Federal Appellate Court Holds that NTSB Must Defer to
FAA's Interpretation of its Airline Safety Regulations

The United States Court of Appeals for the District of Columbia Circuit has reversed a decision by the National Transportation Safety Board ("NTSB") dismissing a safety enforcement order of the Federal Aviation Administration ("FAA") involving its airline safety regulations. The case, Garvey v. NTSB,(1) involved an FAA enforcement order determining that a Northwest Airlines pilot had violated airline safety regulations by failing to follow air traffic controller flight altitude instructions and by operating an aircraft according to an altitude instruction issued to the pilot of another aircraft.(2) The order was initially affirmed by an Administrative Law Judge ("ALJ"), but, on appeal of the decision to the NTSB, the NTSB dismissed the enforcement order.(3) The NTSB's decision was predicated on its own interpretation of aviation safety policy. In its decision, the NTSB rejected the FAA's argument that the NTSB was required "to defer to the FAA's reasonable interpretation of its own safety regulations" as a matter of law. The NTSB held that it was not required to follow the FAA's interpretation of the law as the FAA had offered no specific regulatory guidance to support its interpretation of the safety regulations at issue in the proceeding.(4) The FAA appealed the NTSB decisions in the District of Columbia Circuit.

The heart of the intra-agency dispute decided in Garvey concerned an interpretation of the split-enforcement aircraft safety regime established by Congress in the Federal Aviation Act, delegating, inter alia, rulemaking and rulemaking enforcement authority to the FAA (49 U.S.C. §§ 44701(a), 44709(b)) and adjudicatory authority to the NTSB (49 U.S.C. § 1133).(5)

In Garvey, there was no dispute as to the general principle that the Congress has directed the NTSB "to defer to the FAA's interpretations of its own regulations."(6) Rather, at issue in the case was the NTSB's argument, disputed by the FAA, that deference to the FAA is not required in instances, such as in the present dispute, where the FAA's interpretation was not validly adopted or where the FAA's interpretation was actually a factual finding, and not truly an "interpretation" of its regulations. The court in Garvey rejected the NTSB's arguments, overturned NTSB's decision on review, and remanded the case to the NTSB for further proceedings consistent with its opinion.

As to the issue of whether the NTSB is required to accord the FAA's interpretation of its air safety regulations due deference absent the formal adoption of such policies, the court in Garvey held that the "FAA is not required to promulgate interpretations through rulemaking or the issuance of policy guidances, but may instead do so through litigation before the NTSB."(7) The court held that the NTSB is obligated to accord the FAA's interpretation "due deference" -- even where regulatory interpretation is advanced through "'litigation statements' of counsel," such as those statements made by FAA in the present case.(8)

Likewise, the court in Garvey rejected the NTSB's argument that the FAA's position below was not an "interpretation," but rather a determination of fact with which the NTSB was free to disagree. The court held that the fact that the FAA had inferred that a pilot had been "careless" or "inattentive," at best, was a presumption of pilot safety error which merely shifted the burden to the pilot to produce evidence to explain his actions, which did not impact the FAA's ultimate burden of proof in the proceeding.(9) Such a shifting of the burden of production, concluded the court, is permissible under the law.(10)

The remaining issues considered by the court in Garvey concerned whether the FAA's underlying decision on pilot safety error was "reasonable" or "arbitrary, capricious, or otherwise not according to law," whether NTSB precedent supported the NTSB's reversal of the FAA's initial decision, and whether the court was precluded from considering the FAA's regulatory interpretation arguments when its arguments had not been raised below until made in the FAA's petition for reconsideration of the NTSB's decision.

The court in Garvey rejected the NTSB's arguments that the FAA's enforcement order was unreasonable or otherwise not in accordance with the law, concluding that even if the result was "harsh," it nevertheless was in accordance with the law, which requires the FAA, as its "principal responsibility," to "ensure that air carriers 'provide service with the highest possible degree of safety in the public interest.'"(11) The court also rejected the NTSB's argument that its decision below was fully consistent with agency precedent, and therefore should be upheld. On this issue, the court determined that NTSB precedent on pilot safety did not necessarily support the NTSB's decision, and even if it did, "the interpretation of air safety regulations is an area in which the Board owes deference to the FAA."(12) In such a case, said the court, it would "be both necessary and proper for the Board to depart from its prior case law."(13) Finally, on the issue of issue preclusion for FAA's failure to raise its position as one of regulatory interpretation until late in the proceedings below, the court held that while the FAA may have been "inattentive" or "tard[y]" in asserting its position, no prejudice had been caused.(14) The court concluded: "unlike a pilot, the agency -- and, derivatively, the flying public -- cannot be sanctioned for its inattentiveness through dismissal of the enforcement order issued in this case."(15)

