UNITED STATES COURT OF APPEALS FOR THE D.C. CIRCUIT


FAA

v.

NTSB


98-1365a

D.C. Cir. 1999


*	*	*


Garland, Circuit Judge: The Federal Aviation Administra- tion (FAA)
issued an enforcement order to Captain Richard  Merrell, a Northwest
Airlines pilot whom the FAA deter- mined had violated airline safety
regulations. Merrell appeal- ed to the National Transportation Safety
Board (NTSB),  which ruled in his favor and dismissed the FAA's order.
The  FAA petitions for review of that decision, arguing that the  NTSB
erroneously failed to defer to the FAA's reasonable  interpretation of
its own regulations. We grant the petition,  reverse the NTSB, and
remand for further proceedings con- sistent with this opinion.


I


The Federal Aviation Act, 49 U.S.C. ss 40101 et seq.,  establishes a
"split-enforcement" regime in which the FAA  has regulatory and
enforcement authority, while the NTSB  acts as an impartial
adjudicator. See Hinson v. NTSB, 57  F.3d 1144, 1147 n.1 (D.C. Cir.
1995). We begin by setting  forth the facts and procedural history of
Captain Merrell's  case, and then describe the nature of the
split-enforcement  regime in more detail.


A


The facts of the case are undisputed. On June 19, 1994,  Merrell was
the pilot-in-command of a commercial passenger  plane, Northwest
Flight 1024. After Flight 1024 took off in  the heavily trafficked Los
Angeles area, air traffic control  (ATC) instructed it to climb to and
maintain an altitude of  17,000 feet. Merrell correctly repeated, or
"read back," this  instruction to ATC. About a minute later, ATC
transmitted  an altitude clearance to another aircraft, American
Airlines  Flight 94, directing it to climb to and maintain an altitude


23,000 feet. The American flight promptly and correctly  acknowledged
this clearance with its own "readback."


Merrell, however, mistakenly thought that the instruction  to American
was intended for his aircraft, so he also read the  instruction back
to ATC. Unfortunately, because Merrell  made his readback at the same
time as the American pilot,  his transmission was blocked, or "stepped
on." The ATC  radio system can handle only one transmission at a time
on  any given frequency; when two transmissions overlap, both  may
become blocked or garbled, or the stronger signal alone  may be heard
(i.e., it may "step on" the weaker signal). ATC  can often detect that
a transmission has been stepped on  because, unless the signals
overlap completely, ATC will  receive a portion of the stepped-on
message, and because a  loud buzzing noise usually accompanies the
period of overlap.  On rare occasions, however, two transmissions will
overlap  completely without creating an identifiable buzz. This ap-
pears to have happened in Merrell's case. His readback  apparently
coincided precisely with that of American Flight  94, and as a result
his transmission was entirely blocked.  ATC heard neither Merrell's
readback nor any indication that  it had occurred. And because ATC did
not hear the errone- ous readback, it could not correct Merrell's


Meanwhile Merrell, unaware that ATC had not received his  transmission,
proceeded to ascend toward 23,000 feet. As the  Northwest flight rose
from its assigned altitude, the ATC  controller noticed the deviation
and directed the aircraft to  return to 17,000 feet. Before Merrell
could comply, he had  ascended to 18,200 feet and lost the standard
safety separa- tion required between commercial flights.


On November 3, 1995, the FAA issued an enforcement  order against
Merrell. The order alleged that Merrell had  violated FAA safety
regulations by, inter alia, (1) "operat[ing]  an aircraft contrary to
an ATC instruction in an area in which  air traffic control is
exercised," in violation of 14 C.F.R.  s 91.123(b); and (2)
"operat[ing] an aircraft according to a  clearance or instruction that
had been issued to the pilot of  another aircraft for radar air


violation of 14 C.F.R. s 91.123(e). Joint Appendix (J.A.) at  7.1


Merrell appealed the FAA's order to the NTSB. At the  outset of the
proceedings, the FAA agreed that because  Merrell had filed a timely
incident report pursuant to the  FAA Aviation Safety Reporting
Program, it would waive any  sanction for the alleged violations. See
J.A. at 11. It sought  affirmance of its enforcement order, however,
arguing that  Merrell had deviated from clearly transmitted ATC
instruc- tions, that this mistake was due to his own carelessness 
rather than to ATC error, and that the deviation therefore 
constituted a regulatory violation. The Administrative Law  Judge
(ALJ) agreed and affirmed the order. The ALJ found,  based on both the
recording and the transcript of the radio  communications, that the
ATC transmission to American  Flight 94 had been clear and that the
instruction to climb to  23,000 feet had plainly not been intended for
Merrell's air- craft. Id. at 14-15. Indeed, after Merrell listened to
the  tape, he conceded that he had simply "misheard" the instruc-
tion. See id. at 18-19; NTSB Record (R.) at 145. The ALJ  concluded
that the fact that Merrell's readback was stepped  on did not absolve
"Captain Merrell of his responsibility to  hear that [the] initial
clearance" was for another flight. J.A.  at 26. He explained that:
"[A]viation is ... particularly  unforgiving of carelessness or
neglect. And in this particular  case, the initial mistake was made by
Captain Merrell, and  he's going to have to be responsible for it."
Id. at 27.  Accordingly, the ALJ held that Merrell "was in regulatory 


Merrell appealed the ALJ's decision to the Board. He  argued that under
NTSB precedent, a pilot cannot be held  responsible for an inadvertent
deviation caused by ATC error.  His had been such a deviation, he
contended, because he had 




__________

n 1 Merrell was also charged with "operat[ing] an aircraft in a 
careless manner so as to endanger the lives or property of others," 
in violation of 14 C.F.R. s 91.13(a). As discussed infra note 23, 
both parties appear to believe that the validity of this charge 
depends wholly upon the validity of the s 91.123 charges.


taken actions which, but for ATC, would have kept him from  leaving his
assigned altitude. He reasoned that because ATC  controllers are
required to correct erroneous readbacks,2 his  construction of ATC's
silence as tacit confirmation had been  reasonable and justified. In
response, the FAA again argued  that because the primary cause of the
deviation had been  Merrell's misperception of a clear instruction,
his actions had  violated the safety regulations. The FAA maintained
that  this outcome was consistent with Board precedent which, it 
contended, absolves pilots only when "ATC error is the  initiating or
primary cause of the deviation." R. at 321.


