RECENT DEVELOPMENTS IN AVIATION LAW

Don Andersen

Doug Bates

Clarke Keller

Kristen Orr

Doug Bates

Recent Developments in Aviation Law

Insurance

CNS Corp. v. Global Aerospace, Inc.2011 U.S. Dist. LEXIS 74286 (E.D. MO. July 23, 2010)

Appraisal clause in insurance policy found to be valid mechanism for resolving dispute regarding cost to repair physical damage to aircraft. Insurer allowed to fulfill policy obligations by making repairs, even if aircraft would not be as valuable after repairs since policy excluded loss for diminution in use, appearance and/or value. Appraisal clause did not amount to an impermissible arbitration clause in policy.

Insurance

• Trishan Air, Inc. v. Federal Insurance Company, et al., 635 F.3d 422 (9th Cir. 2011)

Denial of coverage for aviation accident found proper under circumstances where co-pilot had not undergone the training mandated by the policy’s pilot warranty. Ninth Circuit held that California law would require strict compliance with pilot warranty portion of policy.

Insurance

Precision Airmotive Corporation v. Ryan Insurance Services, Inc.

2011 U.S. Dist. LEXIS 4338 (D. ME. January 17, 2011)

Insurance investigator forced to produce file regarding aviation accident. Unless and until an insurance company can demonstrate that it reasonably considered claim to be more likely than not headed to litigation documents prepared for this realization prepared in regular course of business.

Insurance

821,393 LLC v. Liberty Mutual Ins. Co.

2011 Phila. Ct. Com. Pl. LEXIS 7 (Phila Ct. Com. Pl. January 5, 2011)

Insurers sued for bad faith for refusing to pay policy limits where aircraft was damaged in hangar collapse after snow storm and local fire department restricted access to hangar for more than 60 days.

Don Andersen

Federal Preemption Majority of Federal Circuit Courts have now

adopted federal preemption of the field of aviation safety:

In re Air Crash near Clarence Center, New York, on February 12, 2009, 2011 U.S. Dist. LEXIS 78464 (W.D. N.Y. 2011) (listing decisions)

But see North v. Precision Airmotive Corporation, 2011 U.S. Dist. LEXIS 15443 (M.D. Fla. 2011) (Eleventh Circuit district courts must still apply state law to product design and warning cases, unless and until Eleventh Circuit Court of Appeals overrules prior decision in Public Health Trust of Dade County, Fla. v. Lake Aircraft, Inc., 992 F.2d 291 (11th Cir. 1993)).

Federal Preemption Vreeland v. Ferrer, 2011 Fla. LEXIS, 36 Fla. Law Weekly

441 (Fla. S. Ct. July 8, 2011), rehearing denied 2011 Fla. LEXIS 2201, (Fla. S. Ct. September 13, 2011). Federal statute (49 U.S.C. Section 44112) does not preempt Florida Dangerous Instrumentality Doctrine because federal statute is limited to protection of aircraft owners, lessors, or secured parties, not in actual possession or control of the aircraft, for “personal injury, death, or property loss on land or water.” Florida Supreme Court, over dissent, held statute only applies to injury or death on land or water, i.e., to persons or property on the ground. Florida Supreme Court did not consider federal preemption of entire field of aviation safety, or other aspects of legislative history regarding protection of those not in control of aircraft, such as lenders or secured parties, from tort liability.

Federal Court Jurisdiction

Federal Question Jurisdiction

Even with federal preemption airworthiness not a basis for federal jurisdiction. West v. A&S Helicopters, 751 F. Supp. 2d 1104 (W.D. Mo. 2010) (would shift federal/state court balance)

Federal Court Jurisdiction

Federal Court Jurisdiction

Federal Officer Jurisdiction –DER involvement in certification not a basis for federal officer jurisdiction. O’Brien v. Cessna Aircraft Company, 2010 U.S. Dist. LEXIS 120877 and 12689 (D. Nebr. 2010).

Federal Court Jurisdiction

Federal Class Action Fairness Act (Mass Disasters) –

No federal jurisdiction unless single trial with more than 100 claimants. Therefore, 4 cases, each less than 100, but totaling 119 plaintiffs, not removable. However, if “exemplar” case is to be tried in cases involving more than 100 claimants, then removal may be possible. Korai v. Boeing Company, 628 F.3d 945 (7th Cir. 2011).

