Florida Aviation Law Journal

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A Publication of The Florida Bar Aviation Law Committee To Promote Education in the Florida Aviation Community Volume 2, Issue 2 Florida Aviation Law Journal www.fbalc.org September 2011 Enforceability of Commercial Air Carriers’ Contracts of Carriage in the Smartphone Era By Adam G. Wasch* Introduction IN THIS ISSUE Registering an Aircraft Under a Deleware Holding Company.3 The Dreaded 709 Ride: Aircraft Accident, Incident, or Just Another Disney Attraction.4 . And Here, as Paul Harvey would say, is the Rest of the Story.5 Aviation Expert Witnesses: How to Keep Yourself and Your Experts Out of Trouble.6 Flying for a “ 100 hamburger?” Don’t Pay the Landing Fee! Airport User Fees: the Legal Quagmire.7 Editorial Board: S. V. (Steve) Dedmon Editor-in-Chief Committee Officers: Timoth M. Ravich Chair Daniel W. Anderson Vice Chair Charles R. Morgenstein Vice Chair Walter G. Campbell, Jr. Board Liaison The paper ticket and ticket jacket are slowly but surely becoming extinct with more and more commercial air carriers providing electronic methods of allowing passengers to check-in and board airplanes. Air carriers such as American Airlines and Continental have been at the forefront of the instant gratification, “want-it-now” technological age by giving passengers the option to use their smartphones as boarding passes. Tech savvy travelers are able to pull up an air carrier’s “App” on their phone, purchase a ticket, and simply show the barcode on their smartphone to pass through security and board the aircraft. These passengers bypass the face-to-face contact with gate agents to discuss the airlines’ contracts of carriage. These passengers also never receive a paper ticket with, at the very least, a contract of carriage printed on the back. Air travel could very well be paperless in the future. This prompts the question: how do commercial air carriers enforce their contracts of carriage in the smartphone era? Carriers’ Limitation of Liability for Damaged or Lost Luggage One of the most common issues for airline passengers is damaged or lost luggage. Major commercial air carriers publish their contracts of carriage containing liability limitation related to damaged or lost luggage online. JetBlue’s Contract of Carriage, for example, limits its liability for lost, damaged or delayed delivery of checked baggage to 3,300 unless the passenger declares a higher value for loss of baggage at check- in, not to exceed 5,000 and pays JetBlue 1.00 per 100 of excess value. JetBlue provides passengers with a list of items, including cameras and jewelry, not accepted in checked baggage and for which JetBlue assumes no responsibility or liability. To make a baggage claim on a domestic flight, notice must be given to JetBlue within four (4) hours after the arrival of the flight on which the baggage was damaged, delayed or lost. Written notice detailing the items lost or damaged must be provided to JetBlue within 21 days. Legal action, if it becomes necessary, must be commenced within one year of the date of the incident. This is not unique to JetBlue, as most air carriers have similar provisions. History of Liability Limitations in Contracts of Carriage Prior to airline deregulation in 1978, every commercial air carrier was required to file tariffs with the Civil Aeronautics Board (CAB) setting forth, among other things, all classifications, rules, regulations, practices, and services in connection with air transportation.1 Tariffs filed with the CAB, if valid, were conclusive and exclusive, and an air carrier could achieve limited liability simply by filing a valid tariff containing such a provision.2 However, airlines no longer enjoy the conclusive binding effect of contracts of carriage simply by filing a tariff with the CAB.3 Today, federal regulations authorize airlines to incorporate contract terms on a passenger’s ticket so long as certain uniform disclosures are met and permit the Department of Transportation (DOT) to review the See “Contracts of Carriage” page 16

“Read Back” By S.V. (Steve) Dedmon F ollowing a little over a year and a self imposed sabbatical After a short break, Dennis Haber discussed FAA Airmen following my year as the chair of the Aviation Law Enforcement Actions. Using an actual case as a backdrop, he Committee, I am back in the left seat of the Vectors detailed the steps in an enforcement action proceeding. He publication. So, in conjunction with our annual convention, which began by addressing how the FAA uses a Letter of Investigation is the beginning of our committee year, I am back to put together to contact an individual and although it appears innocuous the legal and flying related articles as well as reviews of our past letter may be it should be taken seriously as a person has no meetings and previews of upcoming events. So, buckle up. Miranda rights when it comes to speaking to a the FAA. The discussion then moved to the FAA’s procedure related to a On June 24rd the