The NTSB accepted Merrell's arguments and dismissed the  enforcement
order. It found that Merrell had made only "an  error of perception,"
and that there was "no evidence in the  record ... that [he] ... was
performing his duties in a  careless or otherwise unprofessional
manner." J.A. at 34. A  "perception mistake," the Board said, does not
always result  from "a failure of attention," and therefore "careless
inatten- tion ... will not be automatically assumed in every case" in 
which a pilot mishears ATC instructions. Id. Moreover,  there was no
"failure of procedure" on Merrell's part, as he  had "made a full
readback so that the opportunity was there,  absent the squelched
transmission, for ATC to correct his  error." Id. at 35.


The FAA then petitioned the Board for reconsideration of  its decision.
R. at 360-81. The agency argued that the  Federal Aviation Act
requires the Board to defer to the  FAA's reasonable interpretation of
its own safety regulations.  In the FAA's view, 14 C.F.R. s 91.123
obligates pilots "to  listen, hear, and comply with all ATC
instructions except in  an emergency." Id. at 366; see id. at 362.
"Inattention,  carelessness, or an unexplained misunderstanding," it
said,  "do not excuse a deviation from a clearly transmitted clear-
ance or instruction." Id. at 367. "When there is an 'error of 




__________

n 2 The handbook of ATC rules and procedures states: "If altitude, 
heading or other items are read back by the pilot, ensure the 
readback is correct. If incorrect or incomplete, make corrections as 
appropriate." Federal Aviation Admin., U.S. Dep't of Transp., Air 
Traffic Control p 2-72 (1993) [hereinafter ATC Procedures].


perception' resulting in a deviation, inattentiveness or care- lessness
are imputed in the absence of some reasonable  explanation for the
failure to comply with the ATC clear- ance." Id. According to the FAA,
reasonable explanations  include events such as "radio malfunction" or
a controller  error that precipitates a misunderstanding, but "[t]o
excuse  [Merrell's] deviation in these circumstances as an acceptable,
 though unexplained, 'error of perception' " would be inconsis- tent
with the agency's construction of s 91.123. Id. at 368- 69; see id. at
369, 371. Moreover, the FAA argued that the  Board's decision would
have a "profound" negative effect on  air safety: "Under the decision,
airmen can claim, without  further proof, that they did not hear or
that they misper- ceived safety crucial instructions as a means to
avoid respon- sibility for noncompliance or erroneous compliance with
ATC  clearances and instructions." Id. at 374.


The Board denied the petition for reconsideration. Al- though it
acknowledged its "general obligation to defer to the  FAA's validly
adopted interpretation of its regulations," the  Board considered
itself under no such obligation in this case  because "the FAA cites
no rule it has adopted that stands for  the proposition the FAA urges
here." J.A. at 38. The Board  further noted that the FAA offered "no
evidence of any policy  guidance written by the FAA, validly adopted
or otherwise,"  to support its interpretation, and instead offered
only "[c]oun- sel's litigation statements." Id.


Because the Board determined that it was not required to  defer to the
FAA's interpretation, it followed its own view of  appropriate
aviation policy. It stated:


We ... disagree with the FAA's underlying belief that  our policy
threatens aviation safety. The premise of our  approach is this--human
beings make mistakes, and  there is no regulatory action, remedial or
otherwise, that  can eliminate all mistakes.... [W]here an inevitable 
error of perception does occur, the pilot should not face  sanction if
he has acted responsibly and prudently there- after....


Id. Adhering to this principle, the NTSB announced the  following
rule:


If a pilot makes a mistake and mishears a clearance or  ATC direction,
follows all prudent procedures that would  expose the mistake (e.g.,
reads back the clearance), and  then acts on that mistaken
understanding having heard  no correction from ATC, the regulatory
violation will be  excused if that mistake is not shown to be a result
of  carelessness or purposeful failure of some sort.


Id. at 37. The FAA then petitioned for review in this court.


B


Under the Federal Aviation Act's split-enforcement regime,  Congress
has delegated rulemaking authority to the FAA:  "The Administrator of
the Federal Aviation Administration  shall promote safe flight of
civil aircraft in air commerce" by  prescribing, among other things,
"regulations and minimum  standards for ... practices, methods, and
procedure the  [FAA] finds necessary for safety in air commerce and
nation- al security." 49 U.S.C. s 44701(a). Pursuant to that authori-
ty, the FAA promulgated the safety regulations at issue here,  49
C.F.R. ss 91.123(b), (e). Congress has also given the  FAA authority
to enforce its regulations through a number of  methods, including the
issuance of "an order amending, modi- fying, suspending, or revoking"
a pilot's certificate if the  public interest so requires. 49 U.S.C. s
44709(b). The FAA  exercised that authority in issuing its enforcement
order to  Captain Merrell. See J.A. at 7.


Congress has assigned adjudicatory authority under this  regime to the
NTSB. See generally 49 U.S.C. s 1133. A  pilot whose certificate is
adversely affected by an FAA en- forcement order may appeal the order
to the NTSB. See id.  s 44709(d)(1). Such an appeal is initially heard
by an ALJ,  see 49 C.F.R. s 821.35(a), whose final decision may be
appeal- ed to the full Board, see id. s 821.47(a). The Board's deci-
sion, in turn, may be reconsidered upon the petition of either  party.
See id. s 821.50. In reviewing an FAA order, "the  Board is not bound
by findings of fact of the [FAA] Adminis- trator." 49 U.S.C. s
44709(d)(3). It is, however, "bound by  all validly adopted
interpretations of laws and regulations the 


Administrator carries out ... unless the Board finds an  interpretation
is arbitrary, capricious, or otherwise not ac- cording to law." Id.


