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November 30, 2006

"Extraordinary Circumstances" Required For Untimely Filing Of Petition For Reconsideration

The NTSB recently dismissed an airman's untimely petition for reconsideration based upon the absence of extraordinary circumstances that would otherwise excuse the untimely filing. In Adminstrator v. Nadal, following an ALJ's order affirming a 60 day suspension of the airman's ATP certificate, the airman filed a "Notice of Intent to Submit Petition for Rehearing, Reargument, Reconsideration or Modification" requesting an additional, unspecified amount of time within which to file his petition for reconsideration. The airman stated that he needed extra time to complete his petition pending receipt of his file from his former attorney. He then later filed a document with the same title over a week after the 30 day deadline for filing a petition for reconsideration had passed.

Citing 49 CFR 821.11(b), the Board noted that "to obtain an extension of time to file a petition for reconsideration, a party must demonstrate 'extraordinary circumstances.'" It then stated that the airman did not demonstrate "extraordinary circumstances" because "[i]t is not enough, in our view, to infer, without further explanation, an inability to adhere to this deadline merely because a party is no longer represented by counsel". As a result, the Board held that the rules required dismissal of the airman's petition.

Interestingly, in spite of dismissing the airman's petition, the Board added an extra nail to the coffin by noting that "we have reviewed respondent’s original notice and late-filed petition and neither presents argument or evidence that would warrant modification of our decision in Board Order No. EA-5225 upholding a 60-day suspension of respondent’s airline transport pilot certificate". Although the Board's decision focuses on the timeliness issue and the lack of extraordinary circumstances, its footnote makes clear that even if the airman's petition had been filed on time, it would have been denied.

Although this is an unfortunate outcome for the airman, the decision should, once again, reinforce the necessity of filing appeals etc. within the time allowed by the rules of practice. Personally, I would rather argue the merits of an appeal than have to argue why an untimely filing should be excused or accepted by the Board. Arguments on the merits may not always be successful, as they would not have been in this case. But, as the cases show, arguments on the merits stand a better chance of prevailing than arguments seeking leniency for an untimely filing.

Posted by Greg

November 29, 2006

Choosing An Entity For Aircraft Ownership

If you are an avid reader of aviation trade magazines, as I am, you have probably read the ads in several of the aviation magazines suggesting that aircraft buyers should “incorporate in Delaware” etc. But what does it mean to form a corporation, or limited liability company for that matter, to own an aircraft? Does this make sense? For a discussion of this topic and the answers to these questions, please read my latest article on the topic here.

Posted by Greg

November 22, 2006

Public Charter v. Private Charter

When is a charter a "public charter" as opposed to a "private charter"? According to 49 CFR 1540.5, "Private charter means any aircraft operator flight (1) For which the charterer engages the total passenger capacity of the aircraft for the carriage of passengers; the passengers are invited by the charterer; the cost of the flight is borne entirely by the charterer and not directly or indirectly by any individual passenger; and the flight is not advertised to the public, in any way, to solicit passengers or (2) For which the total passenger capacity of the aircraft is used for the purpose of civilian or military air movement conducted under contract with the Government of the United States or the government of a foreign country." Public charter, on the other hand, "means any charter flight that is not a private charter."

Why does this matter? Well, one of the biggest reasons is the difference between the security procedures that are involved/required for a public charter versus a private charter. Depending upon the size of the aircraft, and if applicable, the security requirements for a public charter are more strict and, as a result, more expensive. Thus, the classification of a charter operation as public will significantly increase the overall cost of the charter to the charterer and its passengers. A charterer will need to make sure all of the criteria are met for private charter in order to avoid the default classification as a public charter.

