RICO to the Rescue?

A recent decision by the United States Eleventh Circuit Court of Appeals may offer a unique path for airline passengers to pursue rights against airlines for issues relating to prices, rates, or services.

As Timothy M. Ravich recently commented in an article by the Daily Business Review, in Ray v. Spirit Airlines, Inc., a class of airline passengers has brought a putative federal class action lawsuit against the airline on the basis of the Racketeer Influenced and Corrupt Organizations Act (“RICO”), alleging that Spirit Airlines conducted an enterprise by means of racketeering activity, e.g., mail and wire fraud involving the concealment and misrepresentation of airfares and user fees.

While the district court dismissed the action on the basis or preemption, the Eleventh Circuit Court of Appeals vacated that decision:

Because federal laws do not preempt other federal laws, subsequent legislation could preclude Plaintiffs’ claims only if Congress had repealed the provisions of RICO, at least insofar as they authorized Plaintiffs’ actions. Congress did not do so expressly through the Airline Deregulation Act of 1978 (ADA) … [a]nd we find no ‘repeal by implication’ because Congress has not exhibited the requisite clear and manifest intent.  The ADA explicitly preempted state laws but, notably, said nothing about any federal cause of action. Moreover, a saving clause found in the ADA did not disturb any other remedies provided by law. Quite simply, the two laws are not irreconcilably in conflict, nor was the ADA clearly intended as a substitute for RICO. Applying the strong presumption against implied repeals, we are constrained to conclude that RICO supplements, rather than subverts, federal regulation of air carriers.

In reaching this conclusion, the court recognized at least one other circumstance in which a federal court found that a RICO action was not precluded by airline deregulation policy.  Cancellation fees charged for flights in the months following September 11, 2001 was the issue in All World Prof’l Travel Servs., Inc. v. Am. Airlines, Inc. where a federal district court in California recognized that a travel agency could have complained to the DOT about an airline’s conduct, but was not required to submit a RICO-type mail and wire fraud claim to the DOT. On this basis, the Eleventh Circuit Court of Appeals wrote that, “we agree with the All World court that civil RICO claims predicated on mail and wire fraud are not precluded by the ADA simply because they involve fraud arising out of pricing, fees, and advertising in the airline industry."

The Ray case is remarkable in that civil lawsuits arising under RICO are seldom used to address consumer complaints against the airline industry. As the Eleventh Circuit’s opinion indicates, only one case relates RICO and the Airline Deregulation Act of 1978.  The theory being tested in Ray appears to be a novel one as applied to airline airfare advertising specifically, and an infrequently litigated theory as applied to the Airline Deregulation Act generally. As a practical matter, traveling under RICO to vindicate alleged violations of airline passengers’ rights is not surprising considering that few private rights of action for the direct use of airline passengers under the Airline Deregulation Act. While consumers might complain to the Department of Transportation for issues relating to airline fares or services, it is usually up to the DOT to enforce penalties. Thus, though still at the pleading stage, Ray (taking the lead of All World Prof’l Travel, Inc.) might establish RICO as a viable strategy for travelers to end-run decades-long frustration with federal passengers’ rights laws that expressly limit or extinguish private causes of action arising from airline prices, routes, and services.

The fact that courts are having to act as customer dispute resolution centers is troubling and Ray may be a case of be careful what you wish for. A victory in that case (however probable or improbable) might compensate a certain class of airline passengers and reward their counsel. But, the commercial airline market will react, possibly in the form of higher fares and ancillary fees. Moreover, the case highlights inconsistencies between talking points broadcast under the banner of a national airline policy and actual airline customer service and conduct. For that matter, where lawmakers are passing specious laws that protect airline passengers without affording passengers any direct rights, the plaintiff bar will continue to think creatively about getting their clients their day in court; for their part, airlines and defense counsel would be well-served to understand that legal victories may be public relations nightmares.

