Category Archives: Litigation

Multi-District Aviation Disaster Litigation after Air France 447

Multi-District Aviation Litigation (MDL) after Air France 447

Air France 447 was operated as a scheduled passenger flight from Rio de Janeiro, Brazil to Paris, France, when it crashed on June 1, 2009.  About three and one-half hours into the flight, the plane entered a high-altitude aerodynamic stall, from which it never recovered, and crashed into the Atlantic, killing all 228 passengers, cabin crew and aircrew.  The Airbus A330-203 was Air France’s newest A330 at the time of the crash, and had undergone a major overhaul on April 16, 2009.  It was the second and deadliest crash of an Airbus A330, causing a fair amount of aviation litigation activity.

The crash was investigated by France’s Bureau d’Enquêtes et d’Analyses pour la Sécurité de l’Aviation Civile (BEA), which released its final report on June 5, 2012.  The report concluded that the aircraft’s pitot tubes were obstructed by ice crystals.  The icing of the pitot tubes created inconsistent airspeed readings which automatically disconnected the autopilot.  The crew reacted improperly, placing the aircraft into an overly aggressive angle of attack, causing it to climb at such a steep angle that air passing over the wings failed to provide lift.  The aircraft remained at varying degrees of excessive pitch, and remained stalled during its entire three minute and thirty second descent from 38,000 feet despite the fact that engines ran at full power and were not defective.  It crashed into the Atlantic Ocean killing everyone on board.

For general information, see Interim and Final reports on the accident on 1 June 2009 to the Airbus A330-203 registered F-GZCP operated by Air France flight AF 447 Rio de Janeiro-Paris.  Paris: Bureau d’Enquêtes et d’Analyses pour la Sécurité de l’Aviation Civile (BEA), July 2, 2009, and July 5, 2012.

Fact Issues Framing Forum, Removal, MDL, The Montreal Convention, MMTJA, and FNC Considerations

In the typical aviation mass disaster where FNC and other considerations arise, the airline will be a foreign carrier.  The accident will have occurred outside the United States or its airspace.  The crash may involve a U.S. or foreign-manufactured aircraft.  The passengers may be from the U.S. or they may be foreign citizens, but the majority of plaintiffs will be foreign.  Component part manufacturers may be numerous and may be foreign or domestic.

The litigation arising from the AF 447 crash, which would become the multidistrict litigation known as In re:  Air Crash Over the Mid-Atlantic on June 1, 2009, Multidistrict Litigation No.3:10-MD 02144, involved all of these situational considerations.

The aircraft was manufactured by the French Company Airbus S.A.S., which sourced components using numerous suppliers from Europe and the United States.  The plane was equipped with two General Electric CF6-80E1A3 engines manufactured in the United States.

Among the 216 passengers were 126 men, 82 women and eight children, including 1 infant.  There were twelve crew members on board.  Due to the thirteen hour length of the flight, there were three pilots on board taking staggered rest periods.  At the time the plane entered the stall, the pilot in command was on a rest period in a cabin behind the cockpit.  Of the twelve crew members, eleven were French and one was Brazilian.  There were passengers and crew representing thirty-three nationalities, including two Americans.  The vast majority were French, Brazilian and German.

In March, 2010 the first twenty-three wrongful death lawsuits were filed against Airbus, the French manufacturer of the pitot tubes and several U.S. component- part suppliers in the United States District Court for the Southern District of Florida.  The component part suppliers included Thales, the French manufacturer of the pitot tubes, as well as U.S.-based component part manufacturers including Intel, G.E., Rockwell, Motorola, Honeywell, du Pont and others.

Other wrongful death lawsuits were filed in U.S. District Courts in Texas, Illinois and California.

Wrongful death lawsuits filed by relatives of the Americans were filed in Houston.  Due to the provisions of the Montreal Convention, which prevented the foreign plaintiffs from suing Air France in the United States, these were the only two lawsuits directly naming Air France as a defendant.

General Principles of Forum Non Conveniens

Principles for application of the FNC doctrine of a supervening venue provision which provides for dismissal to an adequate alternative forum are well established in the United States.  In Piper Aircraft Co. v. Reyno, 454 U.S. 235 (1981), the Supreme Court made clear that defendant has the burden of proving both that an adequate alternative forum is available to plaintiffs and that the balance of private- and public-interest factors weigh in favor of litigation in the alternative foreign forum.

The Piper litigation arose from the crash of a Piper Aztec in the Scottish Highlands in July, 1975.  The crash killed the pilot and five passengers.  The twin-engine light utility plane was manufactured by Piper Aircraft in Pennsylvania, and fitted with Hartzell propellers manufactured in Ohio.  The plane was operated by a British sky taxi service.  The investigation by the British government after the crash found no evidence of any product defects.

Reyno, a legal secretary for the attorney filing lawsuits on behalf of the deceased passengers, was appointed administratrix of the estates.  After Reyno filed negligence and strict product liability lawsuits in a California state court, Piper removed based on diversity jurisdiction and obtained a 28 U.S.C. § 1404(a) transfer to the Middle District of Pennsylvania based on Piper’s substantial business in that district.  Hartzell moved to dismiss, or for transfer under 28 U.S.C. §1631 based on the conduct of business between Piper and Hartzell.

Both defendants then sought dismissal based on forum non conveniens.  The district court, relying on the test in Gulf Oil v Gilbert, 330 U.S. 501 (1947), granted the motions, but the Third Circuit reversed, holding that FNC dismissals are not proper when the law of the alternative forum is less favorable to the plaintiff.  The Supreme Court reversed, upholding the district court’s dismissal to Scotland based on FNC.

The Court noted that strict liability was not available as a cause of action in Scotland.

The Court of Appeals erred in holding that plaintiffs may defeat a motion to dismiss on the ground of forum non conveniens merely by showing that the substantive law that would be applied in the alternative forum is less favorable to the plaintiffs than that of the present forum. The possibility of a change in substantive law should ordinarily not be given conclusive or even substantial weight in the forum non conveniens inquiry.

454 U.S. 235, 247.

Factors in the Supreme Court’s decision about the adequacy of an alternative forum include whether the forum has jurisdiction over all of the parties to the action, and, a different, or even lesser remedy is sufficient.

We do not hold that the possibility of an unfavorable change in law should never be a relevant consideration in a forum non conveniens inquiry. Of course, if the remedy provided by the alternative forum is so clearly inadequate or unsatisfactory that it is no remedy at all, the unfavorable change in law may be given substantial weight; the district court may conclude that dismissal would not be in the interests of justice.  In these cases, however, the remedies that would be provided by the Scottish courts do not fall within this category. Although the relatives of the decedents may not be able to rely on a strict liability theory, and although their potential damages award may be smaller, there is no danger that they will be deprived of any remedy or treated unfairly.

454 U.S. 235, 254-55.

After analysis of an adequate alternative forum, the analysis requires balancing of the parties’ private interests and the public interests of the forum.  Private interests generally include relative access to the proof, availability of compulsory process to obtain witness testimony, cost, and the typically numerous practical considerations to make trial easy, efficient and less costly.  Public interests include the resolution of local controversies on a local level, familiarity with governing law, and avoiding choice of law and conflicts.  454 U.S. 235, 242-43.

For FNC cases of general interest, see also Faat v. Honeywell Int’l, Inc., 2005 WL 2475701 (D.N.J. 2005) (example of foreign air disaster case with fact elements typical of case ripe for FNC dismissal); Blanco v Banco Indus. De Venezuela, S.A., 997 F.2d 974 (2d Cir. 1993) (forum adequate when procedures dissimilar); De Melo v. Lederle Labs., 801 F.2d 1058 (8th Cir. 1986) (alternative forum suitable if no punitive damages); Lockman Found. v. Evangelical Alliance Mission, 930 F.2d 764 (9th Cir. 1991) (FNC may still be suitable forum if no right to jury trial); Quackenbush v. Allstate Ins. Co., 517 U.S. 706 (1996) (factors in FNC); Piere-Louis v Newvac Corp., 584 F.3d 102 (11th Cir. 2009) (holding FNC is procedural); Chubb Ins. Co. of Europe v. Menlo Worldwide Forwarding, Inc., 634 F.3d 1023 (9th Cir. 2011) (discussing third-party actions in FNC cases); King v Cessna Aircraft Co., 2008 WL 276015 (S.D. Fla. 2008) (dismissal of foreign v U.S. passengers); Clerides v. Boeing Co., 534 F.3d 623 (7th Cir. 2008) (dismissal of foreign v U.S. passengers); Cheng v. Boeing Co., 708 F.2d 1406 (9th Cir. 1983) (dismissal of foreign v U.S. passengers).

The Montreal Convention

The Montreal Convention of 1999 is critical to any consideration of FNC in an aviation disaster.  The Convention was ratified by the United States in September, 2003, and went into effect in November 2003.  The Convention is a successor to the Warsaw Convention of 1929 and, in addition to important new provisions, consolidates and clarifies prior provisions of The Warsaw Convention.  Convention for the Unification of Certain Rules for International Carriage by Air, opened for Signature at Montreal on 28 May 1999 (ICAO Doc No 4698).

The Convention applies to “all international carriage of persons, baggage or cargo performed by aircraft for reward.”  Id. at Article 1 § 1.