Posted by Greg

November 17, 2006

Aircraft With Retractable Landing Gear, Flaps And FADEC Meet Definition Of Complex Aircraft

According to Notice N8000.331, which is available for review here and should also soon be available on the FAA's website here, "airplanes equipped with retractable landing gear, flaps, and a full authority digital engine control (FADEC) meet the definition of being a complex airplane and may be used for commercial pilot and flight instructor certification." Up until now, the definition of a complex aircraft applied to aircraft with a controllable or "constant-speed propeller controlled by the pilot. FADEC controls the propeller and engine speed automatically through using a computer. N8000.331 updates the definition of complex aircraft and also updates commercial pilot and flight instructor practical test standards to incorporate this new definition.

Currently, the only aircraft acknowledged by the Notice as having the FADEC is the Diamond DA42 TwinStar. However, several of the aircraft manufacturers are working on developing aircraft with FADEC engines and several STC developers have already obtained approval for incorporation of FADEC engines in existing production aircraft. If you have any questions regarding the updated definition, you should contact Flight Standards AFS-810 at (202) 267-8212.

Posted by Greg

UCC 9-616 Transfer Statements Are Acceptable For Recording With The FAA

In a Notice published today, the FAA Chief Counsel stated that the FAA will now accept transfer statements that are executed under the Section 9-619 of the Uniform Commercial Code, as adopted by the various states, for filing with the FAA Aircraft Registry. The Notice is in response to a request for the FAA to address the situation in which a default on a secured transaction results in foreclosure of an aircraft owner/lessor's interest in the aircraft. The foreclosing party then wants the FAA aircraft records to reflect its interest in the aircraft lease so that the foreclosing party can transfer "lessor's rights" to a new aircraft owner/lessor.

Prior to the Notice, absent an assignment of lessor's rights in the leases, which the lessee was often unwilling to deliver, the foreclosing party has been unable to cause the FAA aircraft records to reflect its rights in the leases. The Notice now provides that, in appropriate circumstances, transfer statements may be recordable instruments that the FAA Registry will accept for recording. This will allow the foreclosing party to transfer "lessor's rights" to a new aircraft owner/lessor. However, it is important to note that the validity of a transfer statement will be determined under the applicable state law (e.g. State adoptions of Section 9-619 of the UCC).

If you would like further information regarding the recording of transfer statements, you may read the FAA's legal opinion contained in the Notice or contact Joseph R. Standell, Aeronautical Center Counsel, AMC-7, Federal Aviation Administration, P.O. Box 25082, Oklahoma City, OK 73125-4904, or call (405) 954-3296.

Posted by Greg

November 14, 2006

IRS Issues Revenue Ruling On Per-Diem Expense Reimbursements Paid By Employers

The IRS recently issued Revenue Ruling 2006-56 providing guidance regarding an employer's obligation to track the amount of per-diem expense reimbursements paid to their employees. Although this Revenue Ruling is not directly aviation related, it is applicable to flight crews, or any other employee engaged in business travel, and their employers.

Usually when an employer reimburses an employee for substantiated business expenses (meals and other incidentals associated with business travel) that amount is not subject to income or employment tax. An employee does not have to substantiate these expenses (e.g. provide receipts/documentation) as long as the reimbursement is equal to or less than the federal per diem rate.

However, according to the IRS, "Revenue Ruling 2006-56 tells employers that if they routinely pay per diem allowances in excess of the federal per diem rates, but do not track the allowances and do not require the employees either to actually substantiate all the expenses or pay back the excess amounts, and do not include the excess amounts in the employee’s income and wages, then the entire amount of the expense allowances is subject to income tax and employment tax." In other words, if per-diem reimbursements are going to exceed the federal rate, receipts and other documentation for all of the expenses will be required in order to avoid income and employment tax on the amounts reimbursed by the employer

Although Revenue Ruling 2006-56 is effective immediately, since employers may need some time to implement systems to accurately track and account for excess allowances, the results under Revenue Ruling 2006-56 will not be applied for taxable periods ending on or before Dec. 31, 2006 unless evidence of intentional noncompliance is found. If employees are receiving reimbursement rates in excess of the federal rate, they should start saving their receipts now.

