A Dangerous New Precedent in FAA Enforcement Law

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Imagine a case where the prosecutor can interpret ambiguous regulations in the middle of the trial and the judge is bound by that prosecutor's interpretation. Even worse, what if the appellate court is also bound to give deference to the Prosecutor's ad hoc interpretations? You say that this cannot happen in the U.S. legal system? What about due process? Guess again, it has happened in the "split-enforcement" regime where the FAA has legal enforcement authority over an airman's certificate, while the NTSB is supposed to act as an appellate adjudicatory authority. AVweb's Phil Kolczynski explains.

Imagine a case where the prosecutor can interpret ambiguous regulations in the middle of the trial and the judge is bound by that prosecutor's interpretation. Even worse, what if the appellate court is also bound to give deference to the prosecutor's ad hoc interpretations?1 You say that this cannot happen in the U.S. legal system? What about due process? Guess again; it has happened in the "split-enforcement" regime where the FAA has legal enforcement authority over an airman's certificate, while the NTSB is supposed to act as an appellate adjudicatory authority.2

The FAA has always promulgated interpretations of the Federal Aviation Regulations (FARs) through rulemaking and the issuance of written policy guidelines. Because of a recent decision, the FAA's lawyers can now make interpretations of the FARs against a certificate holder during an adversary litigation proceeding. Further, the FAA litigation attorney's interpretation will be binding not only on the respondent but also on the judge and the appellate adjudicatory authority. This dangerous precedent is the result of a recent federal appellate decision. Garvey, FAA v. NTSB and Richard Lee Merrell, (FAA v. Merrell), 190 F. 3rd 571, 577 (D.C. Cir. 1999).

What Has Happened to the Traditional Split-Enforcement System?

In order to understand the problem with this new precedent, one needs to understand the way the system works. FAA certificate holders who face an FAA legal enforcement action involving an order of suspension, revocation or the civil penalty may appeal to an administrative law judge (ALJ) of the National Transportation Safety Board (NTSB). 49 CFR 821.35(a). The airman or an aviation business is considered a Respondent and is entitled to an evidentiary hearing before the NTSB judge. The final decision of the ALJ may be appealed to the whole NTSB (The Board). 49 CFR 821.50. The Board is not bound by the findings of the ALJ but may examine the record for evidence to determine whether the judge made an error of fact or law. The NTSB can then overrule or sustain the decision of the ALJ.

In carrying out its appellate adjudicative function, the NTSB has always been bound by the rules and regulations validly promulgated by the FAA. The same is true with regard to the interpretations of the rules and regulations validly adopted by the Administrator.

Traditionally, aviation businesses and airman were on notice of the rules and regulations that applied to them. Importantly, aviation professionals expected to be put on advance notice of any FAA interpretation of the FARs that could affect their right to hold a certificate and exercise the privileges thereunder. Indeed, the very essence of due process requires prior notice and opportunity to be heard, before the rights or privileges granted by law or permitted by regulation can be revoked. This is supposed to be true even with regard to parties subject to regulation by the FAA or other federal agencies.

FAA certificate holders are afforded due process with respect to the FARs because the rules are issued pursuant to the rulemaking process. The process includes prior notice and an opportunity to comment on the propriety of the proposed rule. The importance of this procedure has been stressed by recent amendments that require that the rulemaking procedures be written in "plain language" so that regulated parties will receive fair notice of the rules that will bind them. 14 CFR 11 (as amended, Aug.19, 2000).

The aviation industry has been on notice of official FAA interpretations of the regulations by means of FAA orders, FAA handbooks, advisory circulars, general counsel rule interpretations, etc. Typically, some form of written policy guideline has been issued to put certificate holders on notice of how the rules are to be interpreted and applied. Most of these FAA publications have been considered advisory in nature and viewed by the courts as explaining good practices to employed by airmen depending on the factual circumstances.

Now, because of the recent federal appellate decision discussed in this article, the FAA attorneys can render binding interpretations of the FARs in the middle of adversary litigation! Moreover, it appears that many FAA orders and manuals, previously considered advisory, will now become binding interpretations of the regulations!

