The GAO, in a legal opinion issued September 30, 2008, declared that "FAA currently lacks the authority to auction arrival and departure slots, and thus also lacks authority to retain and use auction proceeds."  This legal opinion came as a result of a Congressional request.

In April and May, 2008, the FAA issued proposed regulations to conduct auctions of the airport arrival and departure slots at LaGuardia, JFK and Newark airports. (See, FAA Proposes Congestion Management Rule for JFK and Newark Liberty).  Since then, the FAA indicated in August that that it was proceeding with an auction of two specific slots at Newark airport on September 3, 2008.  Although that action was administratively stayed (See, FAA Suspends Auction of Flight Slot at Newark Airport), the stay (issued by the FAA’s Office of Dispute Resolution for Acquisition) was subsequently lifted on September 30, 2008.  Moreover, the FAA, on September 16, 2008, announced that it "may" auction slots at Newark, LaGuardia and JFK starting on January 12, 2009.

The FAA claimed that the slots are "intangible property" that it "constructs, owns, and may lease" for "adequate compensation under 49 U.S.C. 106(l)(6) and (n) and 40110(a)(2).  The GAO stated:

An examination of those statutes read as a whole, however, makes clear that Congress was using the term "property" to refer to traditional forms of property.  It was not referring to FAA’s regulatory authority to assign airspace slots, no matter how valuable those slots may be in the hands of the regulated community.  Related case law confirms our conclusion.

The GAO concluded that if the auctions were to go ahead, and the FAA retained the proceeds that the the GAO "would raise exceptions under its account settlement authority for violations of the ‘purpose statute,’ 31 U.S.C. 1301(a), and the Antideficiency Act, 31 U.S.C. 1341(a)(1)(A)."

Needless to say the Department of Transportation was not too pleased with the outcome, stating that the GAO did not have time to do a thorough review given the "complexities of aviation law."  If the GAO had the opportunity to reflect, the DOT was "confident that GAO will better understand both the validity and the effectiveness of [the FAA’s] approach."

On the other side of the fence, both the Air Transport Association and the Port Authority of New York and New Jersey issued press releases applauded the GAO’s legal opinion.  Rep. James Oberstar (D-Minn.), the Chairman of the U.S. House Transportation and Infrastructure Committee, said in a press release that the "FAA should now reconsider its plan to auction slots in light of the GAO finding."

(For my commentary on the situation, see the blog post The "Tragedy of the Commons" and Airport Congestion Management)

The Government Accountability Office issued a report to the Chairman of the U.S House Committee on Transportation and Infrastructure entitled "FAA Has Taken Steps to Determine That It Has Made Correct Medical Certification Decisions" on September 30, 2008.

In 2005, a joint investigation known as "Operation Safe Pilot" was conducted by the Department of Transportation Office of the Inspector General, Social Security Administration’s Office of Inspector General, and California’s U.S. Attorney Office.  That investigation revealed that the FAA had issued medical certificates to a small percentage of pilots who had disqualifying medical conditions that they did not report on their medical certification applications.  Calling some of the medical certificate cases "egregious," the DOT IG stated that 45 individuals identified as having falsified their certificates were prosecuted criminally as a result of the investigation. 

In March, 2007, the House Committee issued a report showing that a significant number of pilots were flying with fraudulent medical certificates and asked the GAO to assess FAA’s efforts for screening medical certification applicants and identifying medically unqualified pilots.  The Report published on September 30, 2008, is the result of that request.

In sum, the GAO reported that the FAA has developed programs to help it determine whether it has properly issued medical certificates.  In particular, the FAA has instituted two quality assurance review programs, one to evaluate certificate that the Aviation Medical Examiners issued and a second to evaluate certificate decisions made by FAA application examiners.  In addition, the FAA checks each pilot applicant against the National Driver Register to look for drug- and alcohol-related motor vehicle actions and indications of substance abuse.

However, due to "recently resolved litigation," the FAA currently does not check federal disability benefits databases for indications that pilots may have disqualifying medical conditions.  The GAO’s analysis of the Social Security Administration’s disability databases found that 1,246 of the 394,985 medically certified pilots were receiving disability benefits.  Since this was the crux of the DOT IG’s "Safe Pilot" investigation, the GAO’s recommendation that "federal disability data bases can provide useful information on potentially disqualifying medical conditions" is a bit of an understatement.  That being said, the GAO correctly points out that just because a pilot is receiving disability benefits does not automatically mean that they are medically unfit to fly.