New Helicopter Rules on FAA's Horizon

The Federal Aviation Administration ("FAA") plans to change current rules governing the certification of rotorcraft weighing 7,000 pounds or less with nine passengers seat or less, under Part 14 of the Code of Federal Regulations, Part 27. 

According to the FAA,several comments on its proposal to move forward "indicated a substantial interest in favor of some form of revision or restructure of the rotorcraft design certification standards ... [and stated that] the current regulatory scheme is outdated by technology and impedes the development of new rotorcraft models."

According to one source:

Helicopter Association International, in its comments posted online, said, "Rapid advances in technology over the past 20 years have challenged the current standards. At the same time, recent rulemaking activities on Part 23 regulations have been making very promising progress with proposals to simplify complex rules and reduce certification costs significantly, while enabling design improvements and the adoption of new safety technology. Because of these developments, we believe that we have a unique opportunity, right now, to conduct a full-scale review and overhaul of Parts 27 and 29. We should take advantage of this opportunity by immediately moving ahead with an effort to restructure rotorcraft airworthiness standards." The current rules, HAI added, "create unnecessary impediments to the adoption of new technology, unnecessarily increase the costs and delay development of new aircraft designs."

No timeline has been set by the FAA and some general aviation manufacturers have said they hope the new Part 23 revision will enable them to certify new models twice as fast, with half the costs.

Federal Court Rules Aviation No-Fly List Violates Due Process and APA

In a 65-page opinion with broad implications, U.S. District Judge Anna Brown of Portland, Oregon, wrote that the current no-fly appeals procedure is "wholly ineffective" and violates  due process rights.

The Judge ordered the government to come up with a new way for airline passengers to challenge travel restrictions. The government should give them basic information, including confirming whether they are on the list and why, she ordered.

By way of background, the plaintiffs in the lawsuit entitled Latif v. Holder were all U.S. citizens and lawful permanent residents--including four veterans of the United States Armed Forces. They were not allowed to board flights to or from the United States or over United States airspace. They believed that they were denied boarding because they were on the "No-Fly List," a government terrorist watch list of individuals who are prohibited from boarding commercial flights that will pass through or over United States Airspace.

Each of the plaintiffs submitted applications for redress through the Department of Homeland Security Traveler Redress Inquiry Program, but they did not receive explanations as to why they were not permitted to board flights.

Consequently, they sued, claiming that their Fifth Amendment right to procedural due process had been violated because the government had not given them any post-deprivation notice or any meaningful opportunity to contest their continued inclusion on the No-Fly List.

The full decision appears below:

Latif v Holder

What's Inside?

Authorities report that there are yet-new prospects for finding the so-called "black box" or flight data recorder of Malaysia Flight 370 that mysteriously disappeared several weeks ago.  Alongside this news are more suspicions of related terrorist activity. Both stories are related and they are both connected to how desperately important the flight data recorder is in this and every aviation tragedy of this size.

A routine Internet search will produce some interesting information about black boxes.  They have come a long way from a foil-based system for recording the vital signs of an airplane to a more sophisticated unit:

While the concept of a black box is well known in public conversation, the law is not as commonly known. Interestingly, the law itself is the best explanation of why the black box important.  This, in effect, is the information that is being sought after -- almost 100 bits of critical data:

§ 121.344 Digital flight data recorders for transport category airplanes.

No person may operate under this part a turbine-engine-powered transport category airplane unless it is equipped with one or more approved flight recorders that use a digital method of recording and storing data and a method of readily retrieving that data from the storage medium. 