FHWA Decision Holding that Agency Lacks
Primary Jurisdiction Over Truck Lease Complaints Upheld

A decision by the Federal Highway Administration ("FHWA") holding that it does not have exclusive authority to adjudicate disputes arising under "Truth-in-Leasing" regulations has been upheld on appeal by the United States Court of Appeals for the Eighth Circuit.

The case, Owner-Operator Independent Drivers Association, Inc. v. New Prime, Inc., involved a determination by FHWA that it did not have exclusive jurisdiction over complaints involving the regulation of motor carrier lease agreements. New Prime specifically involved motor carrier functions transferred to FHWA by law, formerly handled by the Interstate Commerce Commission,(16) involving the administration and enforcement of regulations governing lease agreements between motor carriers and owner-operators of trucks, known as the "Truth-in-Leasing" regulations.(17)

In New Prime, a group of independent owner-operators filed a class action complaint in federal Missouri district court against New Prime, Inc., a registered motor carrier, alleging that its lease and equipment rental-purchase agreements violated FHWA leasing regulations and were "unconscionable" under Missouri law.(18) The district court dismissed the complaint, holding that FHWA had primary jurisdiction over the case.(19) The owner-operators filed a consolidated appeal of the decision with the Eighth Circuit, and also filed an ex parte petition for declaratory order with the FHWA, requesting that a declaratory order be issued construing the underlying regulations in its favor, or otherwise holding that the FHWA lacked primary jurisdiction over the lease dispute at issue.(20) The FHWA issued a Notice of Denial, declining to exercise primary jurisdiction over the carrier's disputes with the owner-operators. New Prime, Inc. appealed FHWA's decision.(21)

In New Prime, the court first reviewed the legislative history of the law granting FHWA authority over the Truth-in-Leasing regulations. The legislative history clarified that it was the intent of the Congress that DOT not "allocate scarce resources to resolving these essentially private disputes," and that "private parties may bring actions in court to enforce the provisions of the Motor Carrier Act," including Truth-in-Lending.(22) Despite this direct Congressional language, New Prime, Inc. argued that the applicable law at 49 U.S.C. § 14704 addressing "rights and remedies of persons injured by carriers" and authorizing "person[s] injured because of a carrier" to bring civil actions in federal court only applied to suits to enforce agency orders. New Prime argued that the provision did not authorize the federal courts to determine violations of the Truth-in-Leasing regulations.(23) After a detailed review of the various provisions of the statute, the court concluded that private actions in federal court for damages and injunctive relief for violations of the Motor Carrier Act were authorized by § 14704, and it rejected New Prime, Inc.'s contention that FHWA's remedial jurisdiction is primary or exclusive.(24)

New Prime, Inc. next argued that the court should compel the FHWA to exercise its jurisdiction over the case. The court refused on the grounds that New Prime, Inc. had cited no authority to rebut the "presumption" that an agency decision not to institute a proceeding is unreviewable.(25) Finally, the court in New Prime rejected the argument by New Prime, Inc. that the ex parte application filed by the owner-operators for a declaratory order and the notice issued by FHWA in response violated the procedures afforded parties under Administrative Procedure Act governing adjudications. The court held that no such "adjudication" had taken place adverse to New Prime Inc.'s interests.(26) To the extent that the FHWA may have expressed "views that are relevant to the merits" of New Prime, Inc.'s dispute with the owner-operators, said the court, Prime would have an opportunity to directly respond in the case before the district court.(27)

The court remanded the case to the district court for further proceedings consistent with its opinion.

