Aviation Law

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					Aviation Law

  AVM 375
Legal Aspects of Aviation

       An Introduction

    Professor Greg Schwab
               Course Highlights
• A detailed examination of aviation law as it relates
  to the pilot, air traffic controller, airport manager,
  or other aviation professionals
• This course is a practical approach to dealing with
  legal issues in the operations world. Special
  emphasis is placed on how to avoid legal problems
  and how to recognize when it’s necessary to seek
  the advice of a qualified aviation attorney
• This course is not just about aviation law; it’s
  about aviation AND the law.
         Course Requirements
• Testing (midterm, final)

• Presentation (~ 10 minutes)

• Point paper outlining presentation

• Attendance and participation
      • News Article, Case Studies
…in the present crisis, government is not the
 solution to our problems; government is the
 problem. From time to time we’ve been tempted
 to believe that society has become too complex to
 be managed by self-rule, that government by an
 elite group is superior to government for, by, and
 of the people. Well, if no one among us is
 capable of governing himself, then who among
 us has the capacity to govern someone else?
…in the present crisis, government is not the solution to our
 problems; government is the problem. From time to time
 we’ve been tempted to believe that society has become
 too complex to be managed by self-rule, that government
 by an elite group is superior to government for, by, and of
 the people. Well, if no one among us is capable of
 governing himself, then who among us has the capacity to
 govern someone else?

                              Ronald Reagan
              Terms to Know…
• Case Law
  – Evolves from similar court decisions from
    prior similar cases and establishes precedent
    for future cases

• Plaintiff
  – Party that brings forward complaint
  – Brings “suit” against defendant
          Terms to Know…
• Defendant
  – The guy “on-the-spot”
  – Must defend himself against complaint

• Party
  – This is easy—anyone involved in a case
             Terms to Know
• Civil Law
  – Laws to protect a person (or society) and
• Criminal Law
  – Protects community against harmful acts
• Crime
  – Offense against the State or people of the State
     • “State of Indiana vs. John Q. Public”
          Terms to Know…
• Venue
  – Place or country in which injury happened
  – Normally associated with where the trial will
  – Does not refer to jurisdiction
  – Clients will look to most favorable location
            Terms to Know…
• Public Prosecutor
   – Brings suit against defendant
• Felony
   – Crime punishable by death or prison sentence
   – Reserved for serious crimes
• Misdemeanor
   – Less serious crimes—sometimes considered petty
   – Always less than 1 year jail time
          Terms to Know…
• Statutory Law
  – Acts made by those guys in the State Capital
    or Washington D.C.
• Remedy
  – Makes person damaged whole again
           Common Law
• Law made by judges over the years, as
  distinguished from statutory law made by
  legislators and regulations adopted by
  administrative agencies
• Court give high priority to protecting the
  health and safety as public policy
• Based on precedent or previous court
          Terms to Know…
• Jurisdiction
  – The right to act
  – Must have:
     • Power
     • Authority
     • Capacity
  – Who/where a case can be heard
  – States have jurisdiction over cases occurring in
    their area that do not involve federal issues
        Section I

Overview of the history of law
        U.S. Legal Philosophy
• What is aviation law?
• Broad in scope:
  –   Federal Aviation Regulations
  –   Labor Relation Law
  –   Product Liability Law
  –   Fair Credit Law
  –   Transportation Law
      Origin of Western Law
• Well-rooted in English law and history
• Magna Carta
  – “You can’t do that, it’s against the law”
• Common Law
  – No specific beginning
• Constitutional Law
  – From an organized political body
U.S. Historical Development
– 1775: American Revolution began
– 1776: Declaration of Independence drafted
   • Stated why the colonists wanted to separate from Great
– 1781: Articles of Confederation drafted
   • Gave form to the new government but was too weak to bind
     the colonists together
– 1787: U.S. Constitution drafted
– 1788: U.S. Constitution adopted as basic law of the
   • Ratified by all states in 1790
– 1791: First 10 amendments added to the Constitution
    Preamble to the Constitution
We the people of the United States,
In order to form a more perfect union,
In order to establish justice,
In order to insure domestic tranquility,
To provide for the common defense,
To promote the general welfare,
To secure the blessings of liberty to ourselves and
   our posterity,
Do ordain and establish this constitution for the
   United States of America
             Constitutional Powers
•   Article One
     – Legislative powers assigned to two houses
     – Senate with equal representation from each state
     – House of Representatives with representation by populace

•   Article Two
     – Executive power is administrative power resting with the President
        and Vice-President

•   Article Three
     – Judicial Power is vested in the Supreme Court and other such
        inferior courts which Congress creates

