Watts Agr. Aviation, Inc. v. Busey

Citation977 F.2d 594
Decision Date01 October 1992
Docket NumberNo. 91-70365,91-70365
PartiesNOTICE: Ninth Circuit Rule 36-3 provides that dispositions other than opinions or orders designated for publication are not precedential and should not be cited except when relevant under the doctrines of law of the case, res judicata, or collateral estoppel. WATTS AGRICULTURAL AVIATION, INC., dba Growers Air Service, Petitioner, v. James B. BUSEY, Administrator, Federal Aviation Administration, Respondent.
CourtUnited States Courts of Appeals. United States Court of Appeals (9th Circuit)

Before WALLACE, Chief Judge, and SCHROEDER and POOLE, Circuit Judges.

MEMORANDUM *

Watts Agricultural Aviation, Inc. (Watts) petitions for review of an order of the Administrator of the Federal Aviation Administration (Administrator) upholding an ALJ's decision imposing a civil penalty upon Watts. Watts contends that the Administrator's decision is not supported by substantial evidence and that the penalty imposed is barred by the issue preclusion doctrine. We have jurisdiction pursuant to 49 U.S.C. § 1486(a). We deny the petition for review.

FACTS

On July 2, 1988, petitioner's SNOW Airtractor aircraft, No. N5224S, became involved in an accident. The FAA dispatched safety inspector Gordon Read to the site on July 6, 1988. Read completed an on-site inquiry into the accident and discovered several violations of FAA rules. The FAA issued a civil penalty order assessing a fine of $1,750 against Watts on May 17, 1989. The basis of the sanction was a finding that Watts had operated its aircraft when it was not in an airworthy condition and for failing to maintain appropriate maintenance and inspection records. Specifically, the FAA found that Watts failed to maintain:

(1) a "current status of applicable airworthiness," including method of compliance, airworthiness directive (AD) number, and revision date;

(2) a copy of FAA form 337, applicable to alterations to the propeller;

(3) required fuel placards on the aircraft wing; and

(4) a current weight and balance report and equipment list. The FAA also found that the safe-life of the wing "carry through structure" was exceeded by 754 hours.

Watts sought a hearing on the charges before an Administrative Law Judge (ALJ). The ALJ ruled in favor of the FAA on all charges except the allegation that Watts had not maintained a current weight and balance report and equipment list and reduced the penalty to $1,400. Watts appealed to the Department of Transportation, and on April 10, 1991, the Administrator upheld the ALJ's decision. Watts filed a timely petition for review on June 6, 1991.

STANDARD OF REVIEW

We must accept as conclusive the Administrator's findings of fact if they are supported by substantial evidence. Janka v. Department of Transportation, 925 F.2d 1147, 1149 (9th Cir.1991); 49 U.S.C. App. § 1486(e).

Substantial evidence means "more than a mere scintilla", but "less than a preponderance." It means "such relevant evidence as a reasonable mind might accept as adequate to support a conclusion." In determining whether there is substantial evidence to support the [Administrator's] decision, [the court is] required to review the administrative record as a whole, weighing both the evidence that supports and detracts from the [Administrator's] decision.

McAllister v. Sullivan, 888 F.2d 599, 601-602 (9th Cir.1989) (internal citations omitted).

We must affirm if " 'there is such relevant evidence as reasonable minds might accept as adequate to support a conclusion....' " Webb v. Lujan, 960 F.2d 89, 93 (9th Cir.1992) (quoting Landes Constr. Co. v. Royal Bank of Canada, 833 F.2d 1365, 1371 (9th Cir.1987)). We give "great deference" to the ALJ's credibility determinations that were in turn upheld by the Administrator. Sierra Club v. Nuclear Regulatory Comm'n, 862 F.2d 222, 230 (9th Cir.1988).

Pursuant to the Administrative Procedure Act, 5 U.S.C. § 706(2)(A), we may reverse the Administrator's decision if it is "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law." We will not find such a flaw unless the Administrator has committed a clear error of judgment or failed to base his decision on consideration of the relevant factors. Citizens to Preserve Overton Park v. Volpe, 401 U.S. 402, 416 (1971).

We review questions of law de novo, Go Leasing, Inc. v. National Transportation Safety Board, 800 F.2d 1514, 1517 (9th Cir.1986), including the question whether issue preclusion applies. Guild Wineries & Distilleries v. Whitehall Co., Ltd., 853 F.2d 755, 758 (9th Cir.1988) (citing Davis & Cox v. Summa Corp., 751 F.2d 1507, 1519 (9th Cir.1985)). However, we afford a high degree of deference to the FAA's interpretation of the Federal Aviation Act and the Federal Aviation Regulations. See Oregon v. Bureau of Land Management, 876 F.2d 1419, 1425 (9th Cir.1989).