Hot DOT Spots

  • FHWA has received and is reviewing comments on proposed rules revising the safety fitness procedures of the Federal Motor Carrier Safety Regulations.(28) Under the proposed rules, unsatisfactory rated carriers would be prohibited from operating in interstate commerce if operations are not improved within a requisite time period. The authority for this change was included in the Transportation Equity Act for the 21st Century, signed into law in June 1998. In response to its proposed rules, FHWA received 17 separate comments from the public prior to the comment period closing date on September 15, 1999. Among other parties submitting comments, the American Trucking Associations, Inc. ("ATA") criticized the proposed rules, arguing, among other things, that the proposed rules would fail to properly identify unsafe carriers. ATA has argued that the FHWA's rating methodology is not properly designed to provide a measure of the safety of trucking companies, but rather, only "compliance" with governing safety rules. ATA argues that "FHWA's own research has shown that there is no linear relationship between compliance and safety" and that "[t]here are and will continue to be non-compliant carriers who are safe and, conversely, compliant carriers who are unsafe." ATA suggests that since "the current safety rating system is fundamentally flawed," FHWA should amend its rules in another manner to more appropriately identify and take action against unsafe carriers.
  • DOT's Aviation Enforcement Office recently has been involved in actions against airlines concerning discrimination against passengers with disabilities. DOT has charged Continental Airlines with violations of federal law and agency regulations prohibiting discrimination against disabled passengers, for failure to provide adequate assistance to wheelchair-dependent passengers. DOT seeks a civil penalty of $250,000 against the carrier for the violations and an additional $1,100 for each additional similar violation revealed in the course of the investigation. Also, on September 28, 1999, DOT announced a settlement with America West Airlines, which was found to have violated federal law and DOT rules for failure to seat a disabled passenger with a service dog in her assigned seat. A civil penalty was assessed to be used by the carrier for training purposes.
  • Secretary Slater has announced an initiative by the Federal Railroad Administration ("FRA") to implement a safety oversight program targeted at reducing railroad accidents caused by human error. The FRA is implementing a new "Operating Practices Initiative" to address safety conditions affecting the railroad industry as a whole, rather than focusing on individual railroad behavior, which is the traditional method of assessing railroad safety. The program is an expansion of FRA's Safety Assurance and Compliance Program which the FRA has touted as leading to "dramatic improvements in rail safety," including 33 percent train incidents, 28 percent fewer highway-rail incidents, and 31 percent fewer highway-rail fatalities since its introduction in the mid-1990s.

1. No. 98-1365, 1999 U.S. WL 731026 (D.C. Cir. Sept. 21, 1999).

2. The order involved alleged violations of FAA regulations prohibiting pilots from operating aircraft "contrary to an ATC instruction in an area in which air traffic control is exercised" (14 C.F.R. § 91.123(b)) and "according to a clearance or instruction that ha[s] been issued to the pilot of another aircraft for radar air traffic control purposes" (14 C.F.R. § 91.123(e)).

3. Garvey, 1999 WL 731026, at *2. The NTSB reaffirmed its decision on the FAA's petition for reconsideration of its initial decision. Id.

4. Id.

5. Under the governing regulations, FAA enforcement orders are initially heard by an ALJ. See 49 C.F.R. § 821.35(a). Appeals of final ALJ decisions are made to the full NTSB. See id. at § 821.47(a).

6. Garvey, 1999 WL 731026, at *5.

7. Id.

8. Id.

9. Id. at *7.

10. On this issue, the court held, "every Circuit that has considered the issue [] has concluded that a presumption that shifts only the burden of production does not shift the 'burden of proof' as that phrase is used in the [Administrative Procedures Act]." Id.

11. Id. at *9 (quoting 49 U.S.C. § 44701).

12. Id. at *11

13. Id.

14. Id. at *13.

15. Id.

16. The Interstate Commerce Commission ("ICC") was terminated by the ICC Termination Act of 1995, Pub. L. No. 101-88, 109 Stat. 803, and replaced by the Surface Transportation Board. Many remaining motor carrier functions formerly under the jurisdiction of the ICC were transferred to DOT and the FHWA.

17. The regulations are found at 49 C.F.R. Part 376.

18. See New Prime, 1999 WL 604433, at *1.

19. Id.

20. Id.

21. Id. The action by New Prime, Inc. before the Eighth Circuit was consolidated with other actions involving the same owner-operators and other motor carriers besides New Prime, Inc. The American Trucking Association filed an amicus brief in support of the New Prime appeal, urging the court to reverse the FHWA's refusal to exercise jurisdiction over the disputes.

22. Id. at *2 (citing H.R. Rep. No. 104-311, at 87-88 (1995), reprinted in 1995-2 U.S.C.C.A.N. 793, 799-800).

23. Id. at *2-6.

24. Id. at *6.

25. Id.

26. Id. at *7.

27. Id.

28. The proposed rules can be found at 64 Fed. Reg. 44,460 (Aug. 16, 1999).

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