ASA Wins Traceability Case

This week, ASA won an important victory in court for its members.  We used the court system to remove language from FAA Guidance that could have adversely affected the industry.

Recently, FAA published an Unapproved Parts Notice (UPN).  This is not unusual.  But what was unusual was a statement in the UPN that appeared to impose a new traceability requirement on distributors.

The UPN was published by the Scottsdale (Arizona) (Manufacturing Inspection District Office and it stated, in relevant part:

“A distributor (seller) is required to provide sufficient documentation to ensure traceability of their parts to an FAA-approved source.” [hereinafter the “legally incorrect language”]

LEGALLY INCORRECT

This statement misstated the law.  There is no FAA requirement for traceability.  The FAA Chief Counsel’s office has repeatedly stated this in numerous Chief Counsel’s opinion letters.[1]

Furthermore, no record-keeping requirement may be imposed by an agency without an OMB Control Number.[2]  Because the FAA has no requirement for traceability, the FAA has never applied for an OMB control number for a traceability requirement.  Thus, the FAA has not met the legal prerequisites for imposing such a traceability requirement.

Most importantly for our members, the FAA has not defined uniform traceability requirements for aircraft parts.  They have made traceability recommendations in the Voluntary Industry Distributor Accreditation Program of AC 00-56A, but even these recommendations fall short of the requirement established in the UPN.  Because there is no uniform traceability standard, an FAA pronouncement of a requirement for “sufficient documentation to ensure traceability of parts to an FAA-approved source” would create real problems for the industry,, as there are still many (new) legacy parts in inventories that do not have this sort of documentation because it was never required or anticipated when the parts were first manufactured.

This misstatement of the law could have a very real effect on the industry.  Many people in the industry have been wrongly told by FAA employees and others that the FAA has a traceability requirement.  The fact that the Chief Counsel’s office has repeatedly had to state that there is no such requirement[3] gives testament to the persistent recurrence of this issue.

ASA made it clear to the FAA that we do not represent Classic Aero LLC and have no relationship to Classic Aero LCC (the target of the UPN).  Our sole interest was in correcting the text that misstated the law.

The UPN specifically called out parts distributors as an affected party; and it also directed the industry to comply with the recommendations and provide the FAA with additional information concerning the referenced parts,[4] including the means used to identify the source and the action taken to remove them from service.

REQUEST FOR CORRECTION

We asked the FAA to rescind the UPN and reissue it without the legally incorrect language.  We pointed out that removing the legally incorrect language about traceability would do nothing to change the emphasis of the UPN, but it would remove an apparent order to provide documentation that was inconsistent with US law.

Unfortunately, a trade association like ASA Only has a 60 day window to appeal an order of the FAA.  The FAA was unable to provide ASA with a constructive reply within this window so we sued the FAA.

LAWSUIT

ASA filed suit against the FAA on the 60th day of its window.  The ASA Board agreed that this language set a dangerous precedent and imposed a documentation requirement that the industry could not uniformly and conclusively meet for all aircraft parts.

Soon after the suit was filed, we got a phone call from FAA Attorney Richard Saltzman.  Saltzman had done his homework and in his first call he reported that he had discussed the matter with the FAA’s subject matter experts.  And they agreed with ASA.

Not long after this, the FAA issued a replacement UPN that omitted the legally incorrect language.  ASA then rescinded its lawsuit, having gotten what we’d requested.

This is the way we like to win a case: prove to the FAA that there is a better way; and then work together to find a solution that works best for the industry.


[1] E.g. FAA Legal Interpretation Letter from Rebecca B. McPherson Assistant Chief Counsel for Regulations (July 8, 2009) (“the regulations do not require “back to birth” records in order to determine the life status of life-limited parts”); FAA Legal Interpretation Letter from Rebecca B. McPherson Assistant Chief Counsel for Regulations (Aug. 6, 2009) (“there is no Federal Aviation regulation that requires traceability of an aircraft part to its origin”); FAA Chief Counsel’s Interpretation 1992-36 (June 1, 1992) (explaining that “[a] complete audit trail to the origin is not needed for all life-limited parts”).

[2] See, 44 U.S.C. §3512 (preventing the imposition of a penalty for failure to comply with an information collection when the information collection does not comply with the requirement to display a current OMB control number); see also United States v. Hatch, 919 F.2d 1394 (1990) (finding that the Paperwork Reduction Act defense could be raised at any time in a proceding); cf. 5 C.F.R. 1320.5(c) (preventing an agency from imposing a penalty for failure to comply with a collection of information when the public is otherwise protected, as when the agency has failed to comply with the requirement to secure an OMB control number).

[3] See supra note 1.

[4] Coincidentally, this request also appears to be inconsistent with the Paperwork Reduction Act, in that it neither includes an OMB Control Number nor does it advise the respondent that compliance is voluntary.

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About Jason Dickstein
Mr. Dickstein is the President of the Washington Aviation Group, a Washington, DC-based aviation law firm. He represents several aviation trade associations, including the Aviation Suppliers Association, the Aircraft Electronics Association, the Aircraft Fleet Recycling Association and the Modification and Replacement Parts Association.

2 Responses to ASA Wins Traceability Case

  1. I recently submitted a manual to the FAA showing how all aerospace surplus parts dumped on the open market,, which due to government repackaging lose all factory traceability. They also lose lot numbers, Factory Certifications as well as the physical, chemical, and dimensional test reports. Many distributors purchase these parts as they have no factory authorizations to sell parts. They take these parts repackage them, and using PC Software create very authentic looking Certifications, which is completely fraudulent and sell the parts. Which can know under my system make all government surplus parts traceable the very source and all factory paperwork. My manual shows how these parts can easily be traced from inception to installation, with all relevant data being available to any one who may purchase surplus parts. Michael Goldberg

  2. Jason Dickstein says:

    Thanks for your comment, Michael. As the Chief Counsel’s opinion letters have repeatedly stated, there is no legal requirement for traceability. Nonetheless, I would be interested to read your thoughts on “inception to installation” traceability … I would be particularly interested to see how you tackle the issues of existing inventories and of low-dollar-value parts.

    I would also be interested to know some more specifics about your allegations. For example, you claim that distributor certifications are fraudulent, but the most common distributor certifications are a spec 106 form (or a similar derivative form) or a narrative certification of the sort which is recommended in AC 00-56. Both of these are normal and legal in the industry (absent special circumstances, these are not normally fraudulent).

    ASA is always interested in developing programs to prevent fraud and misrepresentation in the aircraft parts industry; so if you know of specific instances of fraud, then we’d be happy to hear from you.

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