Providing Additional Civil and Criminal Penalties for Aviation Safety Violations

for up to one year or both; and (3) create a simplified enforcement procedure for certain civil penalty actions before an administrative law judge of the National Transportation Safety Board rather than in federal district court.

The proposed legislation comes as part of the FAA's "get tough" approach to aviation safety, a program which in 1979 led to unprecedented proposed fines against Braniff ($1.5 million),1 PSA ($385,000), American ($500,000) and Continental ($100,000). The first two carriers were cited for a number of maintenance and operational violations, while the latter two carriers were fined in connection with their controversial maintenance procedure involving the DC-10 pylon. The get-tough approach also extended to commuter carriers, the largest of which (Prinair) was fined $166,000 last fall and was actually grounded for several days. The FAA has also stepped up its inspection and surveillance of commuter operations.

The FAA's willingness to pursue safety violations aggressively is a welcome break from the agency's past approach to safety enforcement. A review of the FAA's Air Carrier Enforcement History for the period July 1971 through July 1976 shows an agency willing to rely heavily on warning notices and letters of corrections. Where fines were proposed, the amounts were small, and the FAA was usually willing to settle for a fraction of what it initially sought, presumably to save the time and expense of litigation.

Attachment A provides the Subcommittee with an idea of FAA enforcement actions over a representative five-year period, as compared with its recent initiatives. It is interesting to note, for example, that American paid $500,000 last year solely in connection with DC-10 maintenance violations, but in the five years ending in mid-1976, the carrier paid $79,600 for all violations. Over that same five year period, Continental paid only $6800, while Braniff paid $17,150 and PSA paid $2200.

With this background, ACAP would like to offer the following observations on H. R. 7488.

1. The current $1000 maximum civil penalty dates from the Civil Aeronautics Act of 1938, and it is about the only thing which has not changed in value over the past 42 years. A $1000 fine may have been a substantial sum in the 1930s, but it does not have much bite in the inflationary 1980s. Raising the maximum

The Braniff and PSA cases are still in litigation, and thus the final amounts the FAA will accept are not known at this time. Aviation Daily, 8 Nov. 1979, at 42. American and Continental both sent in checks for the amount proposed, but stated that the payments did not constitute admission of fault but were made to avoid the expense of litigation. Aviation Daily, 19 Nov. 1979, at 91.

civil penalty to $25,000 would provide a desirable deterrent effect.

2. Opponents of H.R. 7488 argue that the FAA does not need a statute raising the civil penalty maximum because it can aggregate individual violations and come up with the staggering sums discussed previously. This argument is unpersuasive. In order to reach six-figure aggregate fines, the FAA had to find 1500 separate violations by Braniff, 385 by PSA, 500 by American and 100 by Continental. Is it not preferable for Congress to set the penalty for individual violations at a level high enough to deter the violations from occurring in the first place?

3. There is the nagging question whether the FAA's new enforcement policy is here to stay. As the Subcommittee is aware, the FAA's safety priorities can change drastically in a very short period of time, and ACAP is concerned that the current enforcement policy may become subject to such bureaucratic vicissitudes. We think Congress should prevent this from happening, and the best way of sending a clear signal to FAA to maintain enforcement as a top priority is by increasing civil penalties and imposing criminal penalties for various air safety violations.

4. It is important to note that the higher civil penalties and new criminal penalties would be applied against persons who violate what are often "minimum standards." Section 601 of the Federal Aviation Act directs the FAA to establish "minimum standards" for the design, materials, workmanship, construction and performance of aircraft, aircraft parts and appliances. In addition, FAA is directed to issue "[r]easonable rules and regulations and minimum standards" for inspecting, servicing and overhauling aircraft and carrying out other aviation safety functions. When one considers the boast from the industry that it regularly exceeds FAA standards, it is difficult to accept the argument that the public does not deserve protection from violations of minimum standards in a better fashion than is provided by today's statute.

5. Section 3 of H.R. 7488 is carefully drawn to allow for the imposition of criminal penalties for "knowing" and "willful" violations of Title VI of the Federal Aviation Act and rules issued thereunder. Thus, the bill would not make inadvertent or accident violations of these safety standards a crime. This approach would bring air safety laws into line with other statutes prohibiting conduct which endangers human life.

The fear that passage of the bill will send dozens of airline executives to prison is a red herring. In the first place, knowing and willful violation of Title IV of the Federal Aviation Act, which governs CAB procedures, is already a criminal offense, and to our knowledge no airline official has been jailed under that provision. Second, the specter of corporate executives trading pinstripes for prison stripes is regularly invoked when illegal pricefixing is discussed, and that claim is considerably

overstated. If, in any year, the number of airline officials imprisoned for safety violations approaches the small number of executives jailed for pricefixing, ACAP will be astonished.

6. It is useful to compare some of the inconsistencies with respect to criminal penalties in the aviation field. The most glaring inconsistency is section 902 (d) of the Federal Aviation Act, which makes "rebating" a misdemeanor punishable by a fine of up to $5000. Of course, rebating giving a discount or refund off the price of a ticket is one means of price competition, which the Airline Deregulation Act encourages. It makes no sense to make price competition a crime while providing no criminal sanctions for conduct which violates safety standards.3

An examination of the criminal penalties established in the Federal Aviation Act demonstrates how the absence of criminal penalties for Title VI violations is out of step with other actions Congress has taken in the area:

* interfering with flight crew members or flight attendants: fine up to $10,000, up to 20 years in jail or both (S 902 (j)).

* aircraft piracy or attempted piracy: imprisonment of not less than 20 years or, if death of another person results, life imprisonment or the death penalty (S 902 (i)).

* interference with an aircraft accident investigation: fine up to $5000, imprisonment up to one year or both ($ 902 (p)).

* willfully delivering or causing to be delivered to a commercial aircraft hazardous materials in violation of a DOT rule: fine up to $25,000, imprisonment for up to one year or both (S 902 (h).

7. Turning for a moment from the FAA to the CAB, ACAP believes that H.R. 7488 would provide a useful mechanism for enforcing CAB regulations designed to provide economic protections for the consumer. Under current law, for example, it

Professor Thomas Kauper, former Assistant Attorney General in charge of the Antitrust Division, so testified at a CAB hearing when it was argued that stripping antitrust immunity from traffic conferences of the International Air Transport Association would threaten executives with jail terms. See CAB Docket, transcript of 22 Oct. 1979 hearing. According to the Justice Department, 19 people went to jail for pricefixing in 1979. 3

The inconsistency is compounded by the fact that sections 102 and 103 of the Federal Aviation Act assign a very high priority to air safety.

might be less expensive for an airline to pull out of a community in violation of the Act or a CAB order and pay a daily fine of $1000 rather than continue service which loses over $1000 each day. Raising the maximum civil penalty from $1000 to $25,000 would also help the CAB enforce regulations of particular interest to passengers, e.g., consumer protections for charter travelers, in-flight smoking rules, regulations governing payment of denied boarding compensation to bumped passengers.

In summary, ACAP sees a number of benefits for commercial air travelers in H.R. 7488, and we hope that the Subcommittee will be able to complete action on the legislation in the near future.

Thank you very much for your consideration of these

comments.

Very truly yours,

Cornich 7. Ittiturst

Cornish F. Hitchcock
Associate Director

Survey of Civil Penalty Actions by the Federal Aviation Administration
Against Scheduled Air Carriers July 1971