If dissatisfied with a final order of the Board, either the  FAA
Administrator or any "person substantially affected"  may petition for
review in this court. Id. ss 1153(c), 44709(f),  46110.3 On judicial
review, the "[f]indings of fact of the  Board are conclusive if
supported by substantial evidence."  49 U.S.C. s 44709(f); id. s
1153(c); see also id. s 46110(c).  We must, however, set aside Board
decisions if they are  "arbitrary, capricious, an abuse of discretion,
or otherwise not  in accordance with law." 5 U.S.C. s 706(2)(A).4 And,
like  the NTSB, we must defer to the FAA's interpretations of its  own
aviation regulations. Cf. Martin v. Occupational Safety  & Health
Review Comm'n, 499 U.S. 144, 147, 150-57 (1991)  (holding that courts
must defer to interpretations of Secre- tary of Labor rather than to
those of OSHRC in split- enforcement regime under Occupational Safety


II


As we have just described, Congress has "unambiguously  direct[ed] the
NTSB to defer to the FAA's interpretations of 




__________

n 3 Although this case is styled Administrator, FAA v. NTSB, the  real
parties in interest are the FAA and Captain Merrell. The  situation is
roughly analogous to an appeal from a district court:  the NTSB (the
adjudicator below) "has no direct stake in the  outcome" and therefore
does not have any role "as a party in  judicial review proceedings."
Hinson, 57 F.3d at 1147 n.1.


4 See generally Martin v. Occupational Safety & Health Review  Comm'n,
499 U.S. 144, 158 (1991); Hinson, 57 F.3d at 1149-50;  Public Citizen,
Inc. v. FAA, 988 F.2d 186, 196-97 (D.C. Cir. 1993).  Prior to 1994,
the text of the Federal Aviation Act mandated that  judicial review of
NTSB orders "be conducted in accordance with  the provisions of" the
Administrative Procedure Act (APA), includ- ing 5 U.S.C. s 706(2)(A).
See 49 U.S.C. s 1903(d) (1994) (repealed  1994). In 1994, this
provision was "omitted as unnecessary because  [the APA] applies by
its own terms." H.R. Rep No. 103-180, at 18  (1993).


its own regulations." Hinson, 57 F.3d at 1148 n.2 (citing 49  U.S.C. s
44709(d)(3)); see also id. at 1151. Here, however,  the NTSB
explicitly declined to defer to the agency's inter- pretation of 14
C.F.R. s 91.123. In this Part, we consider the  argument that
deference to the FAA was not required, either  because its
interpretation was not validly adopted or because  that interpretation
was really a factual finding in disguise.


A


The NTSB declined to defer to the FAA primarily because  the agency had
offered "no evidence of any policy guidance  written by the FAA,
validly adopted or otherwise," to support  its interpretation. J.A. at
38. Instead, the agency had  merely offered the "litigation
statements" of FAA counsel, as  well as citations to the Board's own
case law. See id. The  NTSB believed the former insufficient to
qualify for Board  deference under section 44709(d)(3). Accordingly,
it rejected  the FAA's interpretation and expressly adopted its own
policy  to govern cases like that of Captain Merrell.


The NTSB's refusal to defer to the FAA on this question of  regulatory
interpretation and air safety policy was error.  The FAA is not
required to promulgate interpretations  through rulemaking or the
issuance of policy guidances, but  may instead do so through
litigation before the NTSB. We  have said as much before,5 and the
Supreme Court so held in  Martin v. Occupational Safety & Health
Review Comm'n  with respect to the similar split-enforcement regime of
the  Occupational Safety & Health Act.6 Indeed, the NTSB itself 




__________

n 5 See Hinson, 57 F.3d at 1148-49, 1151 (stating that the FAA  could
assert its interpretations in litigation before the NTSB and  that
"the Board would then be required to defer").


6 See Martin, 499 U.S. at 157-58 (holding that "the Secretary's 
litigating position before the Commission is as much an exercise of 
delegated lawmaking powers as is the Secretary's promulgation of a 
workplace health and safety standard," and that "the Secretary's 
interpretation is not undeserving of deference merely because the 
Secretary advances it for the first time in an administrative adjudi-


has repeatedly made the same point.7 The fact that this  mode of
regulatory interpretation necessarily is advanced  through the
"litigation statements" of counsel does not relieve  the NTSB of its
statutory obligation to accord it due defer- ence.8




__________

n 7 See Petition of Quintana, NTSB Order No. EA-3737 (1992),  1992 WL
362084, at *2 (noting that NTSB has previously recog- nized "that rule
interpretation may occur through adjudication");  id. at *3 (noting
that the NTSB has "adopted and followed the  principles discussed in
Martin v. OSHRC"); see also Petition of  Van Eaton, NTSB Order No.
EA-4692 (1998), 1998 WL 546384, at  *2 ("The FAA is entitled to make
policy via adjudication. In such a  case, the question for us would be
whether the proposed policy  conforms with the words of the
regulation."); Administrator v.  Miller, NTSB Order No. EA-3581
(1992), 1992 WL 137750, at *2-4  ("While the evolutionary
interpretation of rules is thought to be  better accomplished through
the rulemaking process itself, there is  little question that the
adjudicatory process may also be used to  develop and define the


8 In Martin, the Supreme Court rejected the contention that  according
deference to agency litigating positions taken before an 
administrative adjudicator would be inconsistent with the Court's 
prior holdings denying deference to litigating positions taken upon 
judicial review:


Our decisions indicate that agency "litigating positions" are not 
entitled to deference when they are merely appellate counsel's  "post
hoc rationalizations" for agency action, advanced for the  first time
in the reviewing court. Because statutory and  regulatory
interpretations furnished in this setting occur after  agency
proceedings have terminated, they do not constitute an  exercise of
the agency's delegated lawmaking powers. The  Secretary's
interpretation of OSH Act regulations in an admin- istrative
adjudication, however, is agency action, not a post hoc 


499 U.S. at 156-57 (citations omitted). In this case, it is particular-
ly clear that the FAA's position is not simply that of its litigators,
 because after the agency instituted this enforcement action, it 
published its interpretation of s 91.123 in the form of an interpre-
tive rule. See 64 Fed. Reg. 15,912 (1999).


Nor was Merrell's the first case in which the FAA inter- preted its
regulations as it does here. The position the  agency took in its
petition for reconsideration can be summa- rized as follows: Failure
to understand an ATC instruction is  a valid defense to a section
91.123 charge only if the pilot  provides some exculpatory
explanation, such as radio mal- function or precipitating controller
error. See R. at 371.  That is precisely the position the FAA took
before this court  in Hinson--although there we refused to consider it
because  the agency had failed to raise it below. See Hinson, 57 F.3d 
at 1150-51. It is also the position the FAA has consistently  taken in
litigation before the Board. See Administrator v.  Gentile, 6 N.T.S.B.
60, 64 (1988); Administrator v. Wells, 1  N.T.S.B. 1472, 1474 (1971).
As discussed in Part IV, while  the NTSB's own position has wavered
over the years, the  FAA's has not.