When the Montreal Convention governs, damages provided under the convention are the only remedy available to foreign plaintiffs against a carrier.  In El Al Israel Airlines v Tseng, 525 U.S. 155 (1999), the Court held that personal injury claims arising from aircraft operations within the scope of the Convention are not allowed unless permitted under the terms of the Convention.  In light of the holding in Tseng, federal courts have held that the damages available under the Convention are the sole cause of action.  See, e.g., Ugaz v. Am. Airlines, 576 F. Supp. 2d 1354 (S.D. Fla. 2008).

For purposes of FNC motions, Article 33 of the Convention provides that there are five forums in which a plaintiff may bring claims against a carrier:

  1. The domicile of the carrier;
  2. The principle place of business of the carrier;
  3. The place where the airline ticket was purchased;
  4. The place of destination; and,
  5. In personal injury cases, the principal and permanent place of residence of the plaintiff.

The so-called “fifth jurisdiction”, the plaintiff’s principal and permanent place of residence was added by the Montreal Convention, and expanded on the Warsaw Convention provisions governing proper forums.  The principal and permanent residence is the “one fixed and permanent abode of the passenger at the time of the accident”.  Article 33 § 3(b).

Under the fifth jurisdiction principle, a plaintiff may bring the lawsuit for personal injuries in the forum in which he or she has principal and permanent place of residence, and to or from which the carrier operates flights and in which the carrier leases or owns commercial premises by itself of by another carrier with which it has a commercial agreement.  A “commercial agreement” means an agreement made between carriers and related to joint service of passengers by air.  Article 33 § 3(a).

Defendants’ Motion To Dismiss on the Basis of FNC in AF 447

After the AF 447 actions were consolidated in the Northern District of California, Judge Charles Breyer dismissed all cases to France based on FNC.  Judge Breyer performed a detailed FNC analysis and concluded that France was an adequate alternative forum, whatever its pacing may be, and that the balancing of private litigant and public interests dictated dismissal was proper.  In re Air Crash Over Mid-Atlantic, 760 F. Supp. 2d 832 (N.D. Cal. 2010).

Judge Breyer noted at the outset, that nothing in the Montreal Convention suggests that the doctrine of forum non conveniens should not apply, and noted that the Montreal Convention is the “exclusive basis for a lawsuit against an air carrier for injuries arising out of international transportation.”  Id., at 835, citing, Kruger v United Airlines, Inc., 481 F. Supp. 2d 1005, 1008 (N.D. Cal. 2007).  Judge Breyer then noted that the party moving to dismiss based on FNC bears the burden of showing that there is an adequate alternative forum and that the balance of private and public interest factors favors dismissal.  Id. at 839 (citing Lueck v. Sundstrand Corp., 236 F.3d 1137, 1142-43 (9th Cir. 2001)).

In Hosaka v. United Airlines, Inc., 305 F.3d 989, 993 (9th Cir. 1992), the court ruled that the Warsaw Convention was a constructive override to a court’s discretionary authority to consider a motion to dismiss based on FNC.  Judge Breyer rejected the Hosaka court conclusion that the Warsaw Convention was a constructive override to a court’s discretionary authority to consider a motion to dismiss based on forum non conveniens.  760 F. Supp. 2d 832 at 839-840 (citing Hosaka v. United Airlines, Inc., 305 F.3d 989, 993 (9th Cir. 2002)).  Noting the Montreal Convention’s more recent ratification and the position taken by the United States during treaty negotiations supporting forum non conveniens dismissal, Judge Breyer followed the rationale of the courts that have applied the forum non conveniens doctrine in the context of a Montreal Convention case.  See Pierre-Louis v. Newvac, 584 F.3d 1052 (11th Cir. 2009), aff’g sub nom. In re West Caribbean Airways, S.A., 619 F. Supp. 2d 1299 (S.D. Fla. 2007).

As to the elements of FNC, the court found that plaintiffs did “not really contend” that France was an alternative forum, but focused on the assertion that France’s court system is slower and could take several years to conclude complex matters.  760 F. Supp. 2d. at 842.  Therefore, France was an adequate alternative forum.

The Court noted that the private interest factors weighed heavily in favor of dismissal.  The official accident investigation and a criminal investigation were being conducted in France, the physical evidence was in France, defendants had agreed to produce discovery in France, there was no dispute that Air France could be sued in France, and there was “the ability to bring parties together in France in a procedurally sensible fashion “ which would make the trial easier, more expeditious and less expensive.  Id. at 844.

Public interest factors also weighed heavily toward dismissal.  Judge Breyer, citing the public interest factors outlined in Piper and Leuck, reasoned that France was more interested in the litigation than the U.S.  There was a plurality of French citizens on a French flight with a French destination.  Although the rights of the two Americans were legitimate, they were less significant than French interests.  Air France could also be sued directly in France, avoiding “tension” with the Montreal Convention created by the manufacturing defendants attempts to sue Air France as a third-party.  A French forum would also avoid the prospect of U.S. courts having to apply French law.  Judge Breyer also noted that the cases could create unnecessary burdens on the federal judiciary.  Finally, the court stated that the deference to be afforded the U.S. plaintiffs’ choice of forum “does not and cannot” prevent the court from dismissing the case to the adequate alternate forum of France.  Id. at 846-47.

Plaintiffs May Not Create An Unavailable Forum

After Judge Breyer denied plaintiffs’ motion for reconsideration, some of the plaintiffs dismissed the French defendants and refiled, without any substantial change in the facts.  Eight of the U.S. component part manufacturers moved to dismiss two refiled lawsuits.  Judge Breyer agreed with defendants that plaintiffs had created the forum uncertainty, and could not make France an unavailable forum simply by dismissing the French defendants.  Judge Breyer also found that the mere fact that precisely the same lawsuit could not be heard in France did not make France an unavailable forum.  He again dismissed based on the basis of FNC.  In re Air Crash Over Mid-Atlantic, 792 F. Supp. 2d 1090 (N.D. Cal. 2011).

Judge Breyer reasoned that although plaintiffs had freedom to craft their own complaints as they wish, that did not prevent dismissal based on the prior FNC Order, when plaintiffs engaged in pleading practices designed to defeat jurisdiction in the foreign forum and circumvent the order.  Plaintiffs’ good faith and transparency with the court and opposing parties about their desire not to litigate in France was not the test for whether dismissal was appropriate.  Id. at 1096-97.

“Plaintiffs’ argument that, as a general matter, they are free to frame their complaints as they wish ignores entirely the fact that forum non conveniens is by its nature a doctrine that limits plaintiffs’ choices,” Judge Breyer ruled. “Indeed, plaintiffs cite no forum non conveniens cases condoning a post-dismissal refiling designed to make the foreign forum unavailable by omitting the parties necessary to establish jurisdiction abroad. Nor is the court aware of any such authority.”

Id. at 1097.

Judge Breyer also noted that the plaintiffs’ concern that since an FNC dismissal would conditionally obligate them to agree to French jurisdiction, plaintiffs could be without a remedy if the case was dismissed in France.  Judge Breyer ruled that dismissal sua sponte by a French court was not supported by sufficient authority, and denied plaintiffs’ request to return to the United States if the case was dismissed in France.

State Courts May Have Varying Standards for Dismissal Based on Forum Non Conveniens

While most states recognize the doctrine of forum non conveniens, some states may have only incorporated the doctrine into common law recently.  States may also have differing standards for analyzing whether there is an adequate alternative forum and whether the balancing of the private- and public-interest considerations dictates stay or dismissal based on forum non conveniens.

The state most recently incorporating the doctrine of forum non conveniens into state law is Oregon.  On April 16, 2016, the Oregon Supreme Court ruled for the first time that Oregon law included the doctrine of forum non conveniens.  Espinoza v Evergreen Helicopters, Inc., 359 Or. 63 (2016).  The opinion illustrates how state standards for dismissal based on forum non conveniens vary, even though most state courts generally adhere to the framework generally set out in Gulf Oil Corp. v. Gilbert, 330 U.S. 501 (1947) and discussed in Piper Aircraft Co. v. Reyno, 454 U.S. 235 (1981) and cases since.

On March 11, 2008, a 2007 Bell 412EP (N417EV) crashed into remote mountainous terrain near Santa Cruz, Cajamarca, Peru.  The United States certificated airline transport pilot, the Peruvian provisional co-pilot and eight Peruvian miners were killed by impact forces and a post-crash fire.   The helicopter was owned by Evergreen Helicopters, Inc., and leased to Helinka S.A.C., a Peruvian commercial aviation services provider.  Evergreen provided the helicopter, pilots, mechanics, parts, and an on-site contract administrator.  The helicopter was operating on a company visual flight rules flight plan under Peruvian flight regulations.

The accident was investigated by the Peruvian government.  See Informe Final, CIAA-ACCID-005-2008 “Accidente del helicoptero Bell 412EP, de matricula N417EV, operado por la compañía HELINKA SAC, ocurrido el 11 de marzo de 2008, en el Cerro La Cárcel, Distrito de Catache, Provincia de Santa Cruz, Departamento de Cajamarca”, Ministerio de Transportes y Communicaciónes, Comisión de Investigación de Accidentes de Aviación.  http://www.mtc.gob.pe/transportes/aeronautica_civil/ciaa/ciaa.html.  (Last visited 4/27/16).

In its motion to dismiss wrongful death lawsuits filed by relatives of the deceased Peruvian miners, Evergreen argued:

  • The majority of evidence was in Peru.
  • Third-party witnesses were in Peru.
  • A crash site view would only be possible in Peru.
  • There were practical difficulties in Oregon such as a need for interpreters.
  • Evergreen would be unable to implead Helinka as a third-party defendant in Oregon.
  • The crash occurred in Peru, plaintiffs were Peruvian nationals, and Peru had the strongest interest in the controversy.

