Aerial Banners, Inc. v. Federal Aviation Administration

Citations: 547 F.3d 1257; 2008 WL 3906797; 2008 U.S. App. LEXIS 18411Docket: 08-10042

Court: Court of Appeals for the Eleventh Circuit; August 26, 2008; Federal Appellate Court

Original Court Document: View Document

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The United States Court of Appeals for the Eleventh Circuit reviewed a petition from Aerial Banners, Inc. challenging the Federal Aviation Administration's (FAA) revocation of its waiver that permitted the company to tow advertising banners behind airplanes, a practice generally prohibited under 14 C.F.R. 91.311. Aerial Banners had operated under this waiver, which was periodically renewed and included Standard and Special Provisions regulating operations.

The FAA revoked the waiver on December 14, 2007, citing multiple safety incidents over the preceding two years, including paperwork violations and crashes, some resulting in serious injuries to pilots. The revocation letter stated that safety and public interest would not be served by allowing Aerial Banners to continue operations under the waiver. 

The incidents leading to the revocation included: 
1. A hard landing on September 25, 2005, caused by a downdraft, resulting in minor damage.
2. A forced landing due to fuel exhaustion on September 26, 2005.
3. Another hard landing on December 18, 2005, attributed to pilot error, leading to pilot termination.
4. A June 23, 2006, crash due to loss of control after an abrupt turn, resulting in pilot injuries.

After reviewing the administrative record, the court denied Aerial Banners' petition for review of the FAA's decision.

On November 10, 2007, an airplane crash involving Aerial Banners is under investigation by the NTSB, which indicates that the crash was due primarily to pilot error exacerbated by requests from air traffic control for unusual maneuvers, while ruling out mechanical failure. Aerial Banners has faced multiple incidents between 2005 and 2007, including two crashes, hard landings, an emergency landing due to fuel depletion, and four paperwork violations concerning maintenance and aircraft modifications. These issues, including one pilot error leading to injury, have raised concerns about the airworthiness of their planes. Aerial Banners disputes the FAA's decision to revoke its waiver, claiming it was arbitrary and capricious, lacking substantial evidence, and in violation of the Administrative Procedure Act. The court has jurisdiction under 49 U.S.C. 46110(a) for judicial review of FAA orders, with authority to modify or set aside parts of these orders. The review is limited to the administrative record, and the court will uphold the FAA's findings unless unsupported by substantial evidence or deemed arbitrary, capricious, or contrary to law.

Reviewing agency actions under the Administrative Procedure Act (APA) requires deference to the agency’s judgment, and the Federal Aviation Administration (FAA) orders can only be set aside for specific substantive reasons. These include reliance on improper factors, failure to consider relevant factors, or clear errors of judgment lacking a rational connection to the established facts. An agency may also act arbitrarily by not adhering to its own regulations. Arguments not raised before the FAA will not be considered. The law governing waivers, such as the one that allowed Aerial Banners to operate, grants the FAA discretion to issue such waivers if deemed in the public interest. Revocation of waivers must follow specific procedures outlined in FAA Order 7210.3U, which includes immediate notification, verification of cancellation reasons, and documentation.

Aerial Banners contends that its waiver revocation lacked substantial evidence and was arbitrary, arguing that the FAA did not follow its own procedures. While Aerial Banners acknowledges the incidents cited by the FAA occurred, it claims the FAA exaggerated its responsibility and that the revocation was an excessive response. This challenge is framed as a substantive abuse of discretion and must be evaluated under the deferential standard for substantive APA review, which focuses on whether the FAA acted on improper factors, neglected significant factors, or made a judgment error disconnected from the facts.

Aerial Banners argues that pilot error, rather than management oversight, caused the most serious of nine safety incidents, claiming the FAA's decision to shut down the company is irrational and unconnected to the facts, which allegedly do not show a threat to aviation safety. However, Aerial Banners’ challenge under the Administrative Procedure Act (APA) is deemed flawed, as it minimizes the seriousness of the incidents. In a two-year span, the company experienced two crashes, two hard landings, and failed to secure proper airworthiness certificates for mechanical modifications. These issues are significantly linked to Aerial Banners’ ability to operate safely, suggesting that the FAA's judgment was not a clear error. The FAA is granted deference in its discretionary judgment regarding public safety.

Aerial Banners also contends that the FAA wrongly held the company accountable for pilot errors. This argument is rejected on both factual and legal grounds, as Aerial Banners shares fault in the accidents. The FAA found violations of the waiver's Special Provisions, including inadequate pre-flight inspections and using faulty equipment, which justify revocation of the waiver. The company cannot separate its liability from that of its pilots under the waiver conditions. Even with perfect maintenance records, the FAA retains discretion to hold Aerial Banners accountable for pilot compliance with waiver conditions. The FAA’s revocation decision is supported by clear violations of the waiver terms by Aerial Banners’ pilots, confirming the revocation is not arbitrary and capricious.

Aerial Banners’ procedural APA challenge, asserting that the FAA’s revocation letter was insufficiently detailed, is also dismissed as frivolous; FAA procedures do not mandate extensive explanations in revocation letters, which sufficiently notified Aerial Banners of the reasons for the revocation due to repeated safety infractions. Consequently, the petition for review is denied.