Transportation Update January 2009

January 2009

From the editors of CCH's Transportation products, here are summaries of the important recent developments in the area for the past month. Complete coverage of these issues, and many more, appear in our print and electronic products, including: Aviation Law Reporter, Commercial Aircraft Transactions, Issues in Aviation Law and Policy, Federal Carriers Reporter, Federal Motor Carrier Safety Administration Decisions, and Motor Carrier Liability.

If you have comments or suggestions concerning the information provided or the format used, please feel free to contact me directly at aaron.broaddus@wolterskluwer.com.

Hot Topic

11th-Hour Bush Administration Rules Reconsidered
By memorandum on January 20, new White House Chief of Staff Rahm Emanuel directed federal departmental and agency heads to immediately hold all proposed or final regulations initiated during the waning days of the Bush Administration until they can be reviewed and approved by an Obama Administration appointee/designee or their delegate.

The memorandum also directed departmental and agency heads to withdraw from the queue all proposed or final regulations not yet published in the Federal Register and to consider extending for 60 days the effective date of regulations already published but not in effect prior to the transition of power, subject to certain exceptions such as rules issued to satisfy statutory or judicial deadlines, or those affecting critical health, safety, environmental, financial, or national security functions. Aviation Law Reports, Report Letter No. 1396, January 30, 2009; Federal Carriers Reports, Report Letter No. 1550, January 26, 2009.

LaHood, Napolitano Take Over at DOT, DHS
Former Illinois Congressman Ray LaHood's nomination for Secretary of Transportation sailed through the U.S. Senate last week, and he was officially confirmed by voice vote of the full Senate on January 22. A native of Peoria, Illinois, Secretary LaHood served for six years on the Transportation and Infrastructure Committee during his seven-term tenure in the U.S. House of Representatives.

Among several other Obama Cabinet nominees confirmed by the Senate on Inauguration Day, Janet Napolitano was approved as Secretary of the Department of Homeland Security and was sworn in the following day. Prior to joining DHS, Ms. Napolitano was mid-way through her second term as governor of Arizona. While governor, she became the first woman to chair the National Governors Association, where she was instrumental in creating the Public Safety Task Force and the Homeland Security Advisors Council. Before becoming governor, she served as the Attorney General of Arizona and the U.S. Attorney for the District of Arizona.

In addition, President Obama on January 23 announced his intention to nominate Jane Holl Lute as Deputy Secretary for the Department of Homeland Security. Ms. Lute served on the National Security Council under two presidents and, prior to working at the White House, had a distinguished career in the U.S. Army, including service in the Arabian Gulf during Operation Desert Storm. She holds a Ph.D. in political science from Stanford University, and a Juris Doctor from Georgetown University. Aviation Law Reports, Report Letter No. 1396, January 30, 2009.

Major Flight Crew, Dispatcher Training Re-Vamp Proposed
Safety-critical training aimed at significantly reducing aviation accidents is at the heart of a new Federal Aviation Administration proposal to amend its standards for crewmember and dispatcher training programs in domestic, flag, and supplemental operations in order to revise the qualification and training requirements and, among other things, mandate the use of flight simulation training devices. The initiative is part of the agency's efforts to reduce fatal accidents in which human error was a major contributing cause, FAA indicated, asserting that the proposed changes would reduce human error and improve performance among flight crewmembers, flight attendants, and aircraft dispatchers. A secondary purpose of the action would be to reorganize, simplify, and modernize all regulatory language associated with crewmember and aircraft dispatcher qualification and training under 14 CFR part 121.

Among the safety improvements that would become part of the updated training standards are:

The training and evaluation of flight crewmembers in a complete flight crew environment;
A requirement that Line Oriented Flight Training (LOFT) be administered to flight crewmembers in a full flight simulator (FFS) during recurrent training;
Required use of a qualified flight simulation training device (FSTD) for training, testing, and checking flight crewmembers;
Special hazard training—such as loss of control and Controlled Flight Into Terrain (CFIT)—for flight crewmembers;
Additional training and practice in the use of Crew Resource Management (CRM) principles;
The requirement that flight attendants complete "hands on" performance drills using emergency equipment and procedures every 12 months, and complete operating experience by aircraft type for the certificate holder;
A mandate that flight attendant ground instructors and evaluators be trained and qualified;
Standardized training and experience requirements for check dispatchers and dispatcher instructors;
The implementation of supervised operating experience (SOE) requirements for aircraft dispatchers;
Required re-qualification training for aircraft dispatchers and crewmembers; and
A continuous analysis process (CAP) for certificate holders.