In sum, the NTSB's rationale for denying deference to the  FAA's
interpretation of 14 C.F.R. s 91.123 was unjustified.


B


Merrell offers another potential justification for the  NTSB's failure
to defer to the FAA. The FAA's position  below was not truly an
"interpretation," he argues, but rather  a determination of fact with
which the Board was free to  disagree. As Merrell observes, the FAA's
petition for recon- sideration states: "When there is an 'error of
perception'  resulting in a deviation, inattentiveness or carelessness
are  imputed in the absence of some reasonable explanation...."  R. at
367. In addition, the FAA's appellate briefs consistent- ly describe
its interpretation as a presumption or inference.  See, e.g., FAA Br.
at 23 ("FAA employs the following pre- sumption: where evidence shows
that a pilot mistakenly fails  to understand and comply with a clear
and distinct ATC  transmission, and where the pilot fails to provide
an exculpa- tory explanation for his mistake, FAA presumes that the 
pilot's mistake was due to inattention...."); see also id. ("[I]t  is
fair and reasonable to infer that [Merrell's] mistake was 
attributable to inattention...."). The FAA's decision to 


"impute," "presume," or "infer" carelessness in a particular 
situation, Merrell argues, "is nothing more than a finding of  fact,
which can be reversed by the NTSB." Merrell Br. at 14.


We note first that Merrell did not make this argument  below, see Opp'n
to Pet. for Recons., and that the NTSB did  not itself refuse to defer
on the ground that the FAA's  interpretation was really a finding of
fact. Even if we could  nonetheless consider the argument here, it is
plain that the  FAA's decision to infer carelessness from unexplained
error  does not represent a finding of fact in this, or any other, 
particular case. To the contrary, the FAA's inference is  simply a
justification for the regulatory interpretation the  agency applies in
all cases--a rationale for why it is reason- able to declare a
violation when a pilot errs and has no  explanation for his error.
Although the agency's rule does  act like a presumption, a presumption
is a rule of law and not  a finding of fact. See W. Page Keeton et
al., Prosser &  Keeton on the Law of Torts 240 (5th ed. 1984) ("There
is ...  general agreement that presumptions are rules of law....").


A presumption is valid if it is rational. See Usery v.  Turner Elkhorn
Mining Co., 428 U.S. 1, 28 (1976) (noting  that a presumption will be
upheld if there is "some rational  connection between the fact proved
and the ultimate fact  presumed, and [if] the inference of one fact
from proof of  another shall not be so unreasonable as to be a purely 
arbitrary mandate"); see also NLRB v. Baptist Hosp., 442  U.S. 773,
787 (1979); Chemical Mfrs. Ass'n v. Department of  Transp., 105 F.3d
702, 705-06 (D.C. Cir. 1997). And surely it  is rational to infer that
a pilot was careless or inattentive if he  deviated from a clearance
order without any explanation at  all. In this case, everyone who
listened to the recording of  the ATC clearance
instructions--including Captain Merrell-- confirmed that those
instructions were clear and understand- able. See J.A. at 14-15,
18-19; R. at 145. Merrell's state- ment that he "misheard" the
transmission is not an explana- tion for his deviation, but rather a
concession that he has no  explanation. Under such circumstances, it
is not unreason- able to presume that he simply was not listening
closely  enough. Such a presumption is as common-sense as that 


employed in tort cases that hold that the running of a red  light
creates a presumption of negligence, rebuttable only by  an
exculpatory justification (such as brake failure).9


There is also no merit to Merrell's contention that the  FAA's
presumption impermissibly reverses the burden of  proof in NTSB
proceedings--a point upon which, again, the  Board did not rely. FAA
regulations mandate that "[i]n  proceedings under [49 U.S.C. s 44709],
the burden of proof  shall be upon the Administrator." 49 C.F.R. s
821.32. Mer- rell contends that the FAA's interpretation of section
91.123  is in reality an attempt to circumvent this evidentiary
require- ment. He asserts that "[h]aving failed to carry its burden of
 proof," the FAA "sought to eliminate that burden by invent- ing a
legal 'interpretation.' " Merrell Br. at 15. The Su- preme Court
considered a similar contention in Director v.  Greenwich Collieries,
512 U.S. 267 (1994). There, the Court  construed s 7(c) of the
Administrative Procedure Act (APA),  5 U.S.C. s 556(d), which imposes
the "burden of proof" on the  proponent of an order. The Court held
that the phrase  should be understood as having its "ordinary or
natural  meaning," which, it said, was the burden of persuasion. 512 
U.S. at 272, 276. Because the Labor Department rule at  issue in
Greenwich (the so-called "true doubt" rule) reversed  the persuasion
burden, the Court struck it down. See id. at  280-81. It indicated,
however, that a presumption that did  not shift the burden of
persuasion would be acceptable under  the APA because it would not
affect the "burden of proof."  Id. at 280. In accordance with this
reasoning, every Circuit  that has considered the issue since has
concluded that a  presumption that shifts only the burden of
production does  not shift the "burden of proof" as that phrase is
used in the  APA. See Gulf & W. Indus. v. Ling, 176 F.3d 226, 232-34 
(4th Cir. 1999); Glen Coal Co. v. Seals, 147 F.3d 502, 510-13  (6th




__________

n 9 See, e.g., Byrne v. City & County of S.F., 113 Cal.App.3d 731, 
740-41 (Cal. Ct. App. 1980); deJesus v. Seaboard Coast Line R.R.  Co.,
281 So.2d 198, 201 (Fla. 1973); Piatt v. Welch, 974 S.W.2d 786,  788
(Tx. App. 1998). See generally Keeton et al., supra, at 230-31  &


(8th Cir. 1997). Merrell offers no reason to read the same  phrase in
section 821.32 any differently.


