Judicial deference and the futility of litigating civil penalty cases

by Dec 7, 2021Aircraft, FAA, Law, Legal

In the sphere of administrative law that pertains to aviation litigation, due process is a commodity in very short supply.  In fact, the notion of “administrative law” is an oxymoron because of the dearth of due process available in the administrative arena.  Many aircraft operators charged with a regulatory violation will find themselves before a Department of Transportation Judge adjudicating a case under Part 13 of the Federal Aviation Regulations.[1]  If, by some extraordinary circumstance, the operator is able to persuade the judge to lower the sanction, invariably the FAA will appeal to itself and either reinstate the original penalty or one very close to the amount originally sought.  The realities of this circumstance are borne out by the decision in Presidential Aviation, Inc. v. Federal Aviation Administration, United States Court of Appeals for the Eleventh Circuit, Case No. 20-14841 (August 17, 2021).  An examination of the facts, the administrative decision, and the appellate court decision will confirm the accuracy of the assertions set out in this introduction.

[1] See 14 C.F.R. Part 13.

Statement of the Case

Presidential Aviation operates a fleet of aircraft available for on-demand charter, both domestically and internationally.  On October 21, 2014, a jet aircraft operated by Presidential Airways departed Bogotá, Colombia.  The landing gear failed to retract and an “AUTOSLATS” light illuminated.[1]  The flight crew landed the aircraft, and after consulting with the maintenance director, wiped grease from a landing gear proximity switch and verified the “AUTOSLATS” light had gone out.[2]  Once again, the passengers boarded the aircraft, and the aircraft departed Bogotá without testing the landing gear or documenting the problem in the aircraft’s maintenance records.[3]  The aircraft was then flown to Cuba, and then New York, and then Pennsylvania, and landed in Florida.[4]  Upon landing in Florida, the owner of the aircraft learned of the problem and instructed the crew to have the mechanical irregularities written up and have maintenance examine the aircraft.[5] 

            The pilots documented the incident in Bogotá in the maintenance records, and maintenance personnel performed a gear retraction test of the landing gear.[6]  The aircraft failed the test, since the landing gear would not retract and the “AUTOSLATS” light remained illuminated.[7]  Maintenance personnel at Presidential then replaced the aircraft’s left main landing gear proximity sensor.[8] 

            The FAA filed a complaint against Presidential alleging, among other things, that Presidential failed to document a mechanical irregularity in violation of the requirements in 14 C.F.R. §135.65(b),[9] and operated the aircraft in an unairworthy condition on each of the four flights of October 21, 2014, in violation of 14 C.F.R. §91.7(a) [forbidding a pilot from operating an aircraft in an unairworthy condition] and 14 C.F.R. §135.25(a) that provides that the holder of a Part 135 air carrier certificate may not operate an aircraft unless it “[i]s in an airworthy condition…”[10]  The FAA sought a civil penalty of $38,825.00 for the five alleged regulatory violations.[11] 

            As provided in Part 13 of the Federal Aviation Regulations, a Department of Transportation Administrative Law Judge (ALJ) granted a motion for summary judgment in favor of the FAA finding that Presidential had failed to document the problems with the landing gear as required by 14 C.F.R. §135.65(b).[12]  After an evidentiary hearing, the ALJ concluded that Presidential had also committed violations of 14 C.F.R. §§91.7(a), 135.25(a)(2).[13]  Because the ALJ disagreed with the amount of the proposed civil penalty of the FAA, the sanction was reduced to $22,158.00.[14] 

            The FAA appealed unto itself challenging the findings by the ALJ in terms of the preponderance of the evidence, whether the decision was supported by precedent and public policy, and whether ALJ decision was the result of prejudicial errors.[15]  See 14 C.F.R. §13.233.[16]  The FAA reversed the ALJ and assessed a civil penalty of $36,750.00.[17] 

[1] Unpublished opinion of the United States Court of Appeals for the Eleventh Circuit in Presidential Aviation, Inc. v. Federal Aviation Administration, Case No. 20-14841 (August 17, 2021) at 2.

