Gregory J. Reigel
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April 26, 2006

Cape Town Convention Transactions

If you are purchasing, financing or otherwise acquiring an interest in an aircraft or turbine engine, you need to be aware of the Cape Town Convention. The Cape Town Convention went into effect March 1, 2006 and applies to many twin-engine and most jet aircraft. If you would like more information on the Cape Town Convention and the procedures that have been implemented both in the U.S. and at the International Registry in Ireland, please read my latest article on the subject here.

Posted by Greg

April 25, 2006

NTSB Affirms Suspension Of Flight Instructor Certificate For Failure To Sign Logbook

The NTSB recently affirmed a 60 day suspension of a CFI's flight instructor certificate for failing to sign a student's logbook after the student completed ground and flight training with the CFI. In Administrator v. Luyten, the FAA alleged that the CFI provided ground training on four separate occasions and flight training on three separate occasions for a student. After the training, the CFI then allegedly failed to sign the student's pilot logbook in violation of FAR 61.189(a). After a hearing, the ALJ affirmed a 60 day suspension of the CFI's flight instructor certificate holding that the student had successfully completed the ground and flight training, and that the CFI offered no compelling justification for withholding his signature from the student's logbook.

On appeal to the NTSB, the CFI argued that the FAA couldn't take action against him based upon an alleged violation of FAR 61.189(a) because FAR 61.189(a) does not affect safety in air commerce or air transportation as required by 49 USC 44709. He also argued that his failure to sign the student's logbook actually enhanced safety in air commerce or air transportation because the student had to repeat the training with another instructor in order to obtain a signature. Finally, the CFI argued that he substantially complied with the requirements of FAR 61.189(a) in that his e-mail correspondence with the student and detailed invoices constituted a signature for purposes of logbook endorsement.

The Board rejected all of the CFI's arguments. It held that if it had the authority to review the regulatory authority of the FAA, which it doesn't, it would find that the FAA may take action under FAR 61.189(a) because that FAR clearly affects safety in air commerce. Additionally, in rejecting the CFI's claim that the e-mails and invoices constituted a signature, the Board stated that the "availability of a pilot’s complete logbook, including the required signatures, is critical to the FAA’s ability to evaluate a multitude of aspects that play a role in safe flight" and that "[p]roper endorsement of all prescribed documents is a legitimate regulatory requirement whose purpose is to give notice to all concerned parties, such as F.A.A. inspectors, that the airman is qualified for the operation in which he is engaged." Finally, the Board noted that "[o]verall, a conclusion that scattered items such as copies of e-mail correspondence and invoices constitute a properly signed logbook entry would directly disregard the importance of maintaining an accurate, complete logbook."

This is one of those cases where I truly wonder what else was going on. Why didn't the CFI sign the logbook? Was he involved in a dispute with the student? Regardless of what else was going on, it should be clear to CFI's that the FAA will pursue enforcement action for failure to comply with the regulatory requirements of FAR 61.189(a). Also, logbook endorsements should ideally be made in an airman's logbook or, alternatively, in a document that the CFI reasonably believes will be maintained with the other mandatory records that an airman must maintain. In the latter case, it would be prudent for the CFI to also keep a copy of the logbook endorsement in his or her file.

Posted by Greg

April 20, 2006

FAA Issues Safety Alert For Operators Order

The FAA today published a Notice of availability regarding its issuance of Safety Alerts For Operators ("SAFO's") pursuant to Order 8000.87 Safety Alert For Operators. According to the FAA, a SAFO allows the FAA "to reclaim valuable guidance found in discontinued Air Carrier Operations Bulletins (ACOB)" and a SAFO "may also contain new and important safety information alone or a combination of safety information and recommended (non-regulatory) actions."

SAFO's are posted on the FAA's Web site here. SAFO's are arranged by category and by date, with the newest SAFO shown first in each category, the oldest shown last. Subjects include topics pertinent to various types of commercial operations. Although compliance with SAFO's is voluntary, the FAA recommends that operators consult the SAFO website on a regular basis to obtain safety information that may be applicable to the their operations. If you would like more information on SAFO's you can contact Hop Potter, Air Transportation Division, AFS-200, 800 Independence Avenue, SW., Washington, DC 20591, and Telephone (202) 267-8166.

Posted by Greg

April 18, 2006

NTSB Rejects Privacy Act Defense And Affirms Operation Safe Pilot Revocation

In what I believe to be the first case to receive a formal ruling, the NTSB has affirmed the FAA's revocation of an airman's medical and airman certificates following his arrest during the Operation Safe Pilot investigation. As you may recall, Operation Safe Pilot involved an 18 month investigation by the FAA and the California Department of Justice in which a comparison of FAA medical records and Social Security Administration ("SSA") disability records revealed airmen who were collecting disability benefits from the SSA based upon serious medical and psychological conditions, which otherwise disqualified the airmen from operating an aircraft. 30 airmen were indicted on felony charges of making false statements to a government agency and face up to five years in prison and a $250,000 fine. Ten other airmen faced misdemeanor charges of making and delivering a false official writing and are looking at up to a year in jail.