•   Article Four
     – Established states’ rights
              The Bill of Rights
First Amendment
   Freedom of Speech, Press, and Peaceable Assembly
Second Amendment
   Right to Bear Arms (recent court decisions afirm this as an
   individual right)
Third Amendment
   Government can not quarter soldiers in homes, and people
   have the right to oppose it
Fourth Amendment
   The people protected against unreasonable search and seizure
Fifth Amendment
   Due process of the Law, Protects against self-incrimination
      The Bill of Rights (Con’t)
Sixth Amendment
   Speedy and public trial by impartial jury
Seventh Amendment
   Right to trial by jury in civil cases
Eighth Amendment
   Excessive bail shall not be required, nor cruel and unusual
   punishments imposed
Ninth Amendment
   Other rights retained by the citizen
Tenth Amendment
   Powers not delegated to the federal government are reserved
   for the states
               Federal Courts
• U.S. Supreme Court
   – 1 Chief Justice
   – 8 Associate Judges
• How they got their jobs
   – Political appointment by the President
   – Advice and Consent of the Senate
• Appointment is for life
• What they do:
   – Constitutional interpretation, expressly stated or
   U.S. Supreme Court (Con’t)
• Once power applied (established), then can be
  widely interpreted
• But…All powers not granted by the Constitution
  to the federal government are retained by the
• How they do their jobs:
   – Majority decision prevails
   – But… dissenting decisions are not without
     importance and are widely argued in many cases
           U.S. Supreme Court
• Can pass judgment on Constitutional issues on state laws,
  thus making federal government superior to states
• Also decides if acts passed by Congress are
• Court selects cases to be “heard”
   – About 80 cases per year
• Individuals petition for Writ of Certiorari
   – Must present constitutional issue of importance
• “Fascinating legal issue of nationwide importance that cry
  out for the Courts attention”
          U.S. Supreme Court
• Reversals
• Courts can and does reverse itself from time to
• Why?
   – Passage of Time
   – Circumstance
   – Public Perception
• The above causes change in the national outlook
• Future cases are argued both ways
       U.S. Court of Appeals
• Just below U.S. Supreme Court
• “Hear” cases referred by the states
• Limit on the types of cases heard
  – Sums of money
  – Two or more states involved
  – Some Federal factor or issue
            U.S. District Court
• Hey! You can’t sue the Government!
   – Yes, you can…
• Have original jurisdiction with Court of Claims
  against the United States
• Most aviation cases start/or end at this level
• Have power to remand cases to an administrative
   – FAA
   – NTSB
   – DOT
         Congressional Role
• Set broad policies
• Delegates authority to administrative
  – Regulatory control
  – Power of the purse
• Senate and House of Representatives
  – Negotiate differences through committee
           Executive Role
• Appoints Board Members
• May order investigations
• Drafts national budget
• Nominates Supreme Court Justices
           State Court System
• Whatever right not given to the Federal Government is
  reserved to the States (U.S. Constitution)
• Government is least harmful when it is nearest the
• State courts have consistently became more specialized
• All States have at least these levels of courts:
   – Local Trial Courts
   – State Trial Courts
   – State Intermediate Appellate Courts and Supreme
             Local Trial Courts
• Limited jurisdiction (Civil cases only)
   – Traffic offenses, estate cases, juvenile court)
   – Other minor cases (small claims, wills, orphans)
• Also referred to as:
   – People’s Court
   – Conciliation Court
   – Magistrate’s Court
• Hear cases involving less than $5,000
• Other Types
   – Probate Court
   – Family Court (Divorce)
               State Trial Courts
• General jurisdiction to hear wide variety of cases
   – Initial aviation issues are heard at this level
• “State versus Defendant”
• Examples:
   – District Court of Common Pleas
   – Circuit Court of …
   – Superior Court of …
• Local trial court cases can be appealed to these courts
• Decisions are important because few cases are appealed to
  a higher level
• Civil and Criminal Cases heard
   State Intermediate Appellate
• Cases referred to them from courts of lower
  limited jurisdiction
• If satisfactory decision is reached then no further
  appeal is necessary
   – Must consider time and money involved
• DOES NOT deal with Trial courts finding of fact
   – Rather decides if Trial Judge correctly applied the law
• Civil and Criminal Cases heard
            State Supreme Court
• All states have one Supreme Court
• Some states allow a case to move from the local court directly
  to the State Supreme Court
• State jealously guard their powers
   – Citizens wish to retain control of their lives and laws
• States differ in preferences
   – i.e. French versus English orientation
• States protect local interpretation of laws
   – i.e. oil production, tobacco, grain, fishing
• Aviation is concerned with many state laws due to wide
  variation of legal interpretations
   Section II
  Contract Law