In response, plaintiffs argued:

  • The doctrine of forum non conveniens had never been expressly recognized in Oregon.
  • Oregon courts are barred from dismissing an action based on forum non conveniens whenever there is jurisdiction and venue in Oregon.
  • Evergreen was headquartered and had its principal place of business in Oregon and substantial evidence was located in Oregon.
  • A factor in the cause of the crash may have been defects in avionics installed by Evergreen in Oregon.

359 Or. at 71-72.

The trial judge granted Evergreen’s motion to dismiss based on forum non conveniens.  The Oregon Court of Appeals reversed, based in part on the trial court’s failure to make sufficient findings on the availability of evidence in Peru.

The Oregon Supreme Court granted Evergreen’s petition for review and considered two issues: (1) whether the doctrine of forum non conveniens is available under Oregon law, and (2) what standards guide its application.

Plaintiffs argued that the doctrine of forum non conveniens should be rejected entirely, contending its origin was “dubious” and that it “is a parochial, xenophobic and outcome-determinative doctrine that permits reverse forum shopping by powerful corporations seeking to altogether avoid accountability in their home forum for transnational torts.”  359 Or. at 76.

Evergreen argued (in part) that the Oregon Court of Appeals gave too much deference to plaintiffs’ choice of Oregon as their chosen forum.  In support of its argument, Evergreen relied on the holding in Piper Aircraft Co., that the ordinary presumption in favor of the plaintiff’s forum choice applies with less force where the plaintiff is not a resident of that forum.  359 Or. at 75 (citations omitted).

The Oregon Supreme Court rejected Evergreen’s argument and agreed with the Washington Supreme Court that there “is no principled reason to vary the degree of deference afforded to the plaintiff’s choice of forum…we defer to a plaintiff’s choice…because it is the plaintiff’s right to choose from those forums that are available to it.”  359 Or. at 105.

The court ruled that the trial judge did not err when it found that Peru was an adequate alternative forum.  However, the court was critical of the trial judge for ruling that a trial in Peru would “best serve” the convenience of the parties.  The court concluded that the trial judge applied the “wrong substantive standard” and abused its discretion when it ruled that a trial in Peru would be “more convenient” rather than “so inconvenient as to be contrary to the ends of justice”.  359 Or. at 119-120.

The Oregon Supreme Court adopted a strict standard, ruling that a trial court may dismiss an action based on forum non conveniens only when

“…the relevant private-and public-interest considerations weigh so heavily in favor of litigating in that alternative form that it would be contrary to the ends of justice to allow the action to proceed in the plaintiff’s chosen forum.”

359 Or. at 102.

Multidistrict Litigation

  • MDL statute, 28 U.S.C. § 1407 enacted in 1968
  • Statute provides in part that “[w]hen civil actions involving one or more common questions of fact are pending in different districts, such actions may be transferred to any district for coordinated or consolidated proceedings”
  • Transfers made by JPML for “convenience of parties and witnesses and will promote the just and efficient conduct of such actions”
  • Each action transferred remanded to transferor court for trial
  • Transferee forum governs procedural issues
  • Transferor court governs substantive issues
  • JPML consists of seven circuit and district judges, no two from same circuit.
  • Concurrence of four JPML members needed for any action
  • JPML may separate any claim, cross-claim, counter-claim, or third-party claim and remand any claims before remainder of the action is remanded.
  • No discretion to transferee court to remand for trial. Lexecon Inc. v. Milberg Weiss Bershad Hynes & Lerach, 523 U.S. 26 (1998)
  • No authorities for identification of transferee court in aviation disaster or other mass torts

JPML may consider:

  • Convenience of parties and witnesses
  • Accident location
  • Experience, suitability and caseload of transferee district
  • Location of evidence
  • Existence of related cases in transferee court
  • Location and convenience of counsel
  • Potential number of tag-along cases.

MDL Consolidation Distinguished from 1404(a) Transfer

Transfer pursuant to 28 U.S.C. § 1407 must be distinguished from transfer under 28 U.S.C. § 1404(a), which provides:

“For the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought or to any district or division to which all parties have consented.”

Section 1404(a), enacted in 1948, provides no standard for measuring convenience in mass tort cases, but the statute was enacted to allow the most convenience to the greatest number of parties, and was drafted and enacted in accordance with the principles of forum non-convenience.  Yale M. Lyman, Factors of Choice for Venue Transfer under 28 U.S.C. 1404(a), 41 Cal. L. Rev. 507 (1953).

  • Parties more likely to obtain 1404(a) transfer if negotiated
  • Remand to transferor district for trial not required
  • Parties may seek 1404(a) transfer if formation of MDL appears imminent for trial in transferee court
  • Provides for transfer to different division in same district court

Considerations in Parallel State and Federal Cases and When the Government is a Party

Aviation accidents which give rise to parallel state and federal court cases present special challenges.  These include a danger of inconsistent rulings, difficulty coordinating discovery in forums with different procedures and scope of discovery, different experience with federal agencies, and addressing ambiguities over whether a particular issue is substantive or procedural.  See In re Helicopter Crash Near Weaverville, California, 8/5/08  MDL Case No. 3:09-md-2053(Mo) D. Or.; William Henry Coultas, individually, and his wife, Christina Coultas, individually, v. General Electric Company, Multnomah County Circuit Court Case No. 1002-02743; Estate of Roark Schwanenberg v General Electric Company, Multnomah County Circuit Court Case No. 1002-02742.

On August 5, 2008, a Sikorsky S-61N model helicopter crashed in the Trinity Alps National Forest in northern California while transporting firefighters pursuant to a contract between Carson Helicopters and the U.S. Forest Service.  The pilot, a USFS inspector-pilot, and seven contractor-employed firefighters were killed.  The copilot and three firefighters were seriously injured.    The helicopter was designed and manufactured by Sikorsky Aircraft Corporation.  It was nearly 40 years old and had flown well over 30,000 hours.  It was powered by two CT58-140-1 model engines designed and manufactured by GE.  A third-party manufactured the fuel control units on the engines.  The crux of plaintiffs’ complaints was that the pressure regulating valve in the fuel control unit was defectively designed and manufactured, causing a loss of power on the takeoff ascent and a crash seconds later.

NTSB investigators produced over 3,500 pages of data, including more than a dozen factual reports. The NTSB staff investigation found that Carson (1) intentionally understated the helicopter’s empty weight, (2) altered the power available chart to exaggerate the helicopter’s lift capability, and (3) used unapproved above-minimum specification torque in performance calculations.  It also found that the helicopter had been topping on its two prior flights, and it had just refueled before the crash flight, taking on additional weight.  NTSB staff investigation found that the flight crew failed to appreciate and address the prior approaches to the helicopter’s maximum performance capability.  NTSB staff investigators also found that the helicopter was at least 1,000 pounds overweight.

Lawsuits were filed by the injured firefighters and families of the deceased in federal courts in Connecticut, California and Oregon.  In June 2009, the cases were consolidated into an MDL in the District of Oregon.  Carson filed third-party complaints against the United States.  Lawsuits filed on behalf of the pilots in Oregon state court were removed by defendants pursuant to 28 U.S.C. §1331 on the basis that federal questions arose regarding the USFS’ effective status as operator of the flight pursuant to an exclusive use contract and the federal Interagency Helicopter Operations Guide.  Defendants also argued that additional federal questions arose pursuant to FAA rules and regulations and NTSB operations.   The court rejected defendants’ arguments that the federal agencies actions were necessarily at the center of a federal question as required by Grable & Sons Metal Products, Inc. v. Darue Engineering & Manufacturing, 545 U.S. 308 (2005).  The pilot cases were then remanded to state court.

The MDL included lawsuits filed by and on behalf of the ten injured and deceased firefighters, Carson’s workers’ compensation carrier, and the Estate of the deceased inspector pilot.  In addition, Estate of the deceased PIC and co-pilot obtained permission to intervene into the federal actions although their state court actions were also pending.

Defendants denied Plaintiffs’ allegations and contended that the engines received ample fuel flow during the takeoff on the final flight.  Consistent with the findings of NTSB staff investigators, defendants argued that the helicopter crashed because Carson gave the pilots and the USFS erroneous weight and takeoff power available charts that significantly understated the helicopter’s weight and overstated its load carrying capacity.  Defendants also argued, consistent with NTSB staff factual reports, that the flight crew failed to appreciate and address the helicopter’s arrival at maximum performance capability on the two prior flights.  The state court judge excluded the entire NTSB fact record except for two short laboratory reports.

Two years after the lengthy civil trial in state court, two former Carson employees pleaded guilty to federal conspiracy and other charges arising from the intentional falsification of the weight and takeoff power available charts and were each sentenced to lengthy prison terms.