committee met at the Gaylord Palms Resort Notice of Proposed Certificate Action and a pilot’s choices in and Convention Center in Orlando. I had heard about the handling the matter, up to and including a hearing before a NTSB resort through my daughter, who graduated with a hospitality administrative law judge and possible appeal to the full NTSB management degree from UCF, but it was my first visit and it board. He concluded by explaining another option available to was everything she claimed it was-even down to the alligators in the FAA in regard to actions against pilots-the 709 ride. You can the garden, or I guess that is what you call the place they were find a detailed account of his laying (see Ed Booth’s photo). article -The Dreaded 709 Ride: The meeting opened with chair Aircraft Accident, Incident, or Tim Ravich giving an overview Just Another Disney Attraction, of the past year and his vision later in this issue. for the next. As a record of Pat Phillips finished the day attendance and to elicit member strong with a potpourri of legal input, he had each attendee issues including looking at fill out a sheet about their the AOPA’s Legal Services interest pertaining to publishing, Plan, the EAA’s Legal Advisory speaking, board certification, Council and Airshows and practice areas and any ideas Airshow Waivers. He included for committee activity during the as a handout a typical AOPA 2011-2012 calendar year. Part Panel Attorney Agreement. of the intent of the questionnaire As it pertained to the number was to stimulate conversation and rate allowed under the on how to increase membership program, various members involvement and to increase the of the committee expressed committee’s overall presence Photo by Ed Booth concerns that both, in most in the Florida Bar. Adding to cases, were insufficient. They also added they have, under this discussion was Walter Campbell, the committee’s Board of certain circumstances, negotiated higher rates with the AOPA. Governors representative. As part of activity for the past year, I Another issues was a client’s perception of the totality of their was able to update the committee on this year’s recipient of the representation as opposed to the actuality of what being in the Eilon Krugman-Kadi scholarship, Da Hyun Shim. He is a junior at program affords them. Embry-Riddle Aeronautical University, majoring in Aeronautical Science. Then, as is our practice, everyone introduced themselves, Pat moved from there to a history of Sun ‘n Fun, its economic where they were from and their area of practice. impact, and a point lost on many that it is home to the Florida Air Museum which was designated as the “Official Aviation Museum Elizabeth Kozlow was the afternoon’s first presenter. Her topic and Education Center of the State of Florida.” They also house was New Developments in Recording and Registration. The the Central Florida Aerospace Academy, which is a high school discussion including filing registrations for new aircraft, updating that revolves around aviation related curriculum and careers. He changes of address, and Aircraft Re-registration/Renewal. She then discussed the definition of aerobatic flight and various FAA emphasized all aircraft, on a scheduled established by the FAA waivers and authorizations as they pertain to pilots performing based on their original certification date, have a window for at airshows such as Sun ‘n Fun. re-registration and must comply. As such, the FAA will send a Notice of Expiration of Aircraft Registration to aircraft owners that We finished up with announcing the next meeting is scheduled includes Re-regulation instructions of who, when, where, and in Orlando on September 23rd at the Hilton at the Walt Disney how much as it relates to the process. She also included a sheet World Resort in Orlando. from a website where a person could check the status of their On a personal note, being in the position of having to procure re-registration application. Included as part of the presentation speakers, I would like to personally thank Elizabeth, Dennis was as sheet listing various additional registration cites, including and Pat for taking on that responsibility. Also, thanks to all the international registration. attendees, it is not a meeting without you. 2