Reasons and Implications
        Types of Contracts
• Written
• Verbal
• Implied
           Verbal Contract
• Not written but understood
• Can imply action
  – ACFT maintenance (implied)
• Should have written contract
  – Many transactions do not
            Parts of the Contract
• Subject
  – Goal of contract
  – Must be lawful
  – Frivolous contract not enforceable
     • Exploitive or abuse of bargaining power
• Agreement
  – All parties agree
• Consideration
  – Agreed upon consideration
  – An offer with serious intent and made in good faith is
• Enforceable in contracting state
  – Must be clear to all parties
  – Entered without fraudulent intent
  – Contracts won by unwarranted pressure or
    threats are unenforceable
        Section III
Liability and Negligence
          Liability Concepts
• Liability is a broad legal term that includes
  many areas
• Liability law is divided into three types:
  – Administrative
  – Civil
  – Criminal
   Basic Principles of Liability
• Purpose of this section is to ensure that you
  have a working knowledge of the kinds of
  behavior you must refrain from to avoid
• Liability includes:
  – Obligations
  – Debts
  – Assumption of risks
• Liable means a person is:
  – Answerable
  – Chargeable
  – Compelled to make restitution
            Liability, Con’t.
• Civil law is divided into:
  – Tort Law
  – Contract Law
• Liability determined by:
  – Limited Liability
  – Strict Liability
                   Tort Law
• What is a tort?
  – A statement, writing, or print against a person
  – Must damage his/her reputation
     • Diminishes his respectability
     • Discredits him
  – Act or omission that causes injury to another
    person by breach of a legal duty not arising
    out of a contract that subjects the “actor” to
    liability for damages in a civil lawsuit
               Tort Law, Cont.
• In Latin, tort means “to twist”
• A tort represents a civil wrong
   – Can be property damage or loss
   – Injury to individual
• Tort law is not contract law
• Tort law imposes human relations
• Types of torts:
   – Intentional torts
   – Negligence
              Intentional Torts
• Trespass
   – In aviation: landing aircraft on the wrong field
• Conversion—act of assuming rights of the owner
  or person entitled to personal property that are
  inconsistent with the rights of the owner or
  person entitled to possession
   – In society: joyriding with someone else’s car
   – In aviation: FBO apprehending equipment for debts
              Intentional Torts
• Mental Distress
• False Imprisonment
   – Falsely holding someone against their will
   – In aviation—FBO using force to collect debt owed
     physically blocks aircraft from departure
• False Arrest
   – False imprisonment carried out by erroneous assertion
     of legal authority to detain another person
   – Authority to do a citizen’s arrest is generally limited to
     felonies (murder, robbery, or burglary)
           Intentional Torts
• Battery – harmful or offensive contact with
  another person without consent
  – Punching a person, sexual contact
• Assault – a battery attempt that missed
  – He ducked when I tried to hit him
           Intentional Torts
• All “acts” while negligence may consist of
  either an act or an omission. Some “acts”
  are criminal in nature
• “Actor” may be subject to fine or
  imprisonment and ordered to pay
  compensation in a civil trial
  – Courts have held this is not double jeopardy
    (criminal acts)
      Negligence and Liability
• Negligence is the most common form of
  tort involved in aircraft accident litigation
• Common threat running through all law is:
  – You are responsible for the consequences of
    your actions.
• Negligence means failing to do an act that
  a reasonable careful person would do to
  protect others from harm –or- doing an act
  that a reasonable careful person would not
  do under the same or similar
     Elements of a Negligence Case
•   A duty to be reasonably careful
•   A failure to be reasonable careful…
•   Which is the proximate cause of…
•   Injury to another person or his/her property
         Duty extends to…
• Anyone who might possibly be injured (or
  suffer harm) by your neglect
• Must be reasonably careful (in aviation:
  great reasonable care)
        Failure to use care…
• The jury decides if you were “reasonably
• The jury relies upon experts
  – In aviation: aviation experts, FARs, AIM,
    airworthiness directives, ACs
• Ordinarily, real physical injury or property
  – Not just frightening
• Even if you were not reasonably careful, if
  your act did not cause harm, you cannot be
  successfully sued for negligence
  – But, does not relieve you from FAA
    Certificate action
           Proximate Cause…
• Your neglect must have actually caused the
  injury, or at least by setting in motion a sequence
  of events that would not otherwise have occurred
• Not same thing as “NTSB Finding of Probable
  Cause” nor will NTSB’s opinion of probable
  cause be admissible as evidence at trial
• However, facts found by the NTSB investigators
  during the investigation of the accident will be
  admissible at trial
       Proximate Cause, Con’t.
• There maybe more than one proximate cause of the
  accident and more than one person’s negligence may be
  proximate causes of the accident
• When a judges find that multiple defendants are found
  negligent, some states allow judges and juries to
  “apportion” the percentage of negligence among them
  (i.e. 60%/40%)
• Some states award and allow the plaintiff to go after
  whom they want (i.e. most likely those companies or
  individuals with the most ability to pay)
        Proof of Negligence
• Plaintiff must first present evidence to
  prove each of the 4 elements of negligence
  to satisfy the burden of proof
• Proof is established by the preponderance
  of the evidence (51%) not beyond a
  reasonable doubt
• Degrees of care
  – Great care and caution
     • In aviation: all certified air carriers, A&P
       mechanics, air traffic controllers, airport managers
  – Ordinary care
     • In aviation: charter carriers
  – Slight care
     • In aviation: essentially does not apply
• The basis of liability is negligence
          Negligence Per Se
• Negligence occurred despite FARs to
  prevent such accidents
• Losing an FAA enforcement action can
  also result in losing under civil action
   Defenses against Negligence
• Sudden Emergency Doctrine
• Assumption of the risk
• Contributory negligence
    Sudden Emergency Doctrine
• Stresses imposed by sudden onset of an in-flight
  emergency situation may interfere with human
  decision making
   – Judge or jury weighs the reasonableness of your behavior, so an
     imperfect performance that might otherwise have been
     considered not reasonably careful could be found not to cause
     negligence in the face of an emergency situation
• No reduced standard if pilot negligence involved
   – i.e. pilot takes off with minimum fuel and then crashes can be
     held accountable for inadequate pre-flight inspection
      Assumption of the Risk
• If a person can be proved to have known
  and understood the scope, nature, and
  extent of risk involved in flight and to have
  voluntarily and freely chosen to incur that
  risk, that may serve to relieve others of
  legal responsibility
  – i.e. non-pilot aeronautical engineer asking a
    pilot to conduct an intentional spin in an
    aircraft not authorized for spins, then crashes
       Contributing Negligence
• If Plaintiff’s negligence was also a proximate
  cause of the accident, this fact may reduce the
  extent of the defendant’s liability or relieve the
  defendant of all liability
   – Some states have adopted comparative negligence
      • Judge or jury provides % to each
   – Last clear chance
      • Another example of courts trying to protect people’s health
        and safety
              Res Ipsa Loquitur
• Legal doctrine stating “that the facts speak for
• Plaintiff can prove negligence, even if no one knows
  what happened, if…
   – The accident is not the sort of thing that normally occurs
     unless someone was negligent
   – The aircraft involved in the accident was within the
     exclusive control of the defendant
   – Whatever happened, the accident was not caused by any
     fault of the plaintiff
• Most successfully used where airliner crashed and
  the cause of the crash could not be determined
           Strict Liability for
           Defective Products
• How it applies to aviation:
   – A person selling a product delivered in a defective
     condition unreasonably dangerous to the user, or
     other persons in the area of anticipated use is
     strictly liable even if they were careful if…
      • The seller is in the business of selling such
      • The product is expected to be used without
        substantial change in the condition in which it was
        Strict Liability, Con’t.
• If the last two apply, then…
• Negligence need not be proven and the seller is
  liable for resulting injury to users and others even
  if the seller exercised all possible care in the
  manufacture, inspection, and sale of the product
  and even if the seller had no contact with the
  injured person
• The above represents common law
 Organizing the Business to Limit
• Forms of Business
  –   Sole proprietorship
  –   General partnership
  –   Limited partnership
  –   Limited liability company (LLC)
  –   Corporation
         Sole Proprietorship
• Business is owned by a single individual
• That individual is responsible for:
  – Debts of the business
  – Torts committed by the employees
• Very high risk
• Measure cost vs. benefit (being your own
  boss vs. risking all of your personal assets)
         General Partnership
• Required to have at least one general
  partner whose personal assets are at risk
  for business liabilities
• Limited partners have protection from
  personal liability (similar to shareholders
  in a corporation)
  Limited Liability Companies
• Also known as LLCs
• Owners have same protection against
  personal liability as in corporation
• Can possess the limited liability of a
  corporation and the tax treatment of a
• No owner (shareholder) of the business
  takes on the added risk of personal liability
  for tort committed by employees or debts
  of the business
• LLC and corporation offer best protection
  for investment but also have certain
  downfalls (i.e. tax considerations and
  capital requirements)
      Forming a Corporation
• To incorporate your business, you need:
  – Agent for service of process
  – Articles of incorporation
     • Similar to what a constitution is to a nation
