting airman into the ASAP, and the FAA then agrees not to initiate a certificate action against the airman based upon the reported incident. AC 120-66B also specifically provides that an ASAP report may not be used for any purpose in an FAA legal enforcement action, unless the report involves criminal activity, substance abuse, controlled substances, or intentional falsification.

In this case, the airmen wanted to have ASAP reports they submitted admitted into evidence at the hearing. However, the ALJ granted the FAA's motion to exclude the ASAP reports based upon AC 12-66B. The ALJ determined that ASAP reports were not subject to review and that such a review would render ineffectual the memoranda of understanding under which ASAP programs operate. (The elements of an ASAP are set forth in a Memorandum of Understanding (MOU) between the FAA, certificate holder management, and an appropriate third party, such as an employee's labor organization or their representatives). Interestingly, the ALJ also acknowledged that this issue was one of first impression for the Board and that the Board needed to decide the issue before he would review the ASAP reports.

After a hearing, the ALJ affirmed the FAA's orders of suspension against the airmen. One of the airman then appealed the ALJ's decision to the full Board. Not surprisingly, the airman argued, among other things, that the ALJ improperly excluded the ASAP reports.

The Board initially noted that the protection provided by AC 120-66B prohibits the FAA from using ASAP evidence in an enforcement action. However, it then concluded that AC 120-66B "does not prohibit a pilot from waiving this protection to submit his or her own ASAP report into evidence." As a result, the Board remanded the case back to the ALJ for him to review the ASAP reports and to consider whether the airmen's filing of their respective ASAP reports protected one or both of them from FAA enforcement action.

It will be interesting to see how the ALJ rules on remand since the Board simply ruled that the ASAP reports were admissible and should be considered by the ALJ. Unfortunately, the Board didn't provide any guidance on whether the ASAP reports should have precluded the FAA from pursuing enforcement action against the airmen in the first place. I guess we will have to see what the ALJ decides.

Complying With A Manufacturer's "Current" Maintenance Instructions

 

If you own or operate a large airplane (over 12,500 MTOW and to which FAR Part 125 is not applicable), turbojet multiengine airplanes, turbopropeller-powered multiengine airplanes, or turbine-powered rotorcraft, you know that FAR § 91.409(f) requires you to have an FAA approved maintenance/inspection program in place for your aircraft. One option for complying with this requirement is to use a "current inspection program recommended by the manufacturer." In the past, that option had been interpreted to mean that, when a manufacturer updates its maintenance instructions, the aircraft operator is obliged to comply with the new instructions.

That interpretation was questioned when the FAA's Aircraft Maintenance Division requested a legal interpretation from the FAA's Office of Chief Counsel regarding the meaning and application of FAR § 91.409(f)(3). The specific issue that the Chief Counsel was asked to address was: "Whether, if a manufacturer amends its maintenance/inspection instructions, an affected aircraft operator is obliged to comply with the new instructions in order to be in compliance with § 91.409(f)(3)."

The FAA Chief Counsel issued a December 5, 2008 Legal Interpretation addressing this issue. It concluded that an operator is not required to comply with either "current"/"new" maintenance instructions or a "current"/"new" inspection program.

The FAA's Perspective

The Legal Interpretation initially observed that a similar issue had previously been raised, but not answered, regarding whether FAR § 91.9(a), required an operator to comply with a change to an operating limitation in an airplane flight manual if the change had not been made through the notice and comment procedures of 5 U.S.C. 500 et. seq., the Administrative Procedures Act ("APA").  It then concluded that an operator was not obligated to comply for the same reason that an operator is not required to comply with "current", or subsequently issued, changes to maintenance manuals or inspection programs.

According to the Legal Interpretation, "[i]f 'current' in § 91.409(f)(3) and similarly worded regulations could be read to mean an ongoing obligation, manufacturers unilaterally could impose regulatory burdens on individuals through changes to their inspection programs or maintenance manuals. In essence, they would be making rules that members of the public affected by the change would have to follow." However, the FAA does not have the authority to delegate its ability to make rules. Additionally, allowing a manufacturer to issue rules in the form of maintenance instructions or inspection programs, without public notice and comment, would be contrary to the APA.

As a result, the Legal Interpretation concluded that "to comply with § 91.409(f)(3) an operator need only adopt a manufacturer's inspection program that is 'current' as of the time he adopts it, and that program remains 'current' unless the FAA mandates revisions to it." For example, revisions would be required if the FAA issued an applicable airworthiness directive or amended the operating rules applicable to the operator.

Finally, the Legal Interpretation noted that, although not required, operators could, and typically do, incorporate subsequent changes issued by manufacturers. It also suggested that the FAA should initiate a rulemaking change to clarify the meaning of § 91.409(f)(3), and associated regulations, to remove the ambiguity associated with the term "current".

The Litigation Perspective

This Legal Interpretation clarifies that FAR § 91.409(f)(3) does not require compliance with subsequently issued changes to maintenance manuals or inspection programs, absent an airworthiness directive or other regulatory requirement. Thus, from a regulatory perspective, compliance is not mandatory. Yet, simply because the FARs do not specifically require an operator to comply with subsequently issued changes to maintenance manuals or inspection programs, does this mean an aircraft owner or operator can ignore these changes?

We know now that an FAR Part 91 aircraft operator will not invoke the wrath of the FAA if the operator does not comply with subsequently issued changes to maintenance manuals or inspection programs (unless, of course, an airworthiness directive or other regulatory requirement mandates compliance). However, before "current" changes are ignored or rejected, compliance must also be evaluated from a tort perspective in order to accurately assess the risks of non-compliance.

