REMARKS / After two major FAA/industry meetings and two years of formal comment-gathering, the FAA has finished its policy re-think about non-U.S. citizen trusts for ownership of aircraft on the U.S. registry (“N-registered”) as reflected in the Federal Register. Greg Cirillo, Esq. of Wiley Rein LLP has concise and excellent summary. Comment: Among various details, note that now the FAA will require filing not only of the relevant trust agreement to spell out the trustee / beneficiary relationship, but also any document that will “legally affect a relationship under that trust”.

Greg Cirillo, Esq. of Wiley Rein LLP write-up available here.

Link to announcement from this Blog’s New Rules and Developments available here.

Legal take-away:

Some more transparency on whatever is the “deal” between trustee and beneficiaries on control of the aircraft’s ownership and operation.

Practical take-away:

Requires meticulous reading of the entire notice of clarification.

Nothing revolutionary here.

AVIATION (ENHANCED FLIGHT VISION SYSTEM) / “The FAA is proposing to permit operators to use an Enhanced Flight Vision System (EFVS) in lieu of natural vision to continue descending from 100 feet above the touchdown zone elevation to the runway and land on certain straight-in instrument approach procedures under instrument flight rules (IFR). This proposal would also permit certain operators using EFVS-equipped aircraft to dispatch, release, or takeoff under IFR, and to initiate and continue an approach, when the destination airport weather is below authorized visibility minimums for the runway of intended landing.”

“Revisions to Operational Requirements for the Use of Enhanced Flight Vision Systems (EFVS) and to Pilot Compartment View Requirements for Vision Systems

June 11, 2013. Notice of Proposed Rule Making.

“ … Under this proposal, pilot training, recent flight experience, and proficiency would be required for operators who use EFVS in lieu of natural vision to descend below decision altitude, decision height, or minimum descent altitude. EFVS-equipped aircraft conducting operations to touchdown and rollout would be required to meet additional airworthiness requirements. This proposal would also revise pilot compartment view certification requirements for vision systems using a transparent display surface located in the pilot’s outside view. The proposal would take advantage of advanced vision capabilities thereby achieving the NextGen goals of increasing access, efficiency, and throughput at many airports when low visibility is the limiting factor. Additionally, it would enable EFVS operations in reduced visibilities on a greater number of approach procedure types while maintaining an equivalent level of safety.”

AVIATION (U.S. TRUSTEES FOR NON-CITIZEN TRUSTORS AND BENEFICIARIES) / In major public meetings in 2012 and 2011, and in gathering responses to its notices in the Federal Register April 26, 2011 and February 9, 2012, the FAA has undertaken a major review of it, “policies and practices regarding the registration of aircraft in the United States involving U.S. citizen trustees and non-U.S. citizen trustors and beneficiaries”. Speaking very broadly, the “U.S. citizen trustees” are often banks and the “trustors and beneficiaries” are various non-U.S. business interests that own aircraft and who wish to have a United State, “N-registered”, status for such aircraft. The day before this post the FAA announced a major policy clarification which this blog will address this weekend in its “Comment” section. This is a major development in a very intense discussion between the FAA and the aviation community during the past two – now going on three – years.

“Notice of Policy Clarification for the Registration of Aircraft to U.S. Citizen Trustees in Situations Involving Non-U.S. Citizen Trustors and Beneficiaries.”

June 18, 2013. Notice of FAA Policy Clarification.

HOMELAND SECURITY (TSA SECURITY PLAN) / A “certified air carrier” legal term of art operated under a security plan previously approved by the Transportation Security Administration (TSA). After observing the loading of an aircraft of the certified air carrier, TSA inspectors determined that the certified air carrier had failed to adequately implement security measures mandated by its plan. An administrative law judge agreed and imposed an $18,000 fine, which the TSA Administrator upheld. The certified air carrier petitioned the D.C. Circuit for review and the court upheld the TSA’s action.

Suburban Air Freight, Inc. v. Transportation Security Administration, No. 12-1171 (U.S. Court of Appeals for the D.C. Circuit, June 14, 2013). Copy of court-issued opinion available here.

AVIATION (TYPE CERTIFICATES & SPECIAL CONDITIONS) / FAA Testimony to Congress – FAA Associate Administrator Margaret Gilligan testified before the Aviation Subcommittee of the U.S. House of Representatives Committee on Transportation and Infrastructure about the 787 lithium-ion battery system matter. This testimony in my view raised a critical question about the operative status of “DO-311, Minimum Operational Performance Standards for Rechargeable Lithium Battery Systems” as adopted in 2008. I have an e-mail inquiry pending with the FAA’s Deputy Assistant Administrator for Public Affairs on this and will follow up with readers when and as I receive a reply.

Testimony is available here.

AVIATION (INSTRUMENT FLIGHT RULES) / FAA final rule to adopt “miscellaneous amendments to the required IFR (instrument flight rules) altitudes and changeover points for specified Federal airways, jet routes, or direct routes for which a minimum or maximum en route authorized IFR altitude is prescribed”. Technical but clearly consequential.

“IFR Altitudes; Micellaneous Amendments.”

June 3, 2013. Final Rule.