On this analysis, the FAA presumption at issue here is  permissible if
it shifts only the burden of production--and it  does. That is the
typical role of presumptions in modern  evidence law,10 and the FAA's
description of its presumption  indicates that it functions in the
same manner. That is, once  the FAA shows that a pilot failed to
follow a clear ATC  instruction, the burden of production shifts to
the pilot to  offer an exculpatory explanation.11 Accordingly, we find
no  warrant for regarding the FAA's interpretation as the equiva- lent
of a finding of fact or for concluding that it reverses the  FAA's
burden of proof, and hence no warrant for the NTSB's  refusal to pay
it appropriate deference.


III


Deference, of course, does not mean blind obedience. The  agency's
interpretation still must not be "plainly erroneous or  inconsistent
with the regulation" it is interpreting. Cassell v.  FCC, 154 F.3d
478, 484 (D.C. Cir. 1998) (quoting Auer v.  Robbins, 519 U.S. 452, 461
(1997)). And even if the interpre- tation meets this standard, the
NTSB need not follow it if it 




__________

n 10 See Fed. R. Evid. 301 ("[A] presumption imposes on the party 
against whom it is directed the burden of going forward with  evidence
to rebut or meet the presumption, but does not shift to  such party
the burden of proof in the sense of the risk of nonper-


11 See FAA Br. at 23 ("FAA employs the following presumption:  where
evidence shows that a pilot mistakenly fails to understand  and comply
with a clear and distinct ATC transmission, and where  the pilot fails
to provide an exculpatory explanation for his mis- take, FAA presumes
that the pilot's mistake was due to inatten- tion....") (emphasis
added). Compare FAA Pet. for Recons., R. at  371 (characterizing proof
that deviation from ATC instruction oc- curred as establishing "prima
facie case"), with Thomas v. National  Football League Players Ass'n,
131 F.3d 198, 202 (D.C. Cir. 1998)  (holding that proof of prima facie
case of discrimination under Title  VII creates rebuttable presumption
that shifts burden of production  but not burden of persuasion).


"is arbitrary, capricious, or otherwise not according to law."  49
U.S.C. s 44709(d)(3). We consider these two standards  below.


First, we examine whether the FAA's interpretation was a  reasonable
construction of its regulation. The two subsec- tions of section
91.123 that Merrell was charged with violating  state:


(b) Except in an emergency, no person may operate an  aircraft contrary
to an ATC instruction in an area in  which air traffic control is
exercised.


.... 


(e) Unless otherwise authorized by ATC, no person oper- ating an
aircraft may operate that aircraft according to  any clearance or
instruction that has been issued to the  pilot of another aircraft for
radar air traffic control  purposes.


14 C.F.R. s 91.123.


Under the FAA's interpretation, a pilot who flies contrary  to either
of these commands is in violation unless he has an  exculpatory
explanation, such as "radio malfunction" or "ATC  error resulting in a
faulty transmission that precipitates a  misunderstanding." FAA Br. at
15. This interpretation is  consistent with the regulation. Indeed,
the one respect in  which it varies actually favors the pilot: it adds
two excep- tions (radio malfunction and precipitating ATC error) to
the  only two expressly listed in the rule itself (emergency and  ATC
authorization)--apparently because the FAA believes  they are fairly
implied. None of these exceptions assists  Merrell, however, who has
offered no explanation whatsoever  for his failure to understand the
clear and distinct ATC  transmission. The FAA has also indicated, as a
matter of its  enforcement discretion, that in cases where ATC could
have  corrected a pilot's misunderstanding but did not, the agency 
will waive or reduce the sanctions for the violation (although  it
will still declare that the violation occurred). See id. at 18. 
Again, this offers Merrell no assistance, as it is undisputed  that
ATC could not have corrected Merrell's error, and in any 


event, the FAA has in fact waived any possible sanctions  against him.
We therefore find that the FAA's construction  is a reasonable
interpretation of its regulation, and that  Merrell's case fits
comfortably within that interpretation.


Second, we must determine whether the FAA's policy, as  expressed in
its interpretation, is arbitrary, capricious, or  otherwise not in
accordance with law. There is no question  that the FAA's policy is
harsh, but that does not make it  unreasonable. The FAA contends that
the rule's strictness is  required by the potentially catastrophic
consequences of non- compliance with ATC transmissions. In the
agency's view,  the only way to prevent air disasters is to ensure
"that pilots  exercise unflagging diligence in monitoring,
understanding,  and obeying clearly transmitted ATC instructions." Id.
at  16-17. And the best way to ensure such diligence, the FAA  has
concluded, is to hold pilots to "an exacting standard of 


To continue our earlier analogy, the FAA's approach is  somewhat akin
to that of the motor vehicle safety laws.  Although a driver may be
able to defend the running of a red  light on the ground of brake
failure, the excuse that he simply  "did not see it" does not avoid a
ticket. Following the same  logic, the FAA has concluded that while a
radio malfunction  can excuse a pilot's deviation from an ATC
instruction, the  claim that he simply "misheard it" does not. This
approach is  both rational and consistent with the Federal Aviation
Act,  which instructs the FAA to prescribe rules that, in its judg-
ment, "best tend[ ] to reduce or eliminate the possibility or 
recurrence of accidents in air transportation." 49 U.S.C.  s


We recognize that the NTSB prefers a different approach,  one which
might best be expressed, in the words of Alexander  Pope, as, "To err
is human...." Alexander Pope, An Essay  on Criticism, in Collected
Poems 58, 71 (Bonamy Dobree  ed., Everyman's Library 1983) (1711). The
"premise" of its  approach, the Board states, is that "human beings
make  mistakes, and there is no regulatory action, remedial or 
otherwise, that can eliminate all mistakes." Order on Re-


cons., J.A. at 38. Hence, the Board maintains that "where an 
inevitable error of perception does occur, the pilot should not  face
sanction if he has acted responsibly and prudently there- after...."
Id. Although we cannot say that this view is  unreasonable, that is
not the issue. The NTSB is bound to  follow the FAA's interpretation
of a regulation unless the  Board finds it arbitrary, capricious, or
otherwise unlawful.  See 49 U.S.C. s 44709(d)(3). It was not arbitrary
or capri- cious for the FAA to conclude that in the unforgiving
environ- ment of aviation, in which even good-faith error can lead to 
tragedy, the best way to encourage pilot attentiveness is  through its
harsh approach rather than the NTSB's more  lenient one. This
conclusion is consistent with the governing  law, which makes clear
that the FAA's principal responsibility  is not to protect the
interests of pilots, but rather to ensure  that air carriers "provide
service with the highest possible  degree of safety in the public