     • After state accepts your articles, you will be issued
       the certificate of incorporation
              Watch Out…
• The certificate itself may not be able to
  protect you from personal liability
• Alter ego doctrine:
  – If your business continues to operate as though
    it were a sole proprietorship or a partnership,
    an attorney may be able to “pierce the
    corporate veil” to reach your personal assets in
    a liability case
    Looking like a Corporation…
•   Showing the corporate name
•   Adequate capitalization
•   Multiple Shareholders
•   Corporate Signature
•   Separation of personal assets
•   Making and documenting corporate
         Duties to Employees
•   Workers compensation insurance
•   Unemployment compensation insurance
•   Pay agreed wage
•   Withhold payroll taxes
•   Provide a safe place to work
             Evading Taxes
• Businesses try to avoid withholding employee
  taxes and paying employee benefits by
  considering the employee an independent
• IRS has the benefit of hindsight review to
  determine the person was really an employee by
  using the right to control and direct test
• The business may then be liable for back taxes,
  interest, and late charges
          Lines of Defense
• Organizing your business as a corporation
  or LLC should not be your entire risk
  management plan
• Risk management plan must be in-depth
  and diversified, and should include:
  – Accident Prevention program
  – Liability Insurance
         Aviation Insurance
• Adequate insurance should be a key feature
  of your risk management plan
  – Determine the insurance needs to order the
    correct coverage
  – Analyze the policy to be sure it adequately
    covers your needs
  – Recognize changing circumstances to make
    changes in your insurance
       Insurance Fundamentals
•   Sales
•   Insuring and underwriting the risk
•   Claims
•   Insurance coverages
•   Uninsured Matters
              Insurance Sales
• Aviation insurance is sold by agents, by brokers,
  and directly by some insurance companies
   – Agents – represents one or more insurance companies
     as a salesperson
   – Broker – represents you shopping around to find the
     best available deal
   – Direct insurance – some companies such as Avemco
     sell insurance over the phone instead of through
     agents and brokers
       Underwriting the Risk
• Insurance companies – In GA, most
  policies are insured by a single insurance
• Underwriters – most airline insurance
  policies spread the risk over several
  insurance companies through the process
  of underwriting
• If you have an accident, you are required
  by the policy to immediately report it to
  your insurance company
  – Claims on the policy will e investigated and
    offers extended by an insurance adjusters
  – Adjuster represent the company in
    determining whether the loss is covered by the
    policy and the monetary value of the damages
         Insurance Principles
• Spreading the Risk
  – Insurances serves to spread the risk of that
    unlikely but potentially catastrophic event
    over many many similar operators
• Minimizing the Risk
  – Operators perceived as being the safest are
    able to purchase insurance less expensively
    than average operators
             Aircraft Insurance
• Liability Coverage
   – Covers your liability for injuries to passengers in
     aircraft, persons and property on the ground, and other
• Hull Coverage
   – Covers damage to or destruction of the insured aircraft
     resulting from an accident
      • Hull coverage may be purchased to cover all risk, all risks
        while not in flight, or all risks while not in motion
                 Purpose of Use
• Another choice you will have to make when
  order aircraft insurance coverage is the purpose
  of use of the aircraft
   –   Pleasure and business
   –   Industrial aid
   –   Limited commercial
   –   Commercial except instruction or rental
   –   Commercial
   –   Special uses
       Pleasure and Business
• Generally covers:
  – Pleasure flying and personal flying incidental
    to or in direct connection with the insured’s
  – excluding any operation for which a charge is
             Industrial Aid
• Generally includes
  – everything covered by pleasure and business
  – transportation of your business’s executives,
    employees, guests, and customers
  – Excluding any operation for which a charge is
 Commercial Except Instruction
         and Rental
• Generally includes:
  – All uses covered by pleasure and business
  – All uses covered by industrial aid
  – The transportation of passengers or cargo for
  – Excluding commercial flight instruction
  – Excluding rental of the aircraft to other pilots
        Limited Commercial
• Generally includes:
  – All operations covered by pleasure and
    business and industrial aid
  – Commercial flight instruction and aircraft
    rental to other pilots
  – Excludes carrying passengers or cargo for
• Generally referred to as full commercial
• Generally covers:
   –   Pleasure and business
   –   Industrial aid
   –   Carrying passengers and cargo for hire
   –   Commercial flight instruction
   –   Rental to other pilots
• The is the coverage needed by a full-service FBO
                    Special Uses
• Flight operations considered at a higher level of risk
  must pay a higher premium
• These operations include:
   –   Agricultural aviation operations
   –   Operations requiring an FAR waiver
   –   Aerial fire fighting
   –   Helicopter external-load operations
   –   Helicopter flight training
   –   Banner and glider towing
   –   Fish spotting
   –   Power line or pipeline control
   –   Emergency medical service helicopter ops
         Pilot Qualifications
• The premium you pay for your aircraft
  insurance policy varies inversely with the
  minimum qualifications of the pilots who
  will be permitted to operate the aircraft
• You must make sure to never allow a pilot
  who does not meet the pilot qualification
  requirements of your insurance policy to
  operate the aircraft
    Airport Liability Insurance
• If your business is located on an airport,
  you will need airport liability insurance,
  – Premises liability
  – Hangarkeeper’s liability
          Premises Liability
• This covers injury to nonemployees
  occurring at your place of business
• Any business, no matter where it is
  located, should have premises liability
     Hangarkeeper’s Liability
• This insurance covers your liability for
  damage to other people’s airplanes while
  they are in your car, custody, or control
• In-flight hangarkeeper’s covers any
  damage the customer’s aircraft may suffer
  during operations by your employees
    Product Liability Insurance
• This type of insurance is needed by all businesses
  that perform aircraft inspection, maintenance, or
  modification, or supply aircraft parts, fuel, and
• This insurance is needed to cover claims arising
  out of faulty workmanship, oversights in
  inspection, or errors and defects in design or
  manufacture that might lead to claims of
       Prepaid Legal Services
• These plans will pay the cost of an attorney
  to defend you in the event the FAA acts to
  suspend or revoke your pilot or mechanic
    Loss of License Insurance
• Loss of license insurance may provide you
  an income and the cost of learning another
  trade or profession in the event that the
  pilot, mechanic, or aviation medical
  certificate necessary to your work is
  suspended or revoked
     Excess Liability Coverage
• Also referred to as an umbrella policy
• This insurance becomes available to pay liability
  claims only after all other applicable policies
  have paid to their policy limits
• For each of the liability coverages, the insurance
  company owes the insured the duty either to
  defend claims or pay the claim up to the policy
• The insurance company has the obligation to
  defend the claim in court or to settle the claim out
  of court for any amount up to the policy limit
• The insured’s duties include to pay premiums as
  they become due, to be truthful in all disclosures
  made to the insurance company, and to cooperate
  with the company during an investigation
• The right to pursue any claims the insured might
  have against someone else who caused or
  contributed to the cause of the accident
• Comes into play most frequently in the case of
  rented aircraft
• Businesses that wish to protect their customers
  from subrogation may do so by purchasing a
  waiver of subrogation endorsement on the policy
          Uninsured Matters
• Some aviation activities you cannot
  purchase liability insurance
• Liability insurance Is not available for:
  – Bodily injury to skydivers
  – hot-air balloon bungee-jumping operations
• The operator may obtain a measure of
  protection through exculpatory contracts
        Exculpatory Contracts
• An agreement between the aircrft or airport
  operator and a participant in an aviation
  operations by which the participant agrees
  not to sue the operator of the aircraft or
  airport if the participant is killed or injured
  during the operations
   Exculpatory Contracts, Con’t.
• An exculpatory contract is appropriate only
  – The operations is not a common carrier
  – The activity is not one in which the law
    requires the operator to carry liability
  – Insurance is not available to the operator
   Exculpatory Contracts, Con’t.
• Generally used in operations that are perceived
  by conservative insurance companies as
  involving high risk, for which no statistics are
  available to the insurance companies, constituting
  “unknown risk”
• Examples include: airlifting skydivers or bungee
  jumpers, or motion picture “stunt” flying
   Exculpatory Contracts, Con’t.
• Contract should include that the person
  signing the agreement:
  – Knows and understands the scope, nature, and
    extent of the risk involved in the operation
  – Freely and voluntarily chooses to incur that
   Exculpatory Contracts, Con’t.
• The most effective form of the document
  – The person giving up the right to sue
  – To read it carefully
  – To leave a trail of crossings-out and initials
    throughout the document to indicate having
    read and understood the document
   Exculpatory Contracts, Con’t.
• Each contract should be handcrafted by your
  lawyer for your specific operation
• By using “generic” contracts, the documents do
  not provide you with the maximum available
• The best contract does not provide you protection
  as good as adequate liability insurance, but does
  provide a depth and diversity to a good risk
  management plan
  Section IV