"Tough Facts Make Bad Law" FAA v. Merrell

Captain Richard Lee Merrell was the pilot-in-command of Northwest Airlines Flight 1024 departing LAX on June 19, 1994. Air traffic control (ATC) instructed him to climb and maintain 17,000 feet. Captain Merrell correctly read back the clearance. One minute later, ATC instructed American Airlines Flight 94 to climb to and maintain 23,000 feet. The American flight's captain promptly and correctly read back his clearance. Captain Merrell heard the instruction to American flight 94 but truly believed it was directed to his flight 1024. Based on his perception and in accordance with proper procedure, Captain Merrell read back the 23,000-foot climb instruction to ATC. Unfortunately, when Captain Merrell read back the clearance, the American pilot was in the process of reading back his clearance. Captain Merrell's transmission was blocked. Since the ATC radio system can only handle one radio transmission at a time on a given frequency, ATC only received the readback from the American pilot. ATC could not detect that Captain Merrell's readback had been blocked. Captain Merrell, who was unaware that ATC had not received his readback, started to climb to 23,000 feet. ATC noted the deviation and called Captain Merrell who immediately returned to 17,000 feet; however, he had already violated the clearance and separation standards.3

The FAA issued a legal enforcement order against Merrell, sanctioning him for "inattentive carelessness" in violation of 14 CFR Section 91.123(b) (operating contrary to an ATC instruction) and 14 CFR Section 91.123(e) (following a clearance issued to another pilot). Merrell appealed the FAA order to the NTSB. The NTSB judge agreed with the FAA at the hearing and affirmed the FAA Order sanctioning Captain Merrell for deviating from a clearly transmitted ATC instruction.

Captain Merrell appealed the ALJ's decision to the NTSB. The full Board exonerated Captain Merrell and found he had made an error of perception; however, the Board also decided that he was not performing his duties in a careless or otherwise unprofessional manner. The Board felt that mistake of this kind was not always the result of careless inattention. Merrell had made a full readback. But for the squelched transmission, the misunderstanding would have been discovered. ATC would have been able to correct the error. The FAA appealed the decision of the Board to the D.C. Circuit Court of Appeals.

The Court of Appeals Relegates the NTSB to Rubber-Stamping

On appeal, The FAA argued that the NTSB is required to defer to the FAA's litigation interpretation of its own regulations. The NTSB refused to defer to the FAA in this case. The Board ruled that the Agency had offered no evidence of any validly adopted written policy guidelines on the issue. The NTSB believed that the agency had merely offered the "litigation statements" of FAA enforcement lawyers on the question of how to interpret the regulations pertinent to a misunderstood ATC clearance. The Board felt that the interpretation of the regulation about whether the captain was careless under the circumstances was factual in nature and it has always been within the prerogatives of the Board to reverse factual findings regarding alleged violations of the rules.

The D.C. Circuit Court of Appeals overruled the decision of the NTSB and held that the refusal of the Board to defer to the FAA on this question of agency interpretation was "error." The circuit justices ruled that:

The FAA is not required to promulgate interpretations through rule making or the issuance of policy guidelines, but may instead do so through litigation before the NTSB .... The fact that this mode of regulatory interpretation necessarily is advanced through the litigation statements of counsel does not relieve the NTSB of its statutory obligation to accorded due deference. FAA v. Merrell at 577-578.

The Circuit Court went so far as to tell the Board that because the FAA is entitled to launch new policies through administrative adjudication, "it may sometimes be necessary for the NTSB to accommodate such policies by changing its jurist prudential course." Even more amazingly, the Court held that "because the Board is bound to follow such interpretations, it may at times be both necessary and proper for the Board to depart from its prior case law."

The Merrell Decision Creates New and Troublesome Precedent

The decision in the Merrell case by the D.C. Court of Appeals has dire implications for airmen. When one reads the entire Merrell opinion and considers the language of the D.C. Circuit as quoted above, it becomes apparent that the justices have castrated the NTSB as an adjudicatory authority. If enforcement attorneys in an agency can interpret regulations and establish policy during the middle of an adversarial proceeding, such that the interpretation is binding on the appellate adjudicatory authority, whatever authority the agency (the NTSB in this case) thought it had has been rendered impotent.

