The Legal Corner, March 2014 Issue:
Investigations by both FAA and TSA seem to be a common occurrence in the air cargo world these days. These investigations can result in substantial civil penalties and fines, and it is important for those in aviation business to understand civil enforcement actions. This column is a very brief overview of the civil enforcement process.
The investigation is frequently triggered by an observation or audit by government officials, a complaint filed with the agency, or notification under an immunity agreement or policy. The agency will generally issue a Letter of Investigation (LOI) and give the company an opportunity to respond. All correspondence, as well as written records of telephone calls and meetings, will be kept in the investigative file. It is important to note that the company is not obligated to respond to an LOI. Legal counsel can assist in analyzing whether a response would be helpful.
Once the investigation is complete, the agency may do one of several things: take no action; take administrative action; or take legal action. If the agency decides to take no action, the case is closed. Administrative Action could mean a Letter of Correction or a Letter of Warning; no penalty will be assessed, but these items remain part of the company’s violation history.
If the agency decides that legal action is required, it may issue a Notice of Proposed Civil Penalty. The Notice will contain relevant facts, the regulations the agency believes the company has violated, and the proposed civil penalty amount, as well as options with respect to the Notice. Usually, the company will have several choices: pay the penalty as proposed; submit written information for consideration (including evidence of inability to pay); request that a civil penalty be assessed in a specific amount less than that proposed amount or that no civil penalty be assessed; request an informal conference with an agency attorney; or request a formal evidentiary hearing before an Administrative Law Judge (ALJ). Once finalized, the civil penalty will become part of the company’s violation history. If not already involved, legal counsel should be consulted at this point and can assist in deciding which option is the best for the company.
Unless the company decides to pay the proposed fine, evidence of mitigation of the alleged violation should be presented to the agency. Mitigating factors may include evidence of corrective action taken and/or evidence of systemic change intended to prevent future violations. For instance, developing policies and procedures that are not required but would have prevented the violation and terminating employees with demonstrated non-compliance attitude may be helpful in mitigating a fine. Additionally, training designed to refresh prior training received by employees or to address a specific issue may be considered.
Factors that arenotconsidered mitigation to an alleged violation include corrective action that simply brings the violator into compliance, the cost of compliance with a regulatory requirement, lack of a violation history, the fact that violation did not result in injury or damage, and/or ignorance of the regulation or its application.
by Lisa A. Harig
McBreen & Kopko
If you have questions on civil enforcement issues or other matters relating to air import or export, please contact Lisa Harig (lharig@mklawdc.com) or Carl Soller (csoller@mklawnyc.com).
Lisa A. Harig is a Partner of McBreen & Kopko and heads the firm’s Washington DC office. She represents domestic and international clients, including airlines, airports, FBOs, manufacturers, travel companies, corporate flight departments, and individual aircraft owners. Her practice focuses on a wide range of corporate, transactional, compliance and regulatory matters, including representation before DOT, FAA, TSA, and PHMSA. Lisa can be reached atlharig@mklawdc.comor (703) 247-5487.