Landy v. Federal Aviation Administration

GOETTEL, District Judge

(dissenting):

The major issue at trial was whether Landy, IAL and Smith were operating aircraft for compensation or hire. They contended they were not; their basic assertion *150was that Landy had leased the plane to IAL, who then subleased it to customers who used it to ship their own goods. They never took the position that they were complying with the regulations imposed upon carriers for hire. The Government contended that the leasing arrangement was a subterfuge intended to disguise a commercial operation and that the more stringent requirements of Part 121 applied.

In order for the jury to determine whether the defendants had operated the plane for hire, the district court elicited findings by way of written interrogatories. The jury found that each of the defendants was operating the aircraft for hire. Moreover, in making such findings, the jury implicitly found that these parties were involved in a joint venture.1 Evidence from the record amply supports this determination.2

The majority opinion, however, states that these interrogatories were insufficient because they ask simply whether the defendants had operated the aircraft for compensation or hire, without reference to the time, the place or the flight in which the operation took place. I do not agree that it was necessary for these interrogatories to make reference to the time, the place or the flight. After establishing the details of the manner in which the plane had been operated by the defendants, it was sufficient to ask the jury whether the defendants’ conduct constituted a hiring out of the airplane. Then, in order to establish liability, it was only necessary to show that flights were made under this scheme. The district court’s finding concerning the number of flights made under this arrangement was proper. Flight briefing alerts prepared by the New York Metropolitan Transportation Authority provided uncontroverted evidence that on eighteen flights the plane had transported shipper’s cargo under this arrangement. Also, Harvey M. Coates of Smith testified to at least three additional cargo carrying trips.

The trial court also utilized special interrogatories in order to obtain findings from the jury as to whether the defendants had violated specific provisions of the FAA regulations. Since these special interrogatories were paraphrasings of the FAA regulations, the jury’s special verdicts cannot stand unless three requirements are met. First, the way in which the regulation is paraphrased must not prejudice the defendants. Second, the jury must understand what is being asked. (The interrogatory must be self-evident, or information available from the record must allow the jury to understand what the regulation requires.) Third, the jury must have sufficient information concerning the conduct of the defendants on which to base their decision.

As to the form of such interrogatories, the trial court has broad discretion, provided that the questions asked are adequate to obtain a jury determination on the factual issues essential to judgment. See Houston Chronicle Publishing Co. v. United States, 481 F.2d 1240 (5th Cir. 1973), cert. denied, 414 U.S. 1129, 94 S.Ct. 867, 38 L.Ed.2d 754 (1974); Eastern Air Lines, Inc. v. American Cyanamid Co., 321 F.2d 683 (5th Cir. 1963).

*151In those instances where the regulations required the presence of specific equipment or procedures, the defendants were not prejudiced since the special verdict did pass on the essential elements of the regulations. For example, special interrogatory number eighteen asks whether the defendants operated an aircraft while it did not carry an operable flight recorder. It is clear that this summary allows the jury to pass on the essential requirements of 14 C.F.R. § 121.-343.3 In fact, the omission of additional technical requirements could only benefit the defendants.4

The record also demonstrates that the jury was provided with sufficient information to understand the nature of those interrogatories that were not self -evident and to make intelligent responses concerning the conduct of the defendants. John S. Burns of IAL, the company that had day-to-day operational control over the aircraft, explained the nature and function of particular procedures and equipment that were the subject of the special interrogatories. He then gave uncontroverted testimony that those procedures and equipment were not present or in operable condition aboard the airplane. Further, FAA inspectors, who also explained the nature and function of the equipment to the jury, testified that an inspection of the plane revealed that certain equipment was missing or inoperable.

I agree with the majority that in those instances where it was necessary for the jury to find that the airplane was not in compliance with a legal standard, there was no adequate basis on which to find a violation unless the standard was first explained. I also agree with the majority, of course, that the defendants cannot be held liable under those regulations that were applicable to passenger aircraft only, or under those regulations that apply only to a commercial operator who seeks route and area approval.5

I do not agree with the majority, however, that under the court’s instructions, the jury’s affirmative answers to the first three interrogatories required it to find that if one of the three defendants failed to meet any of the requirements made the subject of the remaining thirty five interrogatories, then the other two would be liable for the same violation, despite the fact that they had complied. I do not see, in the jury’s verdict or the court’s application of it, that a failure of any defendant to comply with a regulation would make the other defendants liable for the failure, despite the fact that they had complied. If any of them complied with the regulation, the aircraft would be in compliance and none of them would be responsible. Conversely, if there was a total failure of compliance, since they acted jointly, all would be responsible, regardless of who had the primary obligation.