[2] Id.

[3] Id.

[4] Id.

[5] Id.

[6] Id. at 3.

[7] Id.

[8] Id.

[9] “The pilot in command shall enter or have entered in the aircraft maintenance log each mechanical irregularity that comes to the pilot’s attention during flight time.  Before each flight, the pilot in command shall, if the pilot does not already know, determine the status of each irregularity entered in the maintenance log at the end of the preceding flight.”  14 C.F.R. §135.65(b).

[10] Eleventh Circuit Opinion at 3.

[11] Id.

[12] Id.

[13] Id.

[14] Id.

[15] Id. at 10.

[16] Id. at 11.

[17] Id. at 4.

The Decision of the Eleventh Circuit Court of Appeals

Presidential appealed the Final Agency Decision to the United States Court of Appeals for the Eleventh Circuit.[1]  A United States Court of Appeal has “…exclusive jurisdiction to affirm, amend, modify, or set aside any part of the order and may order…the Administrator of the Federal Aviation Administration to conduct further proceedings…”[2]  A United States Court of Appeals in adjudicating any petition for review from a final FAA order is required to affirm the findings of fact of the FAA “if supported by substantial evidence…”.[3] 

            The scope of appeal afforded by the United States Circuit Courts of Appeal is deferential since the United States Court of Appeal for the Eleventh declared:

…But our standard of review is deferential; “we will uphold the Agency’s decision unless it is arbitrary and capricious, an abuse of discretion, or otherwise contrary to law.”  Aerial Banners, Inc. v. FAA, 547 F.3d. 1257, 1260 (11th Cir. 2008); see 5 U.S.C. §706(2).  This means that “we will set aside the FAA’s order on substantive grounds only if the Agency relied upon improper factors, failed to consider important relevant factors, or committed a clear error of judgment that lacks a rational connection between the facts found and the choice made.  Aerial Banners, Inc., 547 F.3d 126, 1257, 1260 (11th Cir. 2008); see 5 U.S.C. §706(2)…  And the Administrator’s Findings of Fact “are conclusive” if supported by substantial evidence.  49 U.S.C. §46110(c).[4]

  Presidential, in an attempt to persuade the Eleventh Circuit to reverse the FAA’s Final Agency Decision, argued that a mechanical irregularity was a material question of fact not subject to resolution on a motion for summary judgment.[5]  The Eleventh Circuit disagreed, concluding that the issue was a pure question of law.[6]  Presidential further argued that there was no mechanical irregularity to record in the maintenance logbook.[7]  Once again, the United States Court of Appeals for the Eleventh Circuit disagreed and noted: “Airworthiness is not simply a matter of ‘flyability.’ Copsey v. Nat’l Transp. Safety Bd., 993 F.2d 736, 739 (10th Cir. 1993)…”[8]  Citing 49 U.S.C. §44704(d), the Eleventh Circuit Court of Appeals noted that to be airworthy (1) the aircraft must confirm to its type certificate and (2) be in condition for safe operation.[9]  The Eleventh Circuit Court of Appeals concluded that the aircraft deviated from its type certificate and therefore was not airworthy, because the landing gear was not tested until the completion of the fourth flight of the day; and at that time, the aircraft failed the test and required that a proximity sensor be replaced.[10]  In fact, the Eleventh Circuit Court of Appeals relied on Go Jet Airlines, LLC v. FAA, 743 F.3d 1168, 1171-72 (8th Cir. 2014), noting that “an aircraft designed with retractable landing gear did not conform to its type certificate when the landing gear was inoperable.[11]