Under tort law, and specifically the law of negligence, we all have a duty to use reasonable care. The standard of care is established by determining what a reasonable person would do under a set of given circumstances. In recent years, plaintiffs in aircraft crash cases have been using subsequently issued changes to maintenance manuals or inspection programs to establish the standard of care with respect to aircraft ownership, operation and maintenance.

Specifically, in a post-aircraft accident scenario, plaintiffs’ experts will scour the aircraft’s logbooks in an attempt to identify subsequently issued changes with which the aircraft owner, operator, or maintenance provider has not complied. They then try and argue a causal connection between that lack of compliance and the aircraft accident.

At trial, the plaintiffs argue that the manufacturer issues the changes because it believes compliance will make the aircraft or its components safer and that compliance with the "current" change's recommendations, issued by the manufacturer who should know best, establishes the duty owed by the aircraft owner, operator or maintenance provider. They will direct attention to the “mandatory” nature of the issued changes, so designated by the manufacturer. Plaintiffs will also argue that deferred or rejected compliance improperly placed financial savings over safety.

In response, the defense will argue that the aircraft is still safe without compliance with the changes, pointing out that the changes are not issued by the agency responsible for safety and certification of aircraft and aircraft components. After all, unless the FAA has issued an airworthiness directive based upon the manufacturer's changes or otherwise mandated compliance under some other operating rule; the FAA apparently does not deem the manufacturer’s recommendations to be necessary or mandatory to protect the public’s interest in aviation safety. So why should the aircraft owner, operator, or maintenance provider comply when the FAA doesn't think it is necessary or mandatory? And why should the owner or operator spend additional money for parts or maintenance that may or may not actually make the aircraft safer?

All of these arguments are made to, and allowed by, the courts, in spite of the fact that compliance with the subsequently issued changes is not mandated by FAR § 91.409(f)(3). Additionally, juries have heard evidence regarding the absence of compliance and returned verdicts in favor of plaintiffs based upon that evidence. The higher standard of care argued in the tort context has yet to be pre-empted by the regulatory standard of care established by the FARs.

What Should You Do?

So how should an aircraft owner or operator deal with subsequently issued changes to maintenance instructions or an inspection program? First, you will need to be aware of applicable changes to the manufacturer's maintenance instructions or inspection program and to discuss the information with the aircraft owner and/or operator. This means making sure that you are aware of all applicable changes issued by the manufacturer.

Next, you need to specifically identify, in writing, the maintenance instructions or inspection program that have been adopted for your aircraft: Is it current as of the date the aircraft's type certificate was issued or is it current as of some later date? Unfortunately, the Legal Interpretation doesn't provide any guidance in this regard. This is necessary to later prove the version of instructions or program with which you complied.

Conclusion

The Legal Interpretation appears to raise more questions than it answers. And, unfortunately, these questions will only be answered by further legal interpretations or by changes to the regulations. In the meantime, you need to be aware of the regulatory requirements of compliance, to the extent that it is possible given the existing confusion. You will also need to understand the costs and benefits of compliance from a tort perspective. Only then can you make an informed decision as to how the regulations apply and what you should do with "current" maintenance instructions.

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 Suspends Its Expunction Policy



On February 11, 2011, the FAA published a Policy Statement in which it informs airman that the FAA is suspending its policy of expunging certain records of legal enforcement actions against individuals. Up until recently, the FAA would expunge an airman's personal information from the FAA's enforcement database 5 years after the FAA's action in civil penalty and certain certificate action cases (suspension cases, but not revocation cases). However, the FAA is now suspending that policy in order to ensure compliance with recent amendments to 49 U.S.C. 44703(h),the Pilot Records Improvement Act ("PRIA").

On August 1, 2010, the Airline Safety and Federal Aviation Administration Extension Act of 2010 (the "Act") amended PRIA to now require the FAA to create a pilot records database that, among other things, will include summaries of enforcement actions in which individuals were determined to have violated federal aviation regulations. Under the Act and PRIA, Part 121 and Part 135 air carriers will be required to use this database to perform background checks on pilots before hiring them. Rather than expunging individual information after 5 years as before, under the Act the FAA must now keep these records until it receives notice that the individual is deceased.

It is unclear exactly what impact this change in policy will have. Although PRIA requires the FAA to provide this information to air carriers making hiring decisions, as a practical matter, many, if not most, air carriers' employment applications also ask some variant of the question "have you ever been subject to an enforcement action in which you were found to have violated the Federal Aviation Regulations?" Of course, this amendment may, perhaps, deter airmen from providing a false answer, or, more likely, it will reveal an airman who has, in fact, provided a false answer to that question.

With respect to airmen who are not seeking employment with an air carrier, this amendment will likely have limited effect. It is possible that this could affect an airman involved in an aircraft property or casualty lawsuit in which the enforcement information that previously would have been expunged will now be available for use in the litigation. However, given that properly drafted discovery requests in such a case (e.g. "have you ever....") will ask for that same information, the impact of the Act may have the same effect as it might on air carrier applicants.

In any event, it appears that the amendment is another example of legislation resulting in, perhaps, unintended consequences. Fortunately, the FAA will continue to expunge records of administrative actions and cases with no enforcement action, since the FAA is not required to maintain that information under PRIA. However, for an airman who has had his or her airman certificate suspended or revoked, the phrase "till death do us part" now has a new, and unfortunate, meaning

For more information about expunction under PRIA, you can read the FAA's Pilots Records Expunction Policy Frequently Asked Questions or, for a general discussion of PRIA, you can read my article What Will The FAA Say About You?

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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