Registering an Aircraft Under a Delaware Holding Company By Mohammad Ahmed Faruqui, Esq.* or residents of the United States. The common stock shares are held by the voting trustee who issues certificates of stock ownership to the actual owner(s) of the Delaware Corporation. These are mandatory conditions, and if they are not met, then the corporation is “not a citizen” and the aircraft may not be registered on the U.S. Registry. Once the Aircraft is registered under the U.S. registry with an “N” number, it must be maintained to its manufacturer’s standards as well as those of the Federal Aviation Administration (FAA). As the Delaware corporation will function solely as a “Holding Company” to hold title to the aircraft for the actual owner(s), it is precluded from doing any business whatsoever in the United States. Everything must be structured exactly in accordance with U.S. Law and the applicable Federal Aviation Regulations (FAR). An aviation attorney who is knowledgeable in state and federal laws, and in the FARs, can assist their clients who wish to structure their aircraft ownership for registration under the U.S. registry. Doing this using the Delaware holding company is one available option. Endnotes: A foreign company or national may find it convenient and economical to register their aircraft under the United States registry for their business purpose. The use of a Delaware holding company is a commonly used option for achieving this purpose. A foreign company or national may not register an aircraft under the United States registry unless he, she or it is a permanent resident, or has a place of business in the United States. The corporation owning the aircraft must be either a U.S. “citizen” corporation or a foreign corporation that is “qualified to do business” in the U.S. As a result of such qualification, it would be taxable in the U.S. and have all the usual obligations of a domestic business according to State and Federal Laws. As such, many non-U.S. companies and foreign persons form U.S. holding companies in Delaware. The creation and continued existence of the U.S. holding company must be in scrupulous compliance with all state statutes, federal statutes, and Federal Aviation Regulations so the holding company can “qualify” as a “U.S. Citizen”. Since the new Delaware company is a “Holding Company”, it does not participate in any monetary transactions and therefore does not receive income or incur expense to report to the Internal Revenue Service (IRS) for purposes of taxation. Appropriate documentation is required to satisfy the Internal Revenue Service. A Delaware corporation can be treated as a “U.S. Citizen” if at least 2/3 of the members of its board of directors are citizens of the United States and at least 3/4 of its corporate officers are citizens * Mr. Faruqui is an attorney at Aerolaw.info LLC in Fort Lauderdale, FL, servicing aviation clients throughout the United States and abroad. He graduated from Nova Southeastern University Shepard Broad Law Center in 2005 and became a member of the Florida Bar and Florida Bar Aviation Law Committee in 2006. Mr. Faruqui can be reached by phone at (954) 527-0002 or by e-mail at Mohammad@Aerolaw.info. 1. 49 U.S.C. §44102, §44103, and 14 CFR § 47.8 of the Federal Aviation Regulations. 2. §47 and related subsections of the Federal Aviation Regulations. 3

The Dreaded 709 Ride: Aircraft Accident, Incident, or Just Another Disney Attraction by Dennis Haber* I went to Disney World recently, closely discover evidence (the source of which they According to FAA Order 8700.1, Volume followed by a trip to Universal Studios. I do do not have to disclose) that leads them to 2, Chapter 26, “.there must be ample or it because well, because I never grew question an individual’s qualifications to probable cause for requesting the re-examup. I guess that’s why I love aviation. Every exercise the privileges of their certificate. ination” including reliable reports, personal flight is a different ride. The stalls, the spins, Incidents such as the examples above knowledge, or evidence obtained through an the parachute drop, they are all amusement illustrate circumstances that very well accident, incident, or enforcement investigarides to me. Then there is that “other” ride may lead the FAA to question an airman’s tion.1 Thus, the “lack of competence” has to – the terrifying 709 ride. But this ride is not qualifications. Conversely, since this isn’t a be supported by the facts and circumstances at Disney, or Universal. It’s at your local court hearing, the details of the complaint in the case. However, as long as a basis airport, and only your local FSDO gives out are not substantively disclosed. This is an for questioning an airman’s competence the tickets. “administrative proceeding” and the “rules of has been implicated, rather than actually There are those times when you run a evidence” are not applicable. The only axiom demonstrated, the request is considered stop sign, or rear end the reasonable. The irony car in front of you because here is that while there apyou were busy playing pears to be adequate “due with your new iPhone process” protections prior or GPS device. Of course to them calling you in, they you didn’t mean to, but don’t have to provide them there he/she was, and to you. They just have to you ended up with a ticket. come to the conclusion That can also happen in internally and that in and airplanes. Well, maybe of itself, constitutes “probthere is no cop to pull able cause.” Once the you over, but they are out FAA’s version of probable there. They know your evcause is established, your ery move. So, what hapgoose is cooked; don’t pens if you are involved in argue, just take the test such an “incident” (whatand get it over with. ever that