FlyteNow Sues FAA (Uber for pilots)

Discussion in 'Flight Following' started by midlifeflyer, Jan 7, 2015.

  1. midlifeflyer

    midlifeflyer Final Approach

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    Folks will probability recall the discussions about the two Chief Counsel opinions regarding the proposed FlyteNow and AirPooler operations to set up a bulletin board for private pilots to post planned flights and for other people to pick a flight to go an and share the expense.

    FlyteNow has sued the FAA over the interpretations with the support of the Goldwater Institute think tank. There are a few stories out there on it most pretty short. For anyone interested in reading FlyteNow's formal legal position, the Goldwater Institute posted it on their website: Petitioner's Brief

    It's long - over 70 pages double-spaced, including some of the references. It goes further and makes a number of legal arguments but, to summarize a bit, the primary argument is (1) shared cost flight is a "traditional" pilot privilege; (2) shared flight requires some forms of communication between pilot and passengers. which the FAA has always permitted; and (3) the FlyteNow model follows all of the existing rules and interpretations, with; (4) only thing the twin interpretations in fact doing being prohibiting Internet communication (which they argue implicates first Amendment privileges among other things).

    Being a legal brief, those statements are not just the opinion of the writer. They are supported by reference to FAA materials and interpretations, cases, and some historical documents. Just as a matter of history, some migh find the "traditional" sharing privilege argument and supporting material kind of interesting.
     
  2. Henning

    Henning Ejection Handle Pulled

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    Interesting, the last photography interpretation also went over the line.
     
  3. ClimbnSink

    ClimbnSink Ejection Handle Pulled

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    Sue us some freedom. Decaying empires are so much fun.
     
  4. flyingron

    flyingron Touchdown! Greaser!

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    I wish them luck, but I don't give them much hope. While perhaps common carriage is not specifically spelled out in the FARs, the FAA has published a consistent view in the advisory circulars and the term is used throughout the DOT regulations in a way not inconsistent with the FAA interpretations.

    Of course, I'm all for the FAA making the regs mean what they say so compelling the FAA to actually define things rather than leaving it up to talmudic interpretation isn't a bad thing.
     
  5. ronnieh

    ronnieh Cleared for Takeoff

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    +1 Ron
     
  6. poadeleted20

    poadeleted20 Deleted

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    Well, the Supreme Court has already said money is speech, and therefore protected by the First Amendment, so who knows? But absent some bizarre twist like that, for the reasons F'Ron mentioned, I don't see this as anything but a get-rich exercise for the plaintiff's attorneys. At worst, I see the FAA eliminating that paragraph from 61.113 so nobody can share expenses, period.
     
    Last edited: Jan 7, 2015
  7. midlifeflyer

    midlifeflyer Final Approach

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    The only thing suggesting it's not merely a get rich scheme for the attorneys is the involvement of a major think tank that could just as easily said, "we don;t really care about this one."

    I have the same general concern as you about the potential removal. But, if you read (wade?) through the argument and appendix, that's apparently been tried before.
     
  8. Henning

    Henning Ejection Handle Pulled

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    Or they will do what the Coast Guard did a few years ago and change the rules to make a bit more sense.
     
  9. Lindberg

    Lindberg Pattern Altitude

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    How is it a "get-rich" exercise for the attorneys? I don't know, but I suspect, that Flyte-Now is worth approximately $0 if this case is a loser. Likely the attorneys' best chance of getting paid is to win. And as you correctly surmise, that will take a lot of work.

    Also, this isn't really about money as speech. The speech at issue is speech speech, i.e., "I'm going to Maryland on January 7, does anyone want to come along?"
     
    Last edited: Jan 7, 2015
  10. Henning

    Henning Ejection Handle Pulled

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    I doubt an attorney is handling this on contingency, I'm pretty sure the are on retainer.
     
  11. docmirror

    docmirror Touchdown! Greaser!

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    The power of the FAA and many other agencies has come under scrutiny for their expansion. The courts, and more importantly the public are getting tired of the administrative power grabs without congressional backing, or even oversight. This case like some of them against the EPA and DHS have a central common theme, although they are not related in any way as a legal premise. Just too much control being exercised on the thinnest of margins.

    Using the NOTAM process to make policy, using the TFR system to permanently close airspace are other examples of admin over-reach. With the cost sharing rule history, the FAA is working to protect the gen-pop, and that's generally a good thing. But the splitting of hairs, where the split always goes both sides to the agents of regulation is getting old.

    The facts in this case are up for debate, but from a larger perspective, all the little generals in these fed agencies need to be taken down a notch. The FAA is among the worst transgressors. I can't imagine an agency head telling congress that their mandates for policy are not going to be implemented, or are going to be years late. If we had any balls left at all in the govt, the administrator would be fired, and the next one, and then next until the FAA brass understood where their bread is buttered. The fact is now that no one at the FAA or other agencies has any fear of being fired, or even any responsibility for their agencies agenda. Very darn sad.
     
