Voluntary Disclosure Nets FAA Penalty

March 24, 2014
Michael McGrory
SmithAmundsen Aerospace Alert




The FAA’s Voluntary Disclosure Reporting Program is often viewed as a “Get Out of Jail Free” card; if an air carrier voluntarily reports a regulatory violation to the FAA, the FAA will not impose civil penalties. However, simply reporting a violation is not enough. The carrier must also implement a “comprehensive fix” that is approved by the FAA, and must adhere to the procedure required under the VDRP. As the Eighth Circuit in St. Louis recently ruled in GoJet Airlines, LLC v. Federal Aviation Administration, the FAA can penalize a carrier for a voluntarily disclosed violation if the carrier subsequently failed to meet an FAA deadline.

In this case, mechanics installed gear pins on a CRJ-700 to lock a landing gear brake assembly in place while performing maintenance. However, in violation of the airline’s general maintenance manual, the mechanics did not make an entry in the flight book or remove the gear pins when the maintenance was complete. After the plane’s next takeoff, a warning light alerted the pilot that the landing gear would not retract, causing the pilot to return to the departure airport.

The airline reported the violation to the FAA under the VDRP. As its comprehensive fix, the airline proposed to counsel the mechanic who made the error. The FAA rejected this proposal as insufficient to prevent the same mistake from happening again. The FAA gave the airline a deadline by which to propose a new fix, and suggested that an agreeable solution would be to add a pin-removal checklist to the maintenance manual. Alternatively, the airline could seek further review of its proposed fix from the next level of FAA management. The airline, however, did neither so the FAA began an enforcement action and secured an $18,000 penalty.

On appeal, the airline argued that the FAA was wrong to unilaterally terminate the VDRP process. The court, in deference to the FAA’s procedures, disagreed. The airline was unwilling to adopt the FAA’s suggested fix, offered no alternative, and did not seek further review of its own proposed fix despite the deadlock. Once the FAA’s deadline for the airline to take further action passed, the FAA was free to begin enforcement proceedings without any additional notice.

The court also disagreed with the airline’s argument that it did not fly an unairworthy plane. To be deemed airworthy, a plane must comport with its type certificate or a minimum equipment list that constitutes an approved change. This, the court noted, is a technical definition which has little to do with whether a plane is actually flyable. The CRJ-700’s type certificate requires it to have operable landing gear, and the airline did not use minimum equipment list procedures. Thus, regardless of whether the airplane could be flown safely, it was not airworthy. Additionally, since the airline operated an unairworthy aircraft, the FAA did not err in finding as a residual violation that the airline was careless or reckless.

There are two important takeaways to be gleaned from this opinion. First, it serves as a reminder that the VDRP is an exception to the general rule that regulation violations will be prosecuted, so a carrier must comply with every aspect of the VDRP in a timely fashion in order to avail itself of the program’s benefits. Failure to do so will result in an enforcement action against a certificate holder that has already essentially admitted the violation. Second, this opinion illustrates the importance of prevailing at the agency level in an FAA enforcement action. Fighting the FAA is an uphill battle, and, because courts treat FAA decisions deferentially, that hill only gets steeper in the courtroom. This is the case even when those actions seem to place form over substance.