is) in which your The Re-examination Reaircraft is damaged, but quest Photo courtesy of: lifeabovetheclouds.blogspot.com no one is injured? Or perThe procedures for the haps you cut the corner of Class B airspace is the rule of the government, which states, 709 ride are set out in Order 8700.1.2 The or fly too close to the President’s house. “We are the government, and we are here Flight Standards District Office (FSDO) Alternatively, perhaps you landed on a grass to help you.” responsible for the area within which the field breaking off your wheel pants or flew What if the accident or incident wasn’t accident or incident occurred will send the under a bridge thinking nobody would notice. your fault? What if it was caused by a me- airman a letter requesting re-examination If the FAA finds out, you will quite possibly chanical failure, or the result of a unexpected via certified mail, return receipt requested. get a nasty-gram demanding you appear for expansion of Class B airspace or the Presi- The letter will include (1) the reasons for the terrifying and dreaded 709 ride, and trust dent is on the move along with an accom- the re-examination (like you were caught me, this is no Mickey Mouse examiner. panying TFR the moving of which cannot busting a TFR that nobody knew about and Not the Latest Ride at Disney World or be anticipated. What then? Unfortunately, just appeared because some politician was Universal Studios unless the mechanical failure is obvious to hob-knobbing around trying to be President); The 709 ride relates to the FAA’s authority the FAA as the sole cause of the incident, (2) the specific certificate and/or rating for to re-examine an airman holding a certificate a request for re-examination is likely to be which the re-examination is necessary (the (pilot, flight instructor, airframe and power considered reasonable. Why, you ask? Be- government code for whatever license you plant, etc.) at any time pursuant to 49 U.S.C. cause the FAA only has to show that a lack might hold); (3) the type of re-examination 44709(a). They may have good reason, or of competence “could have been a factor” (such as; we want to see if you can fly a holdno reason at all, because they don’t really and, if it was, the re-examination request ing pattern within 50 miles of the designated have to go into any detail in telling you what is considered reasonable, without regard fix); (4) the category and class of aircraft you did wrong. The FAA issues a “request to the likelihood that a lack of competence required (if applicable); (5) the location of for re-examination” to an airman after they had actually played a role in the event. the re-examination (again, government Continued on page 11 4

And Here, as Paul Harvey would say, is the Rest of the Story by S.V.(Steve) Dedmon* Last year, Jim Inhofe, a U.S. Senator from Oklahoma, was piloting an airplane and landed on a closed runway. The incident was widely reported in a variety of news publications not only for who was doing the flying, but also for the eyewitness accounts of the landing and the FAA’s handling of the situation. It is the ultimate repercussion, or at least my perception of it, which is the subject of this article. But, first here is The Story On October 21, 2010 Senator Inhofe was piloting his Cessna 340, N115EA, to Port Isabel-Cameron County (PIL) airport in Texas1 (see accompanying figure). Reportedly, he, including three others, made a landing on a runway bearing oversized Xs, a large red truck, and other vehicles. Additionally, there were construction workers on the runway who could not hear the approaching airplane due to noise from their construction equipment, only to be warned by a person running to the area alerting them of the impending landing.2 In a recorded conversation with the FAA, obtained under the Freedom of Information Act, runway crew supervisor Sydney Boyd said Inhofe touched down, then "sky hopped" over personnel and six vehicles before landing.3 He also commented the aircraft "damn near hit" one red truck and the driver “actually wet his britches.”4 Boyd continued by saying he was so close he could have spit on the fuselage. Later, in another conversation, Lee Williams, an FAA Quality Assurance Specialist spoke with PIL Airport Manager, Marshall Reece, who emphatically stated, “I’ve got over 50 years flying, three tours of Vietnam and I can assure you I have never seen such a reckless disregard for human life, in my life, adding, “something needs to be done. This guy is famous for these violations.”5 In both the incident report6 and recorded audio, the air traffic controller asked if Inhofe was familiar with the NOTAM7 at PIL and he replied Yes, but admitted to not checking for them prior to the flight.8 Adding to this seemingly conflicting ac- count, Inhofe said not getting the NOTAM was the result of a bad relationship he had with an individual who declined to take his phone call before the flight and did not tell him about the NOTAM, then saying, “I did not know it because it was not