Federal Court Jurisdiction

Diversity of Citizenship Federal Jurisdiction

Diversity is determined based on “domicile” at time suit is filed. Brinkman v. Schweizer Aircraft Corp., 2011 U.S. Dist. LEXIS 24602 (N.D. Calif. 2011). However, amendment to add a defendant may “relate back” and diversity may be lost by adding foreign defendant to case involving foreign plaintiff. Campos v. Learjet, Inc., 2011 U.S. Dist. LEXIS 28233 (N.D. Del. 2011).

Federal Court Jurisdiction

Federal Admiralty Jurisdiction

Mid-air collision over Hudson River involves “navigable waters,” but no admirality jurisdiction because scenic helicopter flight not a “traditional maritime activity,” as sight seeing could be done “by vehicle, … by foot, … by boat, … or by air.” In re Hudson River Mid-Air Collision on August 8, 2009, 2011 U.S. Dist. LEXIS 65491 (D. N.J. 2011).

Personal Jurisdiction

Aircraft Manufacturers

No personal jurisdiction over Socata where aircraft not sold in forum state, none of claimants are residents of forum state, and only relationship is place of accident. Newman v. EADS, Co., 2011 U.S. Dist. LEXIS 63503 (D. Mass. 2011)

Personal Jurisdiction Component Manufacturers

Personal jurisdiction over French helicopter component manufacturer in Illinois in case involving Illinois accident on grounds part was designed for use in helicopter to be distributed in Illinois. Court relies on U.S. Supreme Court decision in Asahi. Russell v. SNFA, 408 Ill. App. 3d 827, 946 N.E. 2d 1076, 2011 Ill. App. LEXIS 290 (2011).

No personal jurisdiction in New Hampshire over component manufacturer (fuel shut off valve) for New Hampshire accident where only contact was accident in New Hampshire. West v. Bell Helicopter, 2011 U.S. Dist. LEXIS (D. N.H. 2011).

No jurisdiction over component manufacturer (rotor blade) in Florida under tort long-arm provisions because accident occurred in Alabama. The component manufacturer also was not “engaging in a business or business venture” in Florida when less than 2% of its sales were to Florida customers. Scott v. Lance Aviation, 2010 U.S. Dist. LEXIS 88983 (M.D. Fla. 2010).

Personal Jurisdiction Overhaul Facility

Jurisdiction in Oklahoma over out of state (Kansas) overhaul facility for accident in Bahamas because overhaul facility had “long-standing and substantial business relationship” to Oklahoma engine repair facility that supplied accident engine. Agape Flights, Inc. v. Covington Aircraft Engines, Inc., 2010 U.S. Dist. LEXIS 92956 (E.D. Okla. 2010) (but Florida FBO that installed overhauled unit in Florida was not subject to Oklahoma jurisdiction based on “random, fortuitous and attenuated contacts,” including internet advertising and .04% sales to Oklahoma customers).

Personal Jurisdiction

Aircraft Sales and Leasing Company

Pennsylvania corporation that existed solely to purchase and lease helicopters to helicopter operator subject to jurisdiction in Montana, where accident occurred, even though no other Montana contacts. Burdick v. Dylan Aviation, LLC, 2011 U.S. Dist. LEXIS 64369 (D. Mont. 2011).

Personal Jurisdiction

Aircraft Operators

Canadian pilot and aircraft owner subject to jurisdiction in West Virginia for wrongful death claims involving Canadian passengers, after an unscheduled stop in West Virginia due to IMC conditions on flight from Canada to Bahamas. VFR pilot then made decision in West Virginia to continue, despite IMC weather conditions, and crashed in Virginia approximately 15 miles from West Virginia state line. New meaning to “minimum” contacts. Nezan v. Avies Technologies, Inc., 226 W. Va. 661, 704 S.E.2d 631, 2010 W. Va. LEXIS 129 (W. Va. 2010).

General Aviation Revitalization Act

Maintenance Manual revisions are not “new” parts under “rolling” provisions of GARA. Burton v. Twin Commander Aircraft, LLC, 254 p.2d 778 (Wash. 2011); Agape Flights, Inc. v. Covington Aircraft Engines, Inc., 2011 U.S. Dist. LEXIS 69521 (E.D. Okla. 2011).