Posted by Greg

November 13, 2006

Appeal Of Felony Drug Conviction Does Not Delay Revocation

The NTSB recently rejected an airman's argument that a revocation of his airman's certificate should be vacated because his appeal of the conviction upon which the revocation was based was pending and not yet decided. In Administrator v. Schlieve, the airman was convicted in Federal court of several drug-related felonies and sentenced to serve 160 months in prison.

The FAA then issued an emergency revocation order revoking the airman's certificate based upon his alleged violation of FAR 61.15(a)(2)(conviction for any state or federal drug statute is grounds for suspension or revocation). Although the airman appealed the FAA's order, Judge Mullins granted the FAA's motion for summary judgment and affirmed the FAA's order of revocation. The airman then appealed to the full NTSB arguing that the revocation should be vacated because the felony conviction was not final since his appeal of the conviction was still pending.

The Board rejected the airman's argument stating that "[t]he pendency of that proceeding does not justify a delay to ours." It also repeated its judgment in a prior case that "[T]he better result from a safety policy perspective is to reconsider the revocation action if, in fact, respondent’s conviction is overturned, not to postpone it based on a respondent’s expectation." The Board further noted that the revocation was not a lifetime revocation under 49 U.S.C. 44710, but rather a revocation justified under 49 U.S.C. 44709 "when safety in air commerce or air transportation, and the public interest, dictate."

The arguments raised by the airman are not novel and have been settled with the NTSB for quite some time. Also, even if the revocation was vacated, I am not sure what the airman would have accomplished. He certainly won't be flying for another 160 months, unless the appeal of his conviction is successful, in which case any order of revocation could certainly be vacated at that point in time(although I recognize that could take several months during which time the airman would be out of prison, but not authorized to fly).

Since the airman was appearing pro-se, perhaps his appeal was simply a diversion from his daily grind in the big house. Unfortunately, precedent was against him. Maybe he will have more success appealing his felony conviction.

Posted by Greg

November 10, 2006

Failure To Respond To FAA Discovery Requests Results In Summary Judgment Against Airman

The NTSB recently affirmed an ALJ's entry of summary judgment against an airman based upon allegations that were deemed admitted by the airman's failure to provide substantive responses to the FAA's requests for admissions regarding those allegations. In Administrator v. Zink, the airman was charged with violating FARs 91.7(a)(aircraft must be airworthy) and 91.407(a)(2)(altered aircraft's maintenance log must have required entry reflecting alteration) for allegedly operating an Aerospatiale SA315B Eurocopter with unapproved major alterations, and without the required maintenance entries in the helicopter's logbooks. The airman denied the allegations in the FAA's complaint and appealed to the NTSB.

Prior to the hearing, the FAA served the airman's counsel with requests for admissions of the key allegations in the FAA's complaint. The airman's counsel responded to each of the requests stating "Having made reasonable inquiry, respondent is without knowledge or readily obtainable information sufficient to enable him [the airman] to admit or deny." The airman's counsel subsequently withdrew and then the FAA sent a letter directly to the airman demanding proper responses and, when the airman did not respond, the ALJ then granted the FAA's motion to compel and ordered the airman to provide responses.

When the airman still refused to provide responses, the ALJ deemed the FAA's requests admitted. The ALJ then granted the FAA's motion for summary judgment based upon the admissions as to the key allegations in the FAA's complaint and suspended the airman's ATP certificate for 140 days. The airman appealed the entry of summary judgment arguing that he couldn't explain his counsel's ambiguous responses to the requests for admissions, but that the Board should refer to his responses in his answer, rather than his counsel’s responses.

On appeal the Board rejected the airman's agruments. It noted that the law judge has the discretion to impose sanctions for failing to comply with discovery requests and that "[o]rdering uncontested requests for admission to be considered true is not an inappropriate sanction." The Board also observed that the airman had three distinct opportunities to avoid the ALJ's discovery sanction order that deemed critical facts admitted: the airman could have denied any or all of the Requests for Admissions; he could have responded similarly to the FAA counsel’s letter demanding responses; or he could have responded to the FAA's motion to compel by disavowing his attorney’s earlier, inadequate response. Although the airman was temporarily without counsel, the Board stated "that such a situation does not obviate a respondent’s obligations with regard to discovery or responses in general in a pending enforcement action."

