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Criminalization of Negligence
The "Third Rail" in Aviation Accident Litigation
Practitioners in the field of aviation law are used to seeing civil
actions arise as the result of an aviation accident. In fact, the
proceedings are inevitable, as are the statutorily mandated investigations
by the National Transportation Safety Board (NTSB)1 into the causes of accidents. The
NTSB proceedings may prove quite helpful to the practitioner handling the
civil case arising from an accident. At least the factual portions of the
NTSB report are generally held to be admissible into evidence at trial2 and the laboring oar is often taken
by the NTSB in the conduct of their investigation with respect to the
interviewing of witnesses, narrowing the issues in the civil litigation and
ruling out possible causes for an accident.
However, the newest wrinkle, or the "third rail" in aviation
accidents litigation, so-called because it can at best shock the
practitioner or at worse bring a death sentence to the corporation, is the
criminalization of negligence arising from aviation accidents. This issue
of the Condon & Forsyth LLP Newsletter LLP was the subject of a seminar
presented last month by Michael Holland in Pensacola, Florida.3
While the criminal prosecution of transportation companies arising from
accidents goes back almost one hundred years, New York Central &
Hudson Railroad Co. v. U.S., 212 U.S. 481 (1909), the next three
quarters of a century saw very little criminal prosecution of corporations
involved in transportation accidents.
The trend toward criminal prosecution of corporations began in 1991,
with the indictment of supervisory personnel at Eastern Airlines for
so-called "pencil whipping" and falsifying maintenance records.
While the indictments were ultimately dismissed due to violations of the
federal Speedy Trial Act,4
the prosecution of one of the (at that time) leading airlines in the United
States set off a red flag of warning that perhaps, in addition to FAA
penalties for falsifying records,5
the persons guilty of such actions could face criminal prosecution. The red
flag became a full-blown warning sign following the crash of ValueJet
Flight 592 in the Florida Everglades on May 11, 1996.
The facts of the ValueJet case are well-known to anyone practicing in
the field of aviation law: the crash of the plane, which killed all one
hundred and ten passengers and crew aboard, was traced to oxygen generators
which had been removed from service and improperly secured and loaded into
the cargo hold of a ValueJet MD-80 aircraft bound for Atlanta from Miami.
Shortly after takeoff, an uncontrollable fire started in the aircraft and
it crashed in a remote area of the Everglades.
The NTSB investigators soon found themselves working along side criminal
investigators searching for relevant evidence. The FBI executed a search
warrant at the maintenance company who had put the generators on the
aircraft, SabreTech, and grand jury subpoenas were served on SabreTech,
ValueJet and numerous of their employees. The investigation went so far
that law enforcement authorities contacted SabreTech employees when they
left their employment for the day. SabreTech and several of its employees
were ultimately charged by Federal authorities in a wide ranging indictment
charging conspiracy to falsify records,6
violation of hazardous material regulations,7 and, incredibly, placing a destructive device on
board an aircraft.8
In view of the developments since the horrific incident of September 11,
2001, the charging of SabreTech with placing a destructive device on board
an aircraft may seem to be prosecutorial overcharging. Although SabreTech
was ultimately acquitted of the federal charges based on its wilful
mishandling of the oxygen generators, it was nevertheless convicted for reckless
mishandling of the same.
Perhaps even more significantly, the conviction on federal charges did
not end SabreTech's troubles: SabreTech was indicted in the Florida state
courts for 110 counts of third degree murder and 110 counts of
manslaughter, one count for each of the fatalities aboard the subject
flight. The criminal charges have now been dropped in exchange for a
donation of $500,000 by SabreTech’s corporate parent, The Sabreliner Corp.
to aviation safety causes.
What has been accomplished by the SabreTech indictment? Clearly, it
resulted in the bankruptcy of SabreTech, the loss of jobs for hundreds of
employees, and the destruction of the company, leaving it with a negative
net loss of over $21 million. Debates on whether criminalization of negligence
is the proper route to pursue abound. Ken Quinn, who represented SabreTech,
has testified, lectured and written on the topic many times. His position
is that the criminalization of aviation accident is an ominous development
for the aviation industry since it impedes cooperation by mechanics, flight
crews, manufacturers and others with the NTSB investigatory process.
