January 2011

From the editors of CCH's Transportation products, here are summaries of the important recent developments in the area for the past month.  Complete coverage of these issues, and many more, appear in our print and electronic products, including: Aviation Law Reporter, Commercial Aircraft Transactions, Issues in Aviation Law and Policy, Federal Carriers Reporter, Federal Motor Carrier Safety Administration Decisions, and Motor Carrier Liability.

If you have comments or suggestions concerning the information provided or the format used, please feel free to contact Pamela Maloney, Managing Editor, at pamela.maloney@wolterskluwer.com.

Hot Topics

Record Number of Laser Events Reported in 2010

Nationwide reports of lasers pointed at aircraft almost doubled to more than 2,800 in 2010 from the previous year, according to the Federal Aviation Administration, which noted that this is the highest number of laser events recorded since the agency began keeping track in 2005. With 102 reports, Los Angeles International Airport recorded the highest number of laser events in the country for an individual airport in 2010, and the greater Los Angeles area tallied nearly twice that number, with 201 reports. Chicago O'Hare International Airport was a close second, with 98 reports, and Phoenix Sky Harbor International Airport and Norman Y. Mineta San Jose International Airport tied for the third highest number of laser events for the year with 80 each, FAA revealed.

Nationwide, laser-event reports have steadily increased since FAA created a formal reporting system in 2005 to collect such information from pilots. Reports rose from nearly 300 in 2005, to 1,527 in 2009, and 2,836 in 2010, with the increase likely due to a number of factors, including the availability of inexpensive laser devices on the Internet; higher power levels that enable lasers to hit aircraft at higher altitudes; increased pilot reporting of laser strikes; and the introduction of green lasers, which are more easily seen than red lasers. Some cities and states have laws making it illegal to shine lasers at aircraft and, in many cases, people can face federal charges for having done so, FAA noted.  Aviation Law Reports, Letter No. 1444 (IntelliConnect)—No. 1444 (IRN), January 27, 2011.

Revisions Align HMRs with International Standards

The Pipeline and Hazardous Materials Safety Administration (PHMSA) is amending the Hazardous Materials Regulations (HMRs) to align them with international standards. Due to revisions in the International Maritime Dangerous Goods Code (IMDG Code), the International Civil Aviation Organization's Technical Instructions for the Safe Transport of Dangerous Goods by Air (ICAO Technical Instructions), and the United Nations Recommendations on the Transport of Dangerous Goods—Model Regulations, these amendments are necessary to facilitate the transportation of hazardous materials in international commerce.

The revisions include, among other things, changes to proper shipping names, hazard classes, packing groups, special provisions, packaging authorizations, air transport quantity limitations, and vessel stowage. The amendments are intended to enhance the safety of international hazardous materials transportation through better understanding of the regulations, an increased level of industry compliance, the smooth flow of hazardous materials from their points of origin to their points of destination, and effective emergency response in the event of a hazardous materials incident.

The final rule took effect January 19, 2011. However, voluntary compliance was authorized as of January 1, 2011, while mandatory compliance is required by January 1, 2012. Aviation Law Reports, Letter No. 1444 (IntelliConnect)—No. 1444 (IRN), January 27, 2011; Federal Carriers Reporter, Letter No. 1598, January 28, 2011.

Aviation News

Airbags Can Protect Occupants in GA Accidents, NTSB Says

The National Transportation Safety Board adopted a study which concluded that general aviation (GA) airplanes equipped with airbags provide additional protection to occupants in accidents involving survivable forward impacts. Designed to mitigate head and upper body injuries, airbags were first approved for use in the pilot and co-pilot seats in GA aircraft in 2003, NTSB said. Currently, there are nearly 18,000 airbag-equipped seats in over 7,000 of the 224,000 GA aircraft in the United States.

The study—which examined 88 accidents involving airbag-equipped airplanes that occurred between 2006 and 2009—found no instances in which the airbag had caused harm in properly restrained occupants. In addition, there were ten survivable accidents in which the crash forces had been severe enough to have caused injury and/or to have deployed the airbag, the study found. Within that group, 12 occupants had experienced airbag deployments, and the airbag likely had mitigated injuries for two of those occupants.