  12. poadeleted20

    poadeleted20 Deleted

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    I've never heard of an attorney taking a case on contingency when there weren't large damages to be recovered. There certainly aren't such damages here, and I don't see them doing this one pro bono.

    Nothing says you can't say that. The FAA just says that if you do, you can't take money from them, and that doesn't infringe on your right of free speech, only with providing air transportation for hire/compensation without complying with the applicable sections of Title 14 of the CFR, which is not a Constitutional right. If there was no money changing between the pilots, passengers, and/or the ride board, the FAA wouldn't care about it. IOW, to misquote a former President of ours, "It's the money, stupid!" Take the money out, and it's completely legal, although I suspect that would pretty much end FlyteNow's interest.
     
    Last edited: Jan 7, 2015
  13. poadeleted20

    poadeleted20 Deleted

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    By whom? Congress certainly doesn't have that authority, only the President and SecTrans, and I don't think they disagree with what the Administrators has done on these issues or they would already have fired him/her already.
     
  14. ClimbnSink

    ClimbnSink Ejection Handle Pulled

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    Yeah cause administrative law never infringes on the Constitution.:rolleyes2: Nope that'd be wrong, Murica wouldn't stand for it.:sad:
     
  15. docmirror

    docmirror Touchdown! Greaser!

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    You answered your own question. Also provided the reason they don't. Power reinforces power. The president knows if he takes the agency to task, he's aligning with the congress to demand accountability. Since the pres never wants to align with congress - we have what we have. Regulation by a bunch of crats rather than representation by elected officials. Some people like it that way.
     
  16. poadeleted20

    poadeleted20 Deleted

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    It's happened before that some sort of regulation has infringed on the US Constitution, but it's never stood up upon legal challenge before the US Supreme Court, who are the supreme arbiters of what is or is not constitutional -- see Marbury v. Madison, 5 U.S. 137 (1803) on that point. Clearly, FlyteNow is looking for that Federal judicial review, but once the Federal courts make their final decision and it ends with the regulation upheld, then by that precedent, it does not "infringe on the Constitution". And I'd be very surprised if it ends any other way, although if it does, then I see the regulation being rewritten to take care of that, in which case the entire exercise will have been both pointless and expensive. I just don't see a Constitutional right for pilots to take money from passengers, although at the end of that day, that's a question for the nine wise souls to decide.
     
  17. Jumpmaster

    Jumpmaster Pre-takeoff checklist

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    Public interest law groups (some are law firms and others are not but have legal departments or captive law firms) take these cases all of the time. Believe it or not, a lot of these are pro bono although in most of these cases, if there are any costs or fees recovered they go to the public interest group or law firm.

    How do they do it? Some of these groups are part of larger groups such as the Sierra Club, Greenpeace, Riverkeepers and other enviros. Others are smaller such as a groups that represent whistleblowers (Government Accountability Project) and others. Most of them are also IRC 501(c)(3) or similar corporations so they fund raise their costs including legal costs.

    Why do they do it? Reasons vary. Some organizations especially their lawyers are "true believers" meaning they believe in the cause and most believe that the ends justify the means necessary to get there. Others groups and firms are more practical and just want to "right" what they perceive to be a "wrong". Still others do it for the publicity and exposure high profile cases can bring to their organizations and to themselves. In some instances, it's the only way to get a shot at arguing a case in front of the U.S. Supreme Court which for some attorneys is a really big deal.

    I can tell you from nearly 30 years of litigating against these kinds of groups and their firms (including two cases that had petitions for review denied by the U.S. Supreme Court) they are tough, smart and very capable. The "true believers" are especially difficult because they generally can't spell compromise must less understand it.

    I think this group will give the FAA and its Chief Counsel's Office along with the DOJ attorneys a run for the money. I also think like many federal agencies, the FAA has overreached substantially in some of its regulations, and the First Amendment allegations in this case are not trifling to a federal court. So who knows - draw the right federal judge and anything can happen.
     
  18. poadeleted20

    poadeleted20 Deleted

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    The Goldwater Institute is such an outfit, but The Aviation Law Firm is not.
     
  19. Jumpmaster

    Jumpmaster Pre-takeoff checklist

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    As I mentioned, the captive firm may be compensated by the Goldwater Institute for costs but may also be simply looking for big case exposure and is therefore doing it either on a substantially reduced fee basis or for free. Never can tell for sure. I have one case that I am defending right now where the captive law firm attorney is a classmate of a member of the enviro group. The enviro group has some money but this is going to be a very expensive case so I doubt they could pay fees even at reduced rates. There is no fee shifting possibility in my case meaning even if they prevail, there is no basis for them to collect costs and fees so a contingency fee arrangement is out.

