CAN THEY TAKE YOUR TICKET

Comment -- This article pretty much duplicates what is written in No Basis In Law, which used a difference approach to highlight the problems with license penalties. This will also give you a comprehensive look at what is wrong with FAA enforcement, and has been since 1926. If you have a serious interest. Remember, repetition is the sole of learning -- or something like that. I urge you to also read my law review article Emperor.

The statement that 98% of penalties are certificate actions was an error on my part. I misinterpreted a letter the Chief Counsel sent to Senator John McCain. But the fact is that for private pilots that won't be far off. The statistics provided in Emperor, prepared in 1980, are accurate. They were drawn from a set the Chief Counsel prepared for House Aviation Subcommittee hearings that year, and from the Chief Counsel's Regulatory Docket.

Certificate actions in 1980 for private and student pilots were 87%; commercial pilots, air-taxi and the like, 65%; airline pilots 25%; 60% overall. All the others were civil penalties. Because of the intense pressure FAA undergoes every time there is an airliner crash, one of the knee-jerk reactions of FAA officials has been to use license penalties even more. So today one can figure those statistics have risen substantially.

Not long after Emperor was published in 1985, the regulatory docket, which had a full time clerk, was closed. The keeping of statistics was handed off to Boeing to keep on a computer. A dozen years ago when I went to get a couple years worth, it would have cost $500. No doubt the Chief Counsel, and his enforcement cohorts argued to close that office on grounds of economy, but at least part of their motive had to be shutting out the general public from such information. True, not many people used it, but keeping such statistics and key documents was and is very important. Denying it to the public would be about like a state not revealing how often it used the death penalty. It's fair to assume a factor in the closure of that office was Emperor and my cases challenging the program. FAA publishes hordes of statistics -- the mother's milk of bureaucracy -- why not on enforcement?

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Southern Aviator, Sept. 1994

(Published in two other aviation journals)

CAN THEY TAKE YOUR TICKET?

FAA LICENSE PENALTIES: NO BASIS IN LAW

By Lawrence B. Smith

When the FAA's own studies show that 99% of all safety violations are first offenses, most inadvertent, ever wonder why 98% of penalties are draconian license suspensions or revocations, rather than money fines?

Believe it! In its fourth decade, agency officials have ordered near 100,000 such penalties. Yet no FAR, no provision in the Federal Aviation Act of 1958 (FA Act) hints they may do this.

The agency claims that in any given violation case, it may choose between certificate action with its one-man NTSB administrative trial, or civil penalty action. In the latter, until 1990, if you couldn't reach a compromise, they'd have to sue you in federal court, where you had the right to "demand" jury trial. Even after 1990 with the new administrative hearing program for fines up to $50k (which leaves right to jury, if more) the worst you suffer is a money fine, not lose your job or have your air-taxi company destroyed.

It used to be that having first ordered your license suspended, FAA officials would sometimes let you shift over to a money fine, if you cried enough. That's rare now. But there's no FAR which that advises you that you can ask. If you didn't happen to know about it, you could lose thousands without your license, while the other guy, who did, paid only a fine.

No rule explains what happens to the right to jury trial when such a shift is made, since the same officials could have sought a civil penalty in the first place. (This means they've claimed since 1926 the power to take away your right to jury trial.)

Did you know that not since the seminal Air Commerce Act of 1926 has the aviation public, either through congressional hearings, or NPRMs required by the Administrative Procedure Act (APA), been given an opportunity to help shape enforcement policy?

Neither FAR § 13.15 (civil penalty action), nor § 13.19 (the suspension rule, which makes no mention of violations or penalties) were ever put through the NPRM process. Had they, you might have been alerted to ask FAA officials to explain why almost all violations are punished by suspensions, rather than fines, when in any civilized society it would be the other way round.

The exception proves the rule: The Air Transport Association took legal action because FAA lawyers deliberately failed to lawfully promulgate the new civil-penalty hearing program through APA public notice and comment, and the agency was forced to do it all over again.

That there has been a coverup of lack of authority for license penalties is exemplified by FAR 13.15. It says: "Any person who violates any rule, regulation or order is subject to a civil penalty, if a civil penalty is contemplated." But FA Act § 901 says, as has the law since 1926, "Any person who violates any rule, regulation or order shall be subject to a civil penalty. ." (Section 903 mandates the right to "demand" jury trial.)

Can anyone square "is" subject to with "shall be?" You can't. So how could an FAA rule placed in the Code of Federal Regulations so blatantly misrepresent the law, especially when prior to 1962 it accurately restated it?