Finally, we consider Merrell's argument that the FAA's  interpretation
of subsections (b) and (e) of section 91.123 is  arbitrary because it
conflicts with readback procedures as- sertedly contained in
subsection (a) of the same section. The  FAA's position, Merrell
stresses, means that "a pilot who  inadvertently mishears a clearance,
reads it back to the  controller to check his understanding, and
receives no correc- tion from the controller, would nevertheless be
liable for a  violation of s 91.123" barring an exculpatory
explanation for  the initial misunderstanding. Merrell Br. at 19. Yet,
he  continues, subsection 91.123(a) states that a pilot who is 
"uncertain" about a clearance must "immediately request  clarification
from ATC." Id. at 20 (quoting 14 C.F.R.  s 91.123(a)). That request,
according to Merrell, "is made  through a readback, and the written
procedures governing air  traffic controllers obligate controllers to
correct any errors in  the readback." Merrell Br. at 20; see supra
note 2. Because  of that obligation, Merrell argues, pilots are
entitled to take  ATC silence as acknowledgment that their readback
was  correct. Moreover, he contends that if the FAA's position  were
accepted, "s 91.123(a) would be superfluous" because a  pilot
uncertain about a clearance "could follow the instruction 


of s 91.123(a) precisely, but nevertheless be liable for violat- ing s
91.123(b) if ATC improperly failed, either because of  human or system
error, to respond to the pilot's recitation of  an incorrect
clearance." Merrell Br. at 20.


There is no conflict between the FAA's interpretation of  subsections
91.123(b) and (e) and the language of section  91.123(a). The latter
provision refers to "clarification[s]," not  readbacks, and the two
are not the same. A request for  clarification--which is mandatory
when a pilot is "uncertain"  about his clearance--requires ATC to
transmit an affirmative  clarifying response. If ATC fails to provide
one, the pilot  must renew his request until one is forthcoming. See
14  C.F.R. s 91.123(a); FAA Reply Br. at 7-8. A readback, by 
contrast, is a non-mandatory acknowledgment by the pilot  which, if
correct, does not require an affirmative response  from the
controller. See ATC Procedures p 2-72; 64 Fed.  Reg. 15,912, 15,913
(1999). The clarification procedure is not  implicated in the current
case, as Merrell does not contend he  was uncertain about the ATC


Nor is the FAA's interpretation either inconsistent with, or  rendered
irrational by, what Merrell contends is the routine  pilot practice of
reading back clearances and taking ATC  silence as acknowledgment of
accuracy. "Readbacks," the  FAA points out, "add a layer of safety
redundancy." FAA  Reply Br. at 8. If a pilot transmits a readback, ATC
will  usually be able to correct a misunderstanding even if the pilot 
himself did not realize there was one. But as this case shows,  the
readback procedure is not failsafe; there is no guarantee  that ATC's
silence means it has received and confirmed the  pilot's transmission.
This underscores the reasonableness of  the FAA's policy, which
requires pilots to perceive ATC  instructions correctly and not to
depend upon the potentially  unreliable readback mechanism. See id. at




__________

n 12 Although the FAA could make full readbacks mandatory and  require
pilots to await confirmation before proceeding, the agency  has
concluded that such a policy would disserve air safety by  congesting
radio frequencies. See 64 Fed. Reg. 15,913 (1999).  Neither we nor the
NTSB may second-guess that policy determina-


IV


In support of the decision below, Merrell argues that the  NTSB's
holding is "thoroughly consistent with a well- established line of
Board precedent." Merrell Br. at 17. The  FAA contends that the
opposite is true. As we discuss in this  Part, the situation is far
less clear than either party is willing  to concede. But even if
Merrell were correct, the fact that  the Board followed its own
precedent would not be a suffi- cient basis on which to uphold its
decision. Because the FAA  is entitled to launch new policies through
administrative  adjudication, it may sometimes be necessary for the
NTSB to  accommodate such policies by changing its jurisprudential 


We begin by noting that there are actually two divergent  lines of NTSB
precedent in this area.13 One line contradicts  Merrell's position,
holding that if a pilot deviates from an  ATC instruction in the
absence of an emergency, the pilot is  in violation unless an external
factor precipitated the error.14 




__________

n tion. Merrell also suggests that the FAA could require the installa-
tion of technology "that would eliminate the problem at the root of 
this case: blocked radio transmissions." Merrell Br. at 21-22. 
Because this was not a part of the NTSB's rationale for rejecting  the
FAA's interpretation, we may not rely upon it here. See  Cassell, 154
F.3d at 483 n.5.


13 The NTSB came close to acknowledging this point in its Order  on
Reconsideration. See J.A. at 38 ("As a principle of administra- tive
law, we may modify our precedent.... We have done so over  time with
regard to this issue, with the FAA often in disagree- ment.").


14 See Administrator v. Swafford & Coleman, NTSB Order No.  EA-4117
(1994), 1994 WL 108069, at *2 (holding that although  "precedent
recognizes that when ATC error is the initiating or  primary cause of
the deviation, the complaint will be dismissed,"  that is not the case
where "the ground controller's instructions to  [the pilot] were clear
and unambiguous"); Administrator v. Wolfen- barger, NTSB Order No.
EA-3684 (1992), 1992 WL 289055, at *3  (ruling that "the only
regulatory exception to compliance with an  [ATC] instruction is
in-flight radio malfunction" and that pilot's  claim he did not hear
ATC instruction was therefore "irrelevant"); 


Under this line of cases, when the pilot cannot point to such a 
precipitating factor, the NTSB attributes the error to the  pilot's
own lack of care. And under this line, a violation is not  excused
even if the pilot reads back the misunderstood in- struction and ATC
fails to correct it, notwithstanding its  ability to do so.15


The second line of NTSB precedent, that cited by Merrell,  is more
supportive of his position although not wholly sup- portive. Under
this line, the Board will excuse a pilot's  deviation if ATC error was
a contributing cause.16 In the 




