Do you consider that the $500,000 penalty against American, the $100,000 penalty against Continental and the proposed $1.5 million penalty against Braniff are excessive?

Mr. LANDRY. I believe that the carriers involved felt that those were not totally justified. I think that while American and Continental paid the penalties, they both did so without conceding that they had actually been guilty of the violations that they were cited for, and the Braniff matter, of course, is still a matter of considerable controversy.

What we were suggesting was that perhaps you might want to limit the compounding to the most serious violations of which the operator actually had knowledge, and you also might want to consider putting a monetary cap on the total amount of fine that could be assessed, that perhaps in the nonsafety area it could be something in the nature of $25,000, and in the safety area a higher figure, substantially higher.

Mr. FARY. In general, do you feel that FAA has acted reasonably and fairly in administering the current $1,000 civil penalty?

Mr. LANDRY. We have been very disturbed by what was quite candidly conceded by one of the FAA witnesses yesterday to be sort of a scraping the barrel to build the fines up to the highest possible level through compoundings, and we think that has gotten excessive. We think that that is, as we indicate in our prepared statement, an area where Congress perhaps ought to put a cap on it. In general, I guess we would have to say that they have been fair, but in many specific instances excessive.

Mr. FARY. You oppose the provision in H.R. 7488 allowing FAA to appeal to the courts when it loses a certificate case before NTSB. Suppose NTSB bases its decision on an incorrect interpretation of the law. How can this ruling be corrected if there is no judicial review?

Mr. LANDRY. It seems to us, Mr. Chairman, that there ought to be a limit to what a private citizen has to be subjected to, having gone through the appellate review at the NTSB level. Once that expert agency has reached a determination, it would not seem proper to have to go on up to the court on top of that. But I recognize what you are saying, that it is possible that the NTSB could commit legal error in its determination. I would have to say that would be an extremely rare situation that we have not focused upon. I would like to perhaps address that further in a written submission.

Mr. FARY. All right, if you will submit that statement for the record we would appreciate it. [See letter, page 133.]

Mr. FARY. In your testimony, you criticized what you referred to as compounding. One example you cited charging a separate violation for each flight. Would you agree with me that there are cases in which it is legitimate to charge a violation for each flight such as repeated flying below legal minimums? If you agree, how do we distinguish between legitimate and multiple violations and compounding?

Mr. LANDRY. Perhaps Mr. Jensen might want to address that. Mr. JENSEN. If in the case you cited, Mr. Chairman, it was a separate event where he violated it, I think it should be treated as a separate offense, and FAA should act accordingly. The point,

though, that we were making was that when a single error is made, that a number of different regulations would be cited for that single-event error, and that that needs to be looked at. The same thing with respect to the multiple flight.

I know nothing in the current legislation that says that each flight constitutes a new offense. The law does say that each day of a continuing offense constitutes a new offense, but there is nothing in the law today that I know of that cites a flight or, as we pointed out in our testimony, the number of passengers, so that is a questionable area in what FAA has been doing, in our view.

Mr. FARY. In your testimony, Mr. Landry, you suggest that some increases in civil penalties may be warranted. Can you elaborate as to how much of an increase would be warranted, and for what type of violations?

Mr. LANDRY. We noted yesterday there was considerable discussion of the possibility of two tiers, and actually the discussion centered upon commercial operators and general aviation. We think that the most important tiering of the penalty levels would be to have the higher penalties apply to those violations which directly affect safety-perhaps even a $25,000 limit is appropriate in that area—but for those technical violations, the recordkeeping, the reporting violations, and so forth, that do not directly affect safety, that do not result in an unsafe operation of an aircraft, we think the present level is adequate.

Mr. FARY. I think we should recess for another 15 minutes. We will resume questioning upon our return.

[Recess.]

Mr. FARY. Mr. Landry, I will ask you the next question. Here is Mr. Snyder.

I am sure you will be interested in the answer to the next question.

Mr. SNYDER. I'm listening.

Mr. FARY. The FAA tells us that one of the most frustrating violations they encounter is that some airlines repeatedly allow inebriated passengers to board and allow them to continue drinking onboard. In these cases, FAA believes that a $1,000 fine simply is not enough to deter an airline from refusing boarding to a passenger who may be a regular customer. This is a very big issue with the flight attendants who are forced to cope with these people, and it is a safety issue. What do you propose be done about this problem if the civil penalty is not increased?

Mr. LANDRY. As I understand it, Mr. Chairman, each such boarding is considered a separate offense by the FAA under the present law, and it strikes us that with the kind of compounding activity that they have been going through, which they themselves said yesterday, that you probably will build up fairly sizable penalties just by implementing and carrying out the provisions of the present law.

I don't think this is as widespread at all as perhaps the testimony yesterday indicated. I think it is a rather rare occurrence, and most, I believe all airline managements, are opposed to this, because it can indeed jeopardize the safety of a flight. We question. whether it is as widespread as FAA indicated, and we certainly believe that it can be handled under the current statute.

Mr. FARY. Will you support increased enforcement by the FAA through increased inspections, monitoring, and surveillance of the airlines?

