The grant -- Is for support to write a book about the FAA's regulatory enforcement program. Focus will be on two major areas of FAA enforcement: (1) use of two separate systems of justice to prosecute the same safety violations, money fines and license penalties; (2) use of the agency's emergency power. The book will be a critical in-depth look at the inner workings of an important agency. That aviation is involved will make it more interesting. It will cover a broad spectrum of issues: government lawyers, Congress, federal courts, administrative justice, trade groups, and a detailed explanation of how to fix the program.
The study -- Off and on it has covered nearly twenty years. During the past thirteen that has been 100% of my time working to force reform of enforcement policies. It is now clear only a book will do the job. (Even though the U.S. GAO is doing some reports. Neither will deal with key legal issues, which are the real problems. (1)) Tenure one year, full-time, the maximum grant of $30,000.00 is required. Any necessary expense for further research can be absorbed in that.
Background -- In 1967-68 I worked in the FAA Office of General Counsel in the branch with oversight over the entire enforcement program. In 1980 I was consultant for six-months to the U.S. GAO on the legal aspects of FAA enforcement. At FAA I was so motivated by what I saw I left and spent 15 months pounding a portable typewriter working on a book about the dumb and unfair violation cases I saw. But savings ran out and I couldn't finish it and got involved in an exciting scientific venture that kept me tied down for years. Those chapters need more work and will constitute 20% of the book. Two veteran investigative journalists read several chapters: Charles Peters, Editor, The Washington Monthly, Feb. 16, 1970, wrote: "After a good deal of reflection, I find myself convinced that you have the makings of a damn good book, but I don't see an article for us." Jim Boyd, Director, Fund for Investigative Journalism, Dec. 3, 1970:
After reading portions of your book, I am filled with both admiration and regret. Admiration, because of the absorbing manner in which you expose a great federal bureaucracy trampling with incompetent feet upon the interests and rights of ordinary citizens . . . .Regret, because . . . we [offer] grants only for magazine articles, not books."
By 1979 my work with racehorses in the D.C. area slowed because of technical problems. Needing money, in January 1980 I lucked into the consulting job at GAO. They had just opened a study of enforcement and liked what I'd written. That study was abandoned in mid-stream. The chief counsel of the House Aviation Subcommittee assured them there was nothing wrong with FAA enforcement. I wrote a report anyway. That job afforded me a luxury few researchers ever have, freedom for six months--with pay--to pursue questions about a government program in which I had a vital interest.
Why would a man, who'll be 70 his next birthday, devote years to this when he should have been building a modest retirement? Strong feelings about this country and the rule of law. I grew up in government, I believe in it. At college I majored in political science/public administration under some of the finest professors of those subjects in the country. After the military, I worked in local government before deciding to go to law school.
My father, Harold D. Smith (1898-1947), has to be considered one of the top public administrators of this century. In 1939 a committee recommended him to be President Roosevelt's Director of the Budget. He was sworn in on my 10th birthday, April 15, 1939, and held the job until June 1946. He was brought in to implement the Executive Reorganization Act of 1939. It moved an obscure budget bureau from Treasury to the new Executive Office of the President. OMB was built on the foundation laid by Harold Smith. In its June 14, 1943, cover story, Time said his real title should be general manager of the federal government; that he saw Roosevelt more than any other official except Harry Hopkins. He died of arterioscelerosis, caused no doubt by the stress of those six years. At the time he was Vice President and Acting President of the World Bank. It's fair to say he gave his life for his country. I grew up in critical times, New Deal, WW II. Of our family friends, 99% worked to better government. Osmosis.
At the FAA -- An experienced pilot, with a fine legal education and real-life experience as a practicing lawyer, I wasn't at FAA but three days, literally, when I asked what the heck was going on, and wrote a memo to the division chief. He responded:
I have read with interest your analyses and comments of October 24, 1967 . . . I found your views . . refreshing and you pointed out some areas that I tend to overlook in my day to day routine. I noted that you were particularly concerned about inconsistencies in sanctions between regions, and even in the same region, for similar violations . . . This has long been a concern. . . .
