Monthly Archives: November 2015

DOJ EMPHASIZES INDIVIDUAL ACCOUNTABILITY FOR CORPORATE MISCONDUCT

The DOJ has issued a memorandum (the Yates memorandum) announcing its intention to target individuals for corporate misconduct.  The memo with the new rules was issued to prosecutors across the country and states that fighting corporate fraud and other misconduct is a top priority for the DOJ.  In order to carry out its mission, DOJ noted that one of the most effective ways to fight corporate misconduct is to seek accountability from the individuals who perpetrated the misconduct.  The new policy is designed to make sure all attorneys across the DOJ are consistent in efforts to hold individuals responsible for illegal corporate actions and is in response to criticism that DOJ often targets corporations but does not hold individuals accountable for corporate malfeasance.

If you have any questions, please contact Evelyn Sahr (esahr@eckertseamans.com, 202-659-6622), Drew Derco (dderco@eckertseamans.com, 202-659-6665), or Reese Davidson (rdavidson@eckertseamans.com, 202-659-6633).

FAA PROPOSES CIVIL PENALTY AGAINST UAS OPERATOR

The FAA has proposed a civil penalty of $1.9 million against UAS operator SkyPan International for endangering airspace safety.  This is the largest civil penalty the FAA has proposed against an Unmanned Aircraft Systems (UAS) operator to date.

The FAA alleged that SkyPan conducted 65 commercial unauthorized UAS flights involving aerial photography between March 2012 and December 2014.  The flights took place in New York City and Chicago.  The company flew 43 of the 65 flights in restricted New York Class B airspace without receiving air traffic control clearance to access the airspace.

The FAA further alleged that the aircraft used in all 65 flights lacked an airworthiness certificate, effective registration and that SkyPan did not have a Certificate of Waiver or Authorization for the flights.

If you have any questions, please contact Evelyn Sahr (esahr@eckertseamans.com, 202-659-6622), Drew Derco (dderco@eckertseamans.com, 202-659-6665), or Reese Davidson (rdavidson@eckertseamans.com, 202-659-6633).

DOT ISSUES INTERIM FINAL RULE ON E-CIGARETTES

On October 23, 2015, DOT issued an interim rule prohibiting passengers and crewmembers from carrying battery-powered portable electronic smoking devices (e.g., e-cigarettes, e-cigs, e-cigars, e-pipes, e-hookahs, personal vaporizers and electronic nicotine delivery systems) in checked baggage and also prohibits passengers and crewmembers from charging the devices and/or the batteries while on board the aircraft.  However, these devices may continue to be carried in carry-on baggage.

If you have any questions, please contact Evelyn Sahr (esahr@eckertseamans.com, 202-659-6622), Drew Derco (dderco@eckertseamans.com, 202-659-6665), or Reese Davidson (rdavidson@eckertseamans.com, 202-659-6633).

CBP ISSUES INTERIM FINAL RULE ON ACS REPLACEMENT

On November 1, 2015, the Automated Commercial Environment (ACE) will be a CBP-authorized Electronic Data Interchange (EDI) System.  CBP’s Automated Commercial System (ACS) is being phased out as an authorized EDI System for the processing of electronic entry and entry summary filings.  ACE will replace the ACS as the authorized EDI system for processing commercial trade data.

The ACS is currently used by CBP to track, control, and process all goods imported into the United States.  By the end of 2016, ACE will become the primary system through which the trade community will report imports and exports and the government will determine admissibility.

If you have any questions, please contact Evelyn Sahr (esahr@eckertseamans.com, 202-659-6622), Drew Derco (dderco@eckertseamans.com, 202-659-6665), or Reese Davidson (rdavidson@eckertseamans.com, 202-659-6633).

FAA ISSUES COMPLIANCE PHILOSOPHY DE-EMPHASIZING ENFORCEMENT

On October 15, 2015, Administrator Michael Huerta announced a new FAA “Compliance Philosophy” that aims to de-emphasize enforcement as a means of ensuring compliance in favor of a more collaborative approach that is intended to identify and resolve problems before they result in an accident.

The new policy recognizes that “most operators voluntarily comply with both the rules and the core principles” and that even the most compliance-oriented operators will make unintentional errors.  The agency will now rely to a greater extent on training or documented improvements to the extent a deviation from the rules results from flawed procedures, simple mistakes, a lack of understanding, or diminished skills.  “We don’t want operators who might inadvertently make a mistake to hide it because they have a fear of being punished …. [i]f there is a failing, whether human or mechanical, we need to know about it, to learn from it and make the changes necessary to prevent it from happening again.”

