Baseball & Turns Around A Point

Baseball season is in full swing. Locally, the San Francisco Giants are off to a good start to the season. In my hometown (Dallas, TX), the Texas Rangers (2-time World Series Contenders) are also off to a strong start leading their division. With respect to aviation law, why should you care? There are some peculiar similarities between the two teams that could give rise to an identical infraction by Airmen who happen to be baseball fans.

Both the Texas Rangers and SF Giants baseball stadiums sit beneath the Class B Airspace of DFW & SFO respectively. Each stadium is far enough away from the primary airport, such that a pilot flying VFR could fly below the Class B Airspace and get close enough to observe a game in progress. (Technically, to fly over the SF Giant’s stadium, a pilot would need permission to transit Oakland’s Class C Airspace). In any event, the possibility exists to view a game in progress from the air.

Before you fuel the plane and embark on an afternoon of turns around a point, consider the applicable Federal Aviation Regulations (FARs). Specifically, FAR section 91.119 provides in pertinent part, “Except when necessary for takeoff and landing, no person may operate an aircraft below the following altitudes:…(b) Over any congested area of a city, town, or settlement, or over any open air assembly of persons, an altitude of 1,000 feet above the highest obstacle within a horizontal radius of 2,000 feet of the aircraft….”

A Major League Baseball game in progress constitutes an open air assembly of persons as does similar sporting events such as a NASCAR race, an outdoor ATP/WTA tennis event; and arguably a kid’s weekend soccer game or a company softball game. If you fly your aircraft over one of these events to enjoy a bird’s eye view, then take every precaution for the safety of the spectators below to remain 1,000 feet above the highest obstacle within a horizontal radius of 2,000 feet. When flying over Texas stadium, the area surrounding the stadium is relatively flat there don’t appear to be structures close by within 2,000 feet that are taller than the lights of the stadium. Prudence would dictate that you fly 1,000 feet above the tallest point at the stadium. If flying over the SF Giants stadium, then take into account that there are buildings taller than the stadium adjacent or close by to the stadium which would necessitate a higher altitude to comply with the FAR.

Before setting off for a joyride above the ballpark, be certain that you can perform the flight safely for yourself, your occupants, and the spectators on the ground below while complying with FAR 91.119. Note that FAR section 91.13 prohibits a pilot from operating an aircraft in a careless or reckless manner so as to endanger the life or property of another. A spectator on the ground won’t be familiar with the FARs and could place a call to the local FSDO to report an aircraft buzzing the game. When the FAA investigates, they may very well conclude that your operation of an aircraft close to the minimum altitudes constitutes a careless or reckless endeavor. Do your planning and take the proper precautions to avoid getting involved in a needless FAA enforcement action. If you have questions about FAR section 91.119 or any other FAR, then contact Ronnie Gipson for clarification. He can be reached by email at Gipson@higagipsonllp.com or by telephone at (415) 692-6520.

Licensing Agreements Simplified

I am frequently asked to provide guidance on intellectual property license agreements, and thought a short guide would be helpful to readers. If you compare intellectual property (IP) rights to a bundle of sticks, the licensee would be required to obtain a couple sticks out of that bundle to continue her project. A license is granted when one obtains a subset of the full ownership rights of intellectual property.

What can the licensor and licensee expect to see in a license agreement? These agreements vary greatly, depending on the unique circumstances of each deal, including the type of IP being licensed, the licensee’s intended use of the IP, and the size of the contracting parties. Here’s a list of some of the clauses that are common to intellectual property licenses:

Definition of the intellectual property being licensed. This can sometimes be heavily negotiated because this defines exactly what the licensee can sell by using the licensed IP.

Scope of the license. Licenses can vary greatly. Sometimes there are geographic limitations to where a licensee can exploit her license, sometimes there are temporal limitations. Channels of trade may also be restricted—for instance, a license to use some software license may be limited to software sold in retail stores, or internet stores. The licensee may also be limited in how she can use her license. Licensors may also wish to set minimum or maximum price levels a licensee can sell a product at. There are other elements that can limit the scope of use; these negotiations can become quite complex.

Royalty terms. For obvious reasons, these are some of the most heavily-negotiated terms in a license agreement. Royalties can be paid in a variety of ways—in a lump sum, or on a regular, ongoing basis. The calculation of royalties may be done using a variety of methods, including looking at net sales resulting from the license, or profits resulting from the license. The payment method, term, and regularity will need to be agreed upon by both parties.

