FAA Enforcement: Waivers of Rights to Recover Attorney's Fees in Settlements

Why GAO Did This Study

The Federal Aviation Administration (FAA) requires pilots, mechanics, and others who hold FAA certificates to waive their rights to recover attorney's fees and expenses as a condition of settling enforcement actions against them, according to FAA officials. Under the Equal Access to Justice Act (EAJA), individuals who prevail over FAA in certain FAA legal enforcement actions may, absent a waiver, be entitled to recover their attorney's fees and other expenses, if certain conditions are met. FAA officials said that they require these EAJA waivers to ensure that the individual cannot bring any additional claims against the agency and to avoid spending staff resources responding to frivolous EAJA applications. FAA took about 2,200 actions against individuals' certificates, including revocation and suspension, during fiscal years 2019 through 2023, according to FAA data. About 10 percent of those individuals signed a settlement agreement and could potentially have qualified for EAJA awards if they had not waived their rights to the fees and if they met additional eligibility requirements.

Attorneys and organizations representing pilots and mechanics that GAO interviewed identified drawbacks to FAA's use of these waivers as a condition of settling enforcement cases. The drawbacks included that the waivers may weaken the protections EAJA is intended to provide against agency overreach; cause attorneys not to take the cases because they risk not getting paid without potential EAJA fees; and cause FAA to miss opportunities to identify whether or how their enforcement process could be improved.

When asked to respond to these drawbacks, FAA officials stated that settlement agreements usually involve FAA prevailing and therefore the individual would not be eligible for an EAJA award even if FAA did not include a waiver in those agreements. They also noted that settlements can allow both sides to get a quicker and more satisfactory outcome and that FAA would be unwilling to enter into settlements if they did not include a waiver out of concern that the settlements could be used to support an EAJA claim. Moreover, according to FAA officials, waivers would not cause FAA to miss opportunities to improve its enforcement process because FAA would have identified a problem when it entered into a settlement withdrawing its case. An EAJA award would not provide any additional information, according to the officials.

Officials from the United States Coast Guard and the National Marine Fisheries Service, which, like FAA, bring and settle enforcement actions against individuals, said that their agencies also typically use language in settlement agreements with those individuals that would prevent them from recovering attorney's fees under EAJA. The officials offered rationales for this practice similar to FAA's, such as ensuring that settlement agreements resolve all matters associated with a case.

What GAO Found

In the United States, parties in litigation are generally responsible for their own legal expenses regardless of whether they win or lose the case. EAJA is an exception to this general rule in that it allows individuals in covered proceedings to which the federal government is a party to recover their attorney's fees and expenses, under certain circumstances.

Section 340 of the FAA Reauthorization Act of 2024 includes a provision for GAO to examine FAA's use of waivers of rights to seek attorney fees under EAJA as a condition of settlement of certain legal enforcement actions against pilots, flight engineers, mechanics, and repair technicians (or individuals acting in those capacities). This report provides information on FAA's use of waivers in settlement agreements; legal and industry views on FAA's use of these waivers and FAA's perspective on these views; and a comparison of FAA's use of waivers with the practices of selected other agencies.

GAO reviewed relevant statutes, regulations, case law, and data from FAA's enforcement-action database from fiscal years 2019 through 2023, which was the most current data available; interviewed industry groups representing individuals subject to FAA enforcement actions, law professors who had written about EAJA, and aviation lawyers; and spoke with officials from FAA, the National Marine Fisheries Service, and the Coast Guard.

For more information, contact Derrick Collins at collinsd@gao.gov.