FAA Enforcement
          FAA Enforcement
• The purpose of this segment is to furnish a
  practical working knowledge of your legal
  rights in FAA investigations and
  enforcement situations and when to seek
  the assistance of a competent aviation
• The purpose is NOT to critique the FAA
  nor its’ employees (our fellow aviators)
          FAA Enforcement
• Face this fact!
• The FAA prevails in an overwhelming
  number of it’s enforcement cases against
  airman certificate holders. Airmen are
  clearly at a disadvantage with facing FAA
  certificate action. The following guidance
  will assist in understanding and dealing in
  such an environment.
         FAA Enforcement
• Nationwide the FAA has 2500 inspectors
  that carry out enforcement action.
• That’s 2500 opportunities for different
  opinions on regulation/policy/directive
• Let’s not forget the political and
  organizational structure over the
          FAA Enforcement
• Indianapolis FSDO FY 2002 Statistics
  – 84 Violations Total
     • 48 Air Carrier (Most MX Related)
     • 36 General Aviation
        – 2 MX related, 4 Operations related, 6 Accident related
            » Most of these were paper-related violations
          FAA Enforcement
• Indianapolis FSDO FY 2002 Statistics
     • 30 Violations (of the 84) from Air Traffic Systems
        – 2 Air Carrier, (1 Rwy Incursion, 1 Pilot Deviation -Alt)
     • General Aviation
        – 28 General Aviation Aircraft Violations
            » 14 TFR Violations
            » 4 Airspace
            » 7 Pilot Deviation
            » 2 Restricted Airspace
            » 1 Low Flying
           Administrative Law
• Aviation industry deals more with this area of
  law than all other areas combined. These
  references are designed to keep airmen and the
  public safe.
   – FAR’s
      • FAR’s authorized by Title 14 of the code of regulations
        which address every conceivable body of aviation
   – AC’s
   – AD’s
   – Handbooks
   FAA Enforcement: Broad in
• Certification of People
   – Pilots, flight engineers, controllers, navigators,
     mechanics, dispatchers, inspectors, parachute riggers,
     ground/flight instructors
• Places
   – Airports
• Things
   – Flag carriers, supplemental carriers, air travel clubs,
     helicopter ops, air tax service, ag aircraft, pilot,
     controller, dispatcher training, repair stations,
     maintenance schools
           FAA Enforcement
• When the FAA has reason to suspect an
  individual or company has violated one or more
  FAR’s, the FAA can choose from a variety of
  penalties to punish the violator
• Administrative law rather than criminal law (in
  most cases)
• Honesty always pays with the FAA. Nothing
  infuriates the FAA more than dishonesty.
           FAA Enforcement
• Rule #1 – FAA inspectors are not required to
  advise suspects of their legal rights.
• In regards to certificate action, airmen have
  no Miranda rights. None.
• Rules of evidence do not apply and “hearsay”
  is commonly admissible during enforcement
• Enforcement policy varies by FAA Region.
  This inconsistency is unfair, but that’s the way
  it is.
     FAA Enforcement Options