On September 26, 2008, Chairman James Oberstar (D-Minn.) issued a press release stating that although he was pleased that progress is being made, the fact that there are still medical certificates being issued to unfit applicants is troubling.  “Progress is good, but progress must lead to a goal,” Oberstar said. “In this case, the goal should be 100 percent certainty that certificates are not obtained fraudulently or erroneously. Perhaps that is an impossible goal, but it should be our goal nonetheless.”

The U.S. House Subcommittee on Aviation met on September 25, 2008 to receive testimony on runway safety.  This hearing was a follow-up to the Subcommittee’s February 13th hearing.  Rep. Jerry Costello (D-Ill.) stated in his opening remarks that although the U.S. air transportation system is the safest in the world, there remain many issues to be addressed to keep it that way.  In particular, he was concerned about the fact that although air traffic is down by 3% for the first six months of 2008 compared with 2007, runway incursions are up slightly.  While agreeing that the FAA is headed in the right direction with respect to the development and the deploying of new runway technology, Rep. Costello wanted the FAA to address the very real human factors that the GAO raised in the previous hearing, i.e., the air traffic controller shortage and the adequacy of the training of air traffic controllers.  Rep. Costello specifically mentioned the serious runway incursion that occurred at Lehigh Valley International Airport in Allentown, Pennsylvania, on September 19, 2008, where a trainee failed to notice that a small single engine airplane had not yet vacated the runway prior to allowing a regional jet to take-off on the same runway.  It was reported that 35% of the controllers at the tower at Allentown are trainees.

With respect to the increase of runway incursions, Hank Krakowski, FAA’s Chief Operating Officer, explained that after the FAA adopted the International Civil Aviation Organization’s (ICAO) definition of "runway incursion," it has seen a spike in incursions due to the more inclusive nature of the ICAO definition.  That being said, Mr. Krakowski spent most of his time offering an update about the technological innovations and the progress on the testing in the field.  However, Mr. Krakowski did not address Rep. Costello’s concerns head-on.  Although he addressed some of the "human factors," by mentioning certain procedural changes and a "first ever" fatigue symposium (which are, by all accounts, steps in the right direction), he did not mention anything about staffing levels and quality of the training.

Continue Reading House Aviation Subcommittee Conducts Hearing on Runway Safety

On September 8, 2008, the FAA published a notice in the Federal Register (73 Fed.Reg. 52074) that it is proposing to modify the standard grant application requirements that are required of a sponsor of a non-primary airport before receiving a grant under the Airport Improvement Program (AIP).  This modification would require that a sponsor of a nonprimary airport submit a list of the aircraft (both fixed wing and rotary wing) that are based on the airport.  The FAA invites public comments on this proposed modification.  Comments must be submitted on or before October 8, 2008.

FAA believes that this information is necessary because "accurate information on based aircraft is an important element of justification for many proposed AIP projects at nonprimary airports."  In addition, the FAA posits that the information regarding based aircraft "supports the airport’s importance in the biennial Report to Congress – The National Plan of Integrated Airport Systems (NPIAS) and in the Airport Master Record." 

FAA defines "based aircraft" as an "operational aircraft that is registered in the FAA Aircraft Registry that is at the airport the majority of the year."  The proposal is that the FAA may require a sponsor for a nonprimary airport to include the "N-number" for each based aircraft or to update the list of based aircraft submitted with the most recent Form 5010 inspection.  Unfortunately, the Notice does not provide definition of how airports are to determine which aircraft are "based aircraft."  The FAA concludes the Notice by stating that it will consider a failure to provide the information "as a factor when considering a request from the airport for discretionary funding."

Comments can be sent or delivered to FAA, Airports Financial Assistance Division, APP-500, Room 619, 800 Independence Avenue, SW., Washington D.C. 20591.  Comments can also be submitted electronically by clicking here and then clicking on "Send a Comment or Submission."  This will take you to the Regulations.gov page for docket number FAA-2008-0972-0001.

In 1968, Garrett Hardin, a professor of Human Ecology at University of California at Santa Barbara, wrote an influential article for the journal Science that described a dilemma in which multiple individuals acting independently in their own self-interest can ultimately destroy a shared resource even where it is clear that it is not in anyone’s long term interest for this to happen.  Prof. Hardin titled this dilemma and his article the “Tragedy of the Commons.”  The current situation at this country’s busiest airports, a shared resource, is a graphic example of the Tragedy of the Commons.

In Prof. Hardin’s article, the central theme is that herders share a common parcel of land, i.e., the commons, on which they are all entitled to let their cattle graze.  It is in each herder’s interest to put as many cattle as possible onto the commons, even if it is damaged as a result.  The herder receives all of the benefits from the additional cattle, but damage to the commons is shared by the entire group.  If all the herders make this individually rational decision, however, the commons is destroyed.

