Aviation Digest, September 1987

Though federal agencies prefer to call them "remedial sanctions," license revocations and suspensions have been used as disciplinary measures for years by the FAA. A former FAA attorney charges that the FAA's discipline ignores due process and that the license sanctions which have been used for decades have

No basis in Law

by Lawrence B. Smith

The use for over six decades now by the Federal Aviation Administration and predecessor agencies of certificate suspension and revocation as a sanction or punishment imposed on account of violations of safety rules has never had any basis in law. A startling charge? Certainly, but to underscore the truth of it, we suggest an exercise in "What if."

What if Congress was just now undertaking to regulate aviation for the first time?

What if the FAA administrator proposed to a congressional committee holding hearings on the proposed legislation that for safety violations it authorize two separate tracks of justice:

1. Civil penalties where, failing to compromise with the pilot, mechanic or air-taxi operator, the government would have to initiate suit in federal district court, either could demand a jury trial, and the worst that could happen would be payment of a money fine with no threat of jail if you couldn't pay it;

2. Certificate (license) suspensions and revocations, where FAA regional counsel would order the penalty before any trial, and the pilot would have the burden of having to appeal to the National Transportation Safety Board for a trial, or lose his license on the spot. There he would get a one-man administrative hearing, and the only punishment would be against his license, regardless of how harsh its effect might be, like losing several months' pay, even his job.

What if the administrator then proposed that the FAA lawyer who initiates the case should have sole discretion to choose the track on which to prosecute it.

What if, to put it another way, he said, "We insist on having the power when we initiate a violation case, before the accused has even had a trial, to set in concrete the kind of penalty he'll suffer and whether or not he'll ever have a chance to exercise his right to demand jury trial."

What if the administrator told the congressmen: "We urge you to enact a statute for civil penalties, but don't see any reason for you to do that for certificate sanctions. All we'd like is your informal approval, we don't think it's necessary to have a statute that warns pilots, mechanics and operators that they can lose their license for safety-rule violations.

What if he further testified, "We intend to adopt a rule that warns pilots they are subject to civil penalties for violations (although we won't use the required notice and comment procedures of the Administrative Procedure Act (APA)), but we dont see any need to have such a rule, or even to publish a notice in the Federal Register, that would tell certificate holders their licenses are at risk for violations. They can easily learn about the system by word of mouth around the airport. And it would accomplish nothing to allow them to comment on how this certificate system should work."

"We see no need, either, to establish criteria that would tell one pilot why we take his license and put him out of a job for 90 days and cause him to lose thousands in income, but allow another, who commits the same sort of violation, to pay a S250 fine and continue to work.

"Nor do we think we should have to explain why we put a small airline out of business for the same violations committed by the majors, who we'll allow to pay money penalties and continue operating.

"Our staff recommends, and I agree, that we use the certificate track 67 percent of the time with certain general aviation pilots, which include air-taxi, commuter and corporate pilots. But with private and student pilots, well go to 87 percent. We're aware, of course, except for serious cases like drunk driving, the money fine is traditional. But should a pilot believe himself not guilty or our fine too great, and refuse to pay, processing civil penalty cases through U.S. Attorneys is slow and cumbersome, jury trial expensive, and often those officials don't think we have a good case so don't want to bother with it.

"Airline pilots, well, they have high salaries, so we'll go 20 percent certificate action (for the worst cases) and use civil penalties for the rest.

"I realize the competence, aviation knowledge and temperament of our regional counsel who'll initiate these cases varies widely so these powers can be misused, but that's a risk pilots will have to accept as the price of holding an FAA certificate.

"As a matter of fact, neither I nor my legal staff see any need to put our enforcement policies into rules. For example, when a pilot commits a violation, we plan to advise the NTSB law judge at the hearing if the man had any prior violations so he'll uphold a greater penalty than he otherwise would. It won't bother us that the pilot's already paid the penalty for the first violation, and we dont see any purpose in warning him we are going to use it so that he can come prepared and explain it.

"Once we start a certificate action against, say, an air-taxi pilot, if he can convince our lawyers of his good intentions and that losing three months' salary might cause him to lose his home, or not be able to pay for medical care for his child, we may let him pay a modest civil penalty.

"If neither he nor his attorney know that they can informally ask us to consider a switch to a money penalty, that may have unfortunate consequences, but that's the price of ignorance. My lawyers tell me there's no reason we should have to put this policy in a rule so that everyone could know about it.

"And my lawyers tell me that the fact the pilot would have the right to refuse to pay a money fine, and force trial in federal court where he could demand a jury, were we to start his case as a civil penalty in the first place, though this may seem inconsistent, won't keep us from employing this procedure. It is to his benefit, and in any event my chief counsel insists we should have the authority to determine when and if he can exercise his right to 'demand' a jury trial.