Indeed, former Chairman Jim Hall has already said that the fallout from
the ValueJet case is that potential criminal defendants in other
transportation accidents have refused to cooperate in investigations. In
the case of a pipeline rupture and fire case in Bellingham, Washington in
June of 1999, the NTSB sought to interview potential witnesses, many of
whom invoked their Fifth Amendment rights against self-incrimination. In
October of 1999, Chairman Hall addressed those issues at a committee
meeting in the House of Representatives, stating as follows:
The NTSB wants the answers to all of these
questions, and we need to know them as soon as feasible. But, my
investigators have been stymied by the prospect of criminal prosecutions .
. . A number of our investigative activities has been suspended because
most of the central players will not talk to us. And, prosecutors have
asked that we not test the valve of the pipeline until their concerns
regarding evidence preservation can be allayed. We are hopeful that steps
can be taken to clear up the concerns of needed witnesses and the U.S.
Attorney’s office. But, for now, we do not know all we need to know about
the pipeline’s operations and its level of safety.10
Likewise, in the Alaskan Airlines case in the year 2000,11 where an Alaskan Airlines flight
crashed off the coast of California, allegedly due to a problem with the
jack screw, Alaskan Airlines’ employees have been reluctant to talk to NTSB
investigators. The problem in the Alaskan Airlines case is exacerbated by
the fact that, even before the accident, the U.S. Attorney’s office had
commenced a separate investigation against Alaskan Airlines to determine
whether a pattern of violation of maintenance regulations had taken place.
The governmental decision to pursue criminal charges in connection with
the ValueJet case appears to be the bell weather of a change in the
criminalization of what had been previously viewed as negligent acts. The
United States Attorney in Miami has been particularly active in pursuing
criminal investigations. In his testimony before the Subcommittee on the
Aviation, Committee on Transportation of Infrastructure, United States
House of Representatives, concerning aircraft accidents and criminal
investigations, Guy Lewis, the United States Attorney for the Southern
District of Florida testified on July 27, 2000 as to the various criminal
prosecutions undertaken by his office.12
Mr. Lewis emphasized that in deciding whether to proceed with a criminal
prosecution, his office took a reasonable and principled approach. Having
applied that criteria, the United States Attorney’s office in Miami has
brought criminally related prosecutions in the area of passenger aircraft,
freight forwarders, cargo aircraft, airport personnel, repair facilities,
parts suppliers and air rage.
For example, the United States Attorney’s office obtained a conviction
of Aviation Safeguards, a contract security company providing services at
Miami International Airport. Its general manager and the corporation were
convicted of falsely certifying that background employment verifications
had been performed on prospective employees seeking to enter secure areas
at MIA Airport. As part of the penalty phase of the conviction, Aviation
Safeguards was required to institute a compliance program which involved
comprehensive employment training and auditing by outside consultants.
Actions have also been brought against participants in the alleged
counterfeit parts market. Arrow Air has pled guilty to falsifying records
on engine parts not certified for airworthiness by the FAA, resulting in a
$5 million fine and a comprehensive compliance program. Following the accident
involving a Fine Air aircraft on takeoff from Miami in August of 1999, the
airline was charged with obstruction of justice and false statements
regarding the weighing of cargo pallets and payloads. The company pled
guilty to two charges, unrelated to the crash, including making a false
statement concerning maintenance matters and obstructing the government’s
investigation by destroying, disposing of or altering evidence.
Neither have the larger air carriers been immune to criminal prosecution
by the U.S. Attorney’s office in the Southern District of Florida. An
investigation into the transportation of hazardous materials by American
Airlines resulted in a felony conviction, an $8 million fine and a
restitution payment of $2 million to local authorities by American
Airlines. Its parent corporation, AMR, pled guilty to federal charges that
it illegally stored hazardous waste materials at Miami International
Airport and that it had failed to follow Federal Aviation Regulations that
strictly controlled the transportation of hazardous material on passenger
planes.
What are the various statutes that an airline, fixed based operator, or
maintenance company must be concerned with in a potential criminal
prosecution?
A surprisingly large number of federal statutes have been utilized by
the federal government to prosecute corporate conduct relating to
accidents. Some of these statutes include the False Statement Act,13 the Mail Fraud and Wire Fraud
statute,14 the Obstruction
of Justice Statute,15 the
Hazardous Materials Act16
and state homicide statutes.