The study also found no negative consequences as a result of airbag deployments. For instance, there were no cases in which the airbags had been expected to deploy but had not. Nor were there any cases that involved airbags deploying under unexpected circumstances, hindering egress, fueling post-crash fires, or interfering with rescue attempts. Investigators uncovered certain issues with restraint systems, NTSB cautioned, noting that one such issue involved the incorrect usage or adjustment of seat belts. Another finding was the strong affirmation that correctly installed shoulder harness/lap belt combinations provide significantly greater protection in GA accidents than that offered by a lap belt alone. Based on an analysis of over 37,000 GA accidents, the Board concluded that the risk of fatal or serious injury was 50 percent higher when an occupant was only restrained by a lap belt as compared to the combination lap belt and shoulder harness.

All things considered, NTSB voted to adopt six safety recommendations, all directed to the Federal Aviation Administration:

(1) Require manufacturers to modify restraint systems vulnerable to being used incorrectly in newly built GA airplanes and to modify restraints in existing airplanes;

(2) Revise the guidance and certification standards for restraint systems to reduce the likelihood of misuse;

(3) Modify the guidance to GA airbag manufacturers as to how they should demonstrate that an airbag design provides adequate protection for a greater range of body sizes, including very small and very large individuals;

(4) Require the retrofitting of shoulder harnesses on all general aviation airplanes that are not currently equipped with such restraints;

(5) Evaluate the feasibility of requiring airbag-equipped aircraft to capture and record crash dynamics data to determine whether the system performed as designed; and

(6) Develop a system to track safety equipment (such as restraint systems, airbags, and aircraft parachutes) designed to improve crash outcomes.

The complete safety study will be available on the NTSB website in several weeks, the agency indicated. Aviation Law Reports, Letter No. 1444 (IntelliConnect)—No. 1444 (IRN), January 27, 2011.

Code-Share Disclosure Requirements Clarified

The U.S. Department of Transportation's Office of Aviation Enforcement issued guidance to airlines and ticket agents on January 10 clarifying the requirement for notifying passengers if a flight is being operated under a code-sharing arrangement. Under code-sharing, an airline sells tickets on flights that use the airline's code but actually are operated by a different carrier.

Long-standing DOT rules require airlines to disclose code-sharing arrangements to consumers before they book a flight, and legislation adopted in August 2010 clarifies the requirements for Internet websites that sell airline tickets. Currently, code-sharing on some websites is being disclosed through a hyperlink or when one passes his/her computer's cursor over a link. Under the existing Department rules, code-share disclosure must include the corporate name of the transporting carrier and any other name under which the flight is being offered to the public.

Airlines and ticket agents will have 60 days to modify websites that are now using links for code-share disclosure to bring them into compliance before instituting enforcement action, DOT said. In the meantime, the agency will continue to enforce other aspects of the current rules aggressively, as it has in the past. Air carriers also were reminded airlines that they are responsible for the compliance of their ticket agents, and ticket agents that provide Internet ticket sales software to travel agents were put on notice that they must ensure that the software is in compliance with DOT's rules. Aviation Law Reports, Letter No. 1443 (IntelliConnect)—No. 1443 (IRN), January 13, 2011.

Crewmember Management Initiative Implemented

Non-scheduled charter airlines and air taxis must train pilots and flight attendants in Crew Resource Management (CRM), under a final rule issued by the Federal Aviation Administration last week. CRM is a well-established concept that helps reduce human error in commercial aviation by teaching pilots, flight attendants, and other aviation workers to act as a team. Carriers affected by the new standards are required to establish initial and recurrent CRM training for crewmembers within two years of the rule's March 22, 2011 effective date. The training has to address the captain's authority; intra-crew communications; teamwork; managing workload, time, fatigue, and stress; and decision-making skills.

CRM training focuses on the interactions among personnel—including pilots, flight attendants, operations personnel, mechanics, air traffic controllers, and flight service stations. This training in communications and teamwork can help prevent errors such as runway incursions, misinterpreting information from air traffic controllers, crewmembers' loss of situational awareness, and failure to fully prepare for takeoff or landing. FAA has required CRM training for air carriers operating larger airplanes since December 1995. Aviation Law Reports, Letter No. 1444 (IntelliConnect)—No. 1444 (IRN), January 27, 2011.

Security Checkpoint-Fall Victim Lacks Basis for Claim

An airline passenger who allegedly had sustained personal injury when she tripped and fell on a rug at the security checkpoint before boarding her plane failed to establish a negligence claim against her air carrier, according to a New York federal court. Under the applicable state law, the passenger had to demonstrate a duty owed by the carrier to her, a breach of that duty, and an injury proximately resulting therefrom. Additionally, under relevant case precedent, in order to impose liability upon a defendant in a slip-and-fall action, there had to be evidence that the defendant either had created the condition that caused the accident, or had actual or constructive notice of the condition.