In dealing with the penalties to be imposed, in order to make a case (either per flight or per day6), it should not be incumbent on the Government to establish by direct evidence that the specific conditions involved existed on each day or each flight. It is unreasonable to expect the FAA to inspect an aircraft continually. Since these defendants never brought the aircraft into *152conformity with Part 121,7 and since the testimony of Burns established that some violations existed throughout the relevant period, it is reasonable to conclude that these violations existed on every flight. Also, the FAA inspection of the plane, which found certain equipment missing or inoperable, creates the presumption, in the case of violations that pertained to rather permanent conditions, that the violation existed for a long period. Even with more transient conditions, such as life vests, a Government finding of the absence of such is sufficient, at least for a reasonable temporal period, to imply their continued absence. It is no great burden on an aircraft operator to establish when equipment was put aboard an aircraft or removed. Moreover, to require a special interrogatory answer on each type of violation for each flight would mean hundreds of questions.

Because of the discrepancies and questions noted above, it would be appropriate to remand to the district court to determine which violations were applicable and the number of days or flights on which they occurred, and, if necessary, to recompute the total fine.8 I dissent, however, from the opinion of the Court that a retrial is necessary to determine liability, since this will allow some very culpable defendants a second chance to avoid liability for acts of which they were clearly guilty. To the extent that the majority opinion places an unreasonable burden on the Government, it constitutes a regrettable precedent. Consequently, I most vigorously dissent.

. Since the actions of all three defendants in combination were necessary in order to operate the plane for hire, the jury’s verdict that all three had operated the plane for hire implies the finding of a joint venture.

. Initially, the record established an intimate relationship between Landy and Air-Trans, the company that supplied the pilots and crews for the flights. Henry Wharton, the president of Air-Trans, had acted as Landy’s agent during the purchase of the aircraft, in attempting to gain repossession of the plane from IAL, and during the period in which Landy was preparing the aircraft for a certificate of airworthiness. Further, Landy’s personal secretary had signed Air Trans checks to pay crew members for flying the plane. Secondly, the record demonstrated that the defendants had not turned over operational control of the aircraft to the sublessees. Between them, IAL and Smith provided maintenance, fuel, auxiliary services, loading and unloading and refitting of the plane. The shipper was responsible only for delivery of his cargo to the airport at a specified time and for paying one lump sum to Smith. Finally, evidence that these subleases were a mere sham was provided by FAA inspectors who testified that several of the subleases had overlapping dates and that one of the leases had no ending date.

. The FAA regulations of flight recorders provide in part:

(a) No person may operate a large airplane that is certified for operations above 25,000 feet altitude or is turbine engine powered, unless it is equipped with one or more approved flight recorders that record data from which the following information may be determined within the ranges, accuracies, and recording intervals specified in Appendix B of this Part ....

14 C.F.R. § 121.343.

. Had the defendants presented evidence that the plane was equipped with a flight recorder, the jury might have answered “no” to interrogatory eighteen, even though the defendants had not complied with the strict requirements of section 121.343.

. Since the fine administered by the court is well below the total possible fine, it may well be that the district court took this into account in assessing the penalty.

. Title 49 U.S.C. § 1471(a) provides, with respect to continuing violations, that “each day” is a separate offense.

. Evidence presented by the FAA showed that the inspection program being utilized by IAL was intended to comply only with Part 91 requirements. Further, it had been tampered with to make it appear as if it had been approved by the FAA.

. Of course, I agree with the majority’s finding that the Government’s claims should not have been dismissed on the ground that the FAA was illegally invading the exclusive regulatory province of the Civil Aeronautics Board. I also agree that there is no unconstitutional ambiguity in the definition of “commercial operator” in 14 C.F.R. §1.1 and that there is no need to rule on Landy’s claim that the Government’s seizure of his plane violated due process, since this claim was substantially abandoned in the trial court.