FAA lawyers were worried because pilots and their lawyers were asking: "If your own rule says we have the right to pay a money fine, how can you order my license suspended for the same offense?"

What they did to deflect these questions was take advantage of a 1962 project to recodify all agency rules from the old CAA numbers to new FAA designations. This gave them the opportunity to publish the enforcement rules in the Federal Register, in which they surreptitiously changed the language, without telling the public they were doing so, to what it is today. And got away with it.

How'd all this happen? In 1926, when Congress decided to regulate aviation, it did what common sense tells us it had to do: create an enforcement system. The House chose criminal penalties, but the Senate version, civil money fines and right to jury, loosely patterned after maritime law, carried the day. At no time then or since has Congress ever considered punitive suspensions or revocations with administrative trials as a second system of justice for violations.

It is absurd to believe that Congress, having provided pilots and mechanics with the right to jury trial, and at worst to be hit with a money fine, would then turn around and authorize the executive branch officials who instigate the case, in their sole discretion, to take away those rights. But this is precisely what FAA lawyers contend, they'll never admit it, nor deny it.

The system rolls on because they continue to cite a series of cases which support their claim that vague language in the 1938 Civil Aeronautics Act authorized aviation officials to suspend or revoke whenever they deemed it to be in the "public interest." But FAA lawyers know those cases are based on a fundamental mistake of fact that renders them valueless, nor is there a shred of legislative history Congress had such a thing in mind. Moreover the license penalty system did not start in 1938, but 1926, right in the face of the Congressional mandate for money fines and jury.

The coverup continues. In January 1989 I filed with the FAA a Petition for Rulemaking signed by 14 pilots. It asks for a comprehensive rule that fully and precisely explains how the enforcement program works. It corrects the civil penalty rule's language. The petition's purpose is to get basic issues out in the open. FAA lawyers are sitting on it because it will force them to explain:

(1) Why the public shouldn't be told how enforcement works.

(2) Why they've never done so.

(3) What their authority is for license penalties.

(4) Why they allow FAR 13.15 to misrepresent the law.

When it became obvious they would stall the petition indefinitely, on behalf of several pilots, I filed a second one. It doesn't question FAA authority for license penalties. It simply asks the agency to amend FAR 13.19 by amending it to includes this statement:

The Administrator, as an alternative to or in conjunction with a civil-money penalty imposed pursuant to section 901(a)(1) of the FA Act, 49 U.S.C. § 1471(a)(1), may also issue an order suspending or revoking any airman, air-carrier operating certificate, or air agency certificate as a penalty for the violation of any air-safety rule, regulation or order issued by the Administrator.

This is precisely what the agency claims and is spelled out in detail in its enforcement manual. FAA lawyers, of course, are sitting on it, too. The idea airmen should not be told they can lose their license for a safety violation is ludicrous.

So write Mr. Hinson, send him a copy of this article, and urge him to read Rulemaking Docket No. 25784 (Jan.18, 1989 -- with 500 comments), and Docket No. 26642 (Aug.30, 1991), and ask him to publish them as NPRMs. What possible harm could that do? (Except to the Chief Counsel's Office, which is responsible for sitting on them for 5-1/2 and 3 years, respectively.) Publication doesn't mean they must adopt license penalties--heaven forfend!

A LONG HISTORY

Any claim by FAA lawyers that Congress authorized agency officials in any violation case to chose in their sole discretion between civil money fines with right to jury trial and license suspensions with one-man administrative trial is totally false. Sound extreme. Look at the facts.

After years of pressure, it also being obvious it was impractical for the states to do it, Congress, with the Air Commerce Act of 1926, authorized the Secretary of Commerce to regulate aviation.

By doing this, it did what common sense tells us it had to do: create an enforcement system. The House passed a bill making violations a crime, up to a $500 fine, and/or 90 days in jail.

The Senate, concerned the stigma of crime and threat of jail might stifle the infant industry, chose civil money penalties patterned after maritime law, but specified the right to "demand" jury trial in federal court. Its plan carried the day.

The 1926 legislative history gives "air traffic" violations as an example of what those fines were to be used for. No consideration was given to license penalties.

So how is it FAA officials claim they may chose between two disparate systems of justice, even before you know you're going to be charged with a violation?