Administrator v. Cooper involved the FAA's revocation of the airman's certificates based upon the airman's failure to disclose on four separate applications for medical certificates his use of certain HIV/AIDS medications and diagnosis with a peripheral neuropathy. The airman submitted an answer to the FAA's complaint and the FAA then moved for summary judgment based upon many of the admissions contained in the airman's answer and in subsequent responses to discovery requests. The airman did not oppose the summary judgment motion based upon the falsification claim, but rather argued that his medical condition was illegally obtained from the SSA in violation of the Privacy Act of 1974 and, was thus, tainted. The ALJ dismissed the airman's Privacy Act argument and granted the FAA's motion.

On appeal to the NTSB, the Board affirmed the ALJ's grant of summary judgment. It specifically rejected the airman's arguments that the Privacy Act had been violated or that the FAA illegally or improperly obtained the SSA medical records in light of the absence of evidentiary proof in the form of affidavits or other written documentation. The airman argued that he tried to obtain the evidence through discovery but that the FAA counsel's inadequate responses and the ALJ's refusal to grant his motion to compel precluded him from obtaining the evidence. However, the Board deferred to the discretion of the ALJ in denying the motion and noted that the airman had ample opportunity to pursue further discovery. The Board also held that "he has not made any showing why the relief he requests (suppression, as tainted, of the evidence regarding his HIV-related medication and neuropathy) was required" since any recourse for violation of the Privacy Act would be against the SSA, not the FAA.

Finally, the Board noted that "this is an administrative proceeding concerned with aviation safety, and, even if respondent might have some recourse under the statute against SSA, or even the Department of Transportation Office of Inspector General who purportedly provided the records to the Administrator, we think it would be inconsistent with our mandate to ignore the fact that respondent admits facts sufficient to sustain the charges of intentional falsification and revocation."

It appears to me that the Board didn't really address the Privacy Act argument. Although the Board went beyond the issue of lack of evidentiary support at the summary judgment level, I wasn't impressed with its limited analysis of the issue and its argument that the remedy for the violation was with the SSA and not FAA. However, in its defense, this was not a criminal proceeding and, as a result, I don't know that the "suppression of tainted evidence" is even a proper remedy in an FAA enforcement proceeding. And even if it were, I don't know how you would "un-ring the bell". Arguably the evidence would be available independently from the airman's health care providers and could still be obtained and used by the FAA. Granted, it would be more work, but it seems possible.

Given the Board's less than thorough discussion of the Privacy Act claim, and since this is one of the first cases to receive a ruling, I would expect that this case would be appealed for further review by the 9th Circuit Court of Appeals. It will be interesting to see what happens.

Posted by Greg

FAA To Issue Permanent Aircraft Dealer Registration Certificate Numbers

According to a Notice published today, effective May 1, 2006, the FAA will begin assigning permanent Dealer's Aircraft Registration Certificate numbers to manufacturers and dealers who currently hold an unexpired dealer's certificate and any new issuances. In order to facilitate the Dealer Certificate program and to link all aircraft currently registered under a dealer's certificate to that individual dealer, dealers will be issued a new permanent dealer certificate number that will begin with the letter ``D'' followed by six numbers, i.e. D000001.

It is important to note that the FAA's assignment of a permanent number does not cause the certificate itself to be permanent. Rather, a dealer's certificate will continue to expire 1 year after the date it is issued. If you would like more information, you may contact Walter Binkley, Manager, Aircraft Registration Branch (AFS-750), Mike Monroney Aeronautical Center, Federal Aviation Administration (AFS-750), Post Office Box 25504, Oklahoma City, OK 73125. Telephone (405) 954-3131.

Posted by Greg

April 13, 2006

FAA Issues Guidance For Pilot Records Improvement Act Compliance

Effective March 14, 2006, the FAA has issued further guidance to its principal operations inspectors ("POIs") for inspections and enforcement of employers' compliance with the Pilot Records Improvement Act ("PRIA"). As you may know, PRIA was enacted in response to a number of airline accidents involving pilots who had prior safety or training violations. PRIA requires certain employer's employing pilots to perform background checks on new-hire pilots.

The guidance, Order 8000.88, was issued to provide "inspectors with the knowledge and necessary tools to competently observe, record, and evaluate the PRIA functions of any air carrier assigned to them" and to enable a POI "to successfully conduct an air carrier audit or an inspection of PRIA-related pilot records, as a normal surveillance procedure or in response to an alleged statutory violation." The Order discusses PRIA, PRIA procedures, PRIA surveillance and enforcement. It also contains a compliance checklist and suggested penalties and sanctions for violations.