Under the current standard of corporate liability, a corporation can be
held criminally liable for the unlawful acts of its officers, employees or
agents, where the acts were performed within the scope of the employee’s
authority and where that conduct provides a benefit to the corporation.
Indeed, corporate liability has even been found when employee violations
are contrary to a specific corporate policy.17
Interestingly, in deciding whether or not to cooperate with a criminal
investigation, the company lawyer needs to look at a rather remarkable
document published in 1999 by the Criminal Division of the Department of
Justice, which promulgated its "Principles of Federal
Prosecution" as a guide to prosecutors in determining whether to bring
charges.
Some of the indicators as to whether prosecution should be brought
include the seriousness of the offense, a history of similar conduct, the
willingness of the corporation to cooperate with the government’s
investigation, the corporation’s willingness to identify wrongdoers and
make their witnesses available for interviews, and the cooperation of the
corporation in waiving either the attorney/client privilege or the work
product privilege. These are all criteria which, while they aid the
prosecutor’s office, tend to penalize those corporations whose employees
exercise individual privileges or rights guaranteed by the United States
Constitution.18
Conclusion
The prospect of a criminal investigation is daunting to the practitioner.
While insurers typically oversee the defense of the corporation in civil
proceedings, and specialized counsel, even in-house counsel, customarily
work with the NTSB on behalf of the corporation in dealing with
administrative proceedings arising from an aircraft accident, the
possibility of a criminal investigation arising from an aviation accident
is one that cannot be overlooked by conscientious counsel.
Some of the many issues which arise include work product, scope of
representation, joint cooperation agreements, and the not insignificant
issue of who will pay for the defense of criminal investigations. The
attorney representing a defendant in an aviation accident related matter
must not only be a good civil litigator; he must have a working knowledge
of the criminal law and the various statutes which may be used to implicate
the corporation, its officers and employees.
Endnotes
1 49 U.S.C. § 1131.
2 49 U.S.C. § 1154(b); (I>but see In Re Air Crash
at Charlotte, N.C. on July 2, 1994, 982 F. Supp. 1071 (D.S.C. 1996); Contra,
Chiron Corp. v. Nat. Transp. Safety Bd., 198 F.3d 935 (D.D.C. 1999).
3 The Florida Bar Continuing Legal Education
Committee, Trial Lawyers Section and Aviation Law Committee and NTSB Bar
Association sponsored the program entitled Meet the Blues -- Current
Aviation Law Developments, which was held on November 8-10, 2001.
4 18 U.S.C. § 3161 et seq.
5 49 U.S.C. § 46310.
6 49 U.S.C. § 47126; 49 U.S.C. § 46310.
7 49 U.S.C. § 46312.
8 18 U.S.C. § 32.
9 Testimony of Kenneth P. Quinn before the Aviation
Subcommittee of the Committee on Transportation and Infrastructure,
U.S.H.R., July 27, 2000.
10 Testimony of Jim Hall, Chairman, National
Transportation Safety Board, before the Committee on Transportation and
Infrastructure, Subcommittee on Economic Development, Public Buildings,
Hazardous Materials and Pipeline Transportation, House of Representatives,
regarding the June 10, 1999 Pipeline Rupture and Fire in Bellingham,
Washington, October 27, 1999.
11 In Re Air Crash off Point Magu on January 30,
2000, MDL 00-1343 (N.D. Cal.).
12 Testimony of Guy A. Lewis before the Aviation
Subcommittee of the Committee on Transportation and Infrastructure,
U.S.H.R., July 27, 2000.
13 18 U.S.C. § 1001.
14 18 U.S.C. §§ 1341, 1343.
15 18 U.S.C. §§ 1501-1518.
16 49 U.S.C. §§ 5101-5127.
17 United States v. 20th Century Fox Film Corp., 882 F.2d 656 (2d Cir. 1989).
18 Corporations do not have a right against
self-incrimination, Branswell v. United States, 487 U.S. 99 (1988)
but corporate officers and directors have the right to invoke protections
afforded by the Fifth Amendment. George Campbell Painting Corp. v. Reid,
392 U.S. 286 (1968).
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