With the 1926 Act's ink barely dry, Commerce Department bureaucrats decided civil penalties wouldn't work. Reason: If the accused wanted his day in court, the act limited any suit to collect the fine to the amount they had assessed for the violation. Figuring most fines would be around $25 to $50 (which they were, and a week's wages for many), they feared U S Attorneys wouldn't want bother with suing over such small amounts, that some violators would know this and refuse to pay, thus escaping punishment. (Today, thumb your nose at the FAA and you'll be sued for the maximum $1000 per violation; $10,000, if you're a carrier -- if you're lucky enough to have them go for a money fine.)

A while back, when I interviewed him about a case, FAA lawyer Allan Horowitz commented: "If we only had civil penalties, we wouldn't have an enforcement system."

So, despite what Congress had just mandated, those officials stepped right out and set up their own system of justice. They promulgated a rule that said: "Pilots' and mechanics' licenses will be suspended or revoked for--(A) Violating any provision of the air commerce act of 1926 or these regulations. . . . (F) Violating air traffic rules." (Dept. of Commerce, Air Commerce Regulations, § 74, (A) & (F) (1926)).

Here's how they got away with it: The '26 Act provided for a primitive administrative hearing system clearly meant to determine whether an application for a license had been properly denied, or whether, once issued, because of some subsequent circumstance, such as, flunking a flight check, or suffering a heart attack, an airman lacked the qualifications to hold it.

But the language for this was rather vague. So Commerce officials, rather than put (A) and (F) in the "Penalties" section, along with fines, where they logically belonged, mixed them in with rules about qualifications matters. In other words, they folded their illegitimate system for violations into a legitimate system of administrative justice for qualifications.

This effort to disguise what they were doing was the first step in a coverup that's still going on, and is a key reason it has succeeded for over six decades.

It's why FAA lawyers often get angry if anyone refers to a suspension as a penalty. Complaining that a suspension "has essentially put me out of business for two months," one helicopter pilot told Senator John Tower:

During my informal conference with Mr. Bachman (the F.A.A. Attorney) Mr. Andrus [my lawyer] used the word "punishment" in reference to any potential action on the F.A.A.'s part. Mr. Bachman bristled at the use of this term and stated, "The F.A.A. does not punish people and its sole interest is aviation safety." In retort, if a two month unpaid vacation isn't a punishment then I'm missing the meaning of the word.

The reason FAA lawyers get upset is clear: If forced to acknowledge that a license suspension is an alternative penalty to a money fine, they'd have to confront the fact they've always claimed absolute authority to deny your right to jury trial.

They know such a claim is preposterous, that it assails the most fundamental precepts of justice. But they go right on making it several thousand times a year each time they initiate a punitive certificate action. The first law of bureaucracy is never, never, admit you're doing anything wrong.

To understand how far this corruption extends, look at the end of NTSB's Stale Complaint rule, 49 CFR § 821.33, which calls a punitive suspension by the euphemistic and misleading term "remedial sanction." Nor will you find anywhere in NTSB rules the term "violation."

But what about the cases that uphold this power? It was thirty years after 1926 before a serious challenge was mounted. Wilson v. CAB came down in 1957, followed shortly by Hard v. CAB the same year, then Pangburn v. CAB in 1962. All were airline pilots, all represented by ALPA lawyers. (There were no further reported cases until one of mine in 1986.) Wilson, handed down by the D.C. Circuit of the U.S. Court of Appeals, flagship circuit for federal questions, was the touchstone to which the others looked for guidance.

Amazingly, Wilson is based on a fundamental mistake of fact that destroys any validity it and the others could possibly have: The D.C. Circuit believed that the violation suspension system started with the Civil Aeronautics Act of 1938. It posed the issue: "Whether, in circumstances in which the Civil Aeronautics Board does not find the pilot to be unqualified to fly, the Board is empowered under section 609 [of the 1938 Act] to suspend his airman certificate as a deterrent sanction."

Note that even the court hesitated to call a penalty a penalty, and used a euphemism. Remember, the issue was Congressional intent.

Section 609 (essentially the same under the present 1958 Act), didn't pretend to add any new powers to those created under the 1926 Act, and said, in part:

"The [CAA Administrator] may, from time to time, reinspect any aircraft . . . propeller . . . [etc.], may reexamine any airman, and after investigation, and upon notice and hearing, [the CAB] may alter, amend, modify, or suspend, in whole or in part, any type certificate . . . airworthiness certificate, airman certificate . . . [etc.] if the interest of the public so requires . . ."

Searching for any peg upon which to hang a decision upholding a longstanding system, the court said that "[b]y resting suspension on a Board determination that 'the interest of the public so requires,' Congress conferred broad discretionary authority upon the Board."

