FAA’s New Compliance Philosophy: So Far, So Good.

by Gregory J. Reigel
Attorney At Law
Copyright 2016. All Rights Reserved
Published in Midwest Flyer – Oct/Nov 2016

This year at EAA AirVenture Oshkosh, I was fortunate enough to be able to attend a continuing legal education (CLE) program generously presented by EAA’s Legal Advisory Council. The program hosted a number of FAA personnel to discuss the FAA’s new compliance philosophy, which was announced in June 2015, and actually went into effect October 1, 2015. The FAA representatives included John Duncan, Director of Flight Standards; James Tagmeier, Great Lakes Regional Counsel and Manager of the Midwest Enforcement Team; Jeffrey Klang, Senior Counsel – International; and Mark Bury, Deputy Chief Counsel – Enforcement & Regulations.

To provide you with some background, in June 2015, the FAA issued Order 8000.373 to explain a new philosophy it was implementing with respect to regulatory compliance. As the FAA explained it, this new policy contained its “strategic safety oversight approach to meet the challenges of today’s rapidly changing aerospace system.” What does that mean?

Well, as the regulator of the aviation and aerospace communities, the FAA is charged with establishing regulatory standards to ensure that operations in the National Airspace System are conducted safely. And as we all know, compliance with those regulatory standards is mandatory. However, not only does the FAA expect us to comply with the regulations, but it also believes that we have “a duty to develop and use processes and procedures that will prevent deviation from regulatory standards.” Thus, we are required to conduct ourselves in a way that not only complies with the regulations, but will also ensure that deviations are prevented. Sounds great, until something (e.g. a deviation) happens. Then what?

Prior to this new compliance philosophy, the result was typically unpleasant. But with this new philosophy, the FAA has shifted away from that approach.

According to the FAA’s new philosophy, “[W]hen deviations from regulatory standards do occur, the FAA’s goal is to use the most effective means to return an individual or entity that holds an FAA certificate, approval, authorization, permit or license to full compliance and to prevent recurrence.”

When the new policy was issued, it appeared to be a shift from the FAA’s past compliance philosophy. At least from my perspective, before the new philosophy, the FAA’s response to violations had leaned heavily toward enforcement and punitive action (e.g. certificate suspensions and revocations). And that approach never made sense to me.

If we truly want to encourage compliance and ensure that a certificate holder is safe, why would we want that certificate holder to be sitting on the ramp and out of the system for 30-180 days or longer with a suspended certificate?

Wouldn’t it make more sense to educate certificate holders and do what may be necessary to get them back into compliance and in a position where future compliance is more likely?

Well, after significant discussions and consideration within the agency, the FAA apparently arrived at the same conclusion.

According to the FAA’s current policy, the FAA recognizes that some deviations arise from factors such as flawed procedures, simple mistakes, lack of understanding, or diminished skills. The Agency believes that deviations of this nature can most effectively be corrected through root cause analysis and training, education or other appropriate improvements to procedures or training programs for regulated entities, which are documented and verified to ensure effectiveness.

At the time, and as it turned out to be the case, the FAA is talking about counseling and remedial training. I think that’s a good thing. The Order also notes that “[M]atters involving competence or qualification of certificate, license or permit holders, will be addressed with appropriate remedial measures, which might include retraining or enforcement.” Here again, the concept of retraining rather than enforcement (which was typically revocation in cases involving alleged incompetence or lack of qualification) appears to more appropriately address the situation in a more positive and productive manner. Maybe not in all cases, but my hope was that it would be more cases than in the past. The FAA refers to this type of a resolution as a “compliance action,” as opposed to a legal enforcement action that results in certificate suspension/revocation or assessment of a civil penalty.

Of course, the new compliance philosophy did not eliminate certificate and civil penalty actions. If a certificate holder fails or refuses to take steps to remediate deviations or is involved in repeated deviations, then enforcement may result. That makes sense. Additionally, in those situations where a certificate holder’s conduct was intentional or reckless, the FAA indicates that it will pursue “strong enforcement.” Also not a surprise.

When it was issued, this new policy appeared to be a positive shift in the FAA’s philosophy/national policy. But the rubber really hits the runway with the inspectors at the Flight Standards District Office (FSDO) level. So, my concern was whether this philosophy would actually trickle down to the FAA inspectors and whether this philosophy would apply to all divisions within the FAA. Which brings us to the CLE program nearly one year later.

According to John Duncan, the new compliance philosophy has been implemented agency-wide. That is, all divisions within the FAA are required to apply the new compliance philosophy. Although he did note that some divisions, such as the drug abatement and the security divisions, may not be implementing the philosophy as aggressively as others, such as flight standards. While this is good to know, from my perspective, it does not appear to me that those divisions of the FAA have truly embraced or implemented the new philosophy. But it is good to know that they are supposed to be applying the new philosophy.

Both John Duncan and James Tagmeier emphasized that the philosophy is being applied to those certificate holders who are both “willing and able” to comply with the goals of returning the certificate holder to compliance and ensuring future compliance. In the event that the certificate holder is either unwilling or unable to be “rehabilitated,” then the philosophy dictates that the certificate holder be removed from the National Airspace System (NAS) (e.g. via certificate suspension or revocation).

What does this mean for FAA inspectors? John Duncan indicated that in all cases the FAA’s priorities are to (1) deal with the risk posed or created by the certificate holder and, only then, (2) determine if a violation has occurred. According to John, inspectors who are initially investigating a situation will assume that a compliance action will be used. Legal enforcement action will only be considered after the investigation reveals that a compliance action is not appropriate.

What does this mean for certificate holders? Generally, it means that the risk of a legal enforcement action has been significantly reduced. According to John Duncan, as of April 2016, the FAA had process approximately 2,200 compliance actions. In the absence of the new philosophy, I suspect a significant number of those cases would have resulted in certificate actions.

But, here is the catch: In order to take advantage of this new philosophy, the FAA inspectors require that a certificate holder talk to them to discuss the “how” and “why” the risk was created, as well as options for making sure it doesn’t happen again. Without that information, it makes it difficult for the inspectors to determine whether the situation can be resolved with a compliance action.

From my perspective as an aviation attorney who defends certificate holders against FAA legal enforcement action, this approach raises concerns that the certificate holder will provide the inspector with information that could later be used against the certificate holder in an enforcement action. In the past, my typical advice to certificate holders was to either not speak with the inspector or to at least not volunteer any information that could later come back to bite the certificate holder. Under the new philosophy, that isn’t necessarily the best advice.

Now a certificate holder must carefully analyze the situation to try and determine whether the situation will qualify for a compliance action before the certificate holder starts to volunteer information to the inspector. While resolution of the case through a compliance action is definitely preferable, the certificate holder should try and avoid disclosing information that could preclude a compliance action or that would put the certificate holder in a more difficult position if the FAA pursues legal enforcement action. Discussing the matter with a knowledgeable aviation attorney before you speak with the inspector can certainly assist in making this decision.

The FAA’s new compliance philosophy is definitely a step in the right direction. It is benefiting both certificate holders and the safety of the NAS. As with any change, it does raise some concerns and issues that will yet need to be worked out. However, after nearly a year, the new policy seems to be working.

EDITOR’S NOTE: Greg Reigel is an attorney with Shackelford, Melton, McKinley & Norton, LLP, and represents clients throughout the country in aviation and business law matters. For assistance, call 214-780-1482, email greigel@shackelfordlaw.net, or Twitter @ReigelLaw.

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