•   Administrative Dispositions
•   Certificate Actions
•   Civil Penalties (Fines)
•   Summary Seizure of Aircraft
•   Reexamination
FAA Enforcement

Administrative Dispositions
  Administrative Dispositions :
       Warning Notice
• Same as receiving a letter or warning notice from
  the police.
• States your actions may have been a violation but
  the FAA decided not to file a violation.
• FAA will issue to perceived minor violations that
  the FAA does not want to ignore.
FAA Enforcement

 Letter of Correction
           FAA Enforcement:
           Letter of Correction

• FAA issues to correct defect
  – i.e. bad ELT battery on aircraft.
• In light of corrective action taken by you
  the FAA will not pursue other actions.
         Letter of Correction
• Remedial training possible if FAA agrees
  – See training as necessary if pilot has
    constructive attitude
  – Your flight was not for hire
  – You have a clean record
  – Not for lack of lack of qualification
  – Violation was not deliberate, grossly
    negligent, or criminal intent
          Letter of Correction
• Does not include a testing component (normally)
• After completion of training, you are off the hook
• If given the choice between remedial training and
  enforcement certification action, TAKE THE
• If you are issued a Notice or Letter, it becomes
  part of your record at Oklahoma City
   – Automatically removed after two years
FAA Enforcement

  Certificate Action
               Certificate Action
• Factors considered:
   – Precedent
      • Penalty upheld by NTSB (Case law)
   – Current FAA Enforcement Priorities
      • Trends or patterns (I.e.TFR violations)
   – Individuals considerations
      •   Degree of hazard
      •   Nature of violation
      •   Violations previously recorded
      •   Level of violators experience
      •   Pilot attitude
      •   Horror factor
FAA Enforcement

   Civil Penalties
                  Civil Penalties
• FAA can choose to impose fines instead of certificate
  action when FAA cannot do both (double jeopardy).
• Rule #2: FAA likes to use certificate action against
  individual and fines against companies
   – Individual fines - $1,000 per violation
   – Businesses - $10,000 per violation
   – Falsification of records to anyone is up to $250,000
       • i.e. maintenance records, etc.
   – Most incident incur multiple FAR violations, some include
     miscellaneous charges such as FAR 91.13 – Careless or reckless
     operation or fining air carriers for multiple departures.
FAA Enforcement

Summary of Seizure of Aircraft
   Summary of Seizure of Aircraft
• If FAA is concerned about your ability to
  pay fines, they can seize your aircraft until
  the fine is paid or bond posted.
FAA Enforcement

Airman Re-examination
     Airman Re-examination
• FAA must have reasonable basis for
  requesting, but if they do, you have no
  right of appeal and must submit to
• Rule #3: If requested, always submit
  yourself to re-examination without delay
  and with a positive attitude.
FAA Enforcement

• FAR violations are assigned to a local FSDO
  safety inspector for investigation.
• Most FAR violations are discovered during the
  course of normal duties by FSDO, think of them
  as “cops on a beat.”
   – Ramp Inspectors of:
      • Airports
      • Part 135 Air-Taxi
      • Part 121
   – Air Traffic Controllers
      • Second highest source for violations
   – General Public
      • 1-800-255-1111
                   FAA Inspector
• Rule #4: The most damaging period for the airman is
  the first contact they have with the inspector. The
  FAA knows this and exploits this human error.
• Remember Rule #1!
• FAA exploits you by:
   – Getting damaging admissions early in the investigation with the airman
     not realizing he/she is under investigation.
   – They know these admissions could make your case impossible to
     effectively defend later.
   – FAA has the burden of proof, but your early confessions are admissible
       • Courts have held that investigations dealing with aviation are not
          criminal and thus, absence of the “Miranda Rights” are “merely
          administrative in nature”.
               FAA Inspector
• Now what do you do?
• You still have most of the rights of a criminal under
• Rule #5: You have the right to remain silent—
  exploit it!
• Anything you say WILL BE USED AGAINST YOU
  for certification action or civil penalties!
• Rule #6: You have the right to have a lawyer
  present during questioning.
• BAD NEWS: You don’t have the right to a court
  appointed lawyer.
            FAA Inspector
• What else you need to know:
  – FAA inspectors are not required to identify
    themselves before talking to you.
  – Rule #7: This is how the FAA can trick you
    into an early confession.
  – You can and should ask to see the inspector’s
    identification card—they do not have badges.
                 FAA Inspector
• Some tip-offs to defeat their efforts
• If anyone asks the following questions be ready
  to rise the flag of defense:
   – Anytime someone asks to discuss your “history”
      • Unless you feel this guy is writing a novel on aviation
        exploits and wants to devote a chapter about your history.
   – If you recognize trouble early:
      • “Why do you ask”?
      • Just as well see what the inspector already knows.
                  FAA Inspector
• What if the inspector continues his pressure to
  uncover information without a lawyer present?
• You have two choices: both unpleasant
   – Don’t talk—inspector may show in his report “the suspect
     displayed a belligerent, uncooperative attitude” or the “suspect
     lacks a constructive attitude” and thus could be denied remedial
     training—inspector goes away mad.
   – Talk—inspector goes away happy because he got you to confess.
• Rule #8: Go with the mad inspector every time!
  NEVER discuss your history with the FAA without
  your attorney present.
• But, don’t appear disrespectful!
                First Contact
• What do I do?
• Gee, Mr. Inspector, I really would love to talk to
  you about this… but, the professional thing for
  me to do is contact my lawyer. May I call you
  after I consult with him?
• Then of course, have your lawyer make the
  decision to contact the FAA directly.
• Remember Rule #4 and #5—NEVER DISCUSS
              NASA Report
• More about this later……
      Displaying Documents
• FAR 61.3(h) and 61.51(d) requires you to
  present your:
  – Airmen certificate
  – Medical certificate
  – Logbook
• To whom?
  – Any FAA, NTSB, or any State or local law
    enforcement officer upon reasonable request.
        Displaying Documents
• You are not required to have your logbook with
  you unless you are a student on a cross-country
   – Probably best that you don’t have it with you.
• Must present aircraft worthiness certificate for
  inspection upon request -FAR 21.181 (b)
   – The key here is present your certificate, never
     surrender your certificate.
   – Unless the FAA presents you a written order of
     suspension or revocation signed by an FAA lawyer.
        Displaying Documents
• What if the FAA tries to take your certificate?
   – Insist upon them returning it to you.
      • Otherwise they can say you voluntarily surrendered it and
        thus gave up your right to appeal the revocation of these
        certificates—present but never surrender!
   – Present, BUT DO NOT DISCUSS these documents
     without your lawyer present.
   – If the FAA inspector still tries to remove your
      • The score is tied, you need a witness. Scream bloody murder
        and get witnesses who can later testify you did not
        voluntarily give up the documents.
            Aircraft Inspection
• When and if a FAA inspector wants to board an
   – If you are Part 135/121, you must let them in upon
   – Otherwise, don’t let them in
• Should you have a disagreement with an
  inspector, ask a mechanic to look at the aircraft.
• The inspector can issue an Aircraft Condition
  Notice, FAA Form 8620-1.
  Airmen Certificates

