WELCOME to AVIALEX® , a project which has been contemplated for some time. Our intention is to distribute this Newsletter on a periodic basis to apprise clients and colleagues of recent developments in those areas in which we are primarily engaged--specifically, FAA/NTSB/DOT, certification and enforcement, aircraft and equipment acquisition, sales and leasing, and airports matters. We hope that you find AVIALEX® both interesting and informative. We would also appreciate receiving your feedback with any suggestions or comments that you might have. If you wish to contribute an article that you believe might be of interest, we'd be happy to give you full credit if we incorporate it. Additionally, if you know of someone who might be interested in receiving copies of AVIALEX® , please FAX their names and addresses to us. You may reproduce AVIALEX or use any information from it so long as you give us credit for same.
As the kickoff, here is a recent article that Mike Dworkin wrote on the nuts and bolts of defending an FAA enforcement action. It may look familiar as it appeared in the March 1993 issue of the Newsletter published by our friend, Jim Helms of Transport Aircraft Technical Services, Inc.
A NUTS AND BOLTS APPROACH TO HANDLING
FAA ENFORCEMENT MATTERS
As aviation professionals, we are familiar with the Federal Aviation Regulations (FARs). We consult them frequently to assure that our, and our clients', activities are in compliance.
While many FARs appear are specific and clear, many others are not. There are ambiguities, and even apparent conflicts between FAR provisions. There are also the "Stealth FARs"--the FAA's interpretations, internal orders, handbooks, notices and guidelines, as well as legal and administrative case precedents, which are not so easily found or widely known and which can change from time to time without notice. In some instances, requests for clarification or interpretation can lead one down a perilous path. Clarifications and interpretations oftentimes differ from FAA region to region, district office to district office, and inspector to inspector.
I'm not encouraging anyone to go out and violate FARs. However, my twenty years in the practice of law (including years with the FAA and a major air carrier) have made it abundantly clear that sooner or later, those operating in the aviation environment--pilots, mechanics, repair stations, air carriers, air taxis, commercial operators, or other air agencies--are probably going to have some "differences" with the FAA which could result in the initiation of enforcement action. The majority of enforcement actions arise not from deliberate acts but rather from inadvertence or simple mistake. Although the FAA now professes that it is "kinder, gentler and here to help", the fact of the matter remains that a violation is a violation. An FAA inspector coming across evidence of a violation has no alternative but to write it up.
Enforcement actions can be administrative, such as a letter of reprimand or warning, or legal--generally, the suspension or revocation of any certificate or rating, or the imposition of substantial civil penalties.
In this outline, I address the enforcement/investigative process as follows: Part I, Duck and Cover , deals with the FAA's investigation--how an alleged discrepancy comes to the FAA's attention and what the FAA does in response--and with how the certificate holder or operator can best invoke "damage control". Part II, On the Carpet , addresses procedural measures that should be taken in response to the FAA's institution of action. Part III, To the Mat , addresses the appeal process (i.e., when, despite our very best efforts, Parts I and II have failed). Time permitting, there may be additional articles addressing other issues and new developments.
Please keep in mind that this is an outline. It is not intended to be universally applicable to, or to guaranty success in all situations and all cases.
Part I
Duck and Cover
The investigatory phase is probably the most crucial one in the enforcement process. Comprehensive investigation by the operator, accomplishment of timely and responsive corrective action, and undertaking other mitigation measures are far more effective if taken earlier, rather than later. Likewise, convincing the FAA inspector at the onset that no violation has occurred, or that appropriate corrective action has been taken to preclude possible recurrence, may prevent the matter from going further.
a. FAA authority.
I urge all readers to take a look at Sections 609, 901, 902 and 1005 of the Federal Aviation Act and Part 13 of the FARs. These provisions embody the authority under which the FAAconducts the enforcement/investigative process. You might also look at FAA Handbook 2150.3 (Compliance and Enforcement), Advisory Circulars 00-46C (Aviation Safety Reporting Program) and 120-56 (Self-Disclosure), and NTSB Regulations 830 (Accident Reporting) and 821 (Rules of Practice in Air Safety Proceedings). [UPDATE: See Avialex Volume 4 ].
b. How the FAA finds out.
In the majority of general aviation cases, the FAA enforcement investigation is precipitated by third party complaints. In conducting its investigation, the FAA must literally start from scratch to determine the identity of the aircraft, the operator and crewmember, and specifically what, if anything, happened. This is not necessarily so in air carrier and other air agency cases, where required records can literally hand the FAA its case on a silver platter. It is difficult, if not impossible, to convince the FAA that required records mean something other than what they appear to say. Additionally, because the majority of air carrier operations are conducted under IFR within the ATC system, unauthorized deviations from ATC clearances or instructions and enroute or in-flight irregularities are routinely reported by ATC to Flight Standards for investigation and possible enforcement action.
c. Letter of Investigation.
