The Electronic Records/Signature Law (ESIGN) turns 18

The Electronic Signatures in Global and National Commerce Act (ESIGN) was signed into law on June 30, 2000.  That makes the law 18 years old on Sunday.  If there was any justice in the world, we’d all be buying the law a cigar and allowing it to vote.

ESIGN established a general rule of validity for electronic records, electronic contracts, and electronic signatures.  Prior to the law, many courts had refused to recognize electronic signatures and they questioned electronic records.

ESIGN applies to transactions “in interstate commerce,” which is a term of art meaning that the transaction is open to being regulated by Congress under the Interstate Commerce Clause of the Constitution (most transactions, today, are subject to the Interstate Commerce Clause of the Constitution).  Generally, it explains that when records and agreements are required to be in writing, an electronic version of them counts as a “writing.”

ESIGN also applies to federal and state government agencies.  They are forbidden from adopting record-keeping rules that would “impose unreasonable costs on the acceptance and use of electronic records.”  The law explains that if an agency wants to require paper records (to the exclusion of electronic), then the agency needs to show “there is a compelling governmental interest relating to law enforcement or national security for imposing such requirement.”

Eighteen years after the law was enacted, the aviation industry still struggles with full implementation of the law.  Even though it is clear that aviation records can be recorded and transmitted electronically, the aviation industry remains wedded to paper.  Nowhere is this more clear than with respect to parts documentation.  While distributors are now more comfortable reducing paper 8130-3 tags, and paper material certifications to electronic format for archival storage, transactional records remains stubbornly rooted to a paper paradigm.

One reason for this paper paradigm is because most aircraft parts are unserialized, and therefore it can be difficult to uniquely tie an electronic record to a particular (unserialized) part. A paper record, on the other hand, can be literally, physically, connected to the part to which it applies.  In a world in which we deal with so many different parts coming and going through our warehouses, paper records provide a level of comfort that we are connecting the uniquely correct record to the uniquely correct part.

The FAA has repeatedly said  that commercial documentation paradigms (like back-to-birth traceability) are not required by FAA regulations.  They have specifically stated that there is no Federal Aviation regulation that requires traceability of an aircraft part to its origin, and the FAA does not require back-to-birth records even for life-limited parts.  The FAA has explained that a part may be identified as having been released by a manufacturer as an airworthy part using  “a shipping document, a manufacturer’s certificate of conformance or material certification, or an FAA Airworthiness Approval Tag, Form 8130-3,”  but that in the absence of such documentation, “the part may be submitted for inspection and testing to determine conformity.”

Despite the best efforts of the FAA’s lawyers, the industry remains stubbornly rooted to a paperwork paradigm.  There are many commercial reasons for this, but one important pseudo-regulatory reason is that FAA inspectors frequently insist that the manuals for FAA certificate holders feature documentation requirements.  Once these requirements are published in the manuals, then these FAA-approved manuals drive the documentation requirements which are flowed-down throughout the industry.  And because these documentation requirements are not directly tied to FAA regulations, there is no opportunity to apply the ESIGN mandates and protections to them.

Through recent conversations with both the FAA and EASA, we are starting to see a new understanding of the value of several important paperwork paradigms:

  • limiting documentation ‘requirements’ only to those that are actually valuable to safety;
  • making acceptable safety information more readily available through available (and trusted) industry channels; and
  • permitting greater reliance on electronic information where availability of such data supports safety.

This is likely to be related to the greater reliance of the rest of the world on electronic data (a reliance that was facilitated by ESIGN), but it is also related to the fact that senior decision-makers in the FAA and EASA are more comfortable with electronic records than were their predecessors (again, a comfort that was facilitated by the impact of ESIGN on other parts of the world of data).  And they are also thinking more critically about what information supports safety (and should be encouraged) and what information does not support safety (and therefore becomes unnecessary to the FAA’s mission).

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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 Air Carrier Purchasing Conference, and the Modification and Replacement Parts Association. He also represents private clients drawn from the spectrum of the aviation industry.

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