AVIATION (WARRANTY DISCHAGED IN BANKRUPTCY) / Despite bankruptcy discharge (German version) of aircraft engine manufacturer that voided engine warranty, plaintiff purchaser adequately pled to get to finder of fact (jury or judge) on theory that actions of distributor of airframe rendered that distributor either actual agent or apparent agent of aircraft manufacturer in lawsuit based on terms of the voided engine manufacturer’s warranty.

Continent Aircraft Trust, 1087 v. Diamond Aircraft Indus., Inc., Case No. 11-61663-CIV-Moreno (U.S. District Court for the Southern District of Florida, May 23, 2013). Copy of court-issued opinion available here.

Statements by the airframe manufacturer’s distributor might have triggered liability for otherwise voided warranty obligations of the engine manufacturer itself.

AVIATION (REGULATION) / FAA proposes to amend certain airworthiness regulations for transport category airplanes based on recommendations from the Aviation Rulemaking Advisory Committee in order to eliminate certain regulatory differences between the airworthiness standards of the FAA and those of its European counterpart, the European Aviation Safety Agency (EASA) without affecting current industry design practices. These relate variously to standards-gust and maneuver load requirements.

“Harmonization of Airworthiness Standards-Gust and Maneuver Load Requirements.”

May 28, 2013. Notice of Proposed Rulemaking.

“Following an accident in which an airplane shed a large wing-mounted nacelle, the National Transportation Safety Board (NTSB) recommended that the FAA amend the design load requirements to consider multiple axis loads encountered during severe turbulence (http://www.ntsb.gov/doclib/recletters/1993/A93_136_141.pdf).”

“The FAA proposes to amend the airworthiness regulations described below. This action would harmonize Title 14, Code of Federal Regulations (14 CFR) part 25 requirements with the corresponding requirements in Book 1 of EASA Certification Specifications and Acceptable Means of Compliance for Large Aeroplanes (CS-25).

“The following proposals result from ARAC recommendations made to the FAA and EASA:

1. Amend § 25.331, “Symmetric maneuvering conditions;”

2. Amend § 25.341, “Gust and turbulence loads;”

3. Amend § 25.343, “Design fuel and oil loads;”

4. Amend § 25.345, “High lift devices;”

5. Amend § 25.361, “Engine torque;”

6. Add § 25.362, “Engine failure loads;”

7. Amend § 25.371, “Gyroscopic loads;”

8. Amend § 25.373, “Speed control devices;”

9. Amend § 25.391, “Control surface loads: General;”

10. Amend § 25.395, “Control system;”

11. Amend § 25.415, “Ground gust conditions;”

12. Amend § 25.1517, “Rough air speed, V RA;”

13. Remove appendix G, “Continuous Gust Design Criteria.”

CASE STUDY / “Suspected Unapproved Parts” are the subject of a federal criminal complaint of conspiracy to commit wire fraud in the U.S. District Court for the District of New Jersey. Allegation: Defendant New Jersey resident Gideon Vaisman caused New York-based aircraft parts broker business to buy “blades” and “vanes” from scrap metal dealers then a machine shop NOT certified by the FAA cleaned, sanded and polished and inspected them to hide fact of their origin with scrap dealers and – sometimes – their rejection for repair by an FAA-certified repair station. Used British Virgin Islands-incorporated business that was physically based in Guernsey, U.K. to create fraudulent paper history of the parts. Physically, the parts never left the New York and New Jersey area. Comment: The safety implications of such alleged activity are clear, and this criminal complaint was supported work of the U.S. DOT Office of Inspector General. FAA qualification of such parts is a function of (1) physical condition – airworthy or not; (2) conformity to applicable FAA type certificate design; and (3) availability of historical documentation for that part.

United States of America v. Gideon Vaisman, Criminal Complaint, Magistrate Number 13-8146 (MCA), two supporting statements made by Richard M. McGrade, Special Agent, DOT-OIG, May 13, 2013. Criminal Complaint available here.

Statement of the U.S. Attorney available here.

JDA Aviation Solutions consultancy’s Mike Rioux in blog: “Airworthiness of SUP’s [Suspected Unapproved Parts] may be complicated, but the allegations here appear to merit criminal actions.”

Note also detail about issues involved in SUP’s relating to JDA’s upcoming course on this subject, available here.

Legal Take-Away:

Twofold. First, the law (in the form of the federal wire fraud statute) and federal law enforcement treats this as the consequential issue that Suspected Unapproved Parts pose to aviation safety.

Second, to make the legal case requires expert analysis and testimony (here in the form of the affidavit attached to the Criminal Complaint). Here it required that of a special agent of the U.S. DOT Office of Inspector General.

Put differently, a criminal prosecutor or FBI agent alone lacks the skills needed to identify and document the “unapproved” character of such parts.  

Practical Take-Away:

Twofold.

First, like the inference drawn from a single cockroach in an apartment, it’s likely that there are several times more of these Suspected Unapproved Parts situations than there are enforcement resources and expertise available to interdict and prosecute the parts and those who sell them. 

Second, as Mike Rioux of JDA Aviation Solutions points out, the criminal courts have tangible limitations as the forum in which to address aviation safety. Here the falsification efforts were pretty clear cut, and – as Mr. Rioux believes – a criminal prosecution make sense.

But criminal sanctions can be introduced into situations where fact-finders other than the courts are better disposed to conduct the analysis.