Requests for admissions are a discovery tool used often by the FAA. How an airman responds to those requests can have a critical impact upon his or her case. Whether proceeding with or without counsel, this case makes clear that an airman is obligated to comply with request for admissions and other discovery requests in a substantive way. Failure to do so can potentially result in sanctions ordered by the ALJ and, ultimately, a finding of violation against the airman.

Posted by Greg

November 09, 2006

NTSB Issues Safety Recommendations Regarding FAA Enforcement of Part 135 Operators' Exercise Of Operational Control

Yesterday the NTSB issued Safety Recommendation A-06-66-69 regarding the FAA's oversight of Part 135 operators to ensure that on-demand charter operators are properly exercising their operational control. These recommendations arise out of the NTSB's investigation into the Challenger 600 overrun at Teterboro in February of 2005 and its determination that the certificate holder's failure to properly exercise operational control over the flight was one of the contributing factors to the accident. As a result, the NTSB recommended that the FAA take the following action:

"Disseminate to all principal inspectors of 14 Code of Federal Regulations Part 135 certificate holders and to all Part 135 certificate holders guidance that includes specific procedures, such as those contained in the draft revisions to Operations Specifications A-008, that detail appropriate methods by which a certificate holder can demonstrate to the Federal Aviation Administration that it is maintaining adequate operational control over all on-demand charter flights conducted under the authority of its certificate. This guidance should address operations based at locations geographically distant from the certificate holder's base, should be included in all Part 135 Certificate holders' operations specifications, and should be required as periodic inspection items for principal inspectors. (A-06-66)

Review all charter management, lease, and other agreements between 14 Code of Federal Regulations Part 135 certificate holders and other entities to identify those agreements that permit and/or enable a loss of operational control by the certificate holder and require revisions of any such arrangements. (A-06-67)

Require all 14 Code of Federal Regulations Part 135 certificate holders to ensure that seatbelts at all seat positions are visible and accessible to passengers before each flight. (A-06-68)

Require that any cabin personnel on board 14 Code of Federal Regulations Part 135 flights who could be perceived by passengers as equivalent to a qualified flight attendant receive basic FAA-approved safety training in at least the following areas: preflight briefing and safety checks; emergency exit operation; and emergency equipment usage. This training should be documented and recorded by the Part 135 certificate holder. (A-06-69)"

The first two recommendations track with and overlap the FAA's current efforts in issuing Ops Spec A-008 and the guidance it provided to POIs following the accident to review existing arrangements involving Part 135 certificate holders. I don't think they tell us anything new nor do they recommend anything that wasn't already covered by the FARs. However, they reinforce the current enforcement environment in which the FAA will be exercising increased scrutiny of Part 135 certificate holders and the business arrangements in which they engage with aircraft lessors, charter brokers and other charter operators.

For a more detailed explanation of the NTSB's findings in the TEB accident and the operational control deficiencies it found, you should read the full Safety Recommendation.

Posted by Greg

November 08, 2006

Airman's Intentional Creation Of Collision Hazard Results In Revocation

The NTSB recently affirmed the revocation of an airman's certificates after an ALJ found that the airman had violated FARs 91.13(a)(careless and reckless) and 91.111(a)(operating an aircraft so close to another aircraft as to create a collision hazard). In Administrator v. Schaffer, the FAA issued an emergency revocation of the airman's certificates alleging that the airman had intentionally and deliberately operated a Piper Seminole in a manner that interfered with an Embraer ERJ-170-100LR turbo-jet aircraft performing multiple approaches to the Tamiami Airport (TMB).