            There was expert testimony in the record from Paul Marx, who testified that although the aircraft was not in an airworthy condition when the “AUTOSLATS” indicator came on, “wiping the grease from the proximity switch and checking that the “AUTOSLATS” light had gone out solved the issue and rendered the aircraft airworthy again.[12]  The Eleventh Circuit noted that in the pretrial deposition of Marx, he admitted the aircraft should have undergone a gear retraction test in Bogotá, that the “AUTOSLATS” would have gone out automatically upon landing and declined to offer an opinion with respect to the aircraft’s airworthiness.[13]  Once again, relying on the doctrine of deference, the United States Court of Appeals for the Eleventh Circuit noted:

In any event, in determining whether the Agency’s findings are supported by substantial evidence, we will not overturn the Agency’s “choice between two fairly conflicting views” of the evidence, even if we might have made a different choice if the matter had been before us de novoCity of Pompano Beach v. FAA, 774 F.2d 1529, 1540 (11th Cir. 1985) (citation omitted).  It “is not our function to reevaluate the weight of the evidence or to reexamine credibility issues made by the fact finder.”  Id.  Because the Agency’s finding that Presidential’s aircraft was not in an airworthy condition is supported by substantial evidence, we decline to overturn its decision that Presidential violated Federal Aviation Regulations by repeatedly operating an unairworthy aircraft.[14]

            While Presidential argued that the FAA exceeded its jurisdiction because one component of the penalty – a $7,150.00 sanction for the deliberate failure to record the mechanical irregularity – was higher than the amount suggested in the FAA closing argument, the Eleventh Circuit rejected this argument noting, inter alia:

Here, the FAA sought a civil penalty of $38,825.00 in its Complaint, and the Administrator assessed a penalty of $36,750.00. The amount of the penalty imposed did not exceed the amount sought in the FAA’s Complaint and did not exceed the Administrator’s authority under the regulations.[15] 

Presidential maintained, unsuccessfully, that the FAA could not increase the sanction sought from its statement in opening argument relying on 14 C.F.R. §13.16(j) which provides, inter alia:

…the FAA decisionmaker may assess a civil penalty, but shall not assess a civil penalty in an amount greater than that sought in the complaint.

[1] 49 U.S.C. §46110(c).

[2] Id.

[3] Id.

[4] Eleventh Circuit Opinion at 4.

[5] Id. at 5.

[6] Id. at 6.

[7] Id. at 6.

[8] Id. at 7.

[9] Id. at 7.

[10] Id. at 7.

[11] Id. at 8.

[12] Id. at 8.

[13] Id.

[14] Id.

[15] Id. at 11.

CONCLUSION

Procedurally, as demonstrated by the language that appears in the Opinion of the Eleventh Circuit Court of Appeals in Presidential Aviation, it is clear that any administrative agency, whether the FAA, the NTSB or the TSA, is at an advantage in an appellate tribunal which owes deference to the findings of fact and conclusions of law rendered in the administrative arena.  These harsh realities must inform counsel who attempt to reverse Agency decisions.  If at all possible, counsel must attempt to fashion the argument in such a way as to suggest that a de novo scope of review is appropriate, especially in situations involving questions of law.  However, if the question is one of fact, a United States Circuit Court of Appeals is going to defer to the factual findings and conclusions of the administrative agency, unless they are arbitrary and capricious, an abuse of discretion, or contrary to law.  See 5 U.S.C. §706(2)(A).  Alternately, counsel must persuade the court that an administrative agency decision is contrary to a constitutional right, power or privilege.  See 5 U.S.C. §706(2)(B). 

            To summarize, the opinion of the United States Court of Appeals in the case of Presidential Aviation, Inc. v. FAA is a study in the language employed by the United States Courts of Appeal to defer to the findings of fact and conclusions rendered by administrative agencies.  This is all the more troubling since, as the case which is the topic of this article illustrates, the FAA had the tactical advantage of being able to appeal to itself from the decision of the ALJ imposing a sanction which was less than the amount sought by the FAA in its Complaint.  While aircraft operators may desire to litigate in an arena where the playing field is level, today, that is not the case in the United States of America.

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