Janka v. Department of Transp., Nat. Transp. Safety Bd.

• Decision Date: 07 February 1991
• Docket Number: No. 90-70012,90-70012
• Citation: 925 F.2d 1147
• Parties: Paul Joseph JANKA; Michael E. Newman, Petitioners, v. DEPARTMENT OF TRANSPORTATION, NATIONAL TRANSPORTATION SAFETY BOARD; Federal Aviation Administration, Respondents.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 1147

925 F.2d 1147

Paul Joseph JANKA; Michael E. Newman, Petitioners, v. DEPARTMENT OF TRANSPORTATION, NATIONAL TRANSPORTATION SAFETY

BOARD; Federal Aviation Administration, Respondents.

No. 90-70012.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted Oct. 3, 1990.

Decided Feb. 7, 1991.

Leslie S. McAfee, Woodland Hills, Cal., for petitioners.

Harry S. Gold, Office of Chief Counsel, Federal Aviation Admin., Washington, D.C., for respondents.

Petition for Review of an Order of the National Transportation Safety Board.

Before WALLACE, Chief Judge, POOLE, Circuit Judge, and BREWSTER, ^* District Judge.

WALLACE, Chief Judge:

Janka and Newman appeal from a decision by the National Transportation Safety Board (Board). They argue that the Board lacked jurisdiction to review an administrative law judge's (ALJ) decision. They further argue that the Board's decision was arbitrary, capricious, and not supported by substantial evidence. Finally, they allege errors in Board procedures. We have jurisdiction over this timely petition pursuant to 49 U.S.C.App. Sec. 1429(a). We deny the petition to review and affirm the Board.

I

Janka and Newman were charged with violating Federal Aviation Regulation (FAR) 91.9, for operating an aircraft in a careless or reckless manner, and FAR 91.65(a), for creating a collision hazard. See 14 C.F.R. Secs. 91.9, 91.65 (1989). Janka was additionally charged with making an intentionally false logbook entry in violation of FAR 61.59(a). See 14 C.F.R. Sec. 61.59 (1989). As a result of the violations, the Federal Aviation Administration (FAA) Administrator revoked Janka's commercial pilot and flight instructor certificates, and Newman's private pilot certificate.

Janka and Newman both appealed the orders of revocation. Because the two cases arose out of the same incident, the appeals were consolidated. The ALJ dismissed all charges against Newman, and found that Janka had only violated FAR 91.9. He ordered Janka's commercial pilot license suspended for 30 days.

The FAA Administrator subsequently appealed the ALJ's decision to the full Board. The Board reversed the ALJ and revoked Janka's commercial pilot and instructor certificates, and ordered that Newman's certificate be suspended for six months. Administrator v. Janka and Newman, NTSB Order No. EA-3029 (1989).

II

Janka and Newman first contend that the Board did not have jurisdiction over the appeal from the ALJ decision. They argue that the order of the ALJ amounts to an order of the Board itself, and that the Board may not review its own order. Under this rationale, the only avenue of appeal is directly to the court of appeals.

This argument is foreclosed by the clear language of the Administrative Procedure Act (APA). Under the APA, whenever a statute provides for an adjudication to be determined on the record after an opportunity for an agency hearing, the "presiding employee ... shall initially decide the case." 5 U.S.C. Sec. 557(b); see also Sec. 556(b)(3) (presiding employee may be an ALJ). However, the decision by the presiding employee does not become the decision of the agency if there is "an appeal to ... the agency within time provided by rule." Id. Sec. 557(b). In that case, the agency is free to review the ALJ's decision, and has "all the powers which it would have in making the initial decision except as it may limit the issues on notice or by rule." Id.

Pursuant to the APA, the Board has promulgated procedures for either party to appeal an ALJ's decision. 49 C.F.R. Sec. 821.47 (1989). These provisions track the APA's requirements by giving the parties 10 days to appeal, and the Board 20 days to review, the ALJ's initial decision. Id. Secs. 821.43, 821.47. The rules further provide that an ALJ decision is not reviewable by the appellate court while a Board appeal is pending. See id. Sec. 821.43. When such an appeal is made, the decision of the ALJ is stayed pending the Board's decision, which becomes the final order reviewable by the appellate court. Id.

The APA clearly authorizes the Board to review the ALJ's decision, and we have previously reviewed a number of Board decisions in which the parties had appealed from an initial decision by an ALJ. See Essery v. Department of Transportation, National Transportation Safety Board, 857 F.2d 1286 (9th Cir.1988); Reid v. Engen, 765 F.2d 1457 (9th Cir.1985); Ferguson v. National Transportation Safety Board, 678 F.2d 821 (9th Cir.1982); Hart v. McLucas, 535 F.2d 516 (9th Cir.1976) (Hart ). As these authorities indicate, the argument of Janka and Newman that the Board lacked jurisdiction to hear the appeal is without merit.