ANALYSIS
I. Are the factual findings of the Administrator supported by substantial evidence and are his interpretations of FAA regulations an abuse of discretion?

Federal Aviation Regulation 91.29(a), 14 C.F.R. § 91.29(a) (1989), provides that "[n]o person may operate a civil aircraft unless it is in an airworthy condition." 1 Federal Aviation Regulation § 91.173(a), 14 C.F.R. § 91.173(a), 2 provides:

Except for work performed in accordance with § 91.171, each registered owner or operator shall keep the following records for the periods specified in paragraph (b) of this section:

(1) Records of the maintenance, preventive maintenance, and alteration ... for each aircraft (including the airframe) and each engine, propeller, rotor, and appliance of an aircraft. The records must include--

(i) A description (or reference to data acceptable to the Administrator) of the work performed;

(ii) The date of completion of the work performed; and

(iii) The signature and certificate number of the person approving the aircraft for return to service.

(2) Records containing the following information:

(i) The total time in service of the airframe, each engine, and each propeller.

(ii) The current status of life-limited parts of each airframe, engine, propeller, rotor, and appliance.

...

(v) The current status of applicable airworthiness directives (AD), including, for each, the method of compliance, the AD number, and revision date. If the AD involves recurring action, the time and date when the next action is required [must also be included].

(vi) Copies of the forms prescribed by § 43.9(a) of this chapter for each major alteration to the airframe and currently installed engines, rotors, propellers, and appliances.

Watts asserts that each of the four violations found by the ALJ and affirmed by the Administrator are not supported by the evidence or are based on incorrect interpretations of FAA rules.

A. Incomplete Airworthiness Directive Notes

The ALJ found that Watts did not list in its records required "revision dates." 3 The Administrator was aware of this finding and it was one of the issues that he reviewed. However, in his decision the Administrator stated that Watts' "AD notes were incomplete because ... they did not include the revision numbers of the AD's with which [Watts] had complied." Watts pounces on this statement, pointing out that its records indisputably did contain such "revision numbers." 4 Watts asserts that this is a basis for overturning the Administrator's finding on this point.

We reject the argument because the Administrator's discussion of the facts indicates that he was aware that the "revision dates" were at issue and that the ALJ had found that it was that information which was not included in Watts' records. Neither Watts nor the FAA raised any issue of the revision numbers in briefs to the Administrator. The Administrator's mistake in mentioning "revision numbers" instead of "revision dates" is therefore harmless because the lack of "revision dates" was the only reasonable conclusion that could be reached based upon the record before him. See Brawner v. Secretary of Health & Human Serv., 839 F.2d 432, 434 (9th Cir.1988).

Watts alternatively argues that the evidence shows that it was in compliance with airworthiness directives at the time of the accident. This argument also fails to undermine the Administrator's finding that the records requirement was not met. Inspector Read testified that Watts had not listed revision dates for two particular airworthiness directives. He told the ALJ that he had examined the aircraft's maintenance logs and had found no revision dates for any entries. Watts does not dispute that testimony. Accordingly, the ALJ, followed by the Administrator, found that the FAA proved a violation regardless of Watt's actual compliance with airworthiness directives.

We decline to reverse that finding. The language of the Federal Aviation Regulations indicates that it is the failure to maintain records that constitutes a violation, and an aircraft operator's failure to maintain such records is not a trivial matter. "A policy of leniency toward recordkeeping inevitably encourages carelessness in the timely performance of required maintenance, to the derogation of safety...." Administrator v. Newman, 1 NTSB 2008, 2010 (1972), pet. for review denied, 494 F.2d 1219 (2d Cir.1974).

B. FAA Form 337

Inspector Read determined that Watts had significantly modified the propeller on N5224S to install rollerbearings. The FAA requires the aircraft operator to complete and retain a record of major alterations. 14 C.F.R. § 91.173(a)(2)(vi). The rule specifies that the operator must retain a form--referred to as "Form 337"--prescribed by 14 C.F.R. § 43.9(a)(4) and the Appendix to 14 C.F.R. pt. 43 and completed by the entity that performs the alteration to the propeller.

Watts does not dispute that it did not have a copy of form 337 when Read inspected N5224S. However, Watts asserts that a log entry certifying that the propeller on its aircraft was airworthy and suitable for flying (a "yellow tag"),...

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