Huerta emphasized that FAA will continue to have a zero-tolerance policy for intentionally reckless behavior and inappropriate risk taking and will take enforcement action in cases of “willful or flagrant violations, or for refusal to cooperate in corrective action.”  The FAA will train all employees on the new Compliance Policy, will use “data, not calendar dates” to guide its surveillance and inspection programs, and has emphasized to its inspectors that they must work with operators to identify risks and the most appropriate tools needed to permanently fix the problems.

If you have any questions, please contact Evelyn Sahr (esahr@eckertseamans.com, 202-659-6622), Drew Derco (dderco@eckertseamans.com, 202-659-6665), or Reese Davidson (rdavidson@eckertseamans.com, 202-659-6633).

FAA BACKS BAN ON SHIPPING LITHIUM BATTERIES ON PASSENGER PLANES

U.S. officials will support a proposed international ban on shipping rechargeable lithium batteries as cargo on passenger airlines.  The U.S. will back the proposed ban at an International Civil Aviation Organization (ICAO) meeting on the safety of lithium battery shipments and is the first time that the U.S. has taken an official position on the issue.

Pursuant to a 2012 Congressional statute, the FAA cannot act on its own to bar lithium battery shipments unless ICAO issues more stringent regulations.  The passenger airline ban could mean that some places will not receive battery shipments because cargo airlines often pay passenger airlines to transport shipments to destinations they do not serve.  The ban would not apply to cargo airlines or to lithium-ion batteries that are packed inside equipment.  There is no firm timeline for when ICAO might adopt the proposed ban.

If you have any questions, please contact Evelyn Sahr (esahr@eckertseamans.com, 202-659-6622), Drew Derco (dderco@eckertseamans.com, 202-659-6665), or Reese Davidson (rdavidson@eckertseamans.com, 202-659-6633).

DELTA FILES LAWSUIT AGAINST REGIONAL PARTNER

Delta has filed a lawsuit against regional partner Republic Airways alleging that Republic has failed to fly certain Delta Connection flights as required under the parties’ contract.  Republic has been facing a pilot shortage that has forced it to curtail certain flying.  In a state court filing in Atlanta, Delta alleged that it has suffered millions in lost profits because of Republic’s inability to operate all of the flights promised in the two airlines’ contract.  The dispute comes at a time of great uncertainty as the regional airline industry faces new FAA requirements for minimum number of hours of flight experience before regional airlines can hire pilots.  This has in turn exacerbated a pilot shortage.

If you have any questions, please contact Evelyn Sahr (esahr@eckertseamans.com, 202-659-6622), Drew Derco (dderco@eckertseamans.com, 202-659-6665), or Reese Davidson (rdavidson@eckertseamans.com, 202-659-6633).

DOJ WEIGHS IN ON GULF CARRIER DISPUTE; DELTA TO LEAVE TRADE GROUP

The Department of Justice (DOJ) has raised concerns about demands by American, Delta and United that the U.S. government take action in response to the alleged receipt of government subsidies by Emirates, Etihad and Qatar Airways.  DOJ does not have jurisdiction over the dispute and did not file any comments in the public DOT docket that was open until August.  According to press reports, DOJ was asked specific questions by the three agencies charged with evaluating the dispute (the Departments of Commerce, State and Transportation).  In response, DOJ antitrust officials warned of higher airfares and fewer choices for customers if DOT took any action to block flights by the three Gulf carriers.  So far, the U.S. Government has not taken any action nor has it announced a timeline for completing its review of the subsidy allegations.

In other news, Delta announced that it will leave the U.S. airline trade group Airlines For America (A4A) effective April 2016.  Delta’s departure comes amidst strong policy differences with A4A over the Gulf Carrier dispute, Air Traffic Control reform, and the role of the Export-Import Bank.  In Europe, several carriers have left the Association of European Airlines (AEA) and are in the midst of creating their own trade group.  There are plans to call the new trade group Airlines for Europe (A4E) to mirror the name of the U.S. trade group.

If you have any questions, please contact Evelyn Sahr (esahr@eckertseamans.com, 202-659-6622), Drew Derco (dderco@eckertseamans.com, 202-659-6665), or Reese Davidson (rdavidson@eckertseamans.com, 202-659-6633).