The Merrell case contains emphatic language, setting broad precedent, which will have significant impact on FAA enforcement litigation to the detriment of certificate holders. The D.C. Circuit's strong opinion overriding the NTSB in Merrell is particularly troublesome because the circuit court never explained exactly why the litigation statements of counsel constitute "properly adopted" legal interpretations of FAA regulations. The justices pay lip service to the requirement that interpretations must be "validly adopted" but never explained how the FAA complied with the requirement.

The FAA Can Now Interpret the FARs Against Airmen Without Prior Notice

If an interpretation of a rule is to be applied to a regulated party, the party should receive fair notice. The circuit court dealt with the apparent fact that Captain Merrell had no prior (fair) notice of the FAA's interpretation by simply stating that FAR 91.123 itself, provided sufficient notice. The justices believed that the regulation was clear enough to put Captain Merrell on notice of the FAA's litigation interpretation of that regulation. Indeed, the D.C. Circuit Court held that FAA can even come up with new interpretations of the regulations during litigation as long as the interpretation is not "plainly erroneous" so as to result in "manifest injustice."

If the FAA can dispense with prior notice with regard to any new interpretation, then the rules had better be quite clear or those bound by them will be denied due process. Apparently the justices believed that the FARs are clear and that the FAA's interpretations are the only logical ones consistent with safety.4

The reality is that aviation professionals consider many of the FARs to be quite ambiguous. The ambiguity becomes apparent when the FARs are applied to varying operational circumstances. Thus it is critical that an adjudicatory authority with aviation safety expertise have the power to review interpretations when the rules are applied to operational errors in the enforcement context.

The Circuit Court Ignored the Problem: The FAA Wears Two Hats

Why was the circuit court so critical of the NTSB, harsh to Capt. Merrell and favorably disposed toward the FAA? The answer is the "S" word safety. The justices thought that they were siding with the FAA in the interest of safety.

It is true that FAA rulemaking lawyers and regulatory officials strive to write rules and provide policy guidance to enhance safety. It is questionable whether enforcement attorneys tying to prove sanctions during adversarial litigation are issuing "validly adopted" safety policy interpretations.

The Merrell court noted that the administrator of the FAA has authority under the Federal Aviation Act to prescribe regulations and minimum standards for safety and air commerce. Under the same statute, the FAA has authority to enforce its regulations against certificate holders. Thus, the Agency has a safety policy-making function and a police-enforcement function. Do you trust the police prosecutor to be a proper policy maker?

FAA Enforcement Lawyers Can Circumvent NTSB Legal Precedent

In my opinion, the Merrell court failed to justify whether litigation interpretations by FAA attorneys carrying out an enforcement function constitute "validly adopted" regulations. The court treated the "litigation statements" of enforcement attorneys, arguing in a contested litigation matter, as having the same weight as regulations and policy statements established under the rulemaking process. An advocate is simply not a neutral and detached regulatory official. For the court to require the NTSB to treat such in the "heat of battle" interpretations as regulatory safety policy is "euphemistically," unrealistic and unfair to airmen.

The Merrell decision has the effect of vitiating the certificate holder's right of appeal. The circuit court said that "the FAA can launch new policies through administrative adjudication and that it may be necessary for the NTSB to accommodate such policies by changing its jurist prudential course." [emphasis added].

The court is really saying that NTSB judicial precedent is out the window. An FAA enforcement lawyer can circumvent NTSB legal precedent by interpreting the regulations so as to justify sanctions against the airmen. For the justices to tell the Board to "accommodate" by "changing its jurisprudential course," the court has in effect told the Board that they must rubber-stamp any FAA interpretation that is not plainly erroneous.

Has the NTSB Started to Rubber-Stamp FAA Interpretations?

The Court of Appeals in Merrell reversed the NTSB and remanded the case to the Board for compliance with its decision. Accordingly, the Board sustained the Order against Captain Merrell. Administrator v. Merrell, Order No. EA 4814 (January 13, 2000).