"We don't intend to leave our rulebook blank, however. We propose to have a rule about suspending or revoking certificates after reinspecting an airplane or reexamining a pilot, should either turn out to be unqualified. But we don't see any reason to put it through APA rulemaking and allow public comment, nor say anything in it about violations.

"And we propose that certificate actions be tried by an agency whose primary mission is to investigate aircraft accidents and whose members will often see bodies sacked up at the scene. We think they'll be objective and dispassionate in determining guilt, legal issues and amount of punishment."

Sound absurd? Of course! Were the administrator to really say these things to Congress, he'd be laughed all the way back down Independence Avenue.

Yet this is precisely the way FAA enforcement works!

Make no mistake, any claim that Congress has ever given the FAA or predecessor agencies the power to suspend or revoke a certificate as punishment for the violation of a safety rule, and choose between two tracks of justice, is utterly false. FAA officials cannot point to any request for it ever made to Congress, they cannot point to any hearings ever held on a bill proposing it. Yet since 1926, and especially during the past 28 years, agency officials have suspended or revoked more than 60,000 pilots, mechanics, air-taxis and commuters for alleged violations, when they have no statute, not even a regulation, which so much as hints they may do that!

How did this happen in a country dedicated to the Rule of Law?

The system was instigated in 1926 by zealous officials who refused to live with the system Congress had just enacted. It has been perpetuated by their successors through a deliberate coverup, and by others who lack courage to admit the illegality and do something about it.

Decades after the fact, an appeals court, in an opinion barely one page long, upheld it. That opinion was based on a gross mistake of fact that renders it valueless on its face, and it reflected the court's reluctance to overturn a longstanding enforcement system.

Those seeking to attack punitive certificate sanctions have overlooked the Administrative Procedure Act (APA). It mandates that: 1) agencies may use only those sanctions specifically authorized by Congress; 2) they must promulgate substantive policies as rules and allow the public to participate in doing that, at the least publish the policies in the Federal Register, or forfeit the right to take punitive action. FAA ignores these commands.

Bear in mind, FAA lawyers concede that most violations are inadvertent, 99 percent first offenses. Then picture the uproar were the administrator to go to Congress today and propose that 87 percent of private and student pilots be punished by suspension. Think what would happen if someone suggested that, rather than money fines, for autos!

Bear in mind, Senator Pat McCarran (McCarran Field, Las Vegas), sponsor of the Administrative Procedure Act called it: "(A) bill of rights for the hundreds of thousands of Americans whose affairs are controlled or regulated in one way or another by agencies of the Federal Government. It is designed to provide guarantees of due process in administrative procedure.... Even the ordinary operations of administrative agencies are often difficult to know, and undoubtedly there have been litigants before government agencies who have received less than justice because they were not fully advised of their rights or of the procedure necessary to protect them.

Bear in mind, he said this in 1946, yet even today FAA has only a single regulation which deals with suspension and revocation, FAR 13.19. But it says naught of violations, talks only of qualifications, and for that reason is misleading, and has never been lawfully adopted in accordance with APA procedures. Any concept of due process requires rules.

How did all this come about?

Congress in the seminal year of 1926 did what we would expect, it gave much thought to how rules should be enforced. The Senate chose the civil penalty scheme; the House made rules violations crimes, with up to $500 fines, and/ or 90 days in jail. The Senate version was chosen. At no time did Congress then or ever consider license sanction or administrative trial for violations.

Crimes have always had a right to jury. So there'd be no mistake about that for civil penalties, Congress spelled it out in the Act. Either way, the accused was to get a trial in federal count.

The Air Commerce Act of 1926 allowed the Secretary of Commerce to suspend or revoke for lack of qualifications, but said nothing of violations. This is also true of the 1938 and 1958 Acts.

In spite of the fact the civil penalty with right to jury enforcement scheme was clearly spelled out in the 1926 Act's legislative history, Commerce officials stepped out on their own and promulgated a set of rules which provided: "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."

Why would these men create an alternative system that had no basis in law, especially in the face of a legislative mandate otherwise? They did it because they could see, even if Congress hadn't, that the civil penalty system had serious weaknesses which could allow some to escape punishment. U.S. Attorneys complained to Congress that criminal cases would overload the courts and be long delayed, whereas, civil penalties could be quickly settled by compromise. But they and Congress overlooked the drawbacks.

Commerce officials knew the average penalty was likely to be modest--for several years it was only $25. Under the 1926 law, once they put a price on the violation, that was the limit they could sue for. They knew such small sums weren't going to excite prosecutors. They worried that once pilots found out the U.S. Attorneys might not take their case or it could be dragged out, and, at worst, they'd only have to pay the 25 bucks, they'd ignore the matter and escape punishment.