given to me.”9 Conversely, pertaining to checking NOTAMs for a closed runway, Inhofe conceded, “it “probably” is “technically” something a pilot should do but added, [P]eople who fly a lot just don’t do it.”10 He added, “he was not sure of the exact wording of the FAA’s regulations regarding NOTAMs, but that his frequent flights across Oklahoma would make it impractical for him to check for NOTAMs on every small airport he uses.11 When asked whether his experience in Texas would lead him to change his mind on NOTAMs, he said, “ I don’t want to make any commitment.”12 Looking further into the issue, there was some confusion about the airport’s lack of communications. First, the incident report states airport employees heard the senator call-in on the UNICOM, but did not respond or alert him of the runway closure prior to his landing.13 A one-page statement released by the senator blamed a lack of response to three radio transmissions on a negative relationship with an “attendant” at the airport.14 Regarding the runway environment, Inhofe said he did not see the Xs until late on final approach and was concerned he could not abort safely.15 Thus committed, he said he landed “well off to the side” of the workers.16 When confronting the on-site workers tending the runway Inhofe exclaimed, “[W] hat the hell is this? I was supposed to have unlimited airspace.”17 Later, Inhofe expressly noted he had not admitted a violation and said he was "cleared to approach by the FAA prior to landing on the runway."18 No matter one’s opinion of what should or should not have happened as a result of this incident, the FAA drew a final conclusion. Ultimately, they investigated alleged violations of the Federal Aviation Regulations, Sections 91.13(a) and 91.103(a).19 Based on Inhofe’s agreement to complete remedial trainings and the satisfactory completion thereof, they chose to forego any legal enforcement action.20 Further, they informed the senator, the letter addressing their findings would be a matter of record, held for two years after which the matter would be expunged.21 The FAA then essentially said, have a great day and do not violate any regulations in the future. However, another peculiarity associated with this whole affair is when Inhofe left PIL he took off on a taxiway!22 Now, for the The Rest of the Story On Wednesday July 6, 2011 Senator Inhofe, along with 24 original co-sponsors introduced the Pilot’s Bill of Rights,23 S.1335.24 Its stated purpose is to amend title 49, United States Code, to provide rights for pilots, and for other purposes.25 In addressing his reasons for the bill, Inhofe said, “I have helped an untold number of pilots facing the pressure of dealing with the Federal Aviation Administration [a]nd the bill ensures pilots are treated in a fair and equitable manner.26 Adding to his explanation for introducing the legislation, Inhofe says, "[I]t's our job in Congress to ensure that there are appropriate safeguards in place to prevent agency overreach and this bill proves it."27 However, there is possibly more than representing the nation’s pilot community as motivation. He goes on to personalize the issue, referring to his landing incident, by further declaring, "I was never fully appreciative of the feeling of desperation until it happened to me."28 Continued on page 12 5

Aviation Expert Witnesses How to Keep Yourself and Your Experts Out of Trouble* By Donald M. Maciejewski, Esq.1 S.V.(Steve) Dedmon, Esq.2 Expert witnesses – in today’s litigious legal environment we just can’t seem to get along without them. Whether you are in Federal or State Court, try proving up your aviation case without any expert testimony and chances are that you will not get very far. While its is no secret that a good expert can be worth his/her weight in gold and the key to your winning your case, the trick is to find the expert(s) that best suit your case. Think back to different cases you have worked on and the experts you employed in those cases; are your memories of the expert, their testimony and effectiveness favorable or forgettable? Were your experts well prepared, credible, and believable? Did they explain their theories and opinions to the jury in terms they could understand and ultimately comprehend? Did your expert have some “baggage” that you were concerned about, as in a controversial methodology or indefensible conclusion? Did your experts tell the truth? How did your experts compare personably, technically and conclusively against your opponents’ experts? Was your expert’s testimony good, bad or downright ugly? Selecting and hiring experts is just as important to your case as is jury selection, opening/closing arguments and developing a case theme. As such, in the current contemporary civil litigation environment, experts play a vital role. Literally, as you may suspect, they come in all shapes and sizes with varying credentials and levels of experience. If the possibility of settling a large and technically complicated aviation cases exists, more often than not, it