How could such a tragic mistake happen? The issue was what Congress had intended. If the license penalty system started in 1926, not 1938, one doesn't have to be a lawyer to understand that the only possible relevance the '38 Act could have had was if it'd somehow modified or clarified the existing system. Which it didn't.

Any argument about Congressional intent should have been conducted in the time-frame of 1926. There, the legislative history being so clear, the government would have lost.

The ALPA lawyers blew it. Since the '38 Act was the law in effect in 1957 they argued like a broken record that section 609 didn't say anything about violations, regulations or penalties - which, of course, was true. They evidently were totally unaware the system started in 1926 with Rule 74.

The story gets more improbable. The Justice Department and Civil Aeronautics Board lawyers in their brief revealed that the system had in fact started in 1926, even cited section 74. They said that all Congress was doing in 1938 was passing the system through as it had been since 1926. What they had done was write a clever, lengthy, dissembling brief larded with statements about "air safety" and "public interest."

Incrediby, the ALPA lawyers didn't pick up on what they were being told -- nor did the court. In their reply brief they stuck to attacking 1938's section 609 and the conflict with sections 901 and 903 which dealt with civil penalties and right to jury trial. Had they recognized what the government lawyers were telling them, that the system really began in 1926, they would have rushed to the law library, found the crystal-clear legislative history, and forced the argument into the 1926 time-frame where it belonged.

What demonstrates the duplicity of the government lawyers is the fact that among dozens of case and statutory citations of authority they never once cited the 1926 legislative history. Yet they pointed to Section 3(f) of that act as the touchstone of their authority.

It said, in part: "The Secretary of Commerce shall by regulation . . . [p]rovide for the issuance and expiration, and for the suspension and revocation, of registration, aircraft, and airman certificates . . ." Their argument was that since the act didn't specify the purposes for which licenses could be suspended or revoked it obviously left that "for the Secretary to establish."

Such a claim is unconstitutional on its face. The Supreme Court has held, and the principle is incorporated in the Administrative Procedure Act (5 USC 558), that Congress may not delegate to any agency its exclusive legislative power to create penalties.

Additional facts: No bill has ever been introduced in Congress to create a second system of justice for safety violations; no hearings ever held on such a subject. No FAA document has ever claimed that Congress in 1938 intended to allow aviation officials to suspend or revoke whenever they deemed it to be public interest.

To suggest that Congress would legislate in such a manner where a person's livelihood is often involved, or the right to operate a business, is pure nonsense.

Yet this is precisely what FAA lawyers contend. But they do it by indirection, they cite Wilson and the others, not making the claim themselves. In my view, it is a fraud on the courts for them to continue to cite such cases when they know that Wilson is based on a mistake of fact which renders it invalid.

Look at what they are claiming: that Congress, having told pilots and mechanics in 1926 that for any safety violation they had the right to jury trial, and at worst would only pay a money fine, turned around twelve years later and authorized the executive branch official who initiated the case to deny those rights and choose an entirely different (and fourth rate) system of justice, and did it with vague language about public interest.

Anyone who can read English can see that Section 609's statement about "public interest" wasn't a broad grant of power, it was a condition subsequent that came into play only after first reinspecting, reexamining, or investigating; it was an excuse for aviation officials not to take action when it otherwise might appear proper.

A key question that underscores the lack of good faith on the part of FAA lawyers and their predecessors is this: In 1938, when it was being written to lay out the powers Commerce officials claimed they already had, why didn't those lawyers make sure the new section 609, besides reinspection and reexamination (qualifications matters), specified the power to order a license suspended as a penalty for a rules violation?

Wilson and Hard came down the year before the 1958 Act was adopted. Why didn't those Civil Aeronautics Administration (soon to become FAA) lawyers go to Congress and say, "look, gentlemen, there's no sense in all this time being wasted over lawsuits challenging our punitive certificate sanction power, we know you meant for us to have it, so include it in the new section 609 of the upcoming Federal Aviation Act, that'll stop these suits."

They didn't do it in 1938, 1958, or during the past 36 years for one simple reason: It would put the issue before the public and unmask their claim of legitimacy.

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In 1980, Lawrence B. Smith was a consultant to the U.S. General Accounting Office on the legal aspects of FAA enforcement. Since then he has worked to force reform of that program. He is special counsel to the newly-formed Aviators Legal Fund Ltd. Smith, who resides in Tucson, Ariz., authored the law review article, FAA Punitive Certificate Sanctions: The Emperor Wears No Clothes; or, How Do You Punish a Propeller?, 14 Transportation Law Journal, p. 59-100 (1985). - Ed.