Considerations for Aviation Disasters with parallel MDL and State Court Cases

  • Coordination of separate discovery procedure and scope in separate forums
  • Binding authority/ conflicting rulings
  • Differing interpretations of substantive and procedural law
  • Relative familiarity of state court judges with federal agencies and aviation, FAA, DOT, NTSB
  • Relative familiarity of state court judges with federal statutes, e. GARA
  • Vastly differing jury selection methods and scope
  • Experts
  • Certification of questions of law
  • Claims or defenses available to the government

Pretrial Choice of Law Issues

  • Choice of law statutes in multiple states
  • Cafeteria plan approach to COL on each issue
  • Availability of punitive damages
  • Wrongful death statutes
  • Statutes of limitation and repose
  • Noneconomic damages caps
  • Comparative fault
  • Allocation of fault to settled parties

The Multiparty, Multiforum Trial Jurisdiction Act

Although the Warsaw and Montreal Conventions addressed many aspect of air crash litigation, they did not specifically address U.S. Federal Court handling of mass disaster litigation, and addressed only aviation related cases.  In 2002, the Multiparty, Multiforum Trial Jurisdiction Act (MMTJA) was enacted to create greater efficiency in the federal system.  The MMTJA grants district courts original jurisdiction where minimal jurisdiction requirements are met, and in which the cases arise out of a “single accident, where at least 75 natural persons have died in the accident at a discrete location”.  The permissible lawsuits include both wrongful death and personal injury.

The first case arising under the MMTJA was the Rhode Island Station nightclub fire on November 20, 2003 in which 100 people were killed and 230 injured.  Lawsuits were filed throughout New England in state and federal courts.  Passa v. Derderian, 308 F.Supp.2d 43 (D.R.I., 2004).

The  MTJA statute, 28 U.S.C. § 1369, widely broadens federal jurisdiction in mass disaster cases, and provides that the district courts will have original jurisdiction where:

  1. A defendant resides in a State and a substantial part of the accident took place in another State or other location, regardless of whether that defendant is also a resident of the State where a substantial part of the accident took place;
  2. Any two defendants reside in different States, regardless of whether such defendants are also residents of the same State or States; or
  3. Substantial parts of the accident took place in different states.

28 U.S.C. §1369 (a)(1-3).

Under the MMTJA, “minimal diversity” exists between adverse parties if any party is a citizen of a state and any adverse party is a citizen of another state or a foreign state.  Corporations are deemed to be a citizen of any state in which it is incorporated, or has its principal place of business, and is deemed to be a resident of any state in which it is licensed to do business or is doing business.  28 U.S.C. 1369 (c)(1-2).  The district courts must abstain from hearing any action in which the “substantial majority” of all plaintiffs are citizens of a single state in which the primary defendants are also citizens, and any claims that are governed primarily by state law.  28 U.S.C. 1369 (b)(1-2).

Therefore, the MMTJA provisions providing for removal are much broader than the diversity jurisdiction requirements under 28 U.S.C. §1332.

A recent case addressed the MMTJA in the context of an aviation disaster.  On December 30, 2015, the U.S. District Court for the Northern District of Illinois granted the French company Airbus S.A.S.’s Rule 12(b)(2) motion to dismiss for lack of personal jurisdiction.  Siswanto, et. al. v. Airbus S.A.S., 2015 WL 9489952.  The case was brought under the Multiparty Multiforum Trial Jurisdiction Act of 2002 (“MMTJA”).  The court reasoned that since the case was brought under the MMTJA, Fed. R. Civ. P. 4(k)(l)(C) and the MMTJA enabled the Court to consider Airbus’s contacts with the United States as a whole, and not just the state of Illinois.  However, nothing in the statutes overrode Airbus’s constitutional due process protections governing the Court’s exercise of personal jurisdiction.

The case arose from a December 28, 2014 crash of Air Asia Flight No. 8501, an Airbus A320-216 flying from Indonesia to Singapore.  The heirs and personal representatives of the deceased brought product liability and negligence claims against several defendants, including Airbus.

There was no dispute that Airbus was incorporated and had its principal place of business in France.  For at least the past five years, Airbus had not maintained any offices or employees in the U.S. or owned or rented property in the U.S.  All manufacturing on the aircraft occurred in Europe, and none of Airbus’s subsidiaries in the U.S. undertook this work.  The A320-216 had been issued a Type Certificate by the European Safety Agency but not the FAA.  The aircraft was sold to Air Asia Berhad, a Malaysian airline carrier that did not operate in the U.S. and the aircraft had never been flown in the U.S.

Airbus moved to dismiss for lack of minimum contacts under the Fifth Amendment Due Process Clause.  Plaintiffs proceeded only under a theory of general personal jurisdiction arising from Airbus’ extensive contacts with the United States as a whole.  The court noted that the traditional “minimum contacts” test from International Shoe still governs even when the basis of personal jurisdiction involves a statute providing for nationwide service of process.  KM Enters., Inc. v. Global Traffic Techs., Inc., 725 F.3d 718, 723, 730-31 (7th Cir. 2013) (citations omitted).

In KM Enterprises, the court reasoned that when a federal statute authorizes nationwide service of process, the scope of the minimum contacts test exceeds the forum state’s long-arm statute, and requires “continuous and systematic general business contact” such that Airbus is “essentially at home in the forum, the U.S., not just the State of Illinois.”  See also, Abelesz v. OTP Bank, 692 F.3d 638, 654, 656 (7th Cir. 2012) (citations omitted).

Strategic Considerations Framing Forum, Removal, MDL, The Montreal Convention, MMTJA, and FNC Considerations

  • State or federal forum.
  • JPML may or may not consider wishes of transferor court in retaining case for pre-trial purposes.
  • May require transferee court to sort through multiple choice-of-law conflicts.
  • Impact on FNC motions.
  • Removal under 28 U.S.C. § 1369 or 28 U.S.C. § 1332.
  • Are related actions removable.
  • Government contracts.
  • Governments as parties, particular government agency considerations.
  • Parallel state court actions may complicate discovery, allow multiple bites at the apple.
  • In aviation cases, if no statute of limitations issues, some actions such as hull cases may be filed after all other cases resolved or tried. JPML may or may not transfer.  See, e.g., In re Helicopter Crash Near Wendell Creek, British Columbia, on August 8, 2002, Multidistrict Litigation No. 3:04MD 1694 (SRU) (D.CT.).
  • Choice of law.
  • S. code-share carrier and defendants.
  • Federal court judges much more familiar with relevant federal agencies, NTSB, FAA, and DOT which may have significant impact of discovery.
  • Plaintiff-friendly jurisdictions/likelihood of removal.
  • Relative objective strength of liability arguments.
  • Personal jurisdiction.
  • Montreal Convention specified remedies and potential impact on FNC motions.
  • Third-party actions, and whether governed by Montreal Convention see, e.g., In re Air Crash Near Nantucket Island, Mass, 340 F. Supp. 2d 240 (E.D.N.Y. 2004).
  • Whether a foreign air carrier is a target defendant.

 

Aviation Law Update: Oregon Supreme Court Rules Doctrine of Forum Non Conveniens is Available in Oregon

On April 16, 2016, the Oregon Supreme Court ruled for the first time that Oregon law included the doctrine of forum non conveniens.  Espinoza v. Evergreen Helicopters, Inc., 359 Or. 63 (2016).  The opinion illustrates how state standards for dismissal based on forum non conveniens vary, even though most state courts adhere to the framework generally set out in Gulf Oil Corp. v. Gilbert, 330 U.S. 501 (1947), and discussed in Piper Aircraft Co. v. Reyno, 454 U.S. 235 (1981), and cases since.

On March 11, 2008, a ten passenger 2007 Bell 412EP crashed into remote mountainous terrain near Santa Cruz, Cajamarca, Peru.  Impact forces and a post-crash fire killed the United States certificated airline transport pilot, the Peruvian co-pilot and eight Peruvian miners.  The helicopter was owned by Evergreen Helicopters, Inc., and leased to Helinka S.A.C., a Peruvian commercial aviation services provider.  Evergreen provided the helicopter, pilots, mechanics, parts, and an on-site contract administrator.

In its motion to dismiss the wrongful death lawsuits filed by relatives of the deceased Peruvian miners, Evergreen argued:

  • The majority of evidence was in Peru.
  • Third-party witnesses were in Peru.
  • A crash site view would only be possible in Peru.
  • There were practical difficulties in Oregon such as a need for interpreters.
  • Evergreen would be unable to implead Helinka as a third-party defendant in Oregon.
  • The crash occurred in Peru, plaintiffs were Peruvian nationals, and Peru had the strongest interest in the controversy.

In response, plaintiffs argued:

  • The doctrine of forum non conveniens had never been expressly recognized in Oregon.
  • Oregon courts are barred from dismissing an action based on forum non conveniens whenever there is jurisdiction and venue in Oregon.
  • Evergreen was headquartered and had its principal place of business in Oregon and evidence was located in Oregon.
  • A factor in the cause of the crash may have been defects in avionics installed by Evergreen in Oregon.

359 Or. at 71-72.

The trial judge granted Evergreen’s motion to dismiss based on forum non conveniens.  The Oregon Court of Appeals reversed, based in part on the trial court’s failure to make sufficient findings on the availability of evidence in Peru.

The Oregon Supreme Court granted Evergreen’s petition for review and considered two issues: (1) whether the doctrine of forum non conveniens is available under Oregon law, and (2) what standards guide its application.

Plaintiffs argued that the doctrine of forum non conveniens should be rejected entirely, contending its origin was “dubious” and that it “is a parochial, xenophobic and outcome-determinative doctrine that permits reverse forum shopping by powerful corporations seeking to altogether avoid accountability in their home forum for transnational torts.”  359 Or. at 76.

Evergreen argued (in part) that the Oregon Court of Appeals gave too much deference to plaintiffs’ choice of Oregon as their chosen forum.  In support of its argument, Evergreen relied on one aspect of the holding in Piper Aircraft Co., that the ordinary presumption in favor of the plaintiff’s forum choice applies with less force where the plaintiff is not a resident of that forum.  359 Or. at 75 (citations omitted).

