Courts Say FAA Not the Final Word In Product Liability

 - May 16, 2017, 8:10 AM

When the General Aviation Revitalization Act (GARA) was signed into law by President Clinton in 1994, the industry hailed it as a landmark piece of aviation product liability legislation for providing a degree of legal protection to OEMs, but two recent court rulings have established precedents that could potentially have an even greater effect on the aviation industry, by challenging the oversight of the FAA in determining liability cases.

Earlier this year, in the case of Estate of Becker v. Avco Corp., the Supreme Court of the State of Washington ruled that the federal law does not preempt state laws in cases of product liability and aviation safety. In the case, a retired doctor was killed in the 2008 crash of a single-engine propeller aircraft. His estate claimed the cause of the crash was engine failure that was the result of a poorly manufactured carburetor. A lower court ruled that as “federal regulations pervasively regulate an airplane engine’s fuel system,” that this constitutes “implied field preemption [that] precludes applying a state law standard of care to [the Estate’s] claims.”

The original Federal Aviation Act declared that “the Administrator of the Federal Aviation Administration shall promote safe flight of civil aircraft in air commerce by prescribing: minimum standards required in the interest of safety for appliances and for the design, material, construction, quality of work and performance of aircraft, aircraft engines and propellers; and regulations and minimum standards in the interest of safety for inspecting, servicing and overhauling aircraft, aircraft engines, propellers and appliances.”

While the statutes did not specifically claim exemption from state law, courts in the past had ruled that federal law concerning aviation safety was so comprehensive that it superseded state law in those matters.

Upon appeal, the Washington State Supreme Court ruled that though the Federal Aviation Act was intended by Congress to establish minimum safety standards, it is not “so pervasive or comprehensive enough to preempt state remedies that exceed that minimum.”

In another instance last year the U.S. Court of Appeals, Third Circuit, in the case Sikkelee v. Precision Airmotive Corp., ruled that federal law in the field of aviation safety does not extend to state law liability claims. The U.S. Supreme Court declined to hear an appeal of that case, despite the support of the FAA, the Aircraft Owners and Pilots Association (AOPA) and the General Aviation Manufacturers Association (GAMA) and others, on behalf of the manufacturer. “That preemption argument has worked and worked, and now in these last couple of decisions, it hasn’t worked because judges have said that federal law does not preempt state law with respect to the design and manufacture of airplanes and components,” said Lon Sobel, a California-based pilot and aviation law professor. “It was possible in the past for manufacturers to show that their products were manufactured to the specifications required by the experts at the FAA, and that was enough.”

Precedent-setting Decisions

Taken together, the rulings represent a potential sea change in the legal landscape. “It means that lawsuits will go farther than they used to go before they settle, or they might actually go to trial, because these last couple of decisions now give juries a lot more authority to make decisions about whether aircraft and aircraft parts designs were safe,” Sobel told AIN. “The FAA has experts on what are the elements of safe design, and now jurors just drawn from a pool of the public will get to decide whether what the FAA required was safe enough.”

He noted that those jurors will be “educated” by dueling experts, with lawyers on the plaintiff’s (injured party) side arguing there could have been a safer way to design the aircraft or component, while those for the defendant (manufacturer) countering that they were in compliance with FAA guidance, which may no longer be enough.

Because state law differs from state-to-state, and all of these cases are being decided by juries, there might be 50 different standards for an airplane or component design because 50 different juries decided there’s something more and better than what the FAA requires could be done,” Sobel explained, adding it could put airframers and component makers in an “impossible situation.” “They can’t simply change the design because a jury decided that there was a safer way to design the airplane or its components.”

As AOPA described in its amicus curiae brief to the Sikkelee court, “These aviation product-liability actions result in the imposition of state-law duties, which interfere and conflict with federal control of aviation products and continued operational safety.” As a result the document concluded, “Manufacturer compliance with these variable state-law duties is practically impossible because the federal regulatory scheme requires approval from the FAA to change an approved aircraft design.”

GAMA concurred, explaining in its amicus brief prepared for the same trial: “The federal regulatory framework for the design and manufacturing of aviation products requires federal preemption to achieve congressional safety goals. It cannot coexist with supplementation by, or variation among, local safety standards; piecemeal, inconsistent regulation of aviation products undermines safety, rather than enhances it.”

The result of the rulings, AOPA noted, will have a severe effect on the industry: “Allowing a lay jury to retroactively impose state-law duties, in a field where it has no authority, has negatively impacted and continues to threaten the affordability and safety of general aviation,” the organization stated.

Sobel believes that with more lawsuits going to trial, the cost of these rulings will ultimately be borne by the end user. “Additional costs of defending these lawsuits will result in higher insurance premiums, higher prices for airplanes and their components, and the higher prices come out of the pockets of owners and operators,” he told AIN.

According to Sobel, if the industry finds itself covered under an avalanche of litigation, it would be up to Congress to decide whether it would add further protections to the General Aviation Revitalization Act, possibly in the form of an amendment stating anything that was designed in accordance with specifications required by the FAA is deemed to be safe as a matter of law, thus clearly stating long-held legal opinion and finally removing any ambiguity from the interpretations.