    My only point is you can't assume the attorneys are in it for the money since often times there is no money. Not to suggest these attorneys are altrustic because they are often not; just that there are reasons beyond money that motivate some. I know since I have done fair amount of pro bono work in my career as have many lawyers I know including some FAA attorneys.
     
  20. Henning

    Henning Ejection Handle Pulled

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    When you do pro bono for a non profit, you basically get to write what you would bill off your taxes as charitable contribution, correct?
     
  21. docmirror

    docmirror Touchdown! Greaser!

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    I have a very close friend in the Porsche club who is a litigation atty. We discussed the fees and pro-bono work on several occasions. It was his opinion that the tilting at windmill process is often given to jr partners to oversee, with a small staff of young associates to chew on. He also said that the fedguv and the state are some of the best targets because they have the crappiest attys on staff. Sadly, the judges in most cases, including this one is going to be hard pressed to go against the fedguv, so it's an uphill battle all the way. What the fed attys lack in talent, they make up for in volume. He called it 'wallpapering' a firm by submitting dozens of briefs/motions made up by dozens of staff lawyers that all have to be answered.

    The only protection the citizen has anymore is through the court system. No longer can we rely on legislatures to do the right thing, they are bought and paid for, and it ain't anyone here paying the face time.
     
  22. Lindberg

    Lindberg Pattern Altitude

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    Even if the attorneys are being paid their normal fees, you still haven't explained how this is a "get rich" exercise. At best, they're being compensated for work performed....

    The FAA's big issue with FlyteNow was alleged holding out.
     
  23. Jim Logajan

    Jim Logajan En-Route

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    AHEM...

    The suit seems to make the fundamental mistake of treating an interpretation letter as a "final agency action". I haven't seen any court cases where such letters are treated as such - normally such suits are "won" by the government. FlyteNow will need to first get its nose bloodied by the FAA before a court is likely to consider any "final agency action" to have taken place.

    See for example:
    https://law.resource.org/pub/us/case/reporter/F3/357/357.F3d.632.02-1682.html

    In the above case, a company by the name of Air Brake (substitute FlyteNow) sued the NHTSA (substitute FAA) over the contents of one of its chief counsel interpretation letters (substitute "ride sharing system" for "antilock brake system". This was (will probably be) the result:
    Soon after NHTSA posted the first of these letters on its website, Air Brake filed this action challenging the Chief Counsel's conclusion as well as the Chief Counsel's authority to issue the letter. The district court granted summary judgment in favor of NHTSA, reasoning that interpretive letters issued by NHTSA's Acting Chief Counsel do not constitute "final agency action" subject to judicial review under the Administrative Procedure Act. We agree that the tentative conclusions reached in the letters, which are based in part on Air Brake's representations about its antilock brake system and which NHTSA acknowledges are neither binding on the industry nor entitled to any administrative deference, do not constitute final agency action regarding the meaning of Standard 121 or Air Brake's compliance with that standard. At the same time, however, the letters do reflect final agency action with respect to the distinct question whether the Chief Counsel has authority to issue them, because the practice does not lend itself to further review at the agency level and has legal consequences. Yet because the practice of permitting NHTSA's Chief Counsel to issue advisory opinions in response to inquiries from the public does not exceed the Chief Counsel's authority (and indeed has much to recommend it), we affirm the district court's judgment in favor of the Government.
     
  24. aggie06

    aggie06 Pre-takeoff checklist

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    Not exactly. You would have to actually bill and collect it, then give the cash back to the charity to deduct it. Instead, you just don't pick it up in income in the first place.
     
  25. denverpilot

    denverpilot Taxi to Parking

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    You may think that, but you're dead financially if you actually have to use the legal system.

    Attorneys won't even take most cases that won't pay out more than the median annual salary of half of our Citizens.

    See my thread on Small Claims Court limits and whether they should be significantly raised.

    I wouldn't call a system that will automatically bankrupt half our Citizens if they need it, and use it, "protection" from much. Certainly not a government that pays itself and its attorneys from loans orders of magnitude larger than their income from the same Citizenry.
     
  26. coloradobluesky

    coloradobluesky En-Route

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    The real story here is the funding of the lawsuit. Follow the money.
     
  27. hook_dupin

    hook_dupin Pre-takeoff checklist

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    Is a "legal services for equity" deal common? The only thing valuable in a start-up is equity. I could see a smart firm taking a chunk to take this on.
     
  28. flyingron

    flyingron Touchdown! Greaser!

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    They said political contributions are protected speech. Further, they didn't outright ban restrictions on political contributions, but rather limits such activities as to avoid corruption. The issue in McCutcheon was the argument that the contribution limits were enacted to limit the amount of money in the campaign system.
     
  29. JeffDG

    JeffDG Touchdown! Greaser!

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    Actually, with the think-tank, they're probably on staff.
     