The operational parameters required to be recorded by digital flight data recorders required by this section are as follows:

(1) Time;

(2) Pressure altitude;

(3) Indicated airspeed;

(4) Heading—primary flight crew reference (if selectable, record discrete, true or magnetic);

(5) Normal acceleration (Vertical);

(6) Pitch attitude;

(7) Roll attitude;

(8) Manual radio transmitter keying, or CVR/DFDR synchronization reference;

(9) Thrust/power of each engine—primary flight crew reference;

(10) Autopilot engagement status;

(11) Longitudinal acceleration;

(12) Pitch control input;

(13) Lateral control input;

(14) Rudder pedal input;

(15) Primary pitch control surface position;

(16) Primary lateral control surface position;

(17) Primary yaw control surface position;

(18) Lateral acceleration;

(19) Pitch trim surface position or parameters of paragraph (a)(82) of this section if currently recorded;

(20) Trailing edge flap or cockpit flap control selection (except when parameters of paragraph (a)(85) of this section apply);

(21) Leading edge flap or cockpit flap control selection (except when parameters of paragraph (a)(86) of this section apply);

(22) Each Thrust reverser position (or equivalent for propeller airplane);

(23) Ground spoiler position or speed brake selection (except when parameters of paragraph (a)(87) of this section apply);

(24) Outside or total air temperature;

(25) Automatic Flight Control System (AFCS) modes and engagement status, including autothrottle;

(26) Radio altitude (when an information source is installed);

(27) Localizer deviation, MLS Azimuth;

(28) Glideslope deviation, MLS Elevation;

(29) Marker beacon passage;

(30) Master warning;

(31) Air/ground sensor (primary airplane system reference nose or main gear);

(32) Angle of attack (when information source is installed);

(33) Hydraulic pressure low (each system);

(34) Ground speed (when an information source is installed);

(35) Ground proximity warning system;

(36) Landing gear position or landing gear cockpit control selection;

(37) Drift angle (when an information source is installed);

(38) Wind speed and direction (when an information source is installed);

(39) Latitude and longitude (when an information source is installed);

(40) Stick shaker/pusher (when an information source is installed);

(41) Windshear (when an information source is installed);

(42) Throttle/power lever position;

(43) Additional engine parameters (as designated in Appendix M of this part);

(44) Traffic alert and collision avoidance system;

(45) DME 1 and 2 distances;

(46) Nav 1 and 2 selected frequency;

(47) Selected barometric setting (when an information source is installed);

(48) Selected altitude (when an information source is installed);

(49) Selected speed (when an information source is installed);

(50) Selected mach (when an information source is installed);

(51) Selected vertical speed (when an information source is installed);

(52) Selected heading (when an information source is installed);

(53) Selected flight path (when an information source is installed);

(54) Selected decision height (when an information source is installed);

(55) EFIS display format;

(56) Multi-function/engine/alerts display format;

(57) Thrust command (when an information source is installed);

(58) Thrust target (when an information source is installed);

(59) Fuel quantity in CG trim tank (when an information source is installed);

(60) Primary Navigation System Reference;

(61) Icing (when an information source is installed);

(62) Engine warning each engine vibration (when an information source is installed);

(63) Engine warning each engine over temp. (when an information source is installed);

(64) Engine warning each engine oil pressure low (when an information source is installed);

(65) Engine warning each engine over speed (when an information source is installed);

(66) Yaw trim surface position;

(67) Roll trim surface position;

(68) Brake pressure (selected system);

(69) Brake pedal application (left and right);

(70) Yaw or sideslip angle (when an information source is installed);

(71) Engine bleed valve position (when an information source is installed);

(72) De-icing or anti-icing system selection (when an information source is installed);

(73) Computed center of gravity (when an information source is installed);

(74) AC electrical bus status;

(75) DC electrical bus status;

(76) APU bleed valve position (when an information source is installed);

(77) Hydraulic pressure (each system);

(78) Loss of cabin pressure;

(79) Computer failure;

(80) Heads-up display (when an information source is installed);

(81) Para-visual display (when an information source is installed);

(82) Cockpit trim control input position—pitch;

(83) Cockpit trim control input position—roll;

(84) Cockpit trim control input position—yaw;

(85) Trailing edge flap and cockpit flap control position;

(86) Leading edge flap and cockpit flap control position;

(87) Ground spoiler position and speed brake selection;

(88) All cockpit flight control input forces (control wheel, control column, rudder pedal);

(89) Yaw damper status;

(90) Yaw damper command; and

(91) Standby rudder valve status.

