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International Air Leases, Inc., of Miami, Florida, is engaged in the business of leasing air transport-type aircraft to air carriers.
That company opposes the enactment of HR 7488 and
We have discussed these views with your staff and submit the enclosed memorandum for the record.
Air Leases, Inc.
The harsh penalties that can be imposed on lessors of aircraft should be removed from the Federal Aviation Act
The existing Federal Aviation Act is harsh on lessors of
aircraft, and the FAA has asked Congress to increase that harsh
We are calling this to your attention to ask your help
in getting Congress to remove the unfair imposition on lessors
in the present statute and to resist the effort of the FAA to
make the law even worse.
A lessor can have his aircraft seized
1/ If a lessee violates an F.A.R. so long as the violation
is made by the person in command of the aircraft, the aircraft
1/ "Sec. 901 (49 U.S. Code 1471). (a) (1) Any person who violates TA) any provision of title III, IV, V, VI, VII or XII, or of section 1114, of this Act, or any rule, regulation, or order issued thereunder,...shall be subject to a civil penalty of not to exceed $1,000 for each such violation....
"Sec. 901 (b) Liens- In case an aircraft is involved in such violation and the violation is by the owner or person in command of the aircraft, such aircraft shall be subject to lien for the penalty:..
"Sec, 904 [49 U.S. Code 1474)...In case the violation is by the owner or person in command of the aircraft, the penalty shall be a lien against the aircraft...."
is subject to a lien--no matter how innocent the owner of the
aircraft may be--or how limited his control of the aircraft may
Thus, if the aircraft is under a lease-purchase agreement
that runs for several years and which gives the lessee total
control of the aircraft, the lessor's property is still subject
to a lien by the FAA.
In fact, under the Federal Aviation Act,
there is no statutory avoidance of the lien if the aircraft is
stolen; the lessor's aircraft remains subject to a lien if the
violation is by the person in command.
In other words, the
innocent lessor of aircraft is not even given the benefit of
avoidance of the lien which is granted to innocent owners of
vehicles under other statutes.
For example, the statute pro
viding for seizure of a vehicle for transport of contraband
the lessor/owner articles exempts/from forfeiture when the vehicle is operated by a thief or one unauthorized by law to operate the vehicle. 1
The FAA Act authorizes the FAA to punish A, the lessor,
2/ for an offense committed by B, the lessee. This, of course,
is totally contrary to our moral sense of justice and contrary
to most of our laws.
As the Supreme Court said, this type of
...intended to impose a penalty only on those who
are significantly involved in a criminal enterprise.
U.S. Coin and Currency, 401 U.S. 715, 721-22 (1971).
are moving enforcement of the forfeiture statutes in this direc
A strong indication of this was the language of the Supreme
Court when it decided that forfeiture statutes can be constitu
(footnotes on page 2-A)
tional (Calero-Toledo v.
Pearson Yacht Leasing Co., 416 U.S. 663
There, the Court stated that the owner could claim
exception to forfeiture if he proved "not only that he was un
involved in and unaware of the wrongful activity but also that
he had done all that reasonably could be expected to prevent the
proscribed use of his property."
(footnotes to p. 2)
1/"Chapter 11. Section 782--Seizure and forfeiture of vessel,
vehicle, or aircraft used--Innocent owners.-"Any vessel, vehicle, or aircraft which has been or is being used in violation of any provision of section 1 (8781 of this title), or in, upon, or by means of which any violation of section 1 (8781 of this title] has taken or is taking place, shall be seized and forfeited: Provided, That no vessel, vehicle, or aircraft used by any person as a common carrier in the transaction of business as such common carrier shall be forfeited under the provisions of this Act (S$781-788 of this title] unless it shall appear that (1) in the case of a railway car or engine, the owner, or (2) in the case of any other such vessel, vehicle, or aircraft, the owner or the master of such vessel or the owner or conductor, driver, pilot, or other person in charge of such vehicle or aircraft was at the time of the alleged illegal act a consenting party or privy thereto: Provided further, That no vessel, vehicle, or aircraft shall be forfeited under the provisions of this Act (S$781-788 of this title) by reason of any act or omission established by the owner thereof to have been committed or omitted by any person other than such owner while such vessel, vehicle, or aircraft was unlawfully in the possession of a person who acquired possession thereof in violation of the criminal laws of the United States, or of any State. (Aug. 9, 1939, c. 618, 52, 53 Stat. 1291.)." 49 U.S.C. 782. A comparable provision is found in 21 U.S.C. 881.
2/ We know of no instance when the FAA enforced a lien against an aircraft operated by a thief. Nevertheless, there is no provision in the statute to bar such a lien.
Further support for that view is that since the 1974 Supreme
Court decision, the Federal courts have interpreted the exception
to be applicable if the owner
"...was uninvolved in and unaware
of any wrongful activity, and... that he acted as a reasonably pru
dent person under all the circumstances, doing all that could be expected of him to prevent illegal use of his property, (then) forfeiture... would be improper under the standard established by
the Cupreme Court."
U.S. v. One 1976 Lincoln Mark IV, 462 F.
Supp. 1383, 1387 (1979).
This fair standard is also in the more recent forfeiture
statutes dealing with narcotics violations.
Section 334 (d) (3)
"... the court shall allow the claim of any claimant,
Another means by which other lien and forfeiture statutes
try to be fair to innocent owners is a provision directing the
agency to remit a fine to avoid clear injustice.
is in the statute imposing fines and forfeiture for violating
wherein customs laws/the Secretary of the Treasury is authorized to remit