will not be settled until after the experts have testified. It then is incumbent on you, as lead counsel, to select the best available experts and avoid those who do not possess the attributes your case may require, thus avoiding possible negative ramifications The Lawyer’s 13 Point Expert Checklist When selecting an expert try following these tips when meeting with and selecting expert witnesses to help insure your case and client’s problems are minimized: Do not let the expert offer opinions outside their area of expertise. Insure the expert is a master of the facts of the case. Failure to master the facts will result in your expert looking as though he/she does not know what they’re talking about, which creates an issue of creditability. Do not permit your expert to rely on irrelevant data or documents not pertinent to the case. Insure your expert learns and thoroughly understands the opposing lawyer’s theory of the case. Do not let the expert become your client’s advocate instead of an unbiased expert whose factual testimony favors your client’s position. As a practical matter, do not let the expert bill for work not authorized by you as the hiring attorney. Do not let the expert mishandle custody of tangible evidence. Do not allow the expert to impose their ego into their deposition or trial testimony. Do not allow the expert to reveal an air of arrogance when discussing how much they are being compensated for their time. Counsel the expert on the importance of not losing their temper while testifying in a deposition or while on the stand. Do not allow the expert to answer hypothetical questions that have no basis in fact whether they are, or are not, related to the case. Although, this sounds obvious, require your expert to review all materials pertinent to the case. Failure to supply the expert with critical materials will make them look less than fully prepared. Additionally, discuss information they believe to be pertinent and review its relevance to the case. Go over any “blemishes” or “baggage” in the expert’s CV or reputation and resolve any conflicts prior to the expert’s deposition and trial testimony. Finally, remind your expert they are more than just purveyors of facts, figures, and statistical information, and have them portray a story to the jury. When depicted the evidence to a jury, have your expert explain the technicalities of the case on a level of an intelligent 16 year old, all the while being sensitive to not underestimate their intelligence. Also, have your expert explain key issues to the jury on the basis that they may have little or no familiarity or background in the expert’s field of expertise. Finally, a trial is supposed to be a search for the truth. Every lawyer that employs an expert witness in any type of case, whether it be a complex aviation case or a simple auto negligence case, has to ask himself, “Am I attempting to reveal the truth, or am I ignoring the truth to espouse something I personally believe?” It is the duty of every lawyer to insure an experts who tell less than the truth are eliminated from earning a living as they denigrate their profession and the reputation of their colleagues, by literally being paid liars. As officers of the court and its ultimate guardians you should not only expect, but demand honesty and veracity from your experts and accept nothing less. See “Aviation Expert” page 18 6

Flying for a “ 100 hamburger?”1 Don’t Pay the Landing Fee! Airport User Fees: the Legal Quagmire By Jason Lorenzon* Introduction The debt crisis, the economy, and a broken immigration system had all but buried the user fee debate in General Aviation. However, it has reared its ugly head in the recent debt debate negotiations in Congress. Under the Commerce Clause of the United States Constitution, Congress has the power to levy user fees and harm an already fragile economic sector. On the other hand, under the Supremacy Clause, Congress has the power to unify the law of user fees and usurp state law. I really do not think anyone in Congress has figured this out yet, which in this political climate could be extremely harmful to General Aviation. Federal and state laws are the two main sources for user fees. Under federal law, tax dollars are available through federal grants offered by the Federal Aviation Administration (hereinafter, the FAA), but are insufficient to support the continual maintenance and development of the aviation infrastructure. 2 As a result, user fees have been a means to this end.3 Under federal law, the only legal limitation placed upon airport user fees is that they must be related to aviation safety.4

Center in 2005 and became a member of the Florida Bar and Florida Bar Aviation Law Committee in 2006. Mr. Faruqui can be reached by phone at (954) 527-0002 or by e-mail at Mohammad@Aerolaw.info. 1. 49 U.S.C. §44102, §44103, and 14 CFR § 47.8 of the Federal Aviation Regulations. 2. §47 and related subsections of the Federal Aviation Regulations.

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