The coverup started on day one. Commerce officials, in order to paint it as something different from what it really was, slipped the suspension/revocation violation rule in among qualifications matters in their rulebook, rather than put it where it belonged, in the part titled "Penalties." Ever since, FAA lawyers tell the public that suspension is not "punishment," but a "remedial" sanction. They do this to obfuscate the fact that certificate action is an alternative penalty to a fine, the choice of track being their's alone, thus determining your right to jury. Right to jury trial is sacred. FAA officials' claim that they can take it away from you is a canard, reminiscent of the Big Lie technique. They make it several thousand times a year.

"Remedial" has always been patent nonsense. Other officials called a spade a spade. Early Commerce Department publications list suspensions and fines together as penalties. So does FAA's official history. All FAA enforcement manuals since 1960 talk about suspensions as punishment. If FAA lawyers have now stopped this buncombe, it is only because my law review article exposed the practice for the sham it is.

Even NTSB officials play this shoddy game and call suspensions "remedial sanctions." To understand how pervasive the coverup is, even though the Board now dockets almost one thousand FAA "violation" cases a year, nowhere in related rules does it use that term.

1938 was a landmark year for the coverup. Congress passed the Civil Aeronautics Act of 1938 which created a five-member Civil Aeronautics Authority. (Split in 1940 into the Civil Aeronautics Board (CAB), which remained independent, and the Civil Aeronautics Administration (CAA), which went back to Commerce.)

No new enforcement powers were created, but the 1926 license clause was rewritten in 1938 with more detail into sections 602 (issuance of certificates) and 609 (suspension and revocation). (These were carried over into the Federal Aviation Act of 1958.)

The record doesn't show who or why, but someone slipped into section 609 a kicker, a clause that in obtuse language said an airman's license couldn't be revoked except for the same reasons that would allow the Authority to deny its issuance. It was interpreted to mean that revocation could only be used for lack of qualifications, not as a sanction for violations. (It was mysteriously dropped in '58, but the Board said it would follow it anyway since there was no explanation by Congress why it had been.)

This put the bureaucrats who'd been using revocation as a penalty in a quandary. They'd just codified their 1926 punishment rule in 1938's seminal edition of the Code of Federal Regulations. To drop revocation now meant they'd have to go public and ask the five Authority members to amend the rule. They knew this risked exposing their lack of authority, so they didn't.

When 1940 rolled around, and in what was clearly malfeasance, without Authority members' knowledge, they dropped the entire rule from that year's CFR. It has never been replaced. This is why there's no rule today that tells airmen their certificates are at risk for safety violations.

The coverup's highwater mark came in 1958. FAA officials (transformed from the old CAA) were required to start over and promulgate all new regulations for the agency. Under the APA this meant they were supposed to publish NPRMs which explained the legal and practical basis of any rule, and give the public a chance to comment. To avoid exposing their lack of authority for certificate sanctions and the fact they'd once had a rule but dumped it, they bypassed rulemaking procedures and simply published their entire set of enforcement rules in the Federal Register, without explaining why the agency failed to use the NPRM process.

The law cases FAA lawyers point to to bolster their claims are part of the coverup. Early on at FAA in 1967, I asked my branch chief how agency lawyers could choose whichever track of justice they wanted for a violation. Since section 901 of the Federal Aviation Act provides that "any" violation "shall be" subject to a civil money penalty, and section 903 the right to "demand" jury trial, having the certificate track to choose as an alternative put the lawyer in the position of deciding whether or not the airman ever got his right to jury. That didn't make sense. His response: "The courts have approved it."

True, but those decisions are among the worst in history. They were gained by dissembling, if not fraud, on the part of agency lawyers, and by the startling ineptitude of opposing lawyers.

Three decades elapsed before an attack was mounted. Wilson v. CAB and Hard v. CAB came down from the appeals courts in 1957, Pangburn v. CAB in 1962. All were airline captains, all represented by ALPA lawyers. The latter two took their lead from Wilson. Although barely a page, that decision became the touchstone.

All are based on a gross mistake: those courts believed that certificate sanctions started with the 1938 Act. They were totally unaware that the system in fact started in 1926. Although they agreed that qualifications were not at issue, none understood that the suspensions were being imposed strictly as a "penalty." The Hard court even chastised Captain Hard for using the term.

At issue was whether or not Congress had ever authorized license suspension as a sanction for violations. The logic is basic: if the system really began in 1926, the only possible relevance the '38 Act could have had was if it had somehow modified or clarified it. The argument should have been conducted in the time-frame of 1926. Had it, the Air Commerce Act legislative history is so clear that only civil penalties were authorized, the government would have lost.

