Preparing for an FAA Investigation of Alleged Maintenance Violations
In recent weeks, the widespread media coverage concerning safety issues uncovered during airline inspections has raised the profile on the FAA’s role in enforcing aircraft maintenance. Questioning the FAA’s ability to keep passengers safe, the chairman of the House Transportation and Infrastructure Committee suggested that there may have been a “pendulum swing away from vigorous enforcement of compliance, toward a carrier-favorable, cozy relationship.” The chairman noted that now is not a time for complacency:
The fundamental reason our air transportation industry is so safe today is that we have, historically, been obsessive about compliance with Federal Aviation Regulations. By definition, any aircraft that does not comply with Federal Aviation Regulations is not safe to fly. I have no sympathy for arguments to the contrary, because that is exactly why the system is safe and the only way it will remain safe.
As a political regulatory enforcement entity, the FAA has reacted by increasing enforcement and fines. Southwest Airlines was fined $10.2 million after a whistleblower reported that numerous Boeing 737s were allowed to fly without being inspected for cracks in their fuselages. Delta Airlines and American Airlines have canceled thousand of flights because of wire safety ties that allegedly failed to meet a one-inch spacing requirement. And Atlas Air, Inc. has settled a U.S. government lawsuit brought in federal court alleging improper maintenance on one of its cargo planes. The president of the Professional Aviation Safety Specialists, a union which represent approximately 11,000 employees of the FAA and Department of Defense, claims that there are safety and maintenance issues at other major carriers. Although air maintenance facilities have not been the focus of the recent enforcement, it is possible that they also may come under increased scrutiny in the coming months.
The spectrum of the various remedies that the FAA may employ to curb violations of aviation regulations ranges from informal action to revocation of an operator’s or repair station’s certificate. The most widely utilized remedy for maintenance violations, however, remains the civil penalty, although criminal penalties are possible. For a single violation of an FAA regulation occurring on or after December 12, 2003, entities that are not small business concerns (guidelines for which are set forth in 13 CFR Part 121) are subject to a penalty up to $25,000. A single violation can quickly turn into multiple violations if repeated over multiple days or multiple flights. The FAA may also compromise a penalty. In cases where the civil penalty exceeds the dollar limitation on the FAA’s assessment authority (which in the case of entities other than small business concerns is $400,000 for violations on or after December 12, 2003) and the target of the enforcement proceeding does not agree to the compromise, the FAA refers the case to a United States attorney for prosecution in federal court.
Adverse Publicity Is a Strong Deterrent
It appears that the number of civil penalties imposed by the FAA on operators and maintenance facilities for maintenance violations, which was more than a dozen for the fourth quarter of 2007, may increase substantially in 2008. Even more damaging than any civil fine is the adverse publicity that may accompany a violation of the regulations. The FAA has recognized that publicizing enforcement actions serves many interests, including deterring future violations not only by the entity subject to the enforcement action but also by others similarly situated. Any publicity is largely out of the hands of the target of the investigation because the FAA’s standing policy is not to negotiate the contents of a news release or to provide a copy of a news release to an alleged violator in advance of publication.
In the current climate, it is highly probable that maintenance violations will not go unreported. Any FAA employee who becomes aware of an apparent violation must report the information to the appropriate FAA office and cooperate with any further investigation. And the Department of Labor’s Whistleblower Protection Program (49 U.S.C. § 42121) protects employees of air carriers and their contractors from retaliation for reporting an alleged violation of an FAA order, regulation, standard, or any other federal law related to air carrier safety.
The FAA’s enforcement powers are fairly broad. The FAA may investigate, if reasonable grounds exist, a violation of any aviation regulation and may reinspect any civil aircraft, aircraft engine, propeller, appliance, air navigation facility, or air agency. In conducting an investigation, the FAA may subpoena witnesses and records, administer oaths, receive evidence, examine witnesses, take depositions and seek to enforce subpoenas. Hearsay evidence, normally inadmissible in a court proceeding, may be used to prove a violation in a FAA administrative proceeding. The FAA has the burden of proof, by a preponderance of the evidence, to establish the facts necessary to satisfy each element of a statutory or regulatory violation. In especially complex or controversial cases, FAA legal counsel will become involved early in the process to counsel investigative personnel concerning the sufficiency of evidence or interpretations of regulations. Thus, a certificate holder is at a disadvantage if it does not immediately retain legal counsel upon learning of any possible maintenance violation.