I learned right off that the FAA lawyer who instituted and prosecuted the safety violation case, before the airman was ever told he'd be charged, decided how he'd be punished, civil-money penalty, or license penalty. The latter often cost him his job. They also had great latitude to set the size of penalty. Though it could later be reduced by court or National Transportation Safety Board, it put them in a strong bargaining position to arm-twist the airman into agreeing to something less if he would waive trial.
I asked my branch chief about this matter of choice. I pointed out the FAA normally sent an airline pilot a civil penalty letter offering to accept, say, $250 in compromise for exceeding an altitude restriction on an instrument (ATC) flight plan, which they could be certain he would pay. I pointed out that with a business man flying his Beech Bonanza, for the same violation, FAA would send him a notice of proposed certificate action for a 60-day suspension, then issue a formal order if he couldn't talk his way out of it. I pointed out the lawyer could have sent him a civil penalty letter, too. That's right, he answered. The problem with this was the airline pilot could sit back, do nothing, forcing the FAA lawyer to go to a U.S. Attorney and persuade him to sue in federal district court, where the pilot would have the absolute right to "demand" jury trial. And the only penalty was a money fine. The businessman had to ask the National Transportation Safety Board for a hearing. And the only penalty was suspension of his right to fly. (The great majority of cases against non-airline pilots are instituted as certificate actions.) I further pointed out this meant FAA lawyers were claiming they had the authority to decide whether or not the alleged violator could ever exercise his statutory right to jury trial. My branch chief's response: "The courts have approved it." This made my eyeballs spin. Right to jury trial is sacred, you have it, or you don't. The claim that some government bureaucrat had the power to take it away from you was simply incredible. I saw so many problems, so much unfairness, DUI penalties for parking tickets, a slap on the wrist for manslaughter, I turned my job into a personal research project, left and took with me a pile of extra copies of material I'd reviewed.
The basic problems -- My research at GAO led to my law review article, Smith, FAA Punitive Certificate Sanctions: The Emperor Wears No Clothes; Or, How Do You Punish a Propeller?, 14 Transp. L.J. 59-100 (1985). (Should be available at any law school library.) Emperor, based on fact and the only work of its kind, reveals the lack of any lawful basis for license penalties, and how that's been covered up. Since 1926, when Congress authorized the Secretary of Commerce to regulate aviation, more than 100,000 airmen have been subjected to license penalties. Yet there is no language in the United States Code or Code of Federal Regulations that so much as hints federal officials can do that. Nor is there any legislative history. At no time has the public, either through congressional hearings, or Administrative Procedure Act (APA) rulemaking procedures, ever been involved in the creation of license penalties. They are the creature of officials who in 1926 believed civil money penalties would never work because U.S. Attorneys would be reluctant to sue over $25 fines; and those officials who've followed have consciously covered up their lack of authority. The main facet of which is to never, ever promulgate any rule that connects safety violations with suspension or revocation of airmen certificates. (2) Emperor explains.
At GAO -- It was there I realized there wasn't any rule for license penalties. That fact had escaped me at FAA. So I asked, How could the system have gotten started without one? A search of old rulebooks turned up a 1926 rule. (3) It was even codified in 1938's seminal CFR edition, but disappeared by 1940. That was the first major step in a coverup. Emperor explains. So how did two appeals courts come to uphold "disciplinary sanctions" in 1957 (Wilson v. CAB and Hard v. CAB), based on vague language about public interest and air safety in the Civil Aeronautics Act of 1938, when in fact the system was begun in 1926? The reason for no license-penalty rule? Ever since the Air Commerce Act of 1926, which initiated federal regulation, the law has provided that "Any person who violates any rule, regulation, or order shall be subject to a civil penalty." (4) FAA lawyers cannot publicly reconcile that plain language with punitive suspensions and revocations, an issue that would come up were they to attempt to promulgate a rule. Emperor explains.