The Oregon Supreme Court rejected Evergreen’s argument and agreed with the Washington Supreme Court that there “is no principled reason to vary the degree of deference afforded to the plaintiff’s choice of forum…we defer to a plaintiff’s choice…because it is the plaintiff’s right to choose from those forums that are available to it.”  359 Or. at 105.

The court ruled that the trial judge did not err when it found that Peru was an adequate alternative forum.  However, the court was critical of the trial judge for ruling that a trial in Peru would “best serve” the convenience of the parties.  The court concluded that the trial judge applied the “wrong substantive standard” and abused its discretion when it ruled that a trial in Peru would be “more convenient” rather than “so inconvenient as to be contrary to the ends of justice”.  359 Or. at 119-120.

The Oregon Supreme Court adopted a strict standard, ruling that a trial court may dismiss an action based on forum non conveniens only when

“…the relevant private-and public-interest considerations weigh so heavily in favor of litigating in that alternative form that it would be contrary to the ends of justice to allow the action to proceed in the plaintiff’s chosen forum.”

359 Or. at 102.

 

Noncompetition agreements and restrictive covenants

Kristin Olson published an article regarding the treatment of noncompetition agreements and restrictive covenants in various jurisdictions throughout the United States in this month’s edition of the International Association of Defense Counsel’s Business Litigation Newsletter.

Kristin is an experienced litigator who has extensive experience handling commercial litigation cases.  Kristin has litigated cases concerning noncompetition agreements and restrictive covenants, as well as trade secrets.

Clients rely on Kristin to assist them with interpretation and negotiation of noncompetition agreements in various employment contexts.

In Oregon, noncompetes in an employment context are governed by a lengthy statute, ORS 653.295, which provides that:

“(1) A noncompetition agreement entered into between an employer and employee is voidable and may not be enforced by a court of this state unless:

“(a)(A) The employer informs the employee in a written employment offer received by the employee at least two weeks before the first day of the employee’s employment that a noncompetition agreement is required as a condition of employment; or

“(B) The noncompetition agreement is entered into upon a subsequent bona fide advancement of the employee by the employer;

“(b) The employee is a person described in ORS 653.020(3);

“(c) The employer has a protectable interest. As used in this paragraph, an employer has a protectable interest when the employee:

“(A) Has access to trade secrets, as that term is defined in ORS 646.461;

“(B) Has access to competitively sensitive confidential business or professional information that otherwise would not qualify as a trade secret, including product development plans, product launch plans, marketing strategy or sales plans; or

“(C) Is employed as an on-air talent by an employer in the business of broadcasting and the employer:

“(i) In the year preceding the termination of the employee’s employment, expended resources equal to or exceeding 10 percent of the employee’s annual salary to develop, improve, train or publicly promote the employee, provided that the resources expended by the employer were expended on media that the employer does not own or control; and

“(ii) Provides the employee, for the time the employee is restricted from working, the greater of compensation equal to at least 50 percent of the employee’s annual gross base salary and commissions at the time of the employee’s termination or 50 percent of the median family income for a four-person family, as determined by the United States Census Bureau for the most recent year available at the time of the employee’s termination; and

“(d) The total amount of the employee’s annual gross salary and commissions, calculated on an annual basis, at the time of the employee’s termination exceeds the median family income for a four-person family, as determined by the United States Census Bureau for the most recent year available at the time of the employee’s termination. This paragraph does not apply to an employee described in paragraph (c)(C) of this subsection.

“(2) The term of a noncompetition agreement may not exceed 18 months from the date of the employee’s termination. The remainder of a term of a noncompetition agreement in excess of 18 months is voidable and may not be enforced by a court of this state.

“(3) Subsections (1) and (2) of this section apply only to noncompetition agreements made in the context of an employment relationship or contract and not otherwise.

“(4) Subsections (1) and (2) of this section do not apply to:

“(a) Bonus restriction agreements, which are lawful agreements that may be enforced by the courts in this state; or

“(b) A covenant not to solicit employees of the employer or solicit or transact business with customers of the employer.

“(5) Nothing in this section restricts the right of any person to protect trade secrets or other proprietary information by injunction or any other lawful means under other applicable laws.

“(6) Notwithstanding subsection (1)(b) and (d) of this section, a noncompetition agreement is enforceable for the full term of the agreement, for up to 18 months, if the employer provides the employee, for the time the employee is restricted from working, the greater of:

“(a) Compensation equal to at least 50 percent of the employee’s annual gross base salary and commissions at the time of the employee’s termination; or

“(b) Fifty percent of the median family income for a four-person family, as determined by the United States Census Bureau for the most recent year available at the time of the employee’s termination.

“(7) As used in this section:

“(a) ‘Bonus restriction agreement’ means an agreement, written or oral, express or implied, between an employer and employee under which:

“(A) Competition by the employee with the employer is limited or restrained after termination of employment, but the restraint is limited to a period of time, a geographic area and specified activities, all of which are reasonable in relation to the services described in subparagraph (B) of this paragraph;

“(B) The services performed by the employee pursuant to the agreement include substantial involvement in management of the employer’s business, personal contact with customers, knowledge of customer requirements related to the employer’s business or knowledge of trade secrets or other proprietary information of the employer; and

“(C) The penalty imposed on the employee for competition against the employer is limited to forfeiture of profit sharing or other bonus compensation that has not yet been paid to the employee.

“(b) ‘Broadcasting’ means the activity of transmitting of any one-way electronic signal by radio waves, microwaves, wires, coaxial cables, wave guides or other conduits of communications.

“(c) ‘Employee’ and ‘employer’ have the meanings given those terms in ORS 652.310.

“(d) ‘Noncompetition agreement’ means an agreement, written or oral, express or implied, between an employer and employee under which the employee agrees that the employee, either alone or as an employee of another person, will not compete with the employer in providing products, processes or services that are similar to the employer’s products, processes or services for a period of time or within a specified geographic area after termination of employment.”

Please contact Kristin should you have any questions concerning noncompetition agreements or restrictive covenants.

Scott Brooksby will be featured as a speaker at the American Bar Association’s 3rd Annual Western Regional CLE Program on Class Actions and Mass Torts in San Francisco, California

Scott Brooksby will be featured as a speaker at the American Bar Association’s 3rd Annual Western Regional CLE Program on Class Actions and Mass Torts in San Francisco, California.   The conference explores hot topics in class action and mass tort litigation.  Scott will join federal judges, plaintiffs’ and defense lawyers, academics, and experts to speak on these issues.

Scott’s panel will discuss the interesting substantive, procedural, and strategic considerations for airlines and other types of manufacturers seeking dismissal in forum non conveniens motions, and for passengers and other plaintiffs seeking to defeat FNC motions in multi-district litigation. Using examples from aviation-related MDLs, and specifically after the groundbreaking MDL involving Air France 447, the panel will discuss key aspects of establishing personal jurisdiction over foreign corporate defendants. The panel will discuss the complex issues associated with international treaties, choiceof-law, the meaning of an “unavailable forum” and challenging jurisdiction and venue considerations that arise when both U.S. and foreign individuals
are involved.

Scott Brooksby practices aviation and product liability defense.  He is an experienced trial lawyer who has defended businesses, manufacturers, and organizations in many personal injury and and commercial cases. He has defended and counseled product manufacturers and distributors in a variety of industries including aviation, drugs and medical devices, toys and recreational products, paints and solvents, power tools, heavy equipment and machinery, retail, food, consumer products, and automobiles. He is the former co-chair of a large West Coast law firm’s product liability practice group.

Scott has tried numerous personal injury and product liability cases in Oregon state and federal courts.

In cases that do not necessitate a trial, Scott is a skilled negotiator who has resolved hundreds of cases through arbitration and mediation. He has successfully argued many motions that resulted in the dismissal of claims, or outright dismissal of his client. He also has experience counseling product liability clients regarding the avoidance of litigation, handling product recalls, product modifications, and unwanted governmental intervention.

Scott has litigated everything from small defective product claims to catastrophic injury and wrongful death cases involving punitive damages.  He has experience with medical treatment issues that result from falls, burns and amputation injuries in manufacturing facilities.

As one of the few lawyers in Oregon with significant aviation experience, Scott has litigated helicopter and plane crash cases, as well as aviation component part product liability claims.  Scott was co-counsel on a team that defended a large aviation product manufacturer in a months-long trial.

Scott Brooksby featured as a speaker at the American Conference Institute’s 8th National Forum on Aviation Claims & Litigation at The Carlton Hotel on Madison Avenue in New York, New York

Scott Brooksby will be featured as a speaker at the American Conference Institute’s 8th National Forum on Aviation Claims & Litigation at The Carlton Hotel on Madison Avenue in New York, New York.   The conference will take place June 27–28, 2016.  Scott will speak with other distinguished panelists regarding “Spotlight on Flight Crew Mental Health Issues Post-Germanwings: An In Depth Discussion of the Legal, Regulatory, Public Safety and Ethical Considerations”.