General Aviation Pilot Certification Re-Examined

The United States Department of Transportation has announced that it has "joined with the Cornell e-Rulemaking Initiative in a pilot project to explore ways to use the Internet, blogging, and social media to help ease and encourage greater public participation in DOT rulemaking."

The platform is "RegulationRoom," which is designed and operated by "CeRI" (the Cornell eRulemaking Initiative) to provide "an online environment for people and groups to learn about, discuss, and react to selected rules (regulations) proposed by federal agencies. It expands the types of public input available to agencies in the rulemaking process, while serving as a teaching and research platform."

Meanwhile, it is reported that the Federal Aviation Administration ("FAA") is bringing flying and driving together by evaluating a proposed rule that would allow private pilots to use a driver’s license instead of a medical certificate.

This issues arise from a joint petition filed two years ago by the Aircraft Owners and Pilots Association ("AOPA") and the Experimental Aircraft Association ("EAA") requesting that a third-class medical exemption cover more recreational pilots.

Meanwhile, related legislation in the form of a General Aviation Pilot Protection Act ("GAPPA," House Bill H.R. 3708 and Senate Bill S.2103), is pending in Congress.  Essentially, a driver's license would double as a pilot's license in specific situations.

These efforts parallel a study suggesting that the FAA improve the usability of its online application system and clarity of its pilot's medical form.

Aviation Diplomacy - Part of the Problem?

As I teach my aviation law students, where fault is established as a matter of fact and evidence, the law does the best it can to compensate the families of those who are lost in aviation accidents, but it is not a science and it is hard for survivors to believe that the concept of justice has ever "been done."

Quite simply, the emotional trauma -- present on a personal, social (e.g., community) and even global level -- is lasting.  All the more reason the recent tragedy of Malaysia Flight 370 is so disturbing and why the lack of a coherent explanation for the disaster some 8 days and counting aggravates a horrible situation.

Journalists and investigators and regular airline passengers around the world are stunned this week with news of perhaps the strangest tragedy in aviation history: A Malaysia Airlines Boeing 777 disappeared from civilian RADAR (apparently) during ordinary cruising flight.

At this early stage of the investigation (but a painfully late stage for the families and friends who hold out hope) there is no shortage of theories -- from the logical to the imaginative.  That said, Malaysian authorities have (more than a week after the incident) stated that the "Evidence is consistent with someone acting deliberately from inside the plane," officially confirming the plane's disappearance was not caused by an accident.  ["Deliberate" is not a sinister term standing alone, yet the context here suggests otherwise.]

Among other interesting things about all this is that the person making the announcement is no less than the Prime Minister of Malaysia.  That is a noticeable feature -- and not necessarily an encouraging feature -- of this aviation incident involving a national "flag carrier."

In the United States, air carriers are private and work with the National Transportation Safety Board ("NTSB") which takes the lead in investigating and determining the "probable cause" of an aviation accident.  The NTSB's report is not admissible in a court of law for liability purposes; the policy reason for this is to encourage efforts to find out what happened and why - not to adjudicate who is to blame from a damages perspective, if anybody.

Compare that against the Malaysia investigation where the government itself seems guarded in its dissemination of information that is, for starters, time critical.

From a practical perspective, this is all explicable as the New York Times reported --

By international agreement, the country in charge of investigating a plane crash or other such event is the one where it occurred. If a plane comes down in international waters, jurisdiction goes to the country whose carrier was involved. In this mystery, the presumption is that the problem is Malaysia’s. But whoever is officially responsible, there is a guiding American principle.