To expose the problem, in January 1989 I filed a petition for rulemaking with FAA on behalf of 14 pilots. It proposed a comprehensive rule that explains in full how the enforcement system works. (FAA Regulatory Docket No. 25784.) Nine years later it still sits in the Office of Chief Counsel, although that office is charged with evaluating petitions and sending them to the Administrator for approval or denial. They don't, because the Administrator would read the petition and ask: What's wrong with having a rule that explains to the public how enforcement works?
It took a lawsuit to force FAA to publish the required summary in the Federal Register. Among hundreds commenting, James L. Malarsie, Director of Maintenance for Rocky Mountain Helicopters, Inc., Provo, Utah, wrote: "The foregoing petition is long overdue . . . The public is entitled to know why it is guaranteed a jury trial when civil penalties are imposed for the violation of a regulation, but has no such guarantee when certificate suspension or revocation is the method of punishment . . . This petition is a sight for sore eyes." Eric Barnum, Pres., Falcon Aeronautical, Inc., Millbury, Ohio: "I am continually appalled that the citizens of this country have continued to let the FAA operate its enforcement program with no knowledge as to how it works." Alaska Governor Steve Cowper in a letter to Alaska Aviators, August 6, 1990, urging them to comment:
The petition's goal is to force out in the open serious questions concerning the legitimacy of the FAA's enforcement program and to give the aviation industry a chance to help shape policies that, as we've all seen recently, can actually put companies out of business. . . .I've also enclosed a press release by attorney Lawrence Smith . . . Mr. Smith has taken an active role in the debate over FAA law enforcement. . . ."
The Aviation Daily, Dec. 8, 1988, quoted Jeffrey Lubbers, research director of the Administrative Conference of the United States, from a study he did for Sen. Dennis DeConcini (D-Ariz.): "'Mr. Smith seems to have tapped into a rather rich vein of discontent about FAA's unwillingness to articulate and disseminate its policies in a meaningful way to affected parties. I would hope that this topic would receive further consideration by Congress and FAA.'" Jay White, president of the 20,000-member Calif. Pilots Ass'n, attorney and UAL 747 captain, in its June 1989 newsletter, wrote: "I submit that the FAA is an agency run amok. Its enforcement and punishment system is completely out of control . . . Even in the pursuit of a worthy cause, these Gestapo tactics cannot be tolerated." Two thousand members signed petitions asking Congress to reform enforcement. They might as well have sent them to a landfill.
Emergency revocations -- In December 1989 in Juneau I defeated the emergency revocation of a small Alaskan air-taxi that had operated float planes for 22 years in treacherous terrain, weather and water, and never hurt anyone. Winning was a rare result indeed, but the notoriety caused them to lose several key customers, the family owned company destroyed. Regional Aviation Weekly, Dec. 29, 1989, reported:
FAA enforcement officials, described as embarrassed by an NTSB administrative law judge's overturning of the emergency revocation of Alaska Island Air's operating certificate, plan a "major outreach" to the Alaskan aviation community . . . The reversal, said to be based on the lack of a case, was "very unusual" and the agency now "recognizes it may have gone too far" in its enforcement activities . . .
Nothing changed. Holman W. Jenkins Jr., in his July 2, 1996, Wall Street Journal op-ed column, critical of the FAA, mentioned Alaska Island Air and noted, "Providing the legal advice was Lawrence Smith, an aviation attorney who has waged a decades-long campaign to bring due process to the FAA."