__________

n


Administrator v. Gentile, 6 N.T.S.B. 60 (1988) (holding that "it is 
patent that deviation from an altitude clearance in positive control 
airspace is careless in the absence of an emergency or some other 
extenuating circumstances"); Administrator v. Nelson & Keegan, 2 
N.T.S.B. 1900 (1975) (concluding that "the most reasonable explana-
tion for respondents' following instructions issued to another flight"
 was that "respondents did not exercise the highest degree of care 
expected of airline pilots," and that regulatory violation was not 
excused by fact that "controller might have taken additional mea-
sures which could have averted a deviation of the magnitude that 
occurred"); Administrator v. Wells, 1 N.T.S.B. 1472 (1971) ("Inas-
much as the altitude restriction was transmitted ... twice, both 
times in clear terms, [the pilot's] failure to hear the clearance, and
 adhere to it, can only be attributed to carelessness on his


15 See Swafford & Coleman, 1994 WL 108069, at *2. While the  Board will
not dismiss the violation under such circumstances, it will  mitigate
sanctions. See id. at *3; see also Nelson & Keegan, 2  N.T.S.B. at
1900 (stating that system imperfections and contribut- ing controller
error are "more appropriately given weight as miti- gating
circumstances" rather than as excuses for violations). As  previously
noted, the FAA waived sanctions altogether in Merrell's  case.


16 See Administrator v. Jackson, NTSB Order No. EA-4381  (1995), 1994
WL 804033, at *3 n.11 ("Our precedent holds that,  'even if a
deviation from a clearance is initiated by an inadvertent  mistake on
the pilot's part, that mistake will be excused and no  violation will
be found if, after the mistake, the pilot takes action  that, but for
ATC, would have exposed the error and allowed for it  to be
corrected.' ") (quoting Administrator v. Atkins & Richards, 


typical case, a pilot misunderstands a clear ATC instruction,  the
pilot gives a readback that reflects this misunderstanding,  and ATC
receives the erroneous readback but fails to correct  the error
despite its ability to do so. The cases Merrell cites  indicate the
NTSB will exonerate pilots who deviate from  ATC instructions under
such circumstances. The underlying  rationale of these cases, however,
appears to be that ATC  could have corrected the pilot's
misunderstanding before a  violation occurred. See cases cited supra
note 16.17 Indeed,  the only precedent the NTSB itself cited in
rejecting the  FAA's petition for reconsideration, Administrator v.
Froh- muth & Dworak, was a case in which the Board excused a 
violation because ATC, and not the pilot, was responsible for  the
initial misunderstanding.18 Here, ATC was neither re- sponsible for
the initial misunderstanding nor capable of  correcting it since it


More important, even if the NTSB had followed an unvary- ing line
contrary to the regulatory interpretation the FAA  advances here, that
would not be sufficient to uphold the  Board's decision in this case.
As we noted at the outset, the  interpretation of air safety
regulations is an area in which the  Board owes deference to the FAA.
For that reason, consis-




__________

n NTSB Order No. EA-4078 (1994), 1994 WL 49589, at *2) (emphasis 
added); Administrator v. Shields, NTSB Order No. EA-4180  (1994), 1994
WL 267742, at *1 (suggesting that pilot would have  defense if "ATC
should have caught the mistake"); Administrator  v. Holstein, 6
N.T.S.B. 569 (1988) (dismissing order "under unique  circumstances"
where ATC "either did not hear the miscommunica- tion or was confused


17 The NTSB administrative law judge in Merrell's case read  these
cases the same way. See J.A. at 26 ("In all of the cases where  the
board has absolved these pilots of some responsibility, the 
circumstances have been that that responsibility has somehow been  put
back onto air traffic control....").


18 See Administrator v. Frohmuth & Dworak, NTSB Order No.  EA-3816
(1993), 1993 WL 75479, at *2 (observing that pilot error at  issue was
"apparently induced ... by ATC's actions" because ATC  had "not
clearly separated" instructions to Frohmuth's aircraft from  those to
another plane with similar call sign) (emphasis added).


tency with the FAA's position is more important than consis- tency with
the Board's own. As both the NTSB and Merrell  concede, the FAA is
authorized to initiate new regulatory  interpretations through
adjudication.19 And because the  Board is bound to follow such
interpretations, it may at times  be both necessary and proper for the
Board to depart from  its prior case law.20


As discussed in Part II.A, the position the FAA takes here  is neither
new nor inconsistent with its previous view of a  pilot's obligations.
Nonetheless, there are still some con- straints on the FAA's ability
to bend the NTSB to its will in  this case. For one, if a rule is to
be applied to a regulated  party, that party must have received fair
notice. See United  States v. Chrysler Corp., 158 F.3d 1350, 1354
(D.C. Cir. 1998);  General Elec. Co. v. EPA, 53 F.3d 1324, 1328-29
(D.C. Cir.  1995); see also Martin, 499 U.S. at 158 (noting that
decision  to use adjudication "as the initial means for announcing a 
particular interpretation may bear on the adequacy of notice  to
regulated parties"). In this case, however, there was fair  notice.
The plain language of section 91.123 states that a 




__________

n 19 See Petition of Van Eaton, 1998 WL 546384, at *3 (acknowl- edging
FAA's prerogative to advance regulatory interpretation  through
administrative adjudication even where such interpreta- tion
"amend[s]" the agency's prior approach); Petition of Quinta- na, 1992
WL 362084, at *4-5 (deferring to FAA interpretation  "offered
officially for the first time in this proceeding" and not 
inconsistent "with the words of the rule or with [the Administra-
tor's] past position"); Miller, 1992 WL 137750, at *2-5 (deferring  to
FAA interpretation "now offered for the first time [but] not 
inconsistent with any prior interpretative pronouncements"); Mer- rell
Br. at 16 (citing Miller as case in which "Board deferred to  FAA
interpretation of regulation, asserted for the first time in 
enforcement proceedings"). Cf. Martin, 499 U.S. at 158 ("[T]he 
Secretary's interpretation is not undeserving of deference merely 
because the Secretary advances it for the first time in an adminis-


20 See Hinson, 57 F.3d at 1149-50 ("Nor is the Board irrevocably  bound
to its own precedents, so long as it gives a reasoned  explanation for
its departure.").


pilot must follow ATC directions unless there is an emergen- cy, and
does not suggest that he may rely on readback  procedures to absolve
himself of responsibility.


