Aviation is one of the most heavily regulated industries in the United States. Thousands of complex Federal Aviation Regulations (“FARs”) exist governing the operation, ownership and maintenance of aircraft. This article is an analysis of the consequences of alleged FAR violations. Specifically, the Federal Aviation Administration (the “FAA”) alleged that the Hinman Company (“Hinman”) was operating as a de facto charter air carrier for compensation without the required FAA approvals and as a result, the FAA proposed a $3.3 million civil penalty against Hinman for the related FAR violations.

In this article, Shareholder David M. Hernandez provides an analysis of circumstances that gave rise to Hinman’s $3.3 million proposed civil penalty, the FAA’s case, and the FAA’s subsequent referral to the U.S. Attorney’s Office for the Western District of Michigan with the primary goal of educating companies on how to avoid being the next seven-figure civil penalty enforcement action.