The startling fact is that the government lawyers in their brief told the court and ALPA lawyers the system did start in 1926. They even cited the 1926 Rule and said that all Congress intended in 1938 was to pass the system through as it was. But they wrote such a clever brief they made it sound like they were arguing for 1938, without really saying so.

All this sailed over the heads of the Wilson court and ALPA lawyers, who in their reply brief continued their focus on 1938 and to argue constitutional issues. Had they recognized what they were being told, they would have rushed to the law library, found and cited the 1926

legislative history.

What the Wilson court was doing was looking for any peg on which to hang a decision that would uphold this by now longstanding enforcement system. The judges plucked vague language out of section 609, "if the interest of the public so requires," and said it was intended as a broad grant of power. This was nonsense. Congress had written a detailed act, why would it create a whole new system with such vague language? Why would it talk about reinspection and reexamination, but not speak directly about violations? Anyone who can parse a sentence can see that the phrase is a condition subsequent to first reinspecting an aircraft or reexamining an airman and was an excuse for the Administrator not to take action even though technically warranted.

Ever since, the claim of FAA lawyers has been that the Administrator can suspend or revoke anytime he thinks it's in the interest of air safety and the public. But this language wasn't in the 1926 Act, so it couldn't have been the source of power anyway.

This triad of cases has no value in any event because the APA issues weren't raised. Failure to promulgate the punitive certificate sanction system as a rule, or even simply to publish it in the Federal Register, is an absolute defense. So is lack of specific Congressional authorization for suspension sanctions.

The coverup continues. In June 1980, while at GAO, we met with top FAA lawyers who'd been advised by Ietter of these issues -- and many more. When I asked the deputy chief counsel why FAA didn't have a violation/suspension rule, he responded, "Oh, everybody knows how the system works anyway." FAA lawyers keep citing Wilson, although they know it has no validity.

Understand the mentality we are dealing with: lawyers who are hired, promoted and fired by the chief of police! In 1969 I had to sue the agency under the Freedom of Information Act to get them to release their enforcement handbooks to the public, which even today are the only source of information.

FAA has never done anything to explain to pilots how easy it is to go to trial before the NTSB, that there are no court costs, that the Board won't increase the FAA penalty, only amend or reduce it. During a GAO interview, the Western Region counsel underscored why: "If we told pilots how easy it was to go to trial at NTSB, we would be swamped with trials."

Why won't ALPA and AOPA do anything? They are mirror image bureaucracies to FAA who don't want to risk their many ties to the agency by helping to expose what will come to be seen as one of the great abuses of power in the history of the federal bureaucracy.

Certificate sanctions cause real grief. A typical example I investigated is the helicopter pilot, with 2,000 hours of violation-free combat and civilian flying, who allegedly took a TV cameraman in too close to the Denver Bronco stadium to get the "good" shots they'd been instructed to of the arriving crowd. Nothing happened, but several people felt threatened and complained. In a brutal abuse of power, FAA officials ordered an emergency 180-day suspension. (It was nonsense to suggest the man was an "immediate threat to the public," and would go right back and do the same thing after the hassle it caused, but FAA lawyers are quick to react to publicity. Grounded immediately and without a job, the man couldn't afford an attorney. The NTSB law judge [Patrick Geraghty] rubber-stamped the 180 days.

An FAA lawyer told me that had the helicopter been 100 feet further away from the top of the stadium and 10 miles per hour faster, it'd been a tough case to prove. The pilot and his wife both graduated from college in Denver, her mother lived there. He not only lost half a year's wages, $7,200, but lost his job when his sympathetic employer couldn't hold it open that long, and was forced to move his wife and two infant daughter out of state to find another. There isn't a civilized person alive who wouldn't have thought a fine of $500, even S250, sufficient punishment for what was at worst a mistake in judgment.

If you want to do something about it, write your congressman with a copy of this. Ask him to urge Rep. Dan Glickman, chairman of the House subcommittee on Administrative Procedure, to hold hearings. FAA officials get away with what they are doing only because they ignore the Administrative Procedure Act. Had they ever explained to the public in an NPRM how their enforcement program worked, and asked for comment, it would have brought it down on their heads decades ago.

Lawrence B. Smith is a former FAA attorney. He now practices law in Tucson, Ariz. Mr. Smith authored an article on FAA certificate sanctions for the Transportation Law Journal of the University of Denver's College of Law. In 1980, he was a consultant to the U.S. General Accounting Office (GAO) on legal aspects of FAA enforcement. As a pilot, he holds a certificate for commercial, CFI, multiengine and instrument.