The carrier was entitled to summary judgment because there was no material question of fact with respect to whether the carrier had controlled or occupied the area in which the passenger fell, the court held. Although the carrier controlled the snake-shaped line through which passengers walked prior to reaching the security checkpoint, the Transportation Security Administration controlled the area beyond where a passenger's passport was checked. No one but federal employees were permitted to work in that area of the terminal and, even if carrier employees had helped TSA employees move the rug after the passenger fell, that activity was not sufficient to create a question of material fact regarding control over the area and the rug. Given the evidence of TSA's exclusive control over the area and the rug, it could not be fairly inferred that the carrier also controlled the area simply because its employees had sought to assist the passenger and TSA once the passenger fell, the court concluded. Narvaez v. Am. Airlines, Inc. (SDNY) 34 Avi. 15,652 (IntelliConnect)—34 Avi. 15,652 (IRN).

Porn-Carrying Passenger's Rights Not Violated by Screener's Actions

Where an airline passenger's checked bag was found to contain child pornography during pre-flight baggage screening conducted by the Transportation Security Administration, a trial court did not err in denying the passenger's motion to suppress that evidence in his criminal trial, a Florida appellate panel ruled in a case of first impression in that state. The passenger alleged that the physical search of his checked baggage outside of his presence violated the Fourth Amendment to the U.S. Constitution and was not minimally intrusive because available technology in use at the airport provided TSA with a means to search his unopened baggage for dangerous contraband without searching the bag's contents.

In general, warrantless searches are per se unreasonable unless the search or seizure falls into one of the well-established exceptions to the warrant requirement, the panel explained, noting that administrative searches in airports are an established exception and are constitutionally reasonable because they are conducted as part of a general regulatory scheme. Moreover, consent is not required to conduct an airport screening search, as long as that search is otherwise reasonable and is conducted pursuant to statutory authority, the court added. An airport security search is reasonable if: (1) the search is no more extensive or intensive than necessary, in light of current technology, to detect the presence of weapons or explosives; (2) the search is confined in good faith to that purpose; and (3) a potential passenger may avoid the search by choosing not to fly.

The TSA protocol requiring officers to physically open a certain number of randomly selected bags, swab the inner contents, and test the swabs in an explosive detection machine was no more extensive or intrusive than necessary in light of current technology, the appellate panel ruled. The protocol revealed that the TSA officer who checked the passenger's bag had the discretion to flip through the papers found in the bag while conducting the open-bag search in lieu of swabbing every piece of paper. As such, the TSA officer's conduct was neither deliberate, reckless, or grossly negligent; nor had the officer been engaged in general law enforcement objectives when she discovered the child pornography. The mere fact that a screening procedure ultimately revealed contraband other than weapons or explosives did not render it unreasonable, post facto, the court held.

Finally, even assuming for the sake of argument that the search ran afoul of the Fourth Amendment, the trial court's decision not to suppress the evidence was appropriate under the good-faith exception to the warrant requirement, the appellate panel said, adding that the extreme sanction of exclusion had not been justified. Higerd v. State (FlaDistCtApp) 34 Avi. 15,660 (IntelliConnect)—34 Avi. 15,660 (IRN).

Runway Expansion Okay Survives Appeals Court's Scrutiny

The Federal Aviation Administration's approval of an airport improvement project that included the proposed expansion of an existing runway despite the resulting destruction of an old neighborhood park was neither arbitrary nor capricious, a federal appellate panel determined. In so ruling, the appeals court held that the project approval did not violate the Airport and Airway Improvement Act's provision conditioning approval of a project involving a runway extension found to have significant adverse environmental effects upon the determination that no possible and prudent alternative exists and that every reasonable step has been taken to minimize the adverse effect.

Although the term "prudent" as used in the statutory provision related to environmental effects on parks, wetlands, and historic sites implies a narrower construction, FAA's interpretation of "prudent" as applied to the AAIA provision was within the agency's discretion, the court said, commenting that the AAIA provision does not allow FAA to engage in an open-ended, fully discretionary balancing of competing interests. However, where protected interests exist on both sides of the balance, the agency properly can consider not only the non-environmental defects of the environmentally preferred option, but also the margin by which that option's environmental advantages exceed those of the alternative, the panel instructed.