The presentation will touch on  the following issues:

• An in depth discussion of aeromedical
issues and developments following last year’s
Germanwings crash
• What procedures are currently in place
to identify mental health issues in pilots,
crew-members, air traffic controllers? —
Are they enough?
• Who should be in possession of a
crew-member’s mental health information?
• Who has what responsibilities to make reports
of other crew-members’ mental health info?
• Who regulates this?
• Assessing considerations of confidentiality
with considerations of public safety
• Under what circumstances can medical data
be shared and with whom?
• What strides is the FAA taking in response to
the Germanwings tragedy? (ARC and Amsis)

The American Conference Institute’s (ACI’s)  National Forum on Aviation Claims & Litigation provides up to the minute insights and strategies that are necessary to manage and defend against the newest claims and enforcement.  Scott will join ACI’s unparalleled faculty of federal government officials, judges, expert in-house counsel, and leading outside counsel to provide strategic advice, critical insights, and comprehensive updates for:
FAA, DOT & NTSB priorities, initiatives, and practices
DRONES – the latest FAA regulatory developments; the legal,
technical and policy concerns; and emerging developments in the
UAS (Unmanned Aerial System) insurance market
FLIGHT CREW MENTAL HEALTH ISSUES POST-GERMANWINGS:
the legal, regulatory, public safety and ethical considerations
Incorporating the latest PREEMPTION DEVELOPMENTS into your
litigation strategy, and the continuing fallout from DAIMLER AG V. BAUMAN
Liability and safety issues surrounding PILOT OVER DEPENDENCY ON AUTOMATION FEATURES
BREAKING DOWN TWO HYPOTHETICAL AIRPORT CLAIMS: injury in an airport concession stand & airfield “ramp side” work injury
Analyzing the latest PASSENGER DISCRIMINATION CLAIMS
FOREIGN CRASHES / INCIDENTS: navigating the complexities of
forum non conveniens, criminal liability, venue and choice of law
DEFENDING AVIATION CLAIMS: discovery challenges, effective use of experts, spoliation and preservation of evidence, proper use of NTSB reports, and winning over the jury

The uphill climb to establish general personal jurisdiction over a foreign corporate defendant

From Scott Brooksby’s article in the American Bar Association’s Mass Torts Practice Points on January 29, 2016:

The Uphill Climb to Establish General Personal Jurisdiction over a Foreign Corporate Defendant

On December 30, 2015, the U.S. District Court for the Northern District of Illinois granted the French company Airbus S.A.S.’s Rule 12(b)(2) motion to dismiss for lack of personal jurisdiction. Siswanto, et. al. v. Airbus S.A.S., 2015 WL 9489952. The case was brought under the Multiparty Multiforum Trial Jurisdiction Act of 2002 (MMTJA). The court reasoned that because the case was brought under the MMTJA, Fed. R. Civ. P. 4(k)(l)(C) and the MMTJA enabled the court to consider Airbus’s contacts with the United States as a whole, and not just the state of Illinois. However, nothing in the statutes overrode Airbus’s constitutional due-process protections governing the court’s exercise of personal jurisdiction. Siswanto serves as fresh instruction on the vigorous scrutiny that courts apply to determine the existence of general personal jurisdiction over a foreign defendant.

The case arose from a December 28, 2014, crash of Air Asia Flight No. 8501, an Airbus A320-216 flying from Indonesia to Singapore. The heirs and personal representatives of the deceased brought product-liability and negligence claims against several defendants, including Airbus.

There was no dispute that Airbus was incorporated and had its principal place of business in France. For at least the previous five years, Airbus had not maintained any offices or employees in the U.S. or owned or rented property in the U.S. All manufacturing on the aircraft occurred in Europe, and none of Airbus’s subsidiaries in the U.S. undertook this work. The A320-216 had been issued a Type Certificate by the European Safety Agency but not the Federal Aviation Administration. The aircraft was sold to Air Asia Berhad, a Malaysian airline carrier that did not operate in the United States and the aircraft had never been flown in the United States.

Airbus moved to dismiss for lack of minimum contacts under the Fifth Amendment Due Process Clause. The plaintiffs proceeded only under a theory of general personal jurisdiction arising from Airbus’s extensive contacts with the United States as a whole. The court noted that the traditional “minimum contacts” test from International Shoe still governs even when the basis of personal jurisdiction involves a statute providing for nationwide service of process. KM Enters., Inc. v. Global Traffic Techs., Inc., 725 F.3d 718, 723, 730–31 (7th Cir. 2013) (citations omitted). The KM Enterprises court reasoned that when a federal statute authorizes nationwide service of process, the scope of the minimum-contacts test exceeds the forum state’s long-arm statute, and requires “continuous and systematic general business contact” such that Airbus is “essentially at home in the forum, the U.S., not just the State of Illinois.” See also Abelesz v. OTP Bank, 692 F.3d 638, 654, 656 (7th Cir. 2012) (citations omitted).

Against these demanding requirements for general personal jurisdiction, the plaintiffs argued that four categories of contacts between Airbus and the United States warranted the court’s exercise of general personal jurisdiction, all of which the court rejected.

First, the plaintiffs argued that Airbus’ sale of 811 aircraft—6.73 percent of its global sales in the last 10 years—were to U.S. based customers. The court noted that “imputing general personal jurisdiction from a defendant’s sales in the forum, even if sizable, would stretch general personal jurisdiction beyond its reach.” Siswanto, 2015 WL 9489952, at *4.

Second, the plaintiffs argued that 42 percent of Airbus’s procurement was in the United States. The court reasoned that mere purchases, “even if occurring at regular intervals,” do not establish general personal jurisdiction when the underlying cause of action is not related to those purchases. Id. (citing Helicopteros Nacionales de Columbia, S.A. v Hall, 466 U.S. 407 (1984)).

Third, the plaintiffs attempted to impute the contacts from Airbus’s “separately incorporated” subsidiaries, by arguing that the subsidiaries maintain a physical presence in the United States and provide thousands of jobs. The court rejected this argument based on the general rule that the jurisdictional contacts of a subsidiary are not imputed to the parent. Id.

Fourth, the plaintiffs cited a 2006 Associated Press Article showing that the FAA certified another aircraft model, the Airbus A380. The court noted that this isolated fact had no special significance as far as personal jurisdiction was concerned.

Siswanto emphasizes that while Airbus’s contacts with the United States may have been extensive, the contacts advanced by the plaintiffs fell far short of showing the de facto relocation requirement by the Supreme Court for a foreign corporate defendant to satisfy general personal jurisdiction.

Best practices for enforcement of noncompetition agreements and restrictive covenants

Noncompetition agreements are used routinely by businesses in the United States to protect goodwill, client relationships, trade secrets, confidential and proprietary information, and to develop a competitive advantage.

The validity and enforceability of noncompetition agreements varies according to the jurisdiction of the particular state or federal circuit court.

This article will survey a limited number of states and federal circuits concerning the use and enforcement of noncompetition agreements.  The following jurisdictions will be examined: The First Circuit, the state of Massachusetts, the state of Maine, the Second Circuit, the state of New York, the Ninth Circuit, and the states of California and Oregon.  In each jurisdiction, we will explore the standard aspects of non-competes that courts generally consider, including: reasonableness; duration; protectable interests; modification; and, in some instances, the way that noncompetes are applied in the context of specific professions.

First Circuit

Restrictive covenants “upon an employee’s exercise of a gainful occupation after leaving the employer are, and were at common law considered to be, void as in restraint of trade.”  Am Eutectic Welding Alloys Sales Co., Inc., v. Rodriguez, 480 F.2d 223, 228 (1st Cir. 1973).   However, a court will allow a restrictive covenant or a noncompetition agreement “if the restriction is reasonable, and not wider than is necessary for the protection to which the employer is entitled[.]”  Id.  (Internal quotation marks and citation omitted.)  If there is a valid non-solicitation agreement “and an employee departs for greener pastures, the employer ordinarily has the right to enforce the covenant according to its tenor.”  Corporate Technologies v. Hartnett, 731 F.3d 6, 8 (1st Cir. 2013).

Reasonableness

An overly-broad noncompetition agreement “is enforceable to the limited extent reasonable.”  Am Eutectic Welding Alloys Sales Co., Inc., 480 F.2d at 227 (1st Cir. 1973).   Whether an agreement is “reasonable” depends on the facts and circumstances of each case.  Ferrofluidics Corp. v. Advanced Vacuum Components, Inc., 968 F.2d 1463, 1468-69, 1470 (1st Cir. 1992).  The “appropriate inquiry” is “whether the employer has exploited an inherent imbalance by placing deliberately unreasonable and oppressive restraints on the employee.”  Id. at 1470.

Duration

Time period must be “reasonable”.  Corporate Technologies , 731 F.3d at 8.  Five years is generally too long.  Ferrofluidics Corp., 968 F.2d at 1469.

Protectable Interests

Goodwill, Corporate Technologies, 731 F.3d at 8; customer lists, id.; confidential information, id. at 14; and trade secrets, Lanier Prof’l Services, Inc., v. Ricci, 192 F.3d 1, 5 (1st Cir. 1999), are recognized as protectable interests.  However, a noncompetition agreement “cannot make secret that which is not secret[.]”  Id. at 5 (internal citation and quotation marks omitted).

“The line between solicitation and acceptance of business is a hazy one, and the inquiry into where this line should be drawn in a particular case is best executed by the district court.”  Corporate Technologies, 731 F.3d at 10.   Whoever first makes contact “is just one factor among many that the trial court should consider in drawing the line between solicitation and acceptance in a given case.”  Id. at 12.

