On September 25th, a three-judge panel of the U.S. Circuit Court of Appeals for the District of Columbia heard the oral argument in Flytenow, Inc. v. FAA.
The judges’ line of questioning centered on three main points:
Whether the FAA letter of interpretation constituted a ‘final agency order’.
Holding out - (advertising to the general public) vs. common carrier.
1. Final Agency Order
Firstly, the FAA conceded that its letter banning expense-sharing was a final order. A final order is a definitive agency view that has legal consequences - here, that any pilot who posts on Flytenow would be in violation of Federal Aviation Regulations - versus an agency opinion that is not enforceable. In this regard, the FAA stated “We do think that the views that were offered in this order do represent the definitive agency views” and that this was the “end of the line” for Flytenow and its pilot members. This is an important point because this court may only rule on final agency orders, so the FAA’s own position stops the court from dismissing the case on lack of jurisdiction.
2. Holding Out vs. Common Carrier
Secondly, the FAA doubled down on its position that the breadth of communication transforms conduct that is otherwise non-commercial (expense-sharing) into commercial conduct (common carrier). Conversely, our argument, consistent with the common law definition, is that the determination of whether an enterprise is a common carrier hinges on whether it exists to make a profit, independent of the size of its audience. If a pilot shares expenses and is thus not engaged in an enterprise for profit, then he or she should be free to communicate without restriction, because the flight does not fall under commercial advertising regulations.
3. Pilot Certification
Thirdly, there seemed to be some confusion on the court regarding a flight operation vs. pilot certification. Most people outside of the aviation sphere are surprised to learn that even commercial or airline transport rated pilots are prohibited from transporting people for compensation on their personal flights, regardless of their extensive training.
Judge Robert L. Wilkins
Judge Wilkins appeared to have the firmest grasp of the record.
On holding out vs. compensation, Wilkins recognized correctly that the definition of common carrier is the threshold question:
The FAA’s acceptance of the common law definition of compensation favors Flytenow because expense-sharing offers zero possibility for profit, and therefore, expense-sharing pilots can hardly be said to be common carriers, as the FAA asserts our pilot members are.
Additionally, Wilkins raised questions regarding the FAA’s rationale in determining what constitutes a holding out:
To these inquiries, the FAA responded with the uncomfortable proposition that it would “depend on the number of friends.”
This does not bode well for our more popular pilot members. On a serious note, we’re not sure how these statements fit in with the FAA’s position in its brief that “friends and acquaintances” are ok but “strangers” are not. Will the FAA now look to see whether you are “close friends” or whether you are just “Facebook friends”?
Judge Cornelia T.L. Pillard
Judge Pillard appeared to accept outright the agency’s application of holding out and at times suggested that “commercial pilots” could pursue a profit, which we know is not permissible under Federal Aviation Regulations.
Mr. Riches responded clearly that “a private pilot, a charter pilot, an airline pilot, Captain Sully, Neil Armstrong, could not share expenses on Flytenow regardless of their extensive pilot training.”
As such, the means chosen by the FAA - prohibiting all pilot posts - is antithetical to the goal of safety.
Judge Douglas H. Ginsburg
Judge Ginsburg’s concerns centered on holding out vs. compensation.
Like Wilkins, Ginsburg focused on the common law definition of common carrier.
The FAA’s position is that there are not cases at common law addressing whether an enterprise is a common carrier based on whether it is holding out; however, the agency did say that courts had addressed holding out in other aviation contexts. This helps our case because the only context in which the courts have addressed holding out is in the differentiation between private carriage for hire (charter operations) and common carriage (airlines) – both commercial enterprises for profit. It would be uncharted territory to use the breadth of one’s communication to determine whether conduct is commercial or not. The court is more apt to apply its longstanding definition of common carrier.
The Bigger Issue
Lastly, we’d like to address a bigger issue. Government’s inability to keep pace with innovation is the biggest threat facing the U.S. economy today. For this reason, we’re also fighting for legislative reform by working with Congressman David Schweikert of Arizona to introduce the “Aviation Cost and Expense Sharing Act of 2015”. The sharing economy helps us as a nation to better utilize our resources and continues to improve the way we live and communicate.
You can help show Congress that this is an issue that needs to be addressed by contacting your representatives with the following message:
Support the Sharing Economy, Support Aviation Cost and Expense Sharing Act of 2015
The sharing economy helps us as a nation to better utilize our resources, improve the way we live, and spur economic growth by harnessing technology. I believe in the sharing economy and strongly encourage you to support the Aviation Cost and Expense Sharing Act of 2015 to allow pilots to communicate with the public, in any manner the person determines appropriate, to lawfully share expenses with his or her passengers under 61.113(c) of title 14, Code of Federal Regulations. Contact the office of Congressman David Schweikert for more information.
Full audio from the hearing: