The United States Court of Appeals for the District of Columbia Circuit recently upheld a Federal Aviation Administration (FAA) decision to publish an airworthiness directive ordering the removal of certain cylinder assemblies used in piston engines.1 The manufacturer of the cylinder assemblies challenged the application of the FAA’s risk management methodology, contending there was insubstantial evidence to support the conclusion that the cylinders presented an “unsafe condition.” The Court’s denial of the petition demonstrates the parameters under which a court undertakes review of FAA orders.
As explained by the Court, the Administrative Procedure Act instructs a court to uphold agency action unless it is “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with the law.”2 Similarly, the Federal Aviation Act provides that the FAA’s findings of fact “are conclusive” when “supported by substantial evidence.”3 The Court noted that, when applied to rulemaking, the “substantial evidence” and “arbitrary and capricious” tests are identical.
The FAA’s airworthiness directive at issue had been the culmination of a three-year process, which included an initial notice of proposed rulemaking proposing repetitive inspections and replacement of the cylinder assemblies, two public comment periods, and the addition of technical documents to the rulemaking record. Ultimately, the airworthiness directive issued in 2016 required phased removal of the assemblies and prohibited their future installation.
In reviewing the actions of the FAA, the Court examined the regulations concerning the production of replacement parts for aircraft engines. Under these regulations, a manufacturer is required to obtain a parts manufacturer approval that the part “conforms to its approved design and is in a condition for safe operation.”4 Once the replacement part is in production, the FAA may issue an airworthiness directive if it determines that the part has an unsafe condition that is likely to exist or develop in other products of the same type design.5
The Court found that the FAA properly used the risk-measurement methodology in FAA Order 8040.4A to assess the safety of the cylinders by determining the “severity” of the risk (i.e., the potential consequences of part failure) and the “likelihood” of the risk (i.e., the failure rate). The Court found that the FAA based its “severity” analysis on warranty and service difficulty reports, airplane crash reports, and safety recommendations from the NTSB and FAA inspections that addressed risks posed by failing cylinder assemblies generally and the cylinder assembly at issue specifically. In assessing the “likelihood” of the risk, the Court found that the FAA properly considered data submitted by the manufacturer concerning the probability of failure and determined a far higher rate of failure in replacement parts than in original parts.
This decision highlights that a court’s review of an FAA action, finding, or conclusion is not unlimited. As previously noted by the Supreme Court, “the scope of review under the arbitrary and capricious standard is narrow and a court is not to substitute its judgment for that of the agency,” provided that agency has “examine[d] the relevant data and articulate[d] a satisfactory explanation for its action including a rational connection between the facts found and the choice made.”6 Here, because the Court determined that the FAA’s calculation of the safety of the cylinder assemblies was based on a proper application of the FAA Order 8040.4A methodology and there was an absence of “more specific data as would identify fundamental error casting doubt on the FAA’s conclusion,” the court found that the case should not be remanded to the FAA to conduct a new risk assessment.