We try very hard not to make it look like we are running the investigation, even if we more or less are,” said Bernard Loeb, a former head of aviation safety at the National Transportation Safety Board, which leads the American delegation of experts at any crash involving an American airline or an airplane built in the United States. When crashes occur here, foreign aircraft or engine manufacturers like Airbus or Rolls-Royce get the same “observer” status and often contribute technical expertise.

From a legal perspective, however, if (and when) lawsuits arise from Malaysia 370, the jurisdiction and laws (not least of which is the so-called Montreal Convention) involved will be as varied as the hundreds of souls from around the world aboard the airplane -- making a strong and transparent and organized investigation all the more important.

Fresh off the presses is the March 6, 2014 Huerta v. Pirker legal decision by the National Transportation Safety Board (“NTSB”) Office of Administrative Judges in the context of unmanned aerial systems (“UAS”) or “drones”–specifically commercial UASs.

Below is a description of the ruling, the ruling itself, and some observations about where things stand now.

The case stems from the operation of a powered glider in the vicinity of the University of Virginia. According to the FAA, the glider is an “aircraft” and was operated for compensation in that payment was received for video and photographs taken during the flight. The operator, Raphael “Trappy” Pirker, was fined 10,000 by the Federal Aviation Administration (“FAA”) in October 2011 under the regulation that prohibits the operation of an aircraft in a careless or reckless manner so as to endanger the life or property of another.

“Trappy” filed a motion to dismiss the FAA’s order and penalty on the basis that the FAA did not have any legal authority to regulate model aircraft flight operations. The FAA argued that it has the power to regulate all “aircraft” and that model aircraft fall within the scope of the term “aircraft.” Judge Patrick Geraghty disagreed.

In his order (see below), the NTSB judge said that the FAA has historically considered “aircraft” and “model aircraft” as two different things. For example, in its policies, the FAA has modified the term “aircraft” by prefixing the word “model” to distinguish one device or contrivance from another, wrote Judge Geraghty. In addition, an “aircraft” is a “device that is used or intended to be used for flight in the air.” The FAA requires operators of “aircraft” to obtain airworthiness and registration certification for their machines. It has never done so with respect to “model” aircraft. As a result, the NSTB rejected the FAA’s argument that is power to regulate “aircraft” included regulation of “model aircraft.” According to the NTSB, to believe otherwise would be to believe that “a flight in the air of, e.g., a paper aircraft, or a toy balsa wood glider, could subject the ‘operator’ to the regulatory provisions of the FAA.”

Stated another way, the FAA does not regulate “model aircraft” like Trappy’s in any mandatory way and has not formally enacted any rule that allows it to do so now. Says the NTSB:

[The FAA] has not issued an enforceable [Federal Aviation Regulation ("FAR")] regulatory rule governing model aircraft operation; has historically exempted model aircraft from the statutory FAR definitions of “aircraft” by relegating model aircraft operations to voluntary compliance with [FAA guidance on the subject]. [Therefore, Trappy's] model aircraft was not subject to FAR regulation and enforcement.The classification UAS simply does not appear in the Federal Aviation Regulations.

In addition, and equally significant, while the FAA has published various notices and policy statements respecting UAS, such policy statements are for internal FAA use and not binding upon the general public. For the FAA to create a valid law or rule for UAV operation, it must issue a Notice of Proposed Rulemaking (“NPRM”) and publish such notice for 30 days before any new rule becomes effective. It has not done that, the NTSB found. That is, at the time of Trappy’s model aircraft operation, “there was no enforceable FAA rule or FAR regulation application to model aircraft or for classifying model aircraft as an UAS.”

In all, the Pirker decision is important, but perhaps only because it is a “first” by offering some legal guidance for an industry starving for predictable regulations.

Does the decision really say anything more than what we know (or hope) is true in our democracy – that the government cannot act to punish people without proper rules? Maybe so. If there is a lesson in the Pirker decision, it may be that UAS operators can or should push the envelope and force aviation regulators to focus less on their power to punish in the name of safety and more on their role to stimulate aviation commerce.

For more commentary see droninglawyer.com.