FAA: “Sir I’m Giving You 62 Tickets” The Multiplier Effect

The policeman walked to the side of my car as I watched him in my mirror.  I automatically handed over my license and registration.  “Sir, you know that the state safety inspection for your car was due two months ago.”  Being aware that I was overdue, the best I could summon up was “I’m sorry officer.  I didn’t even realize that.”

As I spoke these words, the officer was busy writing on his clipboard.  What seemed like an hour later, but was only a few minutes, he handed me a stack of paper.  “Sir, I’m issuing you 62 tickets, one for each day that your car was overdue.  I would get the inspection done right away.  Have a good day, sir.”

Not very likely?  Probably not in this way.  However, it does happen every day to aviation companies all over the country and makes about as much sense as it would in our 62 ticket scenario.

Let’s start with one given.  The Federal Aviation Administration, albeit not a perfect regulator, is, in my experience, one of the best, if not the best, aviation regulator in the world.  This doesn’t mean they’re always right and, again in my experience, they’ll admit they’re not perfect.  The objective evidence however is that the working relationships between the US aviation industry and the FAA has created the safest aviation industry in the world.  Granted, there’s a certain amount of patriotism present in such a statement, but, I think most objective observers would agree.  The US aviation system, in virtually all respects, is the model for the rest of the world.

One of the FAA’s roles is as an enforcer of regulations, i.e., the policeman.  In doing so, the FAA, as in many areas, has enforcement guidelines.  Those guidelines are published in their Enforcement Handbook, FAA Order 2150.3B.

Under FAA enforcement guidelines, there is something generally described as a “multiplier,” i.e. each flight during which a violation exists is considered a separate offense.  The way this works is relatively simple.  If a company has a violation, whatever it is, in calculating the monetary penalty, the FAA takes the amount of the fine for the violation, assume that it’s $8,000.00, and multiplies it by the number of flights undertaken until the aircraft was grounded or the offending condition fixed.  So, using our traffic stop scenario, assume there was some mechanical or other violations present on the aircraft for 62 days and, during those 62 days, the aircraft made 100 flights.  In imposing its civil penalty, the FAA multiplies the $8,00.00 by 100 and imposes a penalty of $800,000.

Granted, the Enforcement Handbook provides for recommended ceilings, as well as the exercise of some discretion and civil penalties can frequently be settled for a lesser amount than that proposed.  However, the FAA’s starting point for consideration and possibly negotiations will be $800,000.00.  Maybe some offending conditions on aircraft justify whopping penalties, but many do not.  It doesn’t matter however, the multiplier works essentially the same way and the offender is left with trusting the discretion and reasonableness of the FAA to negotiate a lower penalty.

Sure, the company can always contest the penalty, but to do so, whether in administrative or judicial processes is expensive because, as everyone readily acknowledges, lawyers are expensive.

Don’t get me wrong, in aviation, like every industry, there are bad companies who, quite likely, deliberately don’t do things or delay their accomplishment, to save money.  But the reality is that such companies are, overwhelmingly, a tiny slice of the extraordinarily safe and responsible industry.  While the discretion of the FAA in enforcing civil penalties is usually wisely applied, there are instances where the regulator’s heavy hand comes down on a responsible company which made a mistake, not because they didn’t have appropriate systems or people in place, but rather because mistakes occur, notwithstanding the best systems and best personnel.

In today’s extraordinarily safe aviation industry, the FAA ought to re-visit the multiplier guidelines, reserving its use for the offenders who deserve it, not the responsible company which makes a mistake.

(Originally posted April 30, 2014)

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