Modification

A court may modify an overly-broad noncompetition agreement, and the agreement is unenforceable until it is modified.  Astro-Med, Inc., v. Nihon Kohden America, Inc., 591 F.3d 1, 14 (1st Cir. 2009).   Once an agreement has been narrowed by the court, “the breaching party is being held to a more narrowly circumscribed agreement than the one he signed, and the more restrictive terms of the agreement remain as effective as the day they were agreed to.”  Id. at 15.

Massachusetts

In deciding whether to enforce a particular agreement, a court considers whether the noncompete “(a) is necessary to protect a legitimate business interest of the employer, (b) is supported by consideration, (c) is reasonably limited in all circumstances, including time and space, and (d) is otherwise consonant with public policy.”  Bowne of Boston, Inc. v. Levine, 1997 WL 781444, at *2 (Mass. Super. Nov. 25, 1997).

Whether the employee or the employer is granted deference in the context of a restrictive covenant or a noncompete can vary in Massachusetts.  For example, according to the Supreme Judicial Court of Massachusetts, “[e]mployees occupying positions of trust and confidence owe a duty of loyalty to their employer and must protect the interests of the employer.” Chelsea Indus., Inc. v. Gaffney, 449 N.E.2d 320, 326 (Mass. 1983).  In that case, the court also explained that an employee “is bound to act solely for his employer’s benefit in all matters within the scope of his employment”.  Id.  Furthermore, the court in that case explained that an “executive employee is barred from actively competing with his employer during the tenure of his employment, even in the absence of an express covenant so providing .”  Id. (internal quotation marks and citations omitted).

However, the Superior Court of Massachusetts has stated that, “Contracts drafted by employers to limit the employment prospects of former employees-even those at a very high level-must be construed narrowly against the employer.”  Veridiem, Inc., v. Phelan, No. 034418BLS, 2003 WL 22481390, *3 (Mass. Super. Sept. 26, 2003).

Generally, a noncompete that is “contained in a contract for personal services will be enforced if it is reasonable, based on all the circumstances.”  All Stainless, Inc. v. Colby, 308 N.E.2d 481, 485 (Mass. 1974).

In order to determine whether to enforce a noncompete, “the reasonable needs of the former employer for protection against harmful conduct of the former employee must be weighed against both the reasonableness of the restraint imposed on the former employee and the public interest.”  Id.  If the employer “has protectable and legitimate business interests, the employer’s reasonable need to protect its business interests must then be weighed against the reasonableness of the restraints imposed by the noncompete covenant as well as any public interests that may be at stake.”  Boch Toyota, Inc. v. Klimoski, 18 Mass. L. Rep. 80, 2004 WL 1689770 , *4 (Mass. Super. 2004).

Courts “look less critically” at covenants “arising primarily out of the sale of a business”. Alexander & Alexander, Inc. v. Danahy, 488 N.E.2d 22, 29 (Mass. App. 1986).  However, “any covenant restricting competition is to be enforced only to the extent that it is reasonable in time and space, necessary to protect legitimate interests, and not an obstruction of the public interest.”  Id.

Reasonableness

“What is reasonable depends on the facts in each case.”  Novelty Bias Binding Co. v. Shevrin, 175 N.E.2d 374, 376 (Mass. 1961).  Reasonableness of restrictions is determined with reference to “the nature of the [employer’s] business * * * the character of employment involved * * * the situation of the parties, the necessity of the restriction for the protection of the employer’s business and the right of the employee to work and earn a livelihood.”  Richmond Bros. Inc. v. Westinghouse Broadcasting Co., 256 N.E.2d 304, 307 (Mass. 1970).

A noncompete is likely to be deemed reasonable if it has a “narrow geographic scope” and a “relatively short time frame.”  Boch Toyota, Inc., 18 Mass. L. Rptr. 80, 2004 WL 1689770 at *4 (Mass. Super., June 28, 2004) (upholding a covenant not to compete spanning a duration of twelve months and a geographic scope of thirty-five miles).  Generally, a noncompete is “reasonable if its purpose is to protect an employer’s legitimate business interests.”  Id. at *3.

Courts will uphold broader restrictions outside of the conventional limits of the employer-employee relationship, e.g., in the context of the sale of a business.  “Concern about the restricted individual and the probability of unequal bargaining power between an employer and an employee recedes when the restriction arises in the context of the sale of a business or * * * the sale of an interest in a business.”  Wells v. Wells, 400 N.E.2d 1317, 1319 (Mass. App. 1980).  Therefore, courts will usually look “more critically” at the circumstances of restraints placed on employees in a post-employment context.  Id.

In analyzing restrictions imposed as part of the sale of a business, courts “consider whether the parties entered into the agreement with the assistance of counsel and without compulsion (an element frequently not present in the employer-employee context).”  Boulanger v. Dunkin’ Donuts, Inc., 815 N.E.2d 572, 577 (Mass. 2004) (internal citations and quotation marks omitted).

Duration

“Each time an employee’s employment relationship with the employer changes materially such that they have entered into a new employment relationship a new restrictive covenant must be signed.”  Lycos, Inc. v. Jackson, 2004 WL 2341335, at *3, 18 Mass. L. Rep. 256 (Mass. Super. Aug. 25, 2004); see also Cypress Group, Inc. v. Stride & Assocs., Inc., 17 Mass. L. Rptr. 436, 2004 WL 616302 (Mass. Super.  Feb. 11, 2004) (same). Similarly, in F.A. Bartlett Tree Expert Co. v. Barrington, 233 N.E.2d 756 (Mass. 1968), the Massachusetts Supreme Court voided an employment agreement containing a restrictive covenant because there were subsequent changes in the defendant’s employment that changed the employment relationship.  In particular, the court noted that “the defendant’s rate of compensation and sales area were changed” and “[s]uch far reaching changes strongly suggest that the parties had abandoned their old arrangement and had entered into a new relationship.”  Id. at 758.

In an employment context, a five-year restriction will generally be found to be unreasonable, whereas a three-year restriction will generally be found to be reasonable.  Richmond Bros., Inc. v. Westinghouse Broadcasting Co., 256 N.E.2d 304, 307 (Mass. 1970) (five-year restriction unreasonable; court refused to enforce remaining two years on a five-year non-competition agreement for a radio broadcaster where he had complied with the agreement for almost three-year period); Wrentham Co. v. Cann, 189 N.E.2d 559, 562 (Mass. 1963) (five-year restriction unreasonable; affirmed enforcement of non-competition agreement for three years).

However, in the context of a sale of a business, restrictions for five years or more are more likely to be upheld as reasonable.  Alexander & Alexander, Inc. v. Danahv, 488 N.E.2d 22, 29-30 (Mass. App. 1986) (upholding customer-based covenant for five-year period; finding it was not unreasonable to include prospective customers within the ban and finding covenants were not unreasonably restrictive despite the fact they prevented individuals from “receiving” business; holding that in the context of the sale of a business, a covenant not to compete was proper where the seller received proceeds from the business); Bonneau v. Meaney, 178 N.E.2d 577, 579 (Mass. 1961) (enforcing 20-year non-competition agreement made in connection with sale of telephone answering service business);

Protectable Interests

Goodwill, “confidential or proprietary business information”, “customer or supplier lists”, Boch Toyota, Inc., 2004 WL 1689770 at *3, and trade secrets, RE/MAX of New England, Inc. v. Prestige Real Estate, Inc., 2014 WL 3058295, at *3 (D. Mass. July 7, 2014), are all protectable interests.

However, “skill and intelligence acquired or increased and improved through experience or through instruction received in the course of employment” are not protectible interests.  National Hearing Aid Centers, Inc. v. Ayers, 311 N.E.2d 573, 578 (Mass. 1974).

Modification

A noncompete may be enforced in whole or in part.  All Stainless, Inc., 308 N.E.2d 481, 485.  “If the covenant is too broad in time, in space or in any other respect, it will be enforced only to the extent that is reasonable and to the extent that it is severable for the purposes of enforcement.”  Id.

Specific Professions

Doctors—Noncompetes are void.  Falmouth Ob-Gyn Assocs., Inc. v. Abisla, 629 N.E.2d 291, 293-94 (Mass. 1994) (noncompete was unenforceable because the Massachusetts physician non-competition statute prohibits “any restriction” on the ability of physicians to practice).

Nurses—Noncompetes are void.  Mass. Gen. Laws ch. 112, § 74D (1983).  That statue provides that:

“Any contract or agreement which creates or establishes the terms of a partnership, employment, or any other form of professional relationship with a nurse registered to practice as a registered nurse pursuant to section seventy-four, or a practical nurse registered to practice as a licensed practical nurse pursuant to section seventy-four A, which includes any restriction of the right of such nurse to practice as a nurse in any geographical area for any period of time after the termination of such partnership, employment or professional relationship shall be void and unenforceable with respect to said restriction. Nothing in this section shall render void or unenforceable any other provision of any such contract or agreement.”

Broadcasters—Noncompetes are void.  Mass. Gen. Laws ch. 149, § 186 (1998).  That statute provides that:

“Any contract or agreement which creates or establishes the terms of employment for an employee or individual in the broadcasting industry, including, television stations, television networks, radio stations, radio networks, or any entities affiliated with the foregoing, and which restricts the right of such employee or individual to obtain employment in a specified geographic area for a specified period of time after termination of employment of the employee by the employer or by termination of the employment relationship by mutual agreement of the employer and the employee or by termination of the employment relationship by the expiration of the contract or agreement, shall be void and unenforceable with respect to such provision. Whoever violates the provisions of this section shall be liable for reasonable attorneys’ fees and costs associated with litigation of an affected employee or individual.”