In the only reported decision since the Merrell case, the Board has rubber-stamped another FAA interpretation. This time the issue was the proper interpretation of FAR 65.17(b) by reference to FAA Order 8610.4g. The order is an FAA manual which provides guidance on the testing and examination of mechanics. Administrator v. Rodriguez, NTSB Order No. EA4836, Docket SE 15854 (April 14, 2000).

In the Rodriguez case, the FAA suspended a mechanic's certificate on an emergency basis but allowed him to submit to a re-examination of his qualifications. The minimum passing grade according to FAR 65.17(b) is 70 percent. During the test the mechanic answered most of the questions correctly to achieve a 90 percent score. In one of the subject areas he missed two questions. The designated mechanic examiner stopped the examination and the mechanic failed. Under the FAA's interpretation of the rule according to their examiner's handbook, even if a mechanic scored very high on the entire test, his failure to get 70 percent of the questions correct in any one subject area of the test would result in failure. This is could be very unfair when you consider that the FAA may require only a few questions in each subject area. Thus, if the mechanic only answers a couple questions wrong in the entire test but these questions fall within one subject area, he may fail the entire test though he may have achieved an overall grade in excess of 90%.

The ALJ ruled in favor of the FAA against Mr. Rodriguez. He received a failing grade and he appealed to the full Board. The Board, obviously mindful of decision of the D.C. Circuit Court in the Merrell case, "deferred" to the agency's interpretation of FAR 65.17(b) as explained in FAA Order 8610.4g, and rubber-stamped the FAA order against Mr. Rodriguez.

Conclusion

Those who have worked in Washington, D.C., know that there are four branches of government. We learned about three in school. There have always been checks and balances between these three the executive branch, legislative branch and judicial branch. The fourth branch the administrative agency has enormous power over its regulated industry. In the past this power had to be exercised through validly adopted regulations. Citizens had protection against unfair interpretations by means of built-in administrative adjudicatory review. Now, agency enforcement attorneys can interpret the regulations in the Agency's favor during litigation. Even assuming these litigation advocates interpret to achieve safety and not just to win, the Merrell decision has upset the checks and balances previously provided by the adjudicatory function of the NTSB.

The Board should have the discretion to distinguish between validly adopted written legal interpretations of the regulations and factual inferences by FAA enforcement attorneys made during an adversary proceeding for the purpose of achieving sanctions against airmen. It is time for FAA certificate holders to go to Congress and curb the power of the FAA.

An aviation lawyer who represents a client who can afford to appeal the rulings of an administrative law judge should carefully study a recent decision of the United States Supreme Court on the issue of "deference." The Supreme Court in May of this year said that "interpretations contained in policy statements, agency manuals and enforcement guidelines, all of which lack the force of law do not warrant . . . deference." Christensen v. Harris County, 120 S.Ct. 1913, 146 L.Ed. 2d 914 (2000). The Christensen case did not involve the FAA; moreover, it involved labor issues instead of aviation safety. Nevertheless, the U.S. Supreme Court apparently thinks that the reasoning of the justices of the D.C. Circuit Court of Appeals may be wrong! A good aviation lawyer with a committed client may be able to overturn Merrell.


1. FAA lawyers quickly point out that FAA legal enforcement actions are not "criminal" prosecutions. While true, legal enforcement action seeks sanctions that can deprive an aviation business or an airman of a right to hold a license used to generate a livelihood. Ask any certificate holder who has been the respondent in an FAA enforcement action whether he was prosecuted.

2. The NTSB wears two hats. Besides the well known function of the Board to investigate accidents and render probable cause determinations, the NTSB has an Office of Administrative Law Judges, empowered to review FAA Orders which adversely affect airmen and aviation businesses.

3. For more on the FAA's interpretive rule regarding the clearance readbackss, see AVweb Columnist Rick Durden's article in The Pilot's Lounge.

4. It is interesting that the NTSB, which specializes in making aviation safety recommendations after accidents, disagreed with FAA interpretations. The circuit court justices, whose aviation expertise is probably limited to passenger travel on the airlines, found the regulation clear.