FAA’s Intentional Falsification Settlement Policy: Not Much of An Offer

by Gregory J. Reigel
© February 2021. All rights reserved!
Published online Midwest Flyer Magazine – February/March 2021 issue

As you might imagine, the FAA has a dim view of intentional falsification cases. These situations arise when the FAA believes that a certificate holder (whether airman, mechanic, air carrier, repair station, etc.) has intentionally falsified a required record. They range from airmen who have failed to disclose information on their applications for medical certificates to mechanics who have either omitted information or included incorrect information in aircraft maintenance records.

According to the FAA’s Compliance and Enforcement program, a certificate holder who intentionally falsifies a record lacks the qualifications to hold any certificates. As a result, FAA’s sanction in these cases is revocation of all certificates, usually by emergency order. And after revocation, the certificate holder is generally prohibited from re-applying for new certificates for one year following the effective date of the order of revocation.

However, before the FAA issues a revocation order, it conducts an investigation in which it gathers evidence, sends out a letter of investigation, reviews any response, and analyzes all of the evidence to support its case. This process can take a period of time. But the certificate holder retains all certificates up until the revocation order is issued.

The New Policy

In the case where an airman has allegedly falsified his or her application for medical certificate in violation of 14 CFR 67.403(a)(1)-(4), the FAA recently announced a new “prompt settlement policy.” According to the FAA, the new policy will afford an airman “the opportunity to apply for any airman and ground instructor certificate sooner than had the case proceeded in the absence of the policy.”

Under the new policy, the airman would still have to wait one year, but that would happen “sooner than under the current process because much of the investigation and evaluation processes would be abbreviated or eliminated.” The policy provides the airman with an opportunity to resolve the alleged violation with a settlement agreement in which the airman (1) accepts an order revoking all of the airman’s certificates; (2) immediately surrenders all of his or her certificates; and (3) waives all of his or her appeal rights.

The FAA believes this policy will provide predictability for airmen as to when the revocation order is issued, and accordingly, when the airman would again be able apply for a new certificate. It is also supposed to “promote better resource allocation.”

Who Is Eligible For This Policy?

The policy would be available to an airman who the FAA believes has violated 14 CFR 67.403(a)(1)-(4). However, the policy will not be available to an airman if (1) the FAA believes the airman may lack qualification to hold his or her certificate(s) [other than because the airman allegedly violated 14 CFR 67.403(a)(1) through (4)]; or (2) he or she has a prior violation of 14 CFR 67.403(a)(1) through (4).

How Does It Work?

When the FAA sends a letter of investigation (“LOI”) to an airman for alleged intentional falsification, the LOI will advise the airman that he or she may request consideration for a prompt settlement of the legal enforcement action. If the FAA determines the airman is eligible, an FAA attorney will send the airman a settlement agreement with the following terms:

1. The settlement agreement must be executed by the parties within 10 days after the FAA sends the agreement to the airman;

2. The FAA will issue an emergency order revoking all airman, ground instructor, and unexpired medical certificates the airman holds immediately upon receiving the fully executed settlement agreement;

3. The order of revocation will (a) require the immediate surrender of all airman, ground instructor, and unexpired medical certificates the individual holds to enforcement counsel; (b) notify the airman that the failure to immediately surrender these certificates could subject the airman to further legal enforcement action, including a civil penalty; and (c) inform the airman that the FAA will not accept an application for any new airman or ground instructor certificate for a period of one year from the date of the issuance of the order of revocation;

4. The airman will waive all appeal rights from the order of revocation;

5. The airman acknowledges that the agreement only concerns the legal enforcement action brought by the FAA and does not affect any actions that might be brought by State or other Federal agencies (whether civil or criminal), and that the agreement does not prevent the FAA from providing information about this matter to State or other Federal agencies;

6. The parties will agree to bear their own costs and attorney fees, if any, in connection with the matter;

7. The airman will agree to not initiate any litigation before seeking any costs, damages, or attorney fees, including applications under the Equal Access to Justice Act, incurred as a result of the legal enforcement action; and

8. The airman will agree to waive any and all causes of action against the FAA and its current and/or former officials and employees relating to the legal enforcement action.

Is It Worth It For The Airman?

From my perspective, this policy provides little real benefit to an airman, other than an airman who simply wants to roll over on his or her sword and start the clock ticking on his or her punishment. Here are some of the problems I have with the policy:

• An airman gives up all of his or her rights to have the FAA prove its case. The FAA has the burden of proof in these cases. If the case involves factual issues as to whether the airman intentionally falsified rather than simply made a false statement, forcing the FAA to prove its case could be the difference between revocation of all certificates for intentional falsification versus revocation of just the airman’s medical certificate for making a false statement.

• The policy does not protect the airman from criminal prosecution. An airman who the FAA believes committed intentional falsification could still be referred out to local or federal authorities for prosecution. And the order of revocation and the facts upon which it was based would make it very easy for the prosecution to prove its case. And since the FAA has, in fact, referred these cases out for prosecution, this is not a risk to be taken lightly.

• The airman gives up his or her right to negotiate a reduction in the one-year prohibition on reapplication. If an airman appeals an order of revocation alleging intentional falsification, it is not uncommon for the FAA to agree to a 10-month, or in unusual circumstances a 9-month, prohibition in order to avoid having to litigate its case against the airman before a National Transportation Safety Board (NTSB) administrative law judge.

• The airman must surrender his or her certificates immediately. In the absence of surrender, the airman could have retained his or her certificates while the FAA completes its investigation and until it issues the revocation order. This could be several months in which the airman could continue to exercise the privileges of his or her certificates.

Conclusion

If you find yourself facing an allegation of intentional falsification, you know you made a mistake, and you just want to put the matter behind you, then the new policy may be worth considering. However, you should also consider what you will give up. In most situations, it will likely make more sense to work through the enforcement process to obtain a more favorable resolution. In any event, if you are faced with this situation, you should definitely discuss with a knowledgeable aviation attorney before you make your decision.

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@shackelford.law, or Twitter @ReigelLaw (www.shackelford.law).

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