When the FAA initiates an investigation, it will generally issue a letter of investigation (LOI) to the person(s) or company(ies) involved. However, issuance of an LOI is not mandatory and does not prevent the FAA from taking enforcement action. Do not assume (to your subsequent detriment) that because the FAA has not issued an LOI, you are in the clear. The time to start investigation and taking the appropriate protective measures is upon the occurrence of the incident (or, for company managers, the time that you first learn of the incident). Full and free lines of communication within your organization ar absolutely essential.
d. NASA report.
If the irregularity or occurrence did not result in an accident (as defined in NTSB Regulation 830), did not involve a criminal offense, and was due to inadvertence, consider filing an immunity report with NASA under the Aviation Safety Reporting Program (ASRP). This report must be filed with NASA within 10 days of the occurrence. There are no extensions or exceptions! The ASRP Report will not prevent the FAA from instituting enforcement action, but will preclude it from suspending certificates or imposing civil penalties. Make sure that ASRP Reports are filed on behalf of each individual involved (whether certificated or not) and on behalf of the company--everyone should file. Oftentimes, all involved individuals file, but someone forgets about the company. Although postage on the NASA form is "free", spend the money and send it certified mail, return receipt requested. And remember, don't lose the identification strip that NASA will return to you--it's your only proof that a report has been filed.
e. Self-investigation and self-disclosure.
I cannot understate the importance of a thorough and complete in-house investigation. What happened? How did it happen? Who was responsible? Were employees following all prescribed procedures and manuals? Were contractors in full compliance with all terms and conditions of their contracts with the company? Were company-prescribed procedures and manuals adequate? Do any remedial measures need to be taken to avoid recurrence of similar instances?
Also consider utilizing the FAA's Self-Disclosure Program. Under this program, where c prompt and voluntary disclosure of apparent noncompliance is made, the FAA will either administratively close the case without taking enforcement action, or in the event it initiates enforcement action, will mitigate sanctions. Self-Disclosure also protects the employees involved, provided they promptly report the noncompliance to the company. Self Disclosure and ASRP are not mutually exclusive-- consider doing both.
f. Response to LOI.
Do you respond to the LOI? There is a split in the legal community on this one. However, my general recommendation is YES, for several reasons:
By the time the FAA issues the LOI and the time for response has run, the FAA's investigation is not only already underway but has probably been substantially completed;
In deciding whether to pursue enforcement action and in recommending the type and severity of the action to be taken, the FAA considers as a factor "the attitude of the `violator'."
You have to work with the FAA on a day-to-day basis. Your non-response to the LOI will eventually work to your detriment in your other dealings with the investigating inspector and District Office.
Common courtesy. After all, nobody likes their letters going unanswered.
Remember, however, that this is not a criminal proceeding. There is no 5th Amendment right against self-incrimination. Any information furnished in a LOI response can be used against you, your company, or any other party. Be careful. Seek the assistance of and consider responding through legal counsel--you want to appear to be responsive to the LOI, you don't want to digyour own grave and you don't want to put your, or your company's credibility on the line.
Part II
On the Carpet
The majority of FAA legal enforcement actions fall into two categories--civil penalties and certificate actions. They are initiated by FAA's legal department. By the time the file has gotten to legal, the matter has left the investigating district office and has gone through several offices and levels of administrative review. In other words, it's now out of the inspector's hands.
The FAA's statutes of limitations for initiating these actions are as follows: civil penalties of up to $50,000, 2 years; civil penalties over $50,000, 5 years; certificate actions, 6 months (unless the FAA alleges lack of qualifications in which case there is no limitations period). Even though each type of enforcement action has its own rules of procedure, there is substantial commonality at early stages of the proceedings.
a. Notice of proposed action.
With the exception of emergency certificate actions, the FAA must give notice of its proposed action--either in the form of a Notice of Proposed Civil Penalty, a Civil Penalty Letter (for civil penalties over $50,000) or a Notice of Proposed Certificate Action. These notices advise of the action that the FAA intends to take, list the FARs that have been allegedly violated and recite the operative facts upon which the FAA has based the action. Issuance of the notice requires a response and an election of how one wishes to proceed. Among the choices that the FAA offers, the only one deserving of consideration is the informal conference. An informal conference is not automatic--it must be requested. At the time that this request is made, a request should also be made for copies of the FAA's evidentiary file. Defense counsel's and the operator's review of this file is essential to a meaningful dialogue at the informal conference, planning a successful defense, and successful settlement or resolution of the matter.
b. Informal conference.
The importance of this conference cannot be understated. Generally, it is an off the record meeting conducted for the purpose of discussing, settling or resolving the case. Because FAA legal counsel will conduct and preside at the conference, I recommend that you also have legal counsel present who is well-versed in FAA enforcement matters. In most instances, representatives from FAA's technical offices and services will also attend. Any evidence in defense or mitigation of the matter should be presented at that time. The operator and its counsel should also be prepared to present any "counteroffers" to the FAA for its consideration as a means of settling the matter, including possible issuance of a compromise order in which no finding of violation is made.
These cases frequently settle at the informal conference, or shortly thereafter. However, for those that don't, the FAA will take its final action for which there are appeal procedures.
Part III
To the Mat
a. Certificate actions.