Mr. LANDRY. Perhaps Mr. Jensen would like to respond to that. Mr. JENSEN. We haven't had that question put to our people. I am trying to assess what their response would be. There is a very great amount of inspection that is done, more so than most people realize. Whether or not increased surveillance on the part of FAA over the airlines we represent, would produce increased safety is a question.

I found in dealing with our people that they have a very high priority for safety, the highest. They recognize that their business depends upon running a safe airline, and they realize that the obligation is on the airline management to run a safe operation. Whether or not increased surveillance by FAA would amount to an appreciable difference in the safety of the operation I think is open to a lot of discussion and doubt.

Mr. FARY. Mr. Snyder.

Mr. SNYDER. Thank you, Mr. Chairman.

Mr. Landry, yesterday Mr. Bond cited a particular situation where an airline dispatched a 747 from Honolulu to Dallas after, as he alleged, the FAA inspectors had advised the airline director of line maintenance, that previously performed repairs were unacceptable and contrary to the repair manual. Apparently there was some dispute and the FAA inspector was going to the phone to verify his determination, and the plane was dispatched on, and he alleged that this was because the revenue far exceeded the potential $1,000 fine. I would like for you to comment on that.

Mr. LANDRY. We have not been able yet, Mr. Snyder, to check on the details ot that particular incident that Mr. Bond described. I must say that my gut reaction to that remains that no one of our members or no conscientious airline operator would possibly put a 747 up in the air that he felt was unsafe for the operation.

I find that really incredible, that an unsafe operation could have been conducted in that matter. Perhaps Mr. Jensen has some further comment.

Mr. SNYDER. Maybe you can get help from Braniff's attorney in the room.

Mr. LANDRY. I am sure that if the committee desires, we can get the particulars of the incident, and I am certain that there is a logical explanation.

Mr. SNYDER. It seems to me to be to your advantage to have the particulars of the incident in the record, if in fact it is disputed. After all, the allegation is in the record, so I will ask unanimous consent that you be permitted to amplify your answer. If you don't amplify it, we will assume it is true.

Mr. LANDRY. No; we will be happy to provide that for the record, Mr. Snyder.

[The information follows:]

In the course of my appearance on behalf of the Air Transport Association (ATA) before the Aviation Subcommittee at its July 2 hearing on H. R. 7488, I was asked to supply for the record further amplification of my responses to two questions. One question related to a particular flight operated by an ATA member airline; the other related to the proposal to permit FAA appeals of NTSB decisions.

With regard to Mr. Bond's allegation concerning a specific operation of a 747 from Honolulu to Dallas, I am advised that the airline involved, Braniff International, is supplying the particulars of the incident by separate letter to the Subcommittee.

On the other issue, as was reflected in our testimony, ATA does not feel it is necessary or desirable to amend the Federal Aviation Act to provide for an FAA appeal of an adverse NTSB decision to the U.S. Circuit Court of Appeals. Through the years, Congress has declined to give FAA this right, despite the agency's long-standing interest in, and repeated efforts to establish such standing. (See Lee v. CAB, 225 F.2d 950, at 951-2 (D.C.Cir. 1955); Federal Aviation Act of 1958, Conference Report No. 2556, 85th Congress, 2nd Session, 1958 U.S. Code Congressional and Administrative News 3771.)

This Congressional refusal to accede to FAA's wishes is more than mere consistency with the provisions of the Administrative Procedure Act dealing with judicial review of administrative actions, which explicitly exclude government agencies from the list of "persons" to whom judicial review is available (5 U.S.C. $551, 701, and 702). It is a prudent reaction to the spectre of two federal agencies with complementary statutory roles battling each other through the federal courts over the fate of private parties. As brought out at the hearings, the Justice Department would be confronted with a perplexing threshold selection between agencies to represent in court. The aggrieved or potentially aggrieved private party would be faced with the prospect of expending substantial time and resources

for self-protection in an intragovernmental dispute over a matter which had been accorded exhaustive administrative review. And no matter what the identity of the private party, that "person" would be subject to heavy economic and public relations pressures to settle the case rather than see the dispute through to a final conclusion.

Mr. Fary's question reflected concern over the possibility that an incorrect interpretation of the law might form the basis for an unreviewed NTSB decision. Experience indicates that such occasions would at worst rarely arise. We know of no FAA documentation of a genuine problem in this regard. In our view, the remote possibility that legal error, rather than technical findings, will be dispositive of NTSB cases is far outweighed by the exposure of private parties to a routine and costly prolongation of inter-agency disputes. The record of the hearings on H. R. 7488 offer ample evidence that this exposure is indeed substantial. In short, this is a case in which the proposed amendment promises to do more harm than good.

We do not, of course, contend that the problem can never arise. Rather, we urge the Subcommittee not to adopt a cure which is worse than any demonstrated disease. If a genuine issue arises between FAA and

NTSB over an interpretation of the law, it would seem incumbent upon the Department of Transportation to require an opinion of the Attorney General on the question of law involved (28 U.S.C. §512). There is no reason for us to lack confidence that such opinions would be faithfully followed by the two agencies.

Sincerely,

James & Landry

James E. Landry

Senior Vice President

and General Counsel

JEL/pb