Staying Legal: To Tell The Truth

Scienter and the FARs

As expected, the FAA next issued an emergency order revoking his pilot’s license and medical certificate. He then appealed this decision to the NTSB and asked for a hearing before an administrative law judge. FAA sought summary judgment because it maintained there were no material facts in dispute.

The airman filed an objection to this motion alleging that section 18v was confusing to him and that the term administrative action was not defined on the form or in the instructions. He claimed that this lack of knowledge of the meaning of this term was a disputed issue of fact that he should be allowed to argue to an administrative law judge.

The law judge did not buy his argument and granted summary judgment to the FAA. The airman then appealed to the full NTSB. The full board also denied his appeal stating that … “a pilot’s failure to understand a question does not establish a lack of intent to provide false information.” He then petitioned for review before the U.S. DC Circuit Court of Appeals.

The Court of Appeals came up with some strong support for the airman after reviewing the case and the regulation involved. Speaking to the issue of intent to deceive, it quoted the seminal case on the subject which held that an intentionally false statement — unlike a fraudulent statement — did not require an intent to deceive. But it rejected the FAA’s and the NTSB’s contention that not even knowledge of falsity was required, explaining that the regulation explicitly includes an intent requirement and hence requires reference to the mental state of the person who makes the entry.

The Appeals Court agreed with the airman that when the FAA and the Board said that … failure to understand a question does not establish a lack of intent to provide false information …, they were wrong and in error. The court went further to say that under the regulation (67.403a1) proof is required that the airman subjectively understood what the question meant. Here scienter enters the discussion … the intentional falsification regulation includes a scienter requirement that must be construed to require actual knowledge of falsity.

The court went on to say that the statement that he did not understand the revocation to be an administrative action, raised a genuine issue of material fact as to his knowledge of falsity. Therefore summary judgment was inappropriate … and it was arbitrary and capricious for the Board to find otherwise. The airman was therefore granted his opportunity to present evidence at a full blown hearing supporting his position that he did not intentionally falsify. The result was simply the setting aside of the summary judgment decisions by the FAA and the Board; however, it was a huge step forward for the defense of an otherwise difficult case to defend. He could still lose his case when it went back down for a hearing before the law judge or maybe the FAA fearing it might lose again, might cut him a deal. Nonetheless, I believe the points set out in this appellate decision made some new law and clarified some old issues that will apply to the other varieties of falsity cases that come along.

Second case
A second case handed the FAA and the Board another similar reversal in favor of the airman’s petition for review before the same DC Circuit Court. The case deals with the airman medical application form again, where he neglected to answer “yes” to a history of a non-traffic conviction, both misdemeanors or felonies. In spite of a conviction for bribery as a felony he failed to note this on the application not once but three times in succession. FAA in due course found out about this and ordered his medical certificate and private pilot license revoked on an emergency basis. It stated that it concluded that he had made a fraudulent or intentionally false statement not once but three times on subsequent applications. He appealed the order and requested a hearing to challenge the FAA assertions.

There was no motion for summary judgment in this case probably because of the time that had passed since the first incident and the FAA presented proof of the bribery conviction and his “no” answers on the three applications. The airman was then allowed to present evidence on his behalf.

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