An agency is also barred from applying a new rule in the  adjudication
in which it is announced if doing so would work a  "manifest
injustice." Cassell, 154 F.3d at 486-87 (quoting  Clark-Cowlitz Joint
Operating Agency v. FERC, 826 F.2d  1074, 1081 (D.C. Cir. 1987)).21 In
cases like this one, the issue  boils down to the question of whether
the regulated party  reasonably and detrimentally relied on a
previously estab- lished rule. See id. at 486. For the reasons
discussed above,  however, there was no established, contrary rule
upon which  Merrell could have relied. Again, the FAA's position on
this  matter has been unwavering, while the NTSB's position has  been
at most internally inconsistent. Nor does Merrell sug- gest that there
is anything he would have done differently as  a pilot had he known
how the FAA would interpret its rule.22  Accordingly, the NTSB's
precedent in this area is insufficient  to render the application of
the FAA's interpretation to  Merrell a "manifest injustice."


V


Finally, Merrell complains that the FAA did not begin to  characterize
its position as a regulatory interpretation until  its petition for
reconsideration. Both before the ALJ and  initially before the Board,
Merrell contends, FAA counsel  presented the case as a straightforward
charge of factual  carelessness. But the NTSB did not refuse to
consider the  FAA's interpretation argument on the ground of tardy
pre- sentation, and Merrell himself stops short of contending that 
the agency's tardiness should have barred it from making the 




__________

n 21 In addition, the agency must (among other things) explain its 
change of course, and the new course must be neither arbitrary nor 
capricious. See Motor Vehicle Mfrs. Ass'n v. State Farm Mut.  Auto.
Ins. Co., 463 U.S. 29 (1983); Hinson, 57 F.3d at 1149-50.


22 To the contrary, Merrell contends that "[n]o matter what  happens"
in this case, pilots will continue their current practices.  Merrell
Br. at 21.


argument, saying only that the point is "worth noting." Mer- rell Br.
at 14. He does, however, strongly suggest that the  FAA pursued an
unfair strategy by shifting to a second  theory after losing on the
first. Three considerations lead us  to conclude that the FAA's delay
should not affect our  disposition of this case.


First, it is true that the FAA did not initially argue that it 
interpreted its regulation to presume inattentiveness or care-
lessness in the absence of explanation; nor did it initially  argue
that the NTSB was required to defer to such an  interpretation. On the
other hand, the FAA also did not  appear to limit itself solely to a
claim of factual carelessness.  For example, during the initial
hearing before the ALJ, the  FAA's counsel argued: "The Board has
stated that an alti- tude deviation in positive control airspace ...
is carelessness  in the absence of an emergency." R. at 201. Counsel
also  argued that pilots should be found in violation of section 
91.123 whenever their errors were not initiated by external  factors.
See id. at 200, 213-14. These arguments are consis- tent with the
position the FAA took on reconsideration.  They suggest that the FAA's
litigating posture was not so  much strategic as simply muddled.


Second, we are not precluded from considering a regulatory 
interpretation simply because the FAA raised it for the first  time in
a petition for reconsideration below--at least not  where, as here,
the Board went on to consider and resolve the  petition on the merits.
The pertinent statute states that "the  court may consider an
objection to an order of the Board only  if the objection was made in
the proceeding conducted by the  Board or if there was a reasonable
ground for not making the  objection in the proceeding." 49 U.S.C. s
1153(b)(4); see  also id. s 46110(d). The reconsideration process
qualifies as  a proceeding conducted by the Board. See 49 C.F.R.  s
821.50. Indeed, although in Hinson we rejected the FAA's  effort to
advance its regulatory interpretation because the  agency had not
raised it at all in the NTSB proceedings, we  indicated we would have
considered it had the FAA raised it  at the reconsideration stage. See
Hinson, 57 F.3d at 1148- 49, 1150-51.


Third, and most important, Merrell does not suggest any  way in which
the late emergence of the FAA's interpretation  argument prejudiced
him. He does not contend, for instance,  that if he had known of the
argument earlier he would have  litigated the factual issues
differently. To the contrary, since  Merrell construed the charge
against him as one of pure  factual carelessness, he had every reason
to offer an explana- tion for his misperception of the ATC
instructions at the  initial hearing. And as he concedes he had no
explanation,  there was no further evidence he could have produced,
re- gardless of how he understood the charge. Nor was Merrell 
disadvantaged in arguing the legal issues. After the FAA  articulated
its position in its petition for reconsideration,  Merrell had a full
opportunity to respond in opposition to the  petition, and he did so.


None of this excuses the FAA's failure to be clear about its  position
from the start. Given that the agency lost Hinson in  part because it
failed to raise its interpretation argument in a  timely manner, one
would think it would have taken care not  to wait until the last
possible moment to raise the argument  this time around. Employing the
same presumption the FAA  applies to pilots, we would have to conclude
that only the  agency's "inattentiveness" explains its tardiness. But
unlike  a pilot, the agency--and, derivatively, the flying public--
cannot be sanctioned for its inattentiveness through dismissal  of the
enforcement order issued in this case.


VI


Because the NTSB failed to defer to the FAA's reasonable 
interpretation of its own regulations, we conclude that the  Board's
ruling was not in accordance with law. We therefore  grant the
petition for review, reverse the Board's decision,  and remand the
case for further proceedings consistent with  this opinion.23




__________

n 23 As noted supra note 1, Merrell was also charged with "oper-
at[ing] an aircraft in a careless or reckless manner so as to 
endanger the life or property of another," in violation of 14 C.F.R. 
s 91.13(a). On its face, s 91.13(a) could be read to require a 


---------


Note 23--Continued  different standard of care than s 91.123, since
only the former  expressly uses the term "careless." Nonetheless,
Merrell makes no  argument concerning s 91.13(a), apparently assuming
that--as the  FAA asserts--a s 91.13(a) violation can be wholly
derivative of a  s 91.123 violation. See FAA Br. at 5 n.1 (citing
Jackson v. NTSB,  114 F.3d 283, 287 (D.C. Cir. 1997) (noting NTSB
decision character- izing s 91.13(a) violation as "residual or
derivative" of s 91.123  violation)); see also Administrator v. Clark,
7 N.T.S.B. 434, 436  (1990) (holding s 91.13(a) derivative of s
91.123); Administrator v.  Buller, 6 N.T.S.B. 31, 32 (1988) (same).
Accordingly, we reverse  without addressing whether the standard of
care under each of  these regulations might be different.