Audits. With any calculation of royalties based on a licensee’s sales or performance, the licensor will want to conduct regular audits of the licensee’s activities. Parties will need to decide when these will take place, by whom, and who will bear the costs of such audits.

Enforcement. Parties will also need to determine whose duty it is to enforce the intellectual property associated with the license. There are several ways of organizing this duty, and the stakes can be high for all parties involved.

Modifications to Intellectual Property. Will the licensee be able to modify or improve the intellectual property in any way? Who will own the rights to such modifications?

This list represents a sample of the many considerations that may arise in a licensing transaction. If you have any further questions about licensing agreements, then please contact Veronique Kherian at vkherian@higagipsonllp.com. You can also reach Ms. Kherian by telephone at (415) 692-6520.

California Supreme Court Holds That Employers Are Not Required to Police Employee Meal Breaks

The California Supreme Court issued an opinion recently in Brinker v. Superior Court, that has a huge impact on California employers. At issue was the question of whether or not employers are required to police employees’ actions to ensure that the employees are not working during these breaks. Employees who file wage and hour claims have long alleged that employers were liable to the employee for compensation when the employer provided time for the meal breaks but failed to ensure that the employee refrained from performing any work related tasks during mandatory meal breaks. Employers in response have long argued that they have met their obligations under the Labor Code by providing the meal breaks and that they bear no liability if an employee violates the intent of the break and performs work related tasks during the meal break period.

Per the California Labor Code section 512, an employee is entitled to a 30 minute meal break after 5 hours of work. Interpreting the Labor Code, along with the Wage Orders and Opinion Letters issued that attempt to further explain this law, the Court held that the condition precedent that triggers an employer’s duty to provide a meal break is employment of the person for at least 5 hours. The resulting entitlement by the employee is a meal period of at least 30 minutes. The Court could find no statutory or public policy basis for concluding that an employer is obligated to police employee meal breaks to ensure that the employee is not working during that time. On the contrary, the Court held that it would be inconsistent with the clear plain meaning of the statute to interpret the law to mean that the employer must exert control over the employee during the meal break to confirm that no work is being done. Restated, the imposition of a policing requirement would in effect require the employer to exert control over the employee during the meal break which would run counter to the public policy behind the very purpose of the meal period….relinquishment of employer control during the meal break period.

If you have questions about how this recent ruling by the California Supreme Court could impact your company’s operations, then contact Ronnie Gipson at 415.692.6520 or by email at Gipson@higagipsonllp.com.

Airmen in the Pacific Northwest Face Possible Fines of up to $100,000

Effective February 27, 2012, a new regulation takes effect that would enable the National Oceanic and Atmospheric Administration (NOAA) to impose fines of up to $100,000 for flying at low altitudes (1,000 to 2,000 feet msl) over wildlife sanctuaries in the Channel Islands, Monterey Bay, and the Gulf of the Farallones National Marine sanctuaries in California and Washington.  It is important to note that the boundaries of the new protected areas differ from the boundaries depicted on current charts.

General Aviation organizations such as the Aircraft Owners & Pilots' Association (AOPA) and the Experimental Aircraft Association (EAA) have joined forces in an effort to delay implementation of the new rule without a depiction of the affected areas in graphic form.  Currently, NOAA plans to make Airmen aware of the areas through a Federal Register notice and press releases.  Fundamentally, strict adherence to publication of the lateral dimensions in the Federal Register is insufficient because Airmen correlate restricted/special use airspace with visual representations on charts.  Thus, absent an accurate depiction of the new boundaries of the protected areas, Airmen are certain to violate them due to a lack of proper notice. 

One of the more disturbing aspects to the new regulation is that the final rule contains a provision that presumes that wildlife have been disturbed if the Airmen strays into the ill-defined airspace.  Taken to the next logical step, in an enforcement proceeding, this contention would be impossible to disprove, save locating wildlife who are capable of providing cogent testimony. 

If you are planning a trip to the Pacific Northwest, and in particular a trip near one of the protected areas referenced above, then take every precaution to understand the lateral dimensions of the affected protected areas and avoid them.  Should the need arise to challenge a proposed penalty for violating one of these protected areas, then contact our Aviation Attorney Ronnie Gipson at 415.692 6523 or by email at gipson@higagipsonllp.com.    