The emergency power justifies an entire book in its own right. I've tried almost a dozen FAA cases, about half emergency revocations. I'm familiar with many more. I don't know of a single operator case that justified the claim of emergency, which puts the company out of business, instantly, and rarely fails to destroy it. Two federal cases, as long ago as 1974 and 1980, held that lack of an immediate hearing (like for a temporary restraining order) in which to challenge that claim was a violation of due process. Neither FAA nor Congress has done anything to rectify that. I'm the only lawyer to ever get a TRO from a court of appeals to stop an emergency revocation (at least for a week, in late 1989) in another Alaska case. That got a lot of publicity and prompted Senator Ted Stevens (R-Alaska) to ask Senator Wendell Ford (D-Ky.), Chairman of the Aviation Subcommittee, if he could hold two days of hearings on the emergency power in Anchorage in December. Ford turned him down. And so it goes. It could have well opened things up.
All the FAA lawyer has to do is sign his name to the order, claim air safety is at stake, and . . . boom! you're out of business. No affidavit or explanation of why there is an emergency, they just stack up charges which, if ever valid, were long before taken care of. Employees, creditors, stockholders, banks, all lose. I wrote an article for TRO magazine nine years ago (see resume) that laid out a non-destructive alternative to emergency orders for operators. Senator John McCain, Chairman of the powerful Commerce Committee, has told me personally he is against any change. And so it goes.
Here's the best example I've ever known of how the power can be abused: Neil Bergt moved MarkAir headquarters from Anchorage to Denver, where for three years he'd been building a successful Boeing 737 operation. The decades old company was in Chapter 11 from battles in Alaska with Alaska Airlines. On July 28, 1995, he asked the Denver FAA manager if there were any more problems, some had been caused by the move. Told there weren't, four days later he received an emergency order of revocation. It is little known, but six days after that the FAA lawyers from Seattle, who'd issued it, flew in to Denver and told him they'd been hasty and he could resume operations! On August 1st MarkAir had 165,000 reservations in its computer, a week later, due to the adverse publicity, 65,000! There went the cash flow needed to bring the company out of Chapter 11. Bergt had no choice but to file for Chapter 7. One thousand six hundred employees, count 'em, lost their jobs . . . Bergt, his 100% ownership, worth many, many millions.
Schedule -- Working in my home office, review 20 years of accumulated material contained in more than a dozen file storage boxes, dictate relevant matter on tape, transcribe it, organize it (there will be many endnotes), then proceed to write chapter by chapter. My writing may pass muster, but it is hard, hard work, and knowing my pace will take a year and 100% of my time. I have no law practice. I couldn't write a book while holding a job. If I had any assets to hock, I would have done it long ago.
Contribution -- Without a book the FAA enforcement program will keep on rolling over citizens. One million active pilots and mechanics hold FAA certificates, at least two thousand operators. Another million people are employed by airlines and other operators. The cachet it will give me will make me a prime witness in Congressional hearings certain to be prompted by the book.
______________________________
Lawrence B. Smith
1. See the "referee" letter concerning me recently written to Sen. John McCain by GAO official Gerald Dillingham. Interestingly, I asked for the return of some of the material sent to Dillingham and as I was writing this, Bonnie Beckett-Hoffman, Ph.D., of GAO, dropped me a note informing me she was "currently using" the substantial booklet I'd put together on FAA policies "as background for our follow-up report on emergency orders." And asked "could we please retain it for our permanent file in our aviation safety library?"
2. This is how bad it gets: the APA commands that "A sanction may not be imposed or a substantive rule or order issued except within jurisdiction delegated to the agency and as authorized by law. 5 USC § 558(b) (emphasis added). Where's the law that authorizes FAA officials to punish an airman by suspending or revoking his certificate? But FAA lawyers and courts simply ignore this statute as if it didn't exist.
3. Dept. of Commerce, Air Commerce Regulations (1926), Sec. 74, (A) & (F): Suspension or revocation of licenses. Pilot's and mechanic's 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.
4. The only way currently to find the correct language is to look at the Federal Aviation Act of 1958, as found at Pub. L .No. 85-726. When a recodification of transportation law took place a few years ago, FAA lawyers took advantage of this and rewrote the original language. Among other things, they changed "Any person" to "A person." The law calling for recodification prohibited substantive changes.
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