A parallel can be drawn to the sttructure of the United States air transportation system with respect to congestion management.  It is in the each airline’s interest to schedule as many flights as possible during the busiest time of day, even if those flights are substantially delayed as a result thereby overloading the airspace system and the airport, taxing customers’ patience, and damaging the airline’s reputation.  Each of the airlines receives benefits from the additional flights, but the damage to the airport, the airspace system and the airlines is shared by the entire group. 

Continue Reading The “Tragedy of the Commons” and Airport Congestion Management

Rep. Jerry Costello (D-IL), Chairman of the Aviation Subcommittee remarked in his opening statement that it is: “inexcusable and unacceptable to ignore rules, regulations and standard practices to accommodate those you have responsibility to regulate especially when you have people’s lives in your hands.”   With that in mind, the Subcommittee heard testimony from the Office of the Inspector General (OIG) that the FAA had “alarming problems” and “severe lapses” in judgment in its certification process for the Eclipse EA-500, a Very Light Jet (VLJ). VLJs have been heavily promoted as a potential solution to congestion around larger airports, and as a means tobring a convenient, fast transportation alternative to smaller communities that cannot support network commercial air service.

In particular, the OIG made three findings concerning the EA-500 certification process. First, OIG found that the FAA permitted exceptions to its usual design certification process. For example, the FAA accepted an “IOU” from Eclipse that it would meet accepted standard at a later date for the avionics software. For an aircraft that relies heavily on software, the OIG would have expected the FAA to perform rigorous analysis and testing. Second, the OIG found that the FAA awarded Eclipse a production certificate even though the company failed to demonstrate the ability to replicate the approved design. This was despite that fact that Eclipse encountered numerous problems replicating its won aircraft design on the assembly floor both before and after receiving its certificate. Finally, Senior FAA management identified Eclipse as a priority certification and appeared to be lenient with the manufacturer.

 

Continue Reading U.S. House Subcommittee Investigates Alleged Regulatory Lapses in the Certification and Manufacture of the Eclipse EA-500

If you own a commercial airport that has accepted federal grants and you have sold all or part of the airport’s property, you, no doubt are aware of the provisions of 49 U.S.C. § 47107(l)(5)(A). That provision of the Federal Aviation Reauthorization Act of 1996, as amended, limits any request to recoup capital an operating costs from the sale of airport property to those expenses that occurred within 6 years after the expense has been incurred: 

any request by a sponsor or any other governmental entity to any airport for additional payments for services conducted off of the airport or for reimbursement for capital contributions or operating expenses shall be filed not later than 6 years after the date on which the expense is incurred

49 U.S.C. § 47107(l)(5)(A). That new terminal that the City spent $1 million out of its General Fund on seven years ago? According to § 47107(l)(5)(A), you cannot recoup the expense now. Those operating deficits that the airport has been running for the past ten years that the City has covered? Only the last six years can be recouped. Although you may not be planning on selling all or part of the airport now, or even five years from now, it makes sense, because of § 47107(l)(5)(A) to ensure that the owner’s expenses are currently being paid by the airport by requesting reimbursement on a timely basis.

 

Continue Reading Plan Now, If You Plan to Sell Later: Restrictions on Use of Airport Revenues

On September 10, 2008, Anne Milgram, the New Jersey Attorney General filed an amicus curiae brief in support of the Petitioners in the Airspace Redesign litigation currently pending in Court of Appeals for the District of Columbia Circuit.  In it, the New Jersey Attorney General emphasizes the impact that the Airspace Redesign will have on New Jersey’s air quality and the FAA’s abject failure to address those air quality issues.

The amicus brief "concurs with and joins" in Petitioners’ argument that the Airspace Rdesign is not exempt from the Clean Air Act or EPA regulations, that FAA’s presumption of conformity for air traffic control procedures is not applicable to the Airspace Redesign; and that neither FAA’s regulations nor the record in this matter supports FAA’s "fuel burn study."  The amicus brief goes on to state that the issues that face New Jersey as a result of the FAA’ decision, including inhibiting New Jersey’s ability to comply with the NAAQS under the Clean Air Act.

The brief also mentions that the FAA violated the National Environmental Policy Act (NEPA) because the Airspace Redesign was approved on the basis of an inadequate environmental impact statement.  In particular, the brief argues that the EIS failed "to adequately inform the public of the noise impacts of the Airspace Redesign."