Prosecution and Appeal Process
Prosecution and Appeal Process
• The purpose of this section to to inform
  you about the process of the execution of
  enforcement action when remedial training
  has not been selected or resolved a
  violation. Current FAA enforcement
  policies vary from Region to Region.
      FAA Certificate Action
• Notice of Proposed Certificate Action
  – Expect this if the FAA feels they want to
    suspend or revoke your certificate.
  – States exactly what FAR’s the FAA believes
    you have violated and states what the FAA
    intends to do about it.
  – You will be offered an opportunity for a
    informal conference with an FAA attorney.
         Informal Conference
• Remember Rule #7? Always accept and attend
  this conference BUT go with your aviation
• This is a settlement conference. So settle it!
• Who’s there:
   – FAA Attorney
   – FAA Inspector
   – You AND your attorney
         Informal Conference
• They will look at your attitude, professionalism
  and ask you WHAT you did and WHY you did
• Informal conference CANNOT be used against
  you at a hearing before the NTSB on appeal.
• But…don’t tell a different story when you testify
  under oath because the FAA will impeach your
• Remember, in this role, the FAA is your
  adversary and cannot advise or help you.
         Informal Conference
• The FAA may offer to reduce the period of
  suspension or allow you to to pay a fine instead
  of having your certificate suspended.
• Remedial training may still be an option.
• Rarely, you may be able to convince them you
  are innocent.
• Rule #9: Try your best to settle at the informal
       Order of Suspension or
• If you DO NOT attend an informal
  conference or if you are unable to settle
  (and I told already told you to attend and
  settle under Rule #9) the FAA will issue
  the order.
• Unless, the order is captioned as an
  emergency order it does not take effect
       Order of Suspension or
• These orders are usually sent by certified
  mail to the address on file with the FAA.
  – Good reason to keep your address updated
    with the FAA per FAR 61.60.
• You can defer the effective date by filing
  an appeal with the NTSB within 20 days
  AND provided your attorney follows the
  NTSB Rules of Practice in Air Safety
            NTSB Appeal
• Important point!!! Use an aviation

• Why? You only have 20 days to appeal.
  An attorney (such as probate) won’t have a
  clue about the NTSB documents.
• Don’t pay an attorney for on-the-job-
       Order of Suspension or
• Provided you make an appeal with 20 days AND
  provided your attorney followed the NTSB Rules
  of Practice and Procedures the FAA’s order is
• Yes, you can STILL exercise privileges as an
  airmen certificate holder.
• If you DO NOT appeal within 20 days the order
  becomes final and you can NOT appeal the
  FAA’s order! = Loss of privileges!!
              NTSB Appeal
• As soon as you receive the FAA Order, take it to
  your AVIATION attorney to file an appeal.
• The FAA will file its order with the NTSB Board
  as its complaint. Your attorney must respond
  stating which (if any) of the FAA allegations you
  admit and which you deny.
• Case will be assigned to a law judge.
              NTSB Appeal
• Discovery
  – Your aviation attorney will ask the FAA to
    provide a list of witnesses they intend to use at
    the hearing and copies of all statements they
    have received from those witnesses.
• Can you still Fly? Yes, you can exercise
  FULL and complete privileges of the
               The Hearing
• Trial-type hearing before NTSB
  administrative judge in a city near you!
  Usually where the witnesses are located.
  – This judge travels in circuits hearing
    enforcement and medical appeals.
• “SHOW TIME” The only shot you’ll ever
  get to prove you case.
• Can you still fly? Yes, you can.
              NTSB Hearing
• You ARE NOT ENTITLED to a trail by jury of
  you peers.
• Some good news! The burden of proof is on the
  FAA based upon the preponderance of the
  evidence (51%).
• Your aviation attorney will try to discredit the
  FAA, but…
• The FAA can cross-examine you to discredit
• Judge will make decision at the end of the trial.
      The Decision; now what?
• The judge will;
   – Affirm the order of the FAA (you lose).
   – Decide the FAA proved some but not all of the
     charges and reduce the suspension or change the fine.
• But, the judge cannot impose a harsher
  punishment than the FAA ordered.
• If EITHER side is displeased with the judges
  decision it may appeal to the full board.
 Appeal to the full NTSB board
• This is a paper appeal; you are not there.
• Both sides file a written legal brief arguing their
• NO evidence allowed.
• ONLY issues considered:
   – Did the judge afford both sides a fair hearing?
   – Did the judge apply the law correctly to the
     facts that were proved at the trial?
• Can you still fly? Yes, you can.
  Appeal to the U.S. Court of Appeals

• Another paper appeal.
• But, judges will usually allow the lawyers to the case to
  argue the case orally to the 3-judge panel.
• Again, no new evidence.
• Can you still fly? Yes, you can, but…
   – Appeal does not automatically prevent the order from
     taking effect, but unless the original order was based
     on lack of qualifications the court will allow a motion
     to stay the order pending appeal.
  Appeal to the U.S. Court of Appeals

• How long am I going to have to wait?
  – Usually 2 years from appeal to decision.
  – Can I still fly, Yes, you can.
  – How much is this process going to cost?
    A LOT.
• The decision is called a “written order.”
• Decision:
  – End of the road (that’s all folks!)
   Surrendering your certificate
• If you don’t appeal, or finally lose your appeal,
  you must physically surrender your certificate to
  the FAA for the suspension or revocation.
• So what, I’m bad! What if I don’t?
• The FAA will get an order from a U.S. District
  judge for you to appear in court to explain why
   – Could be jailed for contempt of court until certificate
          Emergency Cases
• Don’t go here!
• The FAA can issue and order to prevent
  you from flying.
• If so, certificate MUST BE surrendered
  then and there.
• Denies you the due process of law, thus,
  the FAA only uses this option in extreme
    Getting your certificate back
• If suspended;
   – Automatically returned to you at the end of the
• If revocation:
   – Doesn’t necessarily mean forever.
• When is forever? If drug-related charge.
• If for FAR violation;
   – 1 year you may apply for reclassification
• If ATP Falsification; don’t go there.
   – Forever. Why? ATP’s must be of good moral character
           Clearing your record
• A FAR violation places your record at a competitive
• You may experience an increase in insurance costs
   – You may not be insurable.
• Administrative letters automatically removed after 1 year
   – Yeah, right! Make sure you check yourself, ask for an updated
     report to make certain.
  FAA; removed after 90 days. (What’s with that?)
• Records of enforcement action resulting in revocation
  stay on your record for life.
Section VI The NASA Report