  30. David7700

    David7700 Pre-takeoff checklist

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    Yes, this should be spelled out in the CFRs instead of expecting pilots to wade through all the chief counsel opinions to find the applicable interpretation.
     
  31. David7700

    David7700 Pre-takeoff checklist

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    This isn't a power grab. This is some private company coming in and trying to do something not permitted, or at best very questionable. And the FAA gave them an opinion that it would be a violation of the regs.

    I disagree that the facts are in dispute. Flytenow says there are Constitutional issues:

    I don’t see any Constitutional issues here. The basis of the suit, as I understand it, is:

    “the FAA’s decision to shut down Flytenow violates the First Amendment and Due Process rights of the company, its owners and members, and that the agency’s rules are unconstitutionally vague.”

    I don’t see any due process issues. In fact, MacPherson is not an Administrative Law Judge Ruling fro the NTSB–it is a letter of interpretation from the chief counsel of the FAA. As such, it is not law but an indication of what the FAA would do in an enforcement action. It is also not an CFR. So where is the Due Process issue?

    The NTSB usually does agree with the FAA Chief Counsel in the letters of interpretation (but not always). And you are wise to follow them as if they were regulation (which I would advise anyone to do). Letters of interpretation have been overturned by the NTSB and Federal Courts before, but it is not common. This letter was based on years of consistent application of the regulations. Thus, I do think it is vague.

    See what I posted earlier about amending the CFRs:

     
  32. David7700

    David7700 Pre-takeoff checklist

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    http://www.goldwaterinstitute.org/institute
     
  33. mrkbbd

    mrkbbd Pre-takeoff checklist

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    Generally you cannot do that ethically...it's the same as an attorney wanting the book/movie rights to a big case in lieu of payment, doesn't really work well for the client.

    They *possibly* could hire one of the attorneys themselves with a $1 salary and all stock options, but the bar assoc'n disciplinary board may see right through that...
     
  34. David7700

    David7700 Pre-takeoff checklist

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    We do not.
     
  35. mrkbbd

    mrkbbd Pre-takeoff checklist

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    I don't think anyone does...it's expected professionally and also I don't think the IRS allows "labor" to be written off, only expenses
     
  36. David7700

    David7700 Pre-takeoff checklist

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    This may or may not be true at big firms. But at many big firms here, it is older or retired partners who do the pro bono work.

    At small firms, it is not true. According to our ethical guidelines, it is the ethical duty of every lawyer in VA to do some pro bono work, though some do and some do not (it is not strictly mandatory).

    In the Flytenow case, the public interest group may have its own lawyers or it may pay players. I have not seen, but would like to see a copy of the suit. I will pull that now off Pacer.
     
  37. David7700

    David7700 Pre-takeoff checklist

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  38. Irish_Armada

    Irish_Armada Pre-takeoff checklist

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    I haven't read up on any of this or the FAA opinion etc so maybe this has already been pointed out numerous times, but I imagine a greatest distinction between traditional pilot pro-rata cost sharing and a FlyteNow model is that there's now a third party taking a cut of $$ on each ride -- i.e. FlyteNow. That seems like a big enough difference that the FAA will get what they want on this one.
     
  39. David7700

    David7700 Pre-takeoff checklist

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    No--it was holding out--plain and simple.
     
  40. David7700

    David7700 Pre-takeoff checklist

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    The Flytenow brief is an interesting read. I do not have time to post my thoughts right now, but I will on each of their positions. i don't see them prevailing on any of them:

    1. Whether the FAA’s MacPherson-Winton Interpretation, concluding that pilots participating on the Flytenow website are engaged in common carriage, is arbitrary, capricious, or otherwise not in accordance with the law.

    2. Whether the FAA’s MacPherson-Winton Interpretation violates Sections 553 and 706 of the Administrative Procedure Act as codified, 5 U.S.C. §§ 553, 706, and/or 14 C.F.R. Part 11, because it constitutes a substantive rule or a change in interpretation to 14 C.F.R. § 61.113(c) or the term “common carriage,” which was promulgated without the required notice-and-comment rulemaking process.

    3. Whether the FAA lacks regulatory authority to restrict private communications over the Internet.

    4. What, if any, deference is owed to the FAA’s interpretation and sudden change of position articulated in the MacPherson-Winton Interpretation?

    5. Whether the MacPherson-Winton Interpretation violates the free speech rights of Flytenow and its members in violation of the First Amendment to the U.S. Constitution.

    6. Whether the FAA defines “common carriage” so broadly, and singles out Flytenow and its members, but not others similarly situated, for unequal treatment, that it violates the equal protection and due process components of the Fifth Amendment to the U.S. Constitution.

    7. Whether the FAA’s interpretation of the “holding out” element of common carriage and application of the “holding out” element to private flight operations is unconstitutionally vague.