If you are an employer subject to PRIA, you should review the Order. Additional information regarding PRIA compliance is also available in Advisory Circular (AC) 120-68, Pilot Records Improvement Act of 1996 or on the FAA's official PRIA website here.

Posted by Greg

April 11, 2006

Part 125 Letters Of Deviation Authority To Disappear?

According to the NBAA, the FAA is in the process of substantially changing its policies regarding business aircraft configured for 6,000 lbs. payload capacity and/or 20 or more passenger seats that are technically governed by FAR Part 125. In the past, most businesses operating "Part 125-size" aircraft operated under letters of deviation authority ("LODAs") issued under FAR 125.3 to avoid the burden and expense of obtaining the operating certification and operations specifications required by Part 125 for aircraft of that size. However, this appears to be changing.

It appears that the FAA will be prohibiting the issuance of LODAs that allow deviation from all provisions of Part 125 ("full" or "blanket" deviation authority) in lieu of granting only "partial" deviation authority. The FAA claims that FAR 125.3 requires this policy because it states that deviation authority may be granted only from "specified sections" of Part 125. Additionally, the FAA appears to be taking the position that partial deviation authority does not allow businesses to conduct the "non-commercial" operations permitted by FAR 91.501.

According to the NBAA, the FAA’s specific position is as follows: "(1) section 91.501(a) provides in part that it does not apply to aircraft when they are required to be operated under Part 125; (2) section 91.501(b) provides that section 91.501 applies rather than other specified parts of the FARs, for the purposes of the types of flights described in that subsection, but does not include Part 125 among the parts superseded by section 91.501; (3) only a full deviation authority could allow a business operating a large aircraft to perform the kinds of flights authorized by section 91.501." But since full deviations are no longer allowed, it appears that only non-commercial flights generally allowed under Part 91 are authorized.

Based upon this position, most flights under section 91.501(b)(5) (those involving carriage of officials, employees, and guests of a company incidental to the company’s business for charges designed to cover the cost of owning and operating the airplane, including timesharing, interchange, and joint ownership arrangements) will not be permitted.

If you operate a Part 125-size aircraft, you should contact NBAA and plan on attending a meeting it has scheduled on the afternoon of April 20, 2006 with FAA Flight Standards and FAA attorneys to discuss this matter in greater detail.

Posted by Greg

April 07, 2006

FAA Publishes Reminder Of Availability Of Draft Documents For Public Comment

The FAA today published a Notice of Availability reminding the public that the Aircraft Certification Service has draft advisory circulars, policy documents and technical standards orders available on the FAA's website for public comment. Since the FAA does not publish an individual Federal Register Notice for each document it makes available for public comment, the Notice advises that the public can find these draft documents by using the FAA's Internet address here.

Posted by Greg

April 06, 2006

Pattern Of Regulatory Non-Compliance Justifies Denial Of Stale-Complaint Motion

A recent FAA enforcement action against a Part 135 air carrier demonstrates the unavailability of a stale-complaint defense when the allegations against the air carrier disclose a pattern of regulatory non-compliance. In Administrator v. Aero Leasing, Inc., the FAA initiated emergency proceedings against Aero Leasing to revoke its Part 135 air carrier certificate for lack of qualification. The FAA alleged multiple violations of the FAR's going back more than a year including Aero Leasing's failure to maintain operational control with a qualified person and its failure to follow its own operating specifications and regulatory procedures.

At the hearing, the ALJ found violations of FAR sections 135.25(a)(2), 135.87 and 119.5(l) and dismissed alleged violations of FAR sections 119.69(1) and 119.69(3). However, the ALJ did not make any express findings as to the allegation that Aero Leasing failed to maintain operational control. The ALJ also reduced the sanction assessed against Aero Leasing from revocation of its air carrier certificate down to a 120-day suspension of its certificate. Both Aero Leasing and the FAA then appealed the ALJ's decision to the full Board.

On appeal, Aero Leasing argued that the ALJ should have dismissed a number of the violations based upon its stale-complaint defense because the alleged violations occurred more than six months before the enforcement action. The Board disagreed and affirmed the ALJ's earlier decision that the FAA's "complaint, taken as a whole, alleges facts sufficient to support the Administrator’s allegation that respondent lacks the qualifications necessary to hold an air carrier certificate." Under Board precedent, the stale-complaint rule does not bar allegations of lack of qualification even if they are based upon violations that occurred more than six months prior to the enforcement action. The Board stated that "[i]n the best light, such allegations raise issues of competence, and, at worst, they depict an organization that does not respect FAA operational requirements."