FAA Safety Team Clarifies IFR Currency Requirements in FAR Part 61.57

On December 16, 2011, the FAA issued a technical correction to 61.57(d) to clarify the meaning of the latest change to the instrument flight rules (IFR) currency regulation. The FAA wrote as follows:

The revised language makes it clear that a pilot who has failed to maintain instrument currency for more than six calendar months may not serve as pilot in command under IFR or in weather conditions less than the minimums prescribed for VFR until completing an instrument proficiency check. A pilot whose instrument currency has lapsed for less than six months may continue to reestablish instrument currency by performing the tasks and maneuvers required in paragraph (c).

On January 27, 2012, The FAA Safety Team issued a notice clarifying the technical amendment to the IFR currency requirements under FAR part 61.57. Notwithstanding certain exceptions, this section of the FARs describes procedures that an Airmen must follow to regain IFR proficiency when his currency has lapsed. In short, a pilot may reestablish instrument currency that has lapsed for more than 6 months by obtaining an Instrument Proficiency Check (IPC).

The following timeline illustrates the correct application of part 61.57(d):

• As of January 31, 2012- a pilot is no longer instrument because they no longer meet the recent experience requirements found in 61.57(c). This pilot may no longer act as PIC of an aircraft operating under IFR or in weather conditions less than the minimums prescribe for VFR.
• From February 1, 2012 to July 31, 2012- the pilot has between these dates to obtain the recent experience requirements found in 61.57(c). This experience may be obtained through instruction, the use of a safety pilot, or through a simulator/training device.
• As of August 1, 2012- If by this date, the pilot has not regained instrument currency, then the only method by which a pilot may become instrument current again is by obtaining an IPC.

If you have questions about the proper implementation of FAR Part 61.57, then contact Ronnie Gipson by email at Gipson@higagipsonllp.com or by telephone at 415.692.6523.

Ninth Circuit Holds that Substantial Compliance with Pilot Training Warranty is Not Enough to Trigger Coverage

In Trishan Air, Inc. et al. v. Federal Insurance Co., et al., 635 F.3d 422 (9th Cir. 2011), the Court addresses whether or not an insured, in this case a Part 91 Operator, can invoke the doctrine of substantial compliance with a pilot training warranty provision in the insurance policy to receive coverage.

Background

On June 10, 2007, a Dassault Falcon 900 jet was set to depart Santa Barbara Municipal Airport for Tampa International Airport. The aircraft had 2 crew members and 13 passengers. Due to a miscalculation in the gross takeoff weight by the second in command (SIC) pilot, the V-speeds were erroneous. As an accompanying error, the stabilizer trim was more than 2 degrees outside the recommended setting for takeoff. Upon reaching Vr, the captain pulled back on the yoke with no response. The captain released the back pressure and the aircraft sped up past the 130-knot mark and the captain again pulled back on the yoke again with no response. Power was reduced and maximum braking was applied. Nonetheless, the airplane departed the end of the runway and impacted a berm. The accident did not result in any fatalities but the aircraft received significant damage.

Prior to the accident, Trishan Air Inc. (Trishan) purchased an insurance policy from Federal Insurance company (Federal) to cover its fleet of jets. At the policy quote stage, Trishan requested that the insurance policy provide coverage for its SIC pilots as long as they met the minimum qualifications set forth in FAR Part 61.55. Trishan was informed by the underwriter that such a policy was not possible. Instead, the underwriter submitted a quote to Trishan that encompassed a pilot training warranty whereby the SIC pilots were required to complete ground school, flight school, and accrue time in a full motion simulator for the make and model of the covered aircraft they would fly in addition to the qualifications set forth in Part 61.55. When the policy of insurance was issued, it included a pilot warranty endorsement containing the more stringent requirements.

Subsequent to the accident, Federal denied coverage for the accident because the SIC at the time of the accident never attended any formal course (ground or flight) relative to any Falcon aircraft in violation of the pilot warranty endorsement in Trishan’s policy. The District Court granted Federal’s motion for summary judgment holding that Federal’s denial of coverage comported with California law.