At the hearing, the FAA presented testimony from the controller on duty, the manager of the TMB tower and the pilots in the Embraer. All of the testimony consistently alleged that the airman had maneuvered between the extended final approach courses of the two parallel runways at TMB in an apparent attempt to intentionally interfere with the Embraer jet. The Embraer pilots also testified that they had to take evasive actions in response to TCAS alerts triggered by the airman's operation of the Seminole. The TMB tower manager further testified that the airman "telephoned him several days prior to the incident, on May 25th, to complain about the negative community effect the Embraer jet flight tests would have on a TMB runway expansion proposal."

The airman did not testify at the hearing. Rather, he presented testimony from his radar and ATC expert who reviewed the radar data and concluded that it was the Embraer and not the Seminole that created the problems. The ALJ found that the FAA's experts were more credible than the airman's expert and affirmed the violations alleged by the FAA. The ALJ also affirmed the sanction of revocation finding that the airman's deliberate conduct demonstrated that he lacked the care and judgment required of a certificate holder. The airman then appealed the ALJ's decision arguing that the evidence did not support the decision and that the sanction was too extreme.

The Board rejected the airman's arguments and held that sufficient reliable and probative evidence supported the ALJ's determinations. Its decision also placed some emphasis on the fact that the airman did not testify or personally provide any explanation to counter the testimony of the FAA's witnesses. The Board also found it significant that the ATC transcript contains the controller's assertions to the airman that he had almost caused a midair each time he tried to block the Embraer, but the airman never argued with the characterization over the radio and never contacted the tower to dispute the charge after he landed. Finally, the Board affirmed the sanction of revocation based upon the obvious lack of qualification exhibited by the airman's conduct.

This is a strange case. Based upon the record discussed in the NTSB's opinion, you have to wonder what the airman was thinking when he acted as the ALJ found that he did. Why would you risk your airman certificates, not to mention a mid-air collision, simply because you believe a particular operation may jeopardize a runway expansion? As is often the case, I suspect that we don't receive the full story in the NTSB's opinion. However, it should be clear, if it isn't already, that the type of behavior discussed in the opinion will, and should, have serious consequences.

Posted by Greg

November 07, 2006

FAA Maintains Percentage Rates For Random Drug And Alcohol Testing Of Safety-Sensitive Employees

In a Notice published today, the FAA stated "that the minimum random drug and alcohol testing percentage rates for the period January 1, 2007, through December 31, 2007, will remain at 25 percent of safety-sensitive employees for random drug testing and 10 percent of safety-sensitive employees for random alcohol testing." Since the reported random drug test positive rate for 2005 was less than 1.00% (it was actually 0.58%) and the minimum random alcohol test rate for 2005 was less than 0.50% (it was actually 0.16%) the FAA may continue the current rates for calendar year 2007.

For further information regarding the annual random testing percentage rates you should review FAR Part 121, appendix I, section V.C (for drug testing), and Part 121, appendix J, section III.C (for alcohol testing) or you may contact Mr. Jeffrey Stookey, Office of Aerospace Medicine, Drug Abatement Division, Program Analysis Branch (AAM-810), Federal Aviation Administration, 800 Independence Avenue SW., Washington, DC 20591; telephone (202) 267-8442.

Posted by Greg

November 06, 2006

Emergency Defense To ATC Clearance Deviation Requires Explanation And Substantiation

The case of Administrator v. Lakhram was recently issued and it reinforces the NTSB's position that an airman's claim of an in-flight emergency as a defense in an enforcement action must be supported by sufficient facts to persuade an administrative law judge that the emergency existed and excused the airman's conduct. In this case, the airman was operating a Part 121 passenger flight. When the flight departed Runway 28R from Pittsburgh International, instead of flying the Pittsburgh Six departure and flying the runway heading straight out, shortly after rotation the airman turned left away from that heading and passed over active runways and the PIT terminal at an altitude below 500 feet.

As you might imagine, the FAA was informed of the flight's deviation and it subsequently intiated a certificate action seeking to suspend the airman's certificate for 120 days alleging that the airman's conduct violated FAR's 91.123(a)(compliance with ATC clearance) and 91.13(a)(careless and reckless). The airman appealed arguing that his deviation was excused because it was the result of wake turbulence from a B-737 that took off in front of him. After a hearing, the administrative law judge affirmed the FAA's order of suspension, but reduced the suspension from 120 days down to 90 days. The airman then appealed to the full NTSB.