     Immunity from Sanction
            NASA Report
• (website)
• The purpose of the NASA Report is to
  identify problems in the National
  transportation systems to provide a sound
  basis for improving the system.
              NASA Report
• There are at least 3 reasons to file:
   – You may make an important contribution to
     aviation safety.
   – You may receive immunity from sanction for
     an FAR violation.
   – You have nothing to lose by filing a report.
     NASA Report - Why File
• 1. Improving the airspace system
  – You may observe or uncover a dangerous
    procedure overlooked by the FAA.
• 2. The FAA considers the filing of a
  NASA Report indicative of a constructive
  attitude that make future violations less
                  NASA Report
• When filed, the FAA will impose a fine or
  suspend or revoke a pilot certificate for an FAR
  violation if report filed within 10 days.
• How long do you have to file a NASA Report?
      • 10 days
• The FAA can issue an order to make the violation
  a part of your airmen records (appealable)
              NASA Report
• File the NASA Report within 10 days of
  the event….if uncertain, file a NASA
  Report within 10 days anyway.
  – Send it in certified return receipt (U.S. Mail)
  – NASA will return bottom portion of report to
    you upon receiving the report.
  – Thus, you have 2 receipts detailing the filing
    of your NASA Report.
               NASA Report

• When filing a NASA Report, be brief, state
  only the minimum of information necessary
  to establish the situation.
• Should the FAA elect to violate you for an
  event, brandishing the mailing receipts is
  much like showing a cross to a vampire.

  – It stops the FAA in their tracks, provided….
   NASA Report - Limitations
• Event must not have been deliberate AND
  must not have involved a crime or
  – NASA checks the forms upon submission.
• A NASA Report will NOT protect you if
  your incident was due to lack of
  qualifications or competency.
   NASA Report - Limitations
• The FAA is prohibited from using the
  report or any information derived from the
  report in any enforcement action taken
  against you.
• Should more than one person witness the
  event, each should fill out and submit a
  NASA Report.
Section VII

FAA Medicals
          Aviation Medicals
• The purpose of this section is to discuss
  and ensure you have a practical working
  knowledge of how to analyze various
  aeronautical problems, arrive at the best
  solution, and provide the best response.
           Aviation Medicals
• You must hold a current FAA medical
  certificate in order to serve as a pilot or air
  traffic controller
   – FAA oversight is increasing due to the vast
     sums of data readily available via computer
   – FAA scans driving record files through the
     National Driver Registry data file on traffic
      Revocation of Medicals
• Many people give up their medical
  certificate without a fight
  – Don’t take no for an answer
  – The FAA can be persuaded to re-instate your
  – If not, the NTSB can order the FAA to re-
    issue or issue your medical certificate
       FAA Health Standards
• Standards are written to help the FAA
  answer these questions:
  – Can you see and hear well enough to control
    the aircraft?
  – Are you likely to suffer a suddenly
    incapacitating medical catastrophe in flight?
  – Are you likely to operate an aircraft
    irresponsibly so as to endanger other people?
     Disqualifying Conditions
• If the flyer has a history or diagnosis of
  any of the following
  – Diabetes (requiring insulin or hypoglycemic
    medication for control)
  – Heart attack
  – Angina
  – Abnormal EKG or evidence of coronary artery
    Disqualifying Conditions, Con’t.
• Psychosis
• Epilepsy
• Alcoholism
• Drug addiction
• Disturbance of consciousness without
• Character or behavior disorder that
  repeatedly manifested itself by overt acts
         Special Flight Tests
• These flight tests allow people with vision
  and hearing problems to demonstrate their
  abilities despite their medical problems
  (i.e. vision and hearing problems)
• Process referred to as certification by
  Statement of Demonstrated Ability
           Special Issuance
• Should one or more of the 10 specifically
  disqualifying conditions exist, then you can
  request special evaluation and receive a
  medical certificate through special issuance
• Burden is on you and your Aeronautical
  Medical Examiner (AME) to convince the
  FAA that you are an acceptable risk to
  flight safety
      Medical Reconsideration
• If your AME denies you, appeal to the FAA at
  Oklahoma City
• If Oklahoma City denies you, appeal to the
  Federal Air Surgeon in Washington, D.C.
• You are not required to report a change in health
  to the FAA before your application for a new
• However, you must refrain from exercising
  airman privileges upon learning of a
  disqualifying condition. Don’t get caught on this
       Truth or Consequences
• FAA medical certification is an honor
  system, depending on your truthfulness
• To falsify an FAA form, it is both an FAR
  violation and a felony
• FAA will revoke all FAA-issued
  certificates, and the U.S. Attorney will file
  charges on you up to five years in prison
  and/or a $250,000 fine
            Required Reports
• You must report any conviction for a drug- or
  alcohol-related traffic offense or the denial,
  cancellation, suspension, or revocation of your
  driver’s license related to such an offense no later
  than 60 days after the conviction or occurrence
• In Indiana, a DWI automatically and immediately
  results in a suspension of your drivers license and
  must be reported under FAR 61.15.
    Drug and Alcohol Testing
• Mandatory drug and alcohol testing has
  become a routine requirement throughout
  the aviation industry
• Refusal to submit to a mandatory drug or
  alcohol test is grounds for suspension or
  revocation of your pilot certificate
                Get Help
• An attorney who is knowledgeable in FAA
  medical certification procedures can be a
  tremendous help in evaluating your
• To read more on FAA aviation medical
  certification standards, see FAA Medical
  Certification: Guidelines for Pilots by Dr.
  Richard O. Reinhart
•    Cohen, M. L. & Olson, K. C. (1996). Legal
  Research: In a nutshell. St. Paul, MN: West
  Publishing Company.
•    Gesell, L. E. (1998). Aviation and the law.
  Chandler, AZ: Coast Aire Publications.
•    Hamilton, J. S. (2002). Practical Aviation
  Law. Ames, IA: Iowa University Press.
•    Rollo, V. F. (1994). Aviation Law: An
  introduction. Lanham, MD: Maryland Historical
        Attorney References
• Check local phone book under “attorney”
• Check references and ensure the attorney
  has dealt with these types of cases.
• AOPA (
• ALPA (
• Law Free Advice (
        Great Video References
• The Kindler, Gentler F.A.A. – The Myth or How
  to Protect your Pilot’s License
• The NASA Form and Pilot Immunity
• Ramp Check
• Each available from:
  –   Alchemy Video Production Corp.
  –   POB 29569
  –   New Orleans, LA 70189-0569
  –   1-800-721-3992 or 504-241-9150
           Your Speaker
• Professor Gregory L. Schwab, Ed.D.
• Department of Aerospace Technology
• Indiana State University
• Terre Haute, IN 47834
• 1-800-833-5325

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