LEGAL CORNER For the most part, I think this is a good update. By
formalizing the settlement process, the updated policy hopefully ensures that both sides understand and agree with the terms upon which the case is being settled and minimizes the opportunity for later confusion or disagreement. However, the update does raise two concerns. First, item No. 8 states that the settlement agreement should contain a waiver of “all potential causes of action” the alleged violator may have against the FAA or its employees. These claims could be related to the legal enforcement action (e.g., the alleged violator might believe that an aviation safety inspector acted improperly or contrary to law during the investigation upon which the legal enforcement action was based). The claims could also arise from a situation unrelated to the legal enforcement action. In either event, if the settlement agreement includes the waiver, then the legal enforcement action will be settled and the alleged violator will lose all other claims. Interestingly, the update indicates that this waiver language should be included “if applicable.” So, if the FAA attorney handling the legal enforcement action is aware of potential claims, then presumably this language will be included in a settlement agreement. For example, if an alleged violator tries to use the threat of other litigation as a bargaining chip in trying to resolve the legal enforcement
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action, it would be reasonable to expect that a settlement of the legal enforcement action would include the waiver language. Thus, although it might be tempting to use such a threat as leverage to settle the legal enforcement action, if an alleged violator wants to pursue claims against the FAA or individual FAA employees separate from the legal enforcement action, it might be best to either not disclose that fact or, alternatively, reject inclusion of the waiver language in the settlement agreement. The second concern with the update is that it does not appear to allow for, or at least it does not address, inclusion of a statement by the alleged violator denying liability. In the past, the parties could agree to include this type of disclaimer in the fi nal order issued by the FAA. For example, the issued order would include a statement that “this matter has been settled by mutual agreement of the parties. The certifi cate holder does not admit or stipulate to any of the allegations, determination, fi ndings of fact or conclusions of law found herein.” Since the update requires the inclusion of some fairly
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specifi c terms in the settlement agreement, presumably such a disclaimer would need to be in the agreement if it were going to also appear in the fi nal order. Unfortunately, the update does not provide for or address the inclusion of this type of disclaimer. As a result, it is unclear whether the FAA will continue to allow this practice. However, it would certainly be reasonable to request that this language be included both in the settlement agreement as well as any fi nal order that may be issued in the case. After all, a settlement is still a negotiated agreement between the parties and the added language doesn’t in any way limit the other terms of such an agreement. In the end, although this update appears to formalize the settlement process, settling a legal enforcement action will still require the agreement of the parties. As such, the FAA and an alleged violator will still need to negotiate the terms of that agreement. Hopefully this more formal process won’t make it more diffi cult for either side to settle a legal enforcement action.
Greg Reigel is an aviation attorney, author and pilot. He holds a commercial pilot certifi cate with an instrument rating and can fl y single-engine land and sea, as well as multi-engine land aircraft. His practice concentrates on aviation litigation, including insurance matters and creditor’s rights,
FAA certifi cate actions and transactional matters. He represents clients throughout the country on aviation law matters. He also an adjunct professor at Minnesota State University - Mankato where he teaches aviation law and at William Mitchell College of Law where he is an instructor in the advocacy course. He can be reached
via e-mail at
greigel@aerolegalservices.com. © 2015 All rights reserved.
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