A “new” component under GARA does not mean “overhauled,” it must be new, and statute runs from date “overhauled” part placed on the original aircraft, not the aircraft in accident. U.S. Aviation Underwriters, Inc. v. Nabisco Corp., 2011 U.S. Dist. LEXIS 46889 (W.D. Wash. 2011).

General Aviation Revitalization Act

A “new” replacement part from manufacturer starts “rolling” provision of GARA, even if not “redesigned” from original part. Crouch v. Teledyne Continental Motors, Inc., 2011 U.S. Dist. LEXIS 67722 (S.D. Ala. 2011).

Successor or PMA can be “manufacturer” under GARA. Stewart v. Precision Airmotive, LLC, 7A.3d 266 (Pa. Super 2010); Aubrey v. Precision Airmotive, LLC, 7 A.3d 256 (Pa. Super. 2010).

Clarke Keller

Admissibility/Discovery of “Other Accidents”

Crouch, et al. v. Teledyne Continental Motors, Inc.2011 U.S. Dist. LEXIS 72740 (S.D. Ala. 2011)

“Substantial Similarity Doctrine”Conditions substantially similar to the occurrence in question caused the prior accidentsNot too remote in timePrejudice/confusion v. value of evidence

Service difficulty reports, warranty claims, incidents

Yoshio Kato, et al. v. Hawker Beechcraft Corp., et al.

2010 U.S. Dist. LEXIS 136236 (N.D. Cal. 2010)

Plaintiffs’ motion to compel discovery of previous accidentsCourt allows discovery

Punitive Damages In Re: Air Crash at Lexington,

Kentucky, August 27, 20062011 U.S. Dist. LEXIS 10429 (E.D.Ky. 2011)

KRS 411.184 applies to wrongful death actionsComair not liable for punitive damages

Exclusion of Experts

Crouch, et al. v. Teledyne Continental Motors, Inc.

2011 U.S. Dist. LEXIS 70449 (S.D. Ala. 2011)

Plaintiffs and Teledyne moved to strike reports and opinions of the following experts:

Experts for Plaintiffs: William Carden, Mark Seader, James E. Hall, Richard Wartman, Bernard J. Coogan, Robert PierceExperts for Defendant: Barry Schiff, J. W. Morris, Jr., John Barton, Robert Douglas Marwill, Norman Alvares

Exclusion of Experts

Competitor Liaison Bureau, Inc. et al. v. Cessna Aircraft Company

2011 U.S. Dist. LEXIS 33065 (M.D.Fla. 2011)

NASCAR’s motion in limine to exclude portions of testimony of Tommy McFall re: Metallurgical engineering, Fire cause and origin, Toxicology, Aircraft maintenance, Weather radar system

Jean Fedelich v. American Airlines724 F. Supp. 2d 274 (D. Puerto Rico 2010)

Plaintiff’s expert S. Melville McCarthyipse dixit insufficient

Kristen Orr

Montreal Convention: “Accident”

Phifer v. Icelandair2011 U.S. App. LEXIS 15362 (9th Cir. 2011)

The Ninth Circuit clarified that a plaintiff does not have to prove that an airline violated an FAA standard to establish that there was an "accident" under Article 17 of the Montreal Convention

Cardoza v. Spirit Airlines, Inc.2011 U.S. Dist. LEXIS 68091 (S.D.Fla. 2011)

Court allowed Plaintiff to proceed with case where alleged accident was violation of airline policy or industry standard

Montreal Convention: “Air Transport Undertaking”

Lavergne v. ATIS Corp.767 F. Supp. 2d 301 (D. Puerto Rico 2011)

Corporate owner of two airplanes did not act as an "air transport undertaking" as defined in the Montreal Convention (Article 1(1)) when it provided gratuitous carriage to passengers Montreal Convention did not extend its scope beyond the commercial realm

Montreal Convention: Forum Non Conveniens

In re Air Crash over the Mid-Atlantic on June 1, 2009

760 F. Supp. 2d 832 (N.D. Cal. 2010)

Although jurisdiction proper pursuant to “fifth jurisdiction” under Montreal Convention, the MC did not override court’s power to dismiss for forum non conveniens

Khan v. Delta Airlines, Inc. et al2010 U.S. Dist. LEXIS 82293 (E.D.NY 2010)

Montreal Convention does not preclude application of the forum non conveniens

doctrine

Don Andersen

Doug Bates

Clarke Keller

Kristen Orr