This brief, coupled with the brief that Sen. Arlen Specter (R-Pa.) and Sen. Christopher Dodd (D-Conn.) filed on September 5, 2008, provide the court with additional reasons why the EIS must be remanded back to the FAA for further consideration.

Senator Arlen Specter (R-Pa.) and Senator Christopher Dodd (D-Conn.) filed a amicus curiae brief on Friday, September 5, 2008. 

The Brief makes three arguments: how the FAA did not give appropriate weight to noise reduction in balancing the alternatives for the Airspace Redesign Project, how the FAA failed to give appropriate weight to noise reduction, which is inconsistent with Congressional Intent, and how the FAA’s current interpretation that safety and efficiency are much more important than noise reduction is inconsistent with its prior interpretations of the relevant statutes.

The Senators in their brief point to several instances where Congress directed the FAA to protect exposed populations from the harm of aircraft noise, concluding that "given this history, the FAA’s policy of considering noise mitigation only ‘where feasible’ cannot withstand scrutiny."  Likewise, the Senators point out that members of Congress have "criticized the FAA for the lack of weight afforded to noise reduction as a goal of the redesign plan."  Thus, the Senators conclude, the FAA "failed to heed its mandate to integrate noise reduction with its other laws, regulations, and policies for the redesign plan.

The FAA’s Brief is due December 12, 2008.

News Articles regarding the amicus Brief by Sens. Specter and Dodd:

Delaware County Daily Times, September 8, 2008.

Danbury News Times, September 8, 2008.

Here are a few court  decisions that have come down since April, 2008, regarding aviation and airport development law:

  1. Aerial Banners, Inc. v. F.A.A., 11th Circuit, Case No. 08-10042 (August 26, 2008). The Federal Aviation Administration grants waivers of certain regulations to businesses that tow advertising banners behind airplanes. Without the waiver, a business cannot conduct air towing operations because aerial towing is generally prohibited. See 14 C.F.R. § 91.311. Aerial Banners, as its name indicates, towed aerial banners for advertisers pursuant to a waiver. After a series of safety problems, including a couple of crashes, the FAA revoked Aerial Banners’ waiver, putting the company out of business. Aerial Banners has petitioned this court to set aside the FAA’s revocation claiming both substantive and procedural violations of the Administrative Procedure Act.  The Court held that the Company argument that it was not responsible for its pilots’ mishaps was unavailing.  In addition, the FAA had found the Company’s maintenance record seriously wanting.  Thus, the FAA had "reasonable" grounds for revoking the waiver.
  2. Flamingo Express v. F.A.A., 536 F.3d 561 (6th Cir. 2008). Airline petitioned for review of an order of the Federal Aviation Administration (FAA), which dismissed airline’s complaint against municipal owner of airport, alleging that it had violated its obligations under federal law by failing to approve airline’s application for permit to operate commuter air service and requiring airline to obtain unreasonably high liability insurance coverage. The Court of Appeals, held that municipal owner did not violate its federal obligations by refusing to approve airline’s permit for proposed commuter service, and that substantial evidence supported FAA determination that owner’s proposed $20 million liability insurance requirement was neither unreasonable nor unjustly discriminatory.
  3. Town of Winthrop v. F.A.A., 535 F.3d 1(1st Cir. 2008). Town and local residents filed petition for review of final order of Federal Aviation Administration (FAA) permitting construction of new taxiway at airport. Airport operator intervened. The Court  held that plaintiffs had standing to challenging FAA order; that  FAA’s failure to prepare supplemental EIS before giving its final approval to project was not arbitrary and capricious; and that FAA’s choice of modeling program for evaluating project’s noise impact was not arbitrary and capricious.Petition denied.
  4. Association of Citizens to Protect and Preserve the Environment of the Oak Grove Community v. FAA, Case No. 07-15675, 11th Circuit (July 16, 2008). The Association alleged that the FAA arbitrarily issued a Finding of No Significant Impact (“FONSI”) with respect to the proposed expansion project at the Troy Municipal Airport in Troy, Alabama. It also alleged that the FAA failed to follow its own regulations requiring additional review and approval of certain mitigation measures. On appeal, the Association maintains that the district court has jurisdiction over the first claim (the “FONSI claim”) because the FONSI is not a final order, and therefore, 49 U.S.C. § 46110(a) does not divest the district court of jurisdiction. The Association also argued the district court has jurisdiction under the Administrative Procedure Act, 5 U.S.C. § 702, over its claim that the FAA failed to comply with its own regulations (the “procedural claim”). The Court held that the district court correctly determined that it lacked jurisdiction over both claims