Initially, the Board noted that to in order to defend against an alleged violation of FAR 91.123(a) "a deviation from a clearance requires at least one of three things: an amended clearance; a TCAS alert; or a valid emergency. Respondent had no amended clearance and no TCAS alert." It then discussed the airman's claim that an emergency existed. The Board noted that an emergency does not need to be declared. However, FAR 121.557(c) requires that an airman in that situation needs to "keep the appropriate ATC facility and dispatch centers fully informed of the progress of the flight" and "shall send a written report of any deviation through the certificate holder’s operations manager, to the Administrator." Unfortunately, the airman did not inform ATC regarding the alleged emergency nor did he file the required report regarding his deviation.

Further, the airman was unable to rebut the testimony of three FAA inspectors who all testified regarding the airman's deviation. The co-pilot for the flight was unable to persuasively corroborate the alleged encounter with wake turbulence and although the airman presented expert testimony on the issue, the airman's expert did not observe the flight and did not have sufficient data to confirm or prove the nature or magnitude of the wake turbulence. As a result, the Board concluded that it had no difficulty finding that the hearing record contained a preponderance of reliable evidence to substantiate the ALJ's decision.

This is a tough case for the airman. Although it is quite likely that the flight encountered something that made the airman deviate from his clearance, unfortunately the airman did not take the steps required by the FARs after a deviation resulting from an emergency. Additionally, the airman did not provide as thorough and persuasive of an explanation for the deviation as he needed to persuade the ALJ. Fortunately for the airman the sanction was a suspension rather than a revocation.

Posted by Greg

November 02, 2006

Inadvertant Or Passive Ingestion Of Drugs Is Not A Defense To A Positive Drug Test

In a recent NTSB opinion, the Board affirmed the FAA's revocation of an airman's ATP and First Class Medical certificates based upon a failed drug test. In Administrator v. Kalberg, the airman operated a flight on behalf of UPS to Anchorage, Alaska. Upon arrival, the airman was required to submit to a random drug test. The airman tested positive for having marijuana in his system. Subsequently, the FAA initiated an emergency revocation of the airman's certificates and the airman appealed.

At the hearing before the administrative law judge ("ALJ"), the airman argued that the most probable explanation for his positive test result was that he inadvertently ingested marijuana "by virtue of smoking several 'house' cigars he had recently purchased while on a family vacation in Aruba." However, the ALJ did not find this explanation credible and affirmed the emergency revocation. The airman then appealed the ALJ's decision to the full NTSB.

The airman argued to the full Board that his testing positive for marijuana "was not the result of knowing or intentional conduct". The Board initially rejected the airman's argument based upon the premise that it was required to defer to the ALJ's negative credibility determination regarding the airman's claim because the airman had provided no evidence to show that the ALJ's determination was arbitrary or capricious.

The Board went on to note that under the DOT drug testing requirements in 49 C.F.R. § 40.137, "the medical review officer (MRO) must verify a confirmed positive test result unless the employee presents a legitimate medical explanation for the presence of drugs found in his system" and that DOT drug testing requirements in 49 C.F.R. § 40.151 "specify that explanations by an employee of “inadvertent” or “passive” ingestion of drugs do not constitute a legitimate medical explanation that can be considered by an MRO as a basis to not verify a positive drug test result." As a result, even if the the airman's explanation of the reason for the positive drug test were to be believed, that explanation would not prevent verification of a positive drug test.

It should go without saying that this case is yet another example of the fate an airman tempts if he or she chooses to smoke or ingest marijuana. However, what may not be as apparent is the risk an airman takes by simply being around other people who may be smoking marijuana. Passive exposure to marijuana can result in testing positive and is equally hazardous to the airman. If an airman finds him or herself in this situation, an immediate departure is probably the best bet.

Posted by Greg

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