6 LEGAL COLUMN
GROUND HANDLING INTERNATIONAL JUNE 2013
Double jeopardy? There seems to be a new approach by US governmental agencies seeking to increase government revenue, reports Len Kirsch.
or years, the FAA has sought to collect fines and penalties from aircraft owners and pilots, holding
both responsible even when only one of the parties (assuming they were not one and the same) was at fault. This was easy, since both parties were regulated entities. However, most other government agencies would pursue airlines only, even when the agency knew that the airline’s ground handler was at fault, and even if the ground handler was considered regulated or quasi-regulated, because it was acting as a subcontractor to an airline. Of course, a major concern of the handling industry was that airlines would simply pay these fines and penalties without challenging them, since they knew that ultimately their ground handler would be required under contract to reimburse the airline. Now that more ground handlers are regulated entities under the Certified Cargo Screening Program (the CCSP) and other TSA regulations, the TSA has started to seek fines and penalties against both ground handlers and airlines for the same underlying discrepancy, even if only one party is at fault. The result is double jeopardy since the airline demands (often properly so) that its ground handler pay any fines. In fact, if a ground handler erred in the handling of multiple airlines, the TSA has acted against the ground handler and each of the handled airlines and sometimes even against individual employees of all or some of the entities. When our firm questioned the TSA about this practice, their response was that airlines should do a better job of auditing their ground handlers. Okay – but at the same time, the TSA allows airlines to permit their ground handlers to conduct self-audits for the airlines? The reason I insert a question mark is how can the TSA criticise an airline for not engaging in sufficient auditing when it permits an airline to allow its ground handler to conduct these audits? Surely something is missing here? Another concern is that when one
reads the TSA regulations, they plainly state that fines and penalties for parties which are not aircraft operators (in other words, not airlines) are in most
instances capped at US$50,000, while fines and penalties for airlines are subject to a US$400,000 cap. The TSA now claims that any party performing services for an airline is acting for an airline (that is obvious) and is therefore subject to the higher capped penalty amount. However, isn’t it correct that most non-airline parties subject to TSA fines and penalties are performing services for airlines? If this is the case, why did Congress write the law so as to distinguish between the airlines and non-airlines? Ground handlers are also under attack by their airport authorities who are increasingly auditing lessee and permittees for unpaid fees or rentals. In their attempt to increase revenues, airport authorities are re-reading leases, questioning long term practices and are now seeking fees for commonplace actions which for years have never been subject to fees. Airport authorities are now seeking back rent based on new readings of leases, even though for years the airport authorities interpreted lease clauses differently. So what is a ground handler to do? When it comes to government fines and penalties, a process always exists to seek to mitigate a finding, even when a party is at fault. In the past, governmental agencies would reduce fines and penalties greatly if a ground handler acknowledged error and demonstrated a willingness and concrete steps to ensure that any errors would not be repeated. It is still necessary to demonstrate both remorse and steps to avoid repetition. However, at times, alleged violations can be challenged as not proven, or as a result of a faulty reading of an X-ray or other machine. Or, even if some error did occur, if ultimately caught before any serious risk occurs, then a penalty may not be appropriate. Or what if the actual cause of an omission or act was down to pressure by an airline customer? Where it is impossible to contest a factual finding, then the ground handler must demonstrate why the agency should not be concerned by repetition. This can best be done by putting in place systems to prevent or reduce a recurrence. The problem is that no
matter how good the system, human error is always possible. Human error by individuals paid relatively low wages is probable. For this reason, government agencies should use the investigative process to educate ground handlers and concentrate less on penalising ground handlers.
When dealing with airport authorities looking for avenues of revenue, ground handlers should not fear challenging an airport authority’s findings during audits or demands for prior and/or increased rentals. Past practice is among many defences to claims for payments of fees and rents based on new interpretations of leases. In most instances (although not always), airport authorities act reasonably and will either concede or negotiate a resolution to a dispute. Airport authorities, like most private parties, do not want to terminate leases and permits or sue their tenants and permittees.
McBreen & Kopko 500 North Broadway Suite 129 Jericho, New York 11753 Tel. (516) 364-1095 Fax (516) 364-0612
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