Court’s Analysis

On appeal, Trishan argued that it was not required to strictly comply with the pilot training warranty to receive coverage. Trishan cited McKenzie v. Scottish Union & Nat’l Ins. Co., 112 Cal. 548 (Cal. 1896) to support the contention that substantial compliance with a warranty merits coverage by the insurer. The Court discounted Trishan’s argument on the basis that compliance with a warranty in an insurance policy is a fundamental component to the risk being evaluated. The Court held that pilot qualifications and experience are obviously factors bearing directly on the risk the insurer is underwriting. Thus, if Trishan were allowed to advance the sufficient compliance argument then there would be no effect whatsoever to the warranty provision in the insurance policy requiring a certain level of proficiency to merit coverage. For emphasis, the Court opined, “If adopted, the practical effect of Trishan’s proposition would be significant, as it would permit an insured to universally assert that only substitute performance, based on the insured’s subjective selection, would be necessary to receive coverage.” In effect, Trishan’s argument sought to rewrite public policy with respect to insurance contract interpretation, which is a step the court rightfully was not willing to take.

The Court went on to demonstrate how Trishan’s actions/inactions failed to merit consideration as substantial compliance. In this instance, the SIC had not received any formal ground school, flight time instruction, or time in a Falcon 900 flight simulator. It is important to note that the captain on the accident flight was also the Chief Pilot whose job duties included making sure that all of the SICs were qualified in make and model prior to dispatch for flights. Not surprisingly, the Court concluded that Trishan had not taken any steps to make sure that the accident SIC met any provision of the pilot training warranty. The cases cited supporting Trishan’s substantial compliance argument contain one common denominator- the fact that the insureds in the referenced cases complied with at least some of the specific requirements at issue. California courts have rejected substantial compliance arguments where the insured completely failed to comply with a warranty or condition. Trishan’s struggle to use the substantial compliance argument was destined to fail, just like the takeoff roll of its Falcon 900 with the improperly trained SIC.

For more information on how the Trishan Air, Inc. case impacts your operations, contact Ronnie Gipson by email at Gipson@higagipsonllp.com or telephone at 415.692.6523.

FAA Explains Crewmember Rest For Flights Conducted Under Part 91

In November 2011, the Flight Standards Regional Office in Alaska requested an interpretation as to whether or not Part 91 permits a required flight crewmember to take a "controlled rest period" i.e. a nap when an augmented crew is not present. 

The controlling provision of the FARs is 14 CFR section 91.105(a)(1) which provides that each required crewmember must be at his crewmember station during takeoff, landing, and while en route.  The implication present in the statute is that the crewmember must actually perform his duties while at his crewmember station.  By simple deductive reasoning along with a careful reading of the regulation, the FAA reasoned that a crewmember who is asleep at his crewmember station cannot and is not performing his duties.  Thus, the FAA concluded that Part 91.105(a)(1) does not permit a required flight crewmember to sleep at his crewmember station.

There are 2 recognized exceptions  to the requirement.  First, a crewmember may leave his station if the absence is necessary to perform duties in connection with the operation of the aircraft.  Second, a required crewmember is allowed to leave his station in connection with physiological needs.  In flight sleep is not a duty that is necessary to operate the aircraft thus a required crewmember does not qualify under the first exception on a Part 91 flight.  Next, the physiological needs exception is very narrow, it only permits breaks for activities such as using the restroom or stretching your legs briefly during a long flight. 

For a large portion of the flying community, a part 91 flight is conducted in an aircraft similar in size to a Cessna 172.  For these pilots, if they were successful in extricating themselves from their seat, there is simply no where to go for physiological needs and there is no aisle to walk down to stretch their limbs.  However, there are flights conducted under Part 91 on larger aircraft that allow a required crewmember to attend to physiological needs or stretch their legs and after reading the FAA's interpretation letter they can continue to do so. 

The above discussion results in a different outcome if the flight is augmented.  In an augmented flight, the required crewmember is replaced by another qualified crewmember.  When the replacement of a crewmember happens, the original crewmember is no longer "required" within the meaning of FAR 91.105(a)(1) because his presence is no longer needed to safely operate the aircraft.  It is important to remember that each and every crewmember is responsible for ensuring that they are sufficiently rested and able to perform their required duties prior to accepting the responsibility of becoming a required crewmember.

If you have questions about the crewmember rest provisions or understanding the FARS as they apply to your operations, then contact Ronnie Gipson by email at gipson@higagipsonllp.com or by telephone at 415.692.6523.