Fair chance
Cleared for the option by the U.S. Supreme Court
It’s rare when the U.S. Supreme Court issues a decision that significantly impacts enforcement cases against pilots and aircraft owners. But this year, there were two. As a result, the playing field has become more level when you are fighting a federal agency action.
Chevron deference is gone
In 1984, the Supreme Court held that courts must often accept an agency’s arguments for how a statute should be interpreted. Called “Chevron deference,” it gave federal agencies a massive advantage in court. How a law is interpreted can change who wins or loses a case. The recent elimination of Chevron deference may inspire more people to fight agency enforcement actions where, in the past, they may have settled their cases or just taken their lumps, due to federal agencies’ advantage in court. This will help airmen facing enforcement actions brought by the DOT, FAA, TSA, or CBP.
For 40 years, Chevron deference put a thumb on the scales of justice, favoring federal agencies’ interpretations of law over all others, including the judge’s interpretation. The agency’s interpretation of a law didn’t have to be the best one and didn’t even have to be better than the defendant’s or the judge’s interpretation. It just had to be “permissible”—meaning rational or reasonable—to require a judge to defer to the agency’s interpretation.
I often defended airmen facing FAA enforcement actions while Chevron was the law of the land. I had to have difficult conversations with my clients. “Yes, the FAA’s interpretation is not the best reading of the statute. Yes, it is unfair how they are applying it here. But the courts will defer to the FAA’s reading.” Counseling airmen when the deck was rigged against them was frustrating and disheartening.
Now, both sides in court have an equal opportunity to make arguments about statutory interpretations and to have those arguments fully considered. Judges, not the agency, will decide the best reading of a statute and resolve any ambiguity. In other words, judges are empowered to do what they do best—interpret laws. The elimination of Chevron deference takes away an advantage federal agencies had in court but does not provide any advantage to the other side. Take note, however, that when an agency is interpreting its own regulations rather than law, a different legal doctrine applies that wasn’t addressed by the Supreme Court’s recent decision.
Improvements in due process
The Supreme Court’s decision in another recent case could lead to certain types of aviation legal matters being decided by judges in federal court, rather than through current administrative processes.
In Jarkesy, the Securities and Exchange Commission (SEC) prosecuted an SEC licensed individual for fraud in a hearing presided over by an SEC Administrative Law Judge. The Supreme Court held that having the same agency as judge and prosecutor raised concerns and that Jarkesy was entitled to a jury trial because the SEC fraud charge was very similar to a common law fraud charge that would require a jury under the Seventh Amendment of the Constitution.
When the FAA prosecutes a certificate holder, it typically targets their certificate, their bank account, or sometimes both. Certificate actions hearings are held before National Transportation Safety Board (NTSB) administrative law judges, and civil monetary penalty cases are mostly held before Department of Transportation (DOT) administrative law judges. Given that the FAA is part of the DOT, civil monetary cases raise questions about due process. It’s like being charged with a violation by a prosecutor and finding out the judge is the prosecutor’s parent. Certificate action cases prosecuted by the FAA are heard by administrative law judges at the NTSB, which is an independent federal agency and not part of the DOT.
Another FAA administrative process that may be impacted by Jarkesy involves airport compliance. When the FAA provides Airport Improvement Program grant funds to an airport, the airport signs a grant agreement saying it will comply with certain conditions called “grant assurances.” Allegations of grant assurance noncompliance can be brought by airport users in an administrative process called a Part 16 complaint, where the FAA decides the case. However, the FAA is also a signatory to the grant contract, which raises questions about due process.
We are already seeing the Jarkesy case used as the basis for arguments questioning the FAA’s ability to decide Part 16 cases and the DOT’s ability to decide civil monetary penalty cases. It’s unclear if Jarkesy will change who decides these types of cases and where the cases are argued—it may take a few years to get clarity.
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