To help transition from the current regulations to the revised requirements for qualification, service, and use of crewmembers and aircraft dispatchers, the current regulations under subparts N, O, and P would be continued for five years after the effective date of the final rule, according to FAA. On that date that the current standards expire, all certificate-holders, crewmembers, and aircraft dispatchers would have to be in compliance with the requirements, thereby necessitating that certificate-holders begin their required training in sufficient time to ensure that all crewmembers and aircraft dispatchers are trained, qualified, and meet the applicable look-back provisions of the prospective rules before the expiration of the current standards, FAA said. In that regard, the proposal would require certificate-holders to submit a transition plan that specifies the transition completion date, which must be before the expiration of the current regulations. The proposed rule also would permit simultaneous compliance to allow a certificate-holder to continue using its approved programs while transitioning to the new requirements. Aviation Law Reports, Report Letter No. 1395, January 15, 2009.

Aviation News

ATC Modernization Bumped from GAO's 2009 "High-Risk" List
Modernization of the nation's air traffic control system has been dropped from the Government Accountability Office's "High-Risk" List, a biennial update of federal programs, policies, and operations that are at "high risk" for waste, fraud, abuse, and mismanagement, or are in need of broad-based transformation. Updated every two years, the list is issued by GAO at the start of each new Congress to assist in setting oversight agendas. The 2009 list was released last week at a bipartisan briefing on Capitol Hill with leaders of the Senate Homeland Security and Governmental Affairs Committee and the House Oversight and Government Reform Committee.

Citing the Federal Aviation Administration's progress in addressing most of the root causes of its past problems and the agency's commitment to sustaining progress, GAO said that FAA's efforts toward ATC modernization have yielded results such as incurring fewer cost overruns and the deployment of new systems across the country. Acknowledging the agency's efforts, FAA Acting Administrator Lynne Osmus asserted that "steady improvements in FAA's financial management and strategies for fielding new air traffic technology have shown that we're committed to keeping these programs on track." ATC modernization was first included on the "High-Risk" List in 1995, and had been on that list for the past 14 years. Aviation Law Reports, Letter No. 1396, January 30, 2009.

Door Closes on Pilots Who Turned 60 Before Rule Repeal
The Fair Treatment for Experienced Pilots Act, which expressly abrogates the Federal Aviation Administration's Age-60 Rule (barring pilots from flying commercial aircraft after having reached 60 years old), mooted petitions for review of the agency's order denying exemption from the rule for commercial airline pilots who had reached 60 before the statute's December 13, 2007 enactment date, a federal appellate panel ruled late last year. The court said that the pilots had failed to cite any persuasive authority for the assertion that their petitions could not be dismissed as moot as the result of a statute that they had asserted is a constitutionally prohibited bill of attainder and a violation of their rights to due process and equal protection.

Jurisdiction to consider constitutional questions unrelated to the FAA's order does not lie with the U.S. Court of Appeals, the panel advised, ruling that the pilots' facial challenges to the FTEPA had to be brought first in the district court, which has original jurisdiction over federal-question claims. Adams v. Fed. Aviation Admin. (DCCir) 33 Avi. 17,324.

Revisions Align Battery Transport Rules with ICAO Standards
Amendments to the federal Hazardous Materials Regulations were implemented by the Department of Transportation's Pipeline and Hazardous Materials Safety Administration (PHMSA) earlier this month in order to, among other things, harmonize U.S. standards for the safe transportation of batteries and battery-powered devices with recent changes to the International Civil Aviation Organization's Technical Instructions for the Safe Transport of Dangerous Goods by Air.

According to PHMSA, several factors contribute to a heightened concern for the future transport of these items aboard aircraft, including the increasing number of batteries and battery-powered portable and hand-held devices—such as laptop computers and cellular phones—carried by passengers into an aircraft cabin. Also of concern is the recent development and use of batteries with extended operating lives and greater stored energy, as well as the increasing number of counterfeit batteries in distribution and use. PHMSA and the Federal Aviation Administration are aware of more than 96 incidents involving batteries and battery-powered devices onboard an aircraft, in cargo, in checked or carry-on baggage, or in ground transport facilities associated with air transportation.