As such, there was nothing arbitrary or capricious in FAA's finding that the challengers' favored runway expansion alternative was not "prudent," and that the statute's demands were satisfied. FAA found that, although the selected alternative would have more adverse environmental impacts than the challengers' preferred alternative, it would have a radical edge in meeting the transportation purposes of reducing delays, ensuring safety, and increasing capacity, the court reasoned. City of Dania Beach v. Fed. Aviation Admin. (DCCir) 34 Avi. 15,684 (IntelliConnect)—34 Avi. 15,684 (IRN).

Surface Transportation News

Procedures for Applying for Special Permits Revised

An applicant seeking to acquire a special permit will be required to provide information about its operations, under revisions to the special permit procedures adopted by the Pipeline and Hazardous Materials Safety Administration (PHMSA). The additional information required will be used to enable the agency to evaluate the applicant’s fitness and the safety impact of operations that will be authorized under the special permit. Additionally, PHMSA has established an on-line application option for special permit requests.

The updated regulations take effect March 7, 2011; however, voluntary compliance was authorized as of January 5, 2011. Federal Carriers Reporter, Letter No. 1597, January 14, 2011.

Regulatory Guidance Issued on Use of Electronic Documents

The Federal Motor Carrier Safety Administration (FMCSA) has issued regulatory guidance addressing the use of electronic signatures and documents to comply with FMCSA regulations. The guidance provides motor carriers; federal, state, and local motor carrier enforcement officials; and other interested parties with uniform information regarding FMCSA’s acceptance of electronic signatures on documents required by the Federal Motor Carrier Safety Regulations (FMCSR). The guidance applies to documents required by FMCSA regulations to be generated and maintained or exchanged by private parties, regardless of whether the agency subsequently requires that the documents be produced or displayed at the request of an FMCSA official or other individual entitled to access.

The revised guidance took effect January 4, 2011. All prior agency interpretations and regulatory guidance, including memoranda and letters, may no longer be relied upon to the extent they are inconsistent with the revised guidance. Full text of the guidance appears at ¶25,063. Federal Carriers Reporter, Letter No. 1597, January 14, 2011.

FRA Develops Model Legislation for Highway-Rail Crossings

The Federal Railroad Administration (FRA) and various states have worked together to develop model state legislation for use in developing bills to improve safety at highway-rail grade crossings without gates or barriers. The model legislation is intended to help states address obstructions limiting a driver’s view of an oncoming train. Between 2001 and 2005, accident reports submitted by railroads showed that 689 collisions resulting in 242 injuries and 87 fatalities occurred at highway-rail grade crossings with sight obstructions. Development of the model state legislation was required by the Rail Safety Improvements Act of 2008. The model legislation is available at http://www.fra.dot.gov/Pages/1730.shtml. Federal Carriers Reporter, Letter No. 1597, January 14, 2011.

U.S. Surface Trade with Mexico and Canada Increased

The U.S. Department of Transportation’s Bureau of Transportation Statistics released figures showing that the surface transportation trade between the United States and its North American Free Trade Agreement (NAFTA) partners (Canada and Mexico) was 14.9 percent higher in October 2010 than in October 2009. However, despite the 2009–2010 growth, the value of U.S. surface transportation trade with Canada and Mexico in October 2010 remained 2.9 percent below the October 2008 levels. BTS also reported that the October 2010 value of U.S. surface transportation trade with Canada and Mexico rose 3.3 percent over September 2010 figures.

U.S.–Canada surface transportation trade totaled $40.7 billion in October, up 12.2 percent compared to a year ago. Meanwhile, U.S.–Mexico surface transportation trade totaled $29.9 billion in October, up 18.8 percent compared to October 2009. Surface transportation consists largely of freight movements by truck, rail, and pipeline. Based on the available figures, 86.1 percent of U.S. trade—by value—with Canada and Mexico moved on land in October of this year. Federal Carriers Reporter, Letter No. 1597, January 14, 2011.