Additionally, the Board reversed the ALJ's sanction in reliance upon his own statements that Aero Leasing's conduct was "sufficient to show at least a propensity to ignore regulatory requirements in the provisions of the Company's own Operations Manual and operations specifications when it is convenient for the Company or inconvenient to observe them," and that its conduct demonstrated "a callous disregard for regulatory compliance [with] its own FAA approved operating procedures." The Board added its own observations that "[u]nder our case law, revocation is the requisite remedial measure for a demonstrated lack of qualification" and "it is well-settled that a demonstrated disposition to flaunt or ignore important safety regulations is a proper basis for certificate revocation."

In the end, the Board felt that Aero Leasing's violations of the FAR's were significantly willful and, based upon Board case law, justified revocation.

Posted by Greg

April 05, 2006

FAA Extends Compliance Date For Antidrug And Alcohol Misuse Prevention Programs

The FAA today published an Amendment to its Final Rule regarding Antidrug and Alcohol Misuse Prevention Programs for Personnel engaged in certain activities. The FAA is delaying the compliance date for the Final Rule until October 10, 2006. The Final Rule published previously clarified the FAA's position that contractors, including subcontractors at any tier, must be subject to drug and alcohol testing.

According to the FAA, "[t]his action is necessary because it has come to our attention that some original equipment manufacturers (OEMs) and other entities may be confused regarding whether they are performing maintenance or preventive maintenance duties subject to drug and alcohol testing, or manufacturing duties not subject to testing." Although the effective date of April 10, 2006, will remain the same, the FAA extended the compliance date in order to give OEMs and others sufficient time to determine what work is and is not subject to drug and alcohol testing. The FAA also noted that it will be providing more substantive guidance on a range of subjects affected by the Final Rule including cleaning of aircraft, entertainment system components, deicing, and decorative plating.

If you would like further information regarding the Final Rule, you may contact Diane J. Wood, Manager, Drug Abatement Division, AAM-800, Office of Aerospace Medicine, Federal Aviation Administration, 800 Independence Avenue, SW., Washington, DC 20591; telephone (202) 267-8442.

Posted by Greg

April 04, 2006

Aircraft Mechanic Sentenced For Improper Engine Overhauls

According to a Post on the FAA Office of Inspector General's website, an Oklahoma aircraft mechanic was sentenced to 90 days house arrest, 5 years probation and fined $57,500.00 for his role in concealing and making false statements in connection with repairs to Lycoming engines using unapproved parts. When the FAA inspected the engines, some engine parts were not airworthy. The FAA had also issued notifications on suspected unapproved parts. The case was investigated by the Defense Criminal Investigative Service (DCIS)(DCIS is the inspector general for the Department of Defense), Federal Bureau of Investigation (FBI) and the FAA.

This should be a healthy reminder that falsification of aircraft documentation can expose aircraft mechanics to significant risk beyond revocation of their A & P certificates. Criminal liability and enforcement are possible. I think this will especially be true when, as in this case, safety of flight is directly implicated by the aircraft mechanic's conduct. Additionally, given the federal agencies that investigated this case, it is likely that other factors were involved in this case that influenced the prosecution of the aircraft mechanic.

Paperwork violations are serious. But if the conduct puts people and property at risk, then you will likely see the FAA involve other federal agencies for criminal prosecution of the conduct.

Posted by Greg

Does An Aircraft Mechanic's CGL Policy Cover Aircraft Pre-Purchase Inspections?

If an aircraft mechanic performs a pre-purchase inspection on an aircraft and he or she fails to notice the defective condition of one of the aircraft's components, will the mechanic's insurance protect him or her if the aircraft owner later asserts a claim against the mechanic? Well, it will likely depend upon whether the defective component results in an accident.

Usually, an aircraft mechanic's coverage under a Commercial General Liability ("CGL") policy with products/completed operations coverage will protect the mechanic if an occurrence (accident) arises and a claim is asserted against the mechanic for damages resulting from his or her failure to do something he or she should have done (e.g. noticing a defective component). However, in the absence of an occurrence (accident), the aircraft mechanic is likely not covered by his or her CGL policy.

This situation arises in the context of an aircraft pre-purchase inspection when the aircraft mechanic performs the pre-purchase inspection, and then at the next annual a different mechanic observes a defective component that requires repair/replacement. The aircraft owner then looks to the aircraft mechanic who performed the pre-purchase inspection for the cost of that repair/replacement arguing that it should have been discovered during the pre-purchase inspection. In this situation, an aircraft mechanic's CGL policy will not provide him or her with coverage because the aircraft owner's claim does not arise from an occurrence (accident).

The moral of the story is that an aircraft mechanic needs to be aware of this gap in coverage and he or she needs to perform a cost-benefit analysis for performing pre-purchase inspections. In the absence of insurance coverage, performing the pre-purchase inspection may not be worth it.

Posted by Greg

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