Therefore, to enhance the safe transportation of these items/devices, the rule revisions include:

Required reporting of incidents involving batteries and battery-powered devices (including those that result in a fire, violent rupture, explosion, or dangerous evolution of heat), with immediate notification required for incidents that occur during air transport;
Clarification of the requirement that batteries, battery-powered devices, and battery-powered vehicles be offered for transportation in a manner that prevents short-circuiting, the potential of a dangerous evolution of heat, damage to terminals, and unintentional activation during transport by aircraft;
Clarified requirements for determining whether a battery is non-spillable and for transporting dry batteries (including a revision of the proper shipping name used to describe dry batteries);
Mandatory certification on shipping documentation that batteries and battery-powered devices have met all conditions and requirements for transport; and
Elimination of the requirement to disconnect the terminals when a battery-powered wheelchair or mobility aid is transported as checked baggage, provided that the wheelchair or mobility aid design provides an effective means of preventing unintentional activation.

Developed in conjunction with FAA, the rule revisions also modify and enhance the requirements for the packaging and handling of batteries and battery-powered devices, particularly in air commerce. The revised standards take effect on February 13, 2009, with voluntary compliance authorized as of January 1, 2009. Aviation Law Reports, Report Letter No. 1396, January 30, 2009.

Carrier Due Refund of Passenger Fees Not Actually Collected
A federal trial court correctly concluded that the U.S. government had illegally exacted from American Airlines the full amount of user fees for immigration and agricultural quarantine inspection that the carrier had been unable to collect from certain passengers, a federal appellate panel held, ruling that the amount that had not been collected from passengers had to be refunded to the carrier. According to the court, the relevant regulations governing these fees impose detailed obligations upon air carriers as well as state-specific penalties for noncompliance, but do not impose upon carriers the obligation to pay uncollected fees. Furthermore, the regulations' requirements for recordkeeping with respect to fee imposition/collection, ticket-marking, and government audits would have no purpose if the authorizing statutes require the carriers to pay the fees for all passengers regardless of whether they had been collected.

Moreover, the carrier's acquiescence and payment of the agencies' assessments for uncollected fees for many years without having sought legal relief did not, of itself, support deference to the agencies' interpretations, the court held, reasoning that the failure to challenge an improper agency action does not ratify such an action or insulate it from later objection and litigation. Accordingly, the trial court correctly concluded that the statutes and regulations governing the fees do not impose liability on the carrier for payment of the fees that were not actually collected from passengers. Am. Airlines, Inc. v. U.S. (FedCir) 33 Avi. 17,335.

ADA Bars Peanut-Allergic Passenger's State Claims
The Airline Deregulation Act of 1978 preempts a state-law intentional infliction of emotional distress claim against an air carrier by a passenger whose allergic son allegedly had been exposed to tree nuts on a flight despite the carrier's pre-flight assurances that no tree nuts would be served aboard the aircraft. The claim was based upon behavior that fell into two categories: (1) misinformation given to the passenger about whether and to what extent nuts would be served; and (2) the rude and unprofessional manner of the agents.

According to a New York federal court, the service of on-board amenities such as nuts include not merely the physical dispensation of the amenities, but the necessary communications with passengers regarding those amenities. As such, statements by airline employees in response to queries about food service fall comfortably within the broad construal of "service" contemplated by relevant case precedent on ADA preemption, the court held, noting that prior case law also has deemed as preempted claims based upon the rude and unprofessional conduct of airline employees. In that respect, as the flight attendants' communications with the passenger had been directly in response to questions and requests involving food service, they were responsive, even if delivered in a rude tone. Therefore, because the behavior upon which the emotional distress claim related to the service of an air carrier, the claim was preempted in its entirety, the court said.

Also preempted was a state-law claim for emotional distress due to an air carrier's breach of its own policy, under the rationale that both the carrier's refusal to refrain from serving nuts and its alleged deviation from its own nut-service policy specifically concerned the service of an on-board amenity and, as such, related to a preemption-triggering "service of an air carrier." Moreover, even if not subject to preemption, the claim failed because it was not cognizable under the applicable state law, which does not recognize a cause of action for emotional distress resulting from a breach of policy. Finally, even if the claim was both cognizable under the state law and not preempted under the ADA, the claim would have failed because the alleged action did not constitute a breach of the carrier's nut-service policy, which made no provision for being peanut-free. Khan v. Am. Airlines, Inc. (SDNY) 33 Avi. 17,269.

MSPB Can't Make FAA Award Controller Back Pay
The Merit Systems Protection Board correctly concluded that federal transportation law does not grant jurisdiction for back-pay awards to Federal Aviation Administration employees, a federal appellate panel determined in a decision that stemmed from the Board's order of back pay to an individual who had been terminated as an air traffic controller based upon the belief that he had been subject to mandatory separation upon having reached age 56 but who later was ordered reinstated. According to the appeals court, the applicable transportation law (i.e., the section establishing FAA's Personnel Management System) specifies that the provisions of the U.S. Code applicable to government organization and employees do not apply to the new personnel system developed and implemented by FAA.

As such, the Back Pay Act, which is codified into U.S. Code Title 5, only can operate in favor of FAA employees if the transportation law provision grants an exception, the court held, advising that, although the provision at issue lists eight exceptions to FAA's exemption from that title, none of the exemptions includes the Back Pay Act under which the controller had sought relief. Where Congress explicitly enumerates certain exceptions to a general prohibition, additional exceptions are not to be implied in the absence of a contrary legislative intent, the court cautioned, ruling that an exception that makes the Back Pay Act available to FAA employees could not be created where the language of the federal transportation law denies that remedy. Accordingly, back-pay awards for FAA employees had to come under the new Personnel Management System and not from MSPB awards, the appeals court determined. Gonzalez v. Dep't of Transp. (FedCir) 33 Avi. 17,364.

Surface Transportation News

Final Rule Will Improve Hazmat Rail Tank Car Safety
The Pipeline and Hazardous Materials Safety Administration (PHMSA) has adopted a final rulemaking designed to significantly improve the safety of rail tank cars that carry the most dangerous hazardous materials, such as Poison Inhalation Hazard (PIH) commodities. Developed in close consultation with the Federal Railroad Administration, the final rule addresses issues arising from several serious train accidents involving hazmat releases. It is intended to satisfy a provision of the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU), which called for the development and implementation of appropriate design standards for pressurized tank cars.

Under the revised regulations, an interim performance standards for rail tank cars has been developed for head and shell impacts. The interim standards will ensure the ongoing availability of tank cars while PHMSA and FRA complete research and testing on advanced tank car design to validate and implement a more stringent performance standard. Further, the new rule would incorporate operational restrictions including a set maximum speed limit of 50 mph for loaded tank cars transporting PIH materials; an improved top fittings performance standard; an allowance to increase the gross weight of tank cars that meet enhanced standards; and adoption of the industry standard for normalized steel in certain tank cars. The final rule takes effect March 16, 2009. Federal Carriers Reports, Report Letter No. 1550, January 26, 2009.

Route Designation Requirements Eliminated for Some Carriers
The Federal Motor Carrier Safety Administration (FMCSA) has announced that it will eliminate the current route designation requirements for certain motor carriers transporting passengers over regular routes. The change will eliminate the need to file and process multiple requests concerning routes, which the agency believes will decrease the paperwork burden on regular-route motor carriers seeking to expand or change their routes without compromising safety. Under the existing rules, motor carriers seeking authority to transport passengers over regular routes must submit a detailed description and a map of the route(s) over which they propose to operate. Additionally, once a carrier has obtained its operating authority, it must seek additional approval from FMCSA in order to change or add routes.

Under the final rule, the agency would be permitted to register certain motor passenger carriers as regular-route carriers without requiring the designation of specific regular routes and fixed endpoints. The elimination of the route designation requirement is intended to alleviate paperwork burdens on both the motor carriers and the agency. The amendments would not apply to carriers who are public recipients of governmental assistance; these carriers still would be required to designate specific routes when applying for regular-route authority. The final rule takes effect March 17, 2009. Federal Carriers Reports, Report Letter No. 1550, January 26, 2009.

FRA Begins Development of Positive Train Control Rules
The Federal Railroad Administration (FRA) is moving forward on the development of new rules prescribing how railroads should implement Positive Train Control (PTC) systems to prevent train-to-train collisions, according to FRA Acting Administrator Clifford C. Eby. “We are acting quickly and without delay because railroads will need guidance on how to create plans to deploy PTC systems by the end of 2015,” Eby said, noting that the first deadline mandated by Congress in a new rail safety law is April 2010, when major freight railroads and intercity and commuter rail operators must submit their PTC implementation plans to FRA for approval.