III

Janka and Newman next argue that the Board abused its authority by reversing the ALJ's decision. The APA grants the Board plenary review of an ALJ's decision. 5 U.S.C. Sec. 557(b). In contrast, our review of the Board's order is narrowly circumscribed. Unless the Board's decision is "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law," we must affirm. 5 U.S.C. Sec. 706(2)(A). Findings of fact made by the Board are conclusive when supported by substantial evidence in the record. 49 U.S.C.App. Sec. 1486(e); Kolek v. Engen, 869 F.2d 1281, 1284-85 (9th Cir.1989) (Engen ). Purely legal questions are reviewed de novo. Id. at 1285.

A.

Janka contends that the Board erred by concluding that he violated FAR 61.59 by making false statements in his logbook. Janka claims that he could not have violated FAR 61.59, because he did not falsify the logbook with the intent to deceive the FAA. He urges us to affirm the ALJ's decision that there can be no violation without a finding of intent to deceive.

Both Janka and the ALJ misinterpret FAR 61.59. In Hart, we held that there are two distinct offenses contained in 61.59, one involving fraud and the other involving intentional falsity. 535 F.2d at 519. The charge against Janka involves the latter. In discussing the elements of each offense, we stated:

the elements of intentional false statement for the purpose of Sec. 61.59(a)(2) are the first three elements of fraud: falsity, materiality and knowledge. Thus, intentional false statement is a lesser included offense within fraud. Thus, for both offenses, the person making the false entry must know of such falsity. However, fraud requires at least one additional element, i.e., an intent to deceive.

Hart, 535 F.2d at 519. Under this test, the question of whether Janka intended to deceive is irrelevant. Rather, the elements of the intentional false statement violation are falsity, knowledge, and materiality.

Janka concedes that he knowingly entered false information in his logbook. He recorded that he gave one hour of dual instruction to Newman on August 8, 1986, but later claimed that the instruction had instead taken place in May. However, Janka argues that the Board erred by concluding that the false statement was material.

Recent decisions interpreting section 61.59 have held that a false statement is material if it "had the natural tendency to influence, or [was] capable of influencing" the FAA. Cassis v. Helms, 737 F.2d 545, 547 (6th Cir.1984) (Cassis ); see also Twomey v. National Transportation Safety Board, 821 F.2d 63, 66 (1st Cir.1987). In Cassis, the petitioner submitted a logbook to the FAA to demonstrate that he had 1500 hours of flight time. Although he had truthfully logged 1500 hours, the logbook contained an additional 150 hours of fictitious flight time. The petitioner argued that false logbook entries were not material because the truthful entries satisfied FAA flight time requirements. Cassis, 737 F.2d at 546. However, the Sixth Circuit rejected this argument, stating that

the logbook in question is a permanent and cumulative record of the appellant's flight experience, [and] may be consulted when Cassis seeks to demonstrate compliance with other FAA flight experience requirements. The FAA, of course, is charged with promoting aviation safety. The FAA cannot meet this responsibility unless pilot logbooks are free of knowing misrepresentations of fact.

Id. at 547 (citation omitted).

We agree with the Sixth Circuit's definition of materiality. The false logbook entry is material if the statement was "capable of influencing" the FAA. Id. Applying this test, we hold that the Board's decision that the false entry was material is supported by substantial evidence.

Inspector Spencer testified that logbook entries are used to document flight experience necessary to obtain higher ratings or to show currency in a type of airplane. The Board relied on this testimony to find that the false entries had "the capability of influencing the FAA in regard to flight experience of both the ostensible instructor, Respondent Janka, and the recipient, Respondent Newman." In response, Janka argues that flight instruction actually took place, although it occurred in May rather than in August as stated in the logbook entry. He thus claims that the false entry was not material, because the date of training is incapable of influencing any agency decision.

The Board rejected Janka's explanation for the logbook entry, pointing out that "Janka provided no evidence to substantiate the earlier instruction, and, ultimately, Janka removed the entry from the logbook." The Board concluded that "the Administrator put on a case to establish that the logbook entry constitute[d] intentional falsification, and that case was not rebutted." In light of the Board's explicit rejection of Janka's defense, we need not decide whether the logbook entry would be considered material if only incorrect as to date.

The Board applied the correct legal standard, and its factual findings underlying the determination of materiality are supported by substantial evidence. We therefore affirm the Board conclusion that Janka's intentional falsification of the logbook violated FAR 61.59.

B.

Janka and Newman also argue that the Board erred...