Although not required, the FAA will generally issue a letter of investigation (LOI) to notify the alleged violator of the activity being investigated. The LOI specifies a time for reply, which is normally within 10 days, and may include a request that documents be retained or made available for inspection and copying. When these requests involve maintenance documents, the target of the investigation has little recourse because the FARs require that certificate holders allow the inspection of maintenance logs. Upon receiving a LOI, operators and maintenance facilities must be proactive because the FAA strives to complete its initial investigation and preparation of an enforcement investigation report, which would initiate a legal enforcement action, within 75 days of the date that the FAA knew or reasonably should have known of the likelihood of a violation.
Carriers and maintenance facilities should be proactive in taking steps to avoid the issuance of a LOI or to act quickly and decisively in the event one is issued. Part of this preparation entails an understanding of the wide array of evidence that the FAA uses to substantiate a violation. For instance, the FAA will conduct interviews with the witnesses knowledgeable about the violation. Witnesses may also be asked to prepare a written statement. Unique issues arise because the FAA may actually conduct an interview of a certificate holder’s employee or agent prior to disclosing the investigation to company management. In certain limited cases, the FAA may grant “special enforcement consideration” to individuals who voluntarily disclose their participation in the violation. It is imperative that counsel be involved in preparing the certificate holder and its employees for these contingencies and to ensure that the certificate holder and its employees understand their respective roles and duties.
The FAA will also undertake steps to obtain copies of all relevant documents. In the case of an alleged maintenance violation, this will certainly entail copies of all relevant maintenance records, including the maintenance logbook, Airworthiness Directive (AD) compliance records and possibly historical maintenance records. The FAA may also request hard-copy documents and electronically-stored information, in which instance the FAA will seek to have a witness authenticate such documents. In addition, the FAA may seek aircraft flight and aircraft maintenance manuals because these documents contain information necessary for the safe operation of the aircraft and airworthiness limitations.
In this regard, it is vital that a carrier operating under Parts 121, 129, or 135 routinely review or sample records reflecting the following information for each of its aircraft:
- total years in service
- total flight hours
- total flight cycles
- date of last records review and inspection
- current status of life-limited parts
- time since last overhaul of all structural components required to be overhauled on a time specific basis
- current inspection status of the airplane, including time since last inspection
- status of major structural alterations, compliance with ADs, service bulletins, or original equipment manufacturer notices
In addition, a carrier should conduct spot inspections of several structural items and should observe maintenance procedures and tasks to ensure that work instructions are complied with and that maintenance tasks are accomplished by trained and qualified personnel.
Voluntary Disclosure Is Advantageous
In order to avoid becoming a target of the FAA’s heightened enforcement, certificate holders must increase their internal reviews and become proactive instead of reactive. The FAA itself recognizes that internal audits improve a certificate holder’s ability to identify and correct safety problems before FAA inspections. Under the FAA’s voluntary disclosure program (14 C.F.R. Part 193), the FAA may accept voluntary disclosure of an apparent violation if, among other things, the certificate holder notifies the FAA immediately after detecting the violation and before the FAA learns of it by other means. If the certificate holder meets all voluntary disclosure requirements, it may avoid a civil fine and be subject only to a letter of correction. Thus, the key is to identify, correct and voluntarily disclose any issue before the FAA launches an investigation.
In the event that the FAA issues a LOI, there are several steps that certificate holders should immediately consider with the assistance of legal counsel. These steps include the following:
- prompt disclosure to insurers and brokers
- notification to relevant employees and agents concerning the investigation
- procedures and protocols concerning witness preparation and interviews
- retention and disclosure of maintenance documents and protection of proprietary and privileged information
- preservation of relevant physical evidence
- responses to media inquiries and FAA press releases
By the time the FAA issues a LOI, the certificate holder is already at a disadvantage if it has not taken adequate steps to prepare. Proper preparation may reduce the likelihood that the FAA will ultimately commence legal enforcement proceedings seeking a civil penalty. The civil penalty adjudication process, which is governed by the rules of practice contained in Part 13 of the FARs, is an unwelcome exercise for any certificate holder.