Eby asserted that developing the new rules is a necessary first step to specify how the technically complex PTC systems must function and to describe how FRA will assess a railroad's PTC implementation plan before it can become operational. He added that FRA already is working with its Railroad Safety Advisory Committee to identify key issues and will release a recommendations report by next April. Federal Carriers Reports, Report Letter No. 1549, January 12, 2009.

STAA's Jurisdiction Conferring Amendment Not Retroactive
A federal court of appeals affirmed a lower court's decision holding that a jurisdiction conferring amendment to the Surface Transportation Assistance Act (STAA), that permits certain retaliatory discharge complaints to be brought in federal district courts, was not to be retroactively applied. A truck driver, who alleged he had been fired for refusing to drive a vehicle with faulty brakes, filed a STAA retaliatory discharge complaint with the Occupational Safety and Health Administration in March of 2005. A hearing was held and, on November 16, 2006, an administrative law judge issued a recommended decision and order dismissing the employee's claims. However, a final order had not been issued by the Secretary of Labor within the 120 days provided by statute.

In August of 2007, Congress enacted the Implementing Recommendations of the 9/11 Commission Act of 2007, [Pub. L. 110-53, §1536, 121 Stat 266, 464-67], which strengthened protections for employees who complain of potential dangers and deficiencies regarding motor carrier equipment through amendments to the STAA. The relevant amendment to this action allows an individual to file an action under the STAA in federal district court, without regard to the amount in controversy, if the Secretary of Labor fails to issue a final decision within 210 days of the filing of the original complaint, provided the delay was not due to the bad faith of the employee.

Within days of the enactment of the STAA amendments, the driver filed a retaliatory discharge action in the district court. The employer sought dismissal of the action, arguing that the new jurisdiction conferring provision should not be applied retroactively. The district court agreed, finding that retroactive application would affect the employer's substantive rights by increasing the universe of employees who could pursue their claims in federal court.

Upon review, the appellate court looked at Congressional intent and examined the impact that retroactive application of the amendment would have on the substantive rights of the parties. Based on its inquiry, the court concluded that neither the plain language nor the legislative history signaled a congressional intent for retroactive application. Furthermore, the analysis revealed that a retroactive application of the jurisdiction conferring amendments to the STAA would result in an impermissible outcome. Thus, it found that the district court had properly dismissed the driver's federal court action. Elbert v. True Value Co. (8thCir) Federal Carriers Reporter ¶84,571.

Final Agency Order Reinstated
A final agency order that had been vacated based on a meritorious defense was reinstated by the Federal Motor Carrier Safety Administration after it was discovered that the claimed defense no longer was viable. The motor carrier had been charged with seven violations of the Federal Motor Carrier Safety Regulations and assessed a civil penalty in the amount of $28,135. An Order on Reconsideration had found that the carrier had admitted the violations, but had submitted a meritorious defense with regard to the payment of the civil penalty by asserting that it could not afford to pay the penalty and still remain a viable business.

Notwithstanding the carrier's assertion, which implied that it was a viable concern, evidence surfaced indicating that the carrier had ceased operations approximately 18 months before the order was issued. Accordingly, it’s meritorious defense claim, that it could not pay the penalty and remain in business, was unavailable once the carrier had ceased operations. Thus, since it had admitted the violations and no longer could invoke the meritorious defense, it was ordered to pay the assessed civil penalty. Wells & Wells Equipment, Inc. (FMCSA) Federal Carriers Reporter ¶51,291.

Final Order Stayed—Time Limit for Filing Reconsideration Petition Extended
The Assistant Administrator for the Federal Motor Carrier Safety Administration stayed a final agency order and granted a request for an extension of time to submit a petition for reconsideration. The Field Administrator (FA) for the Western Service Center argued that additional time was needed to review the final order, which allowed a carrier to pay a civil penalty, while avoiding an adjudication that could have resulted in a safety violation being placed on its record. By paying the fine, but denying the charges, the carrier had essentially closed the proceeding before an official finding of culpability could be entered.

In support of its requests, the FA alleged that the decision could have a significant affect on a broad range of enforcement procedures on a national level, and that an analysis of the potential implications required more than the 20 days provided for in the regulations. Furthermore, it asserted that the carrier would not be harmed by the stay or the extension of time because it had already paid the civil penalty. For good cause shown, the FA was given an additional 45 days to submit a petition for reconsideration and the Final Order was stayed pending a final decision on any petition for reconsideration submitted. Homax Oil Sales, Inc. (FMCSA) Federal Carriers Reporter ¶51,292.