The FAA's Orders of Suspension or Revocation are appealable to the NTSB. The filing of an appeal stays the effectiveness of the FAA's action (except in emergency cases). The case will go to a full public evidentiary hearing before an NTSB administrative law judge (ALJ). With current case backlogs, it can take up to one year for the matter to be scheduled for hearing. At the conclusion of the hearing, the ALJ will issue an initial decision and order either affirming, reversing or modifying the FAA's Order. Either party may appeal to the full five-member NTSB. Again, except in emergency cases, the appeal stays the effectiveness of the action. It will take another year for the NTSB is decide a case on appeal. Thereafter, a petition for review can be filed with one of the U.S. Courts of Appeal. However, the action is not automatically stayed and the granting of a stay is discretionary with the NTSB. Procedural rules are contained in NTSB Regulations Part 821.
b. Civil penalty actions up to $50,000.
With the exception of cases against pilots, mechanics and flight engineers (which under new legislation will be appealed to the NTSB, although no rules of practice are as yet in place), civil penalty appeals are handled in-house by the FAA. The case is heard by a DOT administrative law judge. Thereafter, an appeal may be made to the FAA Administrator. Appeals stay the effectiveness of the FAA Orders. The FAA's enforcement docket is becoming more congested. As a result, it may take a year for a hearing to be scheduled and another year for an appeal to be decided by the Administrator. The Administrator's final decision can be appealed by the filing of a petition for review with one of the U.S. Courts of Appeal. Procedural rules are contained in FAR 13, Subpart G.
c. Civil penalty actions over $50,000.
The FAA cannot adjudicate these cases in-house and must refer them to the U.S. Attorney for institution of a civil suit. Generally, the U.S. Attorneys have not given these cases the highest priority (in fact, this was the impetus for the FAA's seeking in-house adjudication and appellate authority from Congress). However, that is not to say that the case will just go away. The speed and effort with which U.S. Attorneys prosecute these cases varies from office to office and attorney to attorney.
Conclusion
The FAA's enforcement/investigative process is far from perfect -- at times, it can be draconian and heavy-handed. It is also a reality with which we must deal. The role of aviation counsel is not only to defend the enforcement action after it has been initiated, but to better understand the clients' day to day concerns and provide the necessary advice and assistance to prevent the occurrence of the violation or at least mitigate its effects.
In prosecuting air carrier security enforcement actions, the FAA, citing "air transportation security" concerns, routinely seeks to close the proceeding to the public and impose restrictions on the dissemination of information arising in the handling of the case--particularly the carrier's security program (ACSSP), the location of the violation, any defenses and mitigating factors that the carrier might raise, as well as all pleadings and court documents filed in the course of the carrier's appeal. Of course, the FAA still wants the carrier's violation to remain a matter of public record--these violations are listed on each carrier's "rap sheet" maintained in Oklahoma City.
AIR CARRIER SECURITY CASES--Right to a Public Hearing ?
While the FAA's concerns might be understandable, the FAA action deprives the carrier of its right to a public hearing and imposes burdensome and cumbersome restrictions on the conduct ofthe defense and the handling of the case. Generally, and despite the carriers' objections, the FAA's attempts at sealing the proceeding have been successful.
Recently, however, in a case that we have been handling, an administrative law judge (in an 11 page order with no less than 24 footnotes!) denied the FAA's requests to take all testimony in closed executive session and withhold the testimony, all court documents and information pertaining to the location of the alleged incident from public disclosure. The judge concluded that the FAA had not shown (1) a compelling need for secrecy, (2) a practical method for withdrawing information from previously publicly available documents or (3) that public access to the information sought to be "protected" threatened aviation safety. The FAA has not appealed this ruling.
...AND SO MUCH FOR UNIFORM FAA POLICY .
The FAA's Assistant Chief Counsel, Western-Pacific Region (i.e., the legal office for CA, AZ, NV, HI and the Pacific and Asia) has implemented a new policy under which the FAA will no longer compromise air carrier security cases without making a formal finding of violation. So far, this is the only FAA Region that has adopted this policy. In fact, it appears to be contrary to the FAA's own Enforcement Handbook. As a result, we have not been settling any air carrier security cases in that Region. Sooner or later, the backlog of pending cases might cause the Region to rethink its position.
AND FINALLY A WORD FROM OUR SPONSOR
Michael L. Dworkin and Associates was established in 1981 to serve the special legal needs of the aviation industry. We provide services in the following areas:
- Aircraft and Equipment Acquisition
- Airports
- Audits and Accident Investigations
- Certification
- Contracts
- Financing
- Insurance
- Regulatory--FAA, NTSB and DOT
on a nationwide basis and are dedicated to providing our clients with the highest quality legal services in an expeditious, efficient and cost effective manner. Mr. Dworkin has been practicing law for over 20 years, first serving as a staff attorney with the FAA in Washington, D.C., and Los Angeles, and subsequently with a major air carrier prior to establishing this Office. He is an active member of the State Bar of California and District of Columbia Bars. He is a Founding Member, Regional Vice President of the Rules Committee of the National Transportation Safety Board Bar Association, and a member of the American Bar Association, International Society of Air Safety Investigators, Aircraft Owners and Pilots Association, and Regional Airline Association.