Towing Regulations Preempted in Part by Federal Statute

City ordinances regulating towing services were not preempted by federal law as they related to non-consensual towing, but were preempted for consensual and pass-through towing operations, according to a federal district court in California. The ordinances required towing companies performing towing services within the city and county of San Francisco to pay a fee and obtain a permit. An association of towing companies challenged the ordinances, claiming that they were preempted by the Federal Aviation Administration Authorization Act of 1994 (FAAAA). The city contended that the ordinances were not preempted because they were enacted to promote safety by eliminating "chasing" by tow truck operators and making it easier to monitor towing companies providing non-consensual towing services.

The towing association asserted that the city's regulations were outside the scope of the safety exception. Based on the evidence presented, it was determined that the challenged ordinances were preempted by the FAAAA as they related to consensual and pass-through towing services. However, the court concluded that the regulations did apply to and promote the city's legitimate safety concerns as they related to non-consensual towing services. Thus, the city’s motion for summary judgment was granted as to non-consensual towing, while the association’s motion for summary judgment was granted as to consensual and pass-through towing operations.  Calif. Tow Truck Ass’n v. City & County of San Francisco (NDCal) Federal Carriers Cases ¶84,675.

Carmack Covers Carrier's Liability for Failure to Collect C.O.D.

A shipper's state law claims arising from a carrier's failure to collect or remit cash on delivery (C.O.D.) payments as required by a bill of lading were preempted by the Carmack Amendment, a federal court of appeals ruled. The shipper contracted with the carrier to transport goods in interstate commerce. In furtherance of the arrangement, the shipper prepared online waybills for each shipment that required the carrier to collect payment upon delivery. The carrier delivered the goods but failed to remit some of the C.O.D. payments to the shipper.

The shipper then filed suit in state court alleging breach of fiduciary duty, breach of contract, and conversion, along with a claim under the Texas Theft Liability Act. The shipper sought $21,999.72 in actual damages and between $75,375 and $80,775 in attorneys' fees. The carrier removed the action to federal court and filed a motion for summary judgment, asserting that the shipper's state law claims were preempted by Carmack, and that its liability under Carmack was limited to $100 per package. The shipper argued that while Carmack was applicable, its state law claims were not preempted because the Carmack Amendment is not intended to condone breach of fiduciary duty, breach of contract, conversion, or thievery. The U.S. Supreme Court has held that the Carmack Amendment embraces all damages resulting from any failure to discharge a carrier's duty with respect to any part of the transportation services provided, including the collection of C.O.D. payments. As such, the trial court rejected the shipper's argument, holding that the state law claims arising from the carrier's failure to remit C.O.D. payments were preempted by Carmack.

On appeal, the shipper challenged the applicability of Carmack to its claims arising from the carrier’s failure to collect and remit C.O.D. payments. In support of its argument, the shipper asserted that its damages were separate and distinct from any conduct related to the shipment of goods. The appellate panel rejected the shipper’s assertion, concluding that the Carmack Amendment embraced all damages resulting from a carrier’s failure to carry out any of its duties arising under a transportation agreement, including the collection of C.O.D. payments. Accordingly, the decision finding the shipper’s state law claims preempted by Carmack was affirmed.  Trans Enterprises LLC dba Nutrition Depot v. DHL Express (USA), Inc. (5thCir) Federal Carriers Cases ¶84,677.

Termination for Cause Not Prohibited by STAA

A federal court of appeals denied a petition seeking review of a decision by the Department of Labor's Administrative Review Board (ARB) finding that a motor carrier employee had not been terminated in violation of the Surface Transportation Assistance Act (STAA). The employee claimed that he had been terminated in retaliation for engaging in safety-related activities protected by the STAA, specifically refusing to drive a vehicle that he felt was unsafe. The employer claimed that it had not violated the STAA because the employee had not been terminated for refusing to drive but, rather, for the volatile and antagonistic manner in which he had voiced his safety-related concerns to management and other employees.

The ALJ agreed that the employee had engaged in a protected activity and had suffered an adverse employment action when he was discharged. However, the ALJ also determined that it was the employee's inappropriate behavior in voicing his safety concerns that ultimately had resulted in his termination. Furthermore, while the ALJ acknowledged that an employee with safety concerns should be given some leeway for impulsive behavior in pursuing his complaint, the employee's behavior in this case went beyond any leeway to which he was entitled. The ARB agreed with the ALJ's determination that the termination was justified and had not violated the STAA. On review, the appellate court agreed with the ARB’s conclusion that the motor carrier had not violated the STAA when it terminated the petitioner's employment.  Formella v. DOL (7thCir) Federal Carriers Cases ¶84,676.