Social workers—Noncompetes are void.  Mass. Gen. Laws ch. 112, § 135C.  That statute provides that:

A contract or agreement creating or establishing the terms of a partnership, employment, or any other form of professional relationship with a social worker licensed under this chapter that includes a restriction of the right of the social worker to practice in any geographic area for any period of time after termination of the partnership, employment or professional relationship shall be void and unenforceable with respect to that restriction. This section shall not render void or unenforceable the remainder of the contract or agreement.

Attorneys—Noncompetes are void.  Meehan v. Shaughnessy, 535 N.E.2d 1255, 1262 (Mass. 1989).  In that case, the court explained that, ethically, “a lawyer may not participate in an agreement which restricts the right of a lawyer to practice law after the termination of a relationship created by the agreement.”  The court found that this rule protects the public.  Id.

Maine

Generally, in Maine, covenants not to compete “are contrary to public policy and will be enforced only to the extent that they are reasonable and sweep no wider than necessary to protect the business interests in issue.”  Chapman & Drake v. Harrington, 545 A.2d 645, 647 (Me. 1988) (internal citation and quotation marks omitted).  The reasonableness of a noncompetition agreement “is a question of law to be determined by the court.”  Id.  A party may show reasonableness by developing case-specific facts regarding the noncompete’s “duration, geographic area and the interests sought to be protected.”  Id.  Because Maine “law does not favor non-competition agreements * * * it requires that such agreements be construed narrowly and technically.”  Id.

Reasonableness

Chapman & Drake illustrates the way that Maine courts look at the reasonableness of noncompetition agreements.  In that case, the court explained that, “There is further support for the reasonableness of a covenant not to compete when the employee limited thereby has had access to his employer’s confidential information, including customer lists, and is in a position after leaving his employer to take advantage of that information.”  Id. at 647.

 

Although the noncompetition agreement in that case did not contain a geographical limitation, the court found that it was reasonable because it was negotiated by both parties—the employee and the employer—and it “simply” prohibited the employee from “soliciting or accepting” the employer’s customers.  Id. at 648.  Therefore, the employee was not overly burdened by the noncompete and the noncompete did not violate public policy.  Id. at 648-49.

In Flaherty v. Libby, 81 A. 166, 167 (Me. 1911), the court found that it is “customary and oftentimes necessary that a person purchasing the business of another, with the good will that should follow the transaction, enters into an agreement with the seller, whereby the seller is restricted from engaging in a similar business within specified districts.”

However, “protecting an employer from business competition is not a legitimate business interest to be advanced by” a noncompete.  Brignull v. Albert, 666 A.2d 82, 84 (Me. 1995).
Duration

Although the noncompete at issue in Chapman & Drake was for five years, the court found that the duration was not per se unreasonable because the agreement did not preclude the employee from selling insurance—it only precluded him from doing business with people who were customers of the employer at the time that the employee worked for the employer.  545 A.2d  at 648.  The court also found that, “As enforced, the five-year limit also is reasonably related to protecting recognized legitimate business interests of” the employer.  Id.

Protectable interests

The sale and protection of goodwill are interests that may be protected by noncompetes. Flaherty, 81 A. at 167 (sale of goodwill); Brignull, 666 A.2d at 84 (protection of goodwill).  Trade secrets are also protectable interests.  Roy v. Bolduc, 34 A.2d 479, 481 (Me. 1943).  A “list of current patients” is a protectable business interest.  Brignull, 666 A.2d at 84.

Modification

If a court finds that a noncompete is overbroad, the agreement may be modified and enforced to the extent reasonable. Lord v. Lord, 454 A.2d 830, 834 (Me. 1983).  Maine courts will evaluate the reasonableness of a noncompetition clause as the employer seeks to apply it, as opposed to how it is written and may be hypothetically applied. Brignull, 666 A.2d at 84; Prescott v. Ross, 383 F.Supp.2d 180, 190 (D. Me. 2005).  However, the court will not impose its own draft of an overly broad provision on the parties.  Prescott v. Ross, 390 F.Supp.2d 44, 47 (D. Me. 2005).  Instead, the party seeking to enforce the noncompete, may only rely on the court to narrow the scope of the noncompete.  Id.

Second Circuit

Generally, noncompetition agreements “are narrowly construed by the courts” in the Second Circuit, “and must contain time, geographic and/or industry limitations”.  A.N. Deringer, Inc. v. Strough, 103 F.3d 243, 248 (2d Cir. 1996).

The Second Circuit generally disfavors noncompetes in the employment context, and enforces them only to the extent that they are reasonable and necessary to protect valid interests.  AM Media Communications Group v. Kilgallen, 261 F.Supp.2d 258 (S.D.N.Y. 2003).

Reasonableness

In evaluating whether a noncompete is reasonable, “courts must weigh the need to protect the employer’s legitimate business interests against the employee’s concern regarding the possible loss of livelihood.”  Ticor Title Ins. Co. v. Cohen, 173 F.3d 63, 69 (2d Cir. 1999).

A ten-mile geographic restriction is reasonable.  Singas Famous Pizza Brands Corp. v. N.Y. Adver. LLC, 468 Fed. Appx. 43, 2012 WL 89923, *3 (2d Cir. Mar. 19, 2012)

Duration

Generally short periods of time will be found reasonable.  A.N. Deringer, Inc., 103 F.3d at 248 (no one disputed that 90 days was reasonable).

Protectable Interests

Protectable interests include confidential information, A.N. Deringer, Inc., 103 F.3d at 248; “institutional know-how, reputation, and goodwill”, Singas, 468 Fed. Appx. 43, 2012 WL 89923 at *3; and “confidential information, such as customer lists and other confidential information not generally known to the public”, Am. Fed. Grp., Ltd. v. Rothenberg (American Federal Group 1), 136 F.3d 897, 906 (2d Cir. 1998).

Modification

“Generally, a contract will not be regarded as severable unless (1) the parties’ performances can be apportioned into corresponding pairs of partial performances, and (2) the parts of each pair can be treated as agreed equivalents.”  Ginett v. Computer Task Group, Inc., 962 F.2d 1085, 1098 (2d Cir. 1992)

New York

Covenants not to compete were at one time disfavored by New York courts.  Purchasing Assocs., Inc. v. Weitz, 196 N.E.2d 245, 247-48 (N.Y. 1963).  However, noncompetes are now generally enforced under New York law as long as they are reasonable and protect legitimate business interests.  Id.  Broad noncompete agreements are likely to be viewed more favorably in the context of the sale of a business as opposed to an employee who has signed an employer-drafted noncompete.  Id.  In the context of an employee who has signed an employer-drafted noncompete, those agreements are likely to be upheld if they are narrow in scope.  Id.  “Thus, a covenant by which an employee simply agrees, as a condition of his employment, not to compete with his employer after they have severed relations is not only subject to the overriding limitation of ‘reasonableness’ but is enforced only to the extent

necessary to prevent the employee’s use or disclosure of his former employer’s trade secrets, processes, or formulae * * * or his solicitation of, or disclosure of any information concerning, the other’s customers * * *.”  Id.  However, if “the employee’s services are deemed ‘special, unique or extraordinary,’ then, the covenant may be enforced by injunctive relief, if ‘reasonable,’ even though the employment did not involve the possession of trade secrets or confidential customer lists.”  Id.

Reasonableness

Generally, “reasonable” means, “not more extensive, in terms of time and space, than is reasonably necessary” to protect legitimate business interests.  Purchasing Assocs., Inc., 196 N.E.2d at 247-48.

Under New York law, “The modern, prevailing common-law standard of reasonableness for employee agreements not to compete applies a three-pronged test. A restraint is reasonable only if it: (1) is no greater than is required for the protection of the legitimate interest of the employer, (2) does not impose undue hardship on the employee, and (3) is not injurious to the public. A violation of any prong renders the covenant invalid.” BDO Seidman v. Hirshberg, 712 N.E.2d 1220, 1223 (N.Y. 1999) (emphasis in original).  Therefore, “a restrictive covenant will only be subject to specific enforcement to the extent that it is reasonable in time and area, necessary to protect the employer’s legitimate interests, not harmful to the general public and not unreasonably burdensome to the employee.”  Id.  (internal quotation marks and citations omitted).

Broad restrictive covenants are not likely to be enforced.  Id.

It is unreasonable to restrict competition in a case where the former employee gained clients with whom he did not have a relationship prior to leaving his former employer.  Id. at 1225  (explaining that, “it would be unreasonable to extend the covenant to personal clients of defendant who came to the firm solely to avail themselves of his services and only as a result of his own independent recruitment efforts, which BDO neither subsidized nor otherwise financially supported as part of a program of client development.”).

Duration

“To impose a continuing restraint beyond the period agreed upon is contrary to the agreement and not equitable.”  DeLong Corp. v. Lucas, 176 F.Supp. 104, 126 (S.D.N.Y. 1959), aff d, 278 F.2d 804 (2d Cir. 1960), aff’d, 364 U.S. 833, 81 S. Ct. 71, 5 L. Ed.2d 58 (1960).

However, in dealing with restrictive covenants between professionals, courts are not opposed to long durations, particularly when the restrictions are geographically limited or in rural areas.  BDO Seidman, 712 N.E.2d at 1223 (explaining that the court has upheld even permanent restrictions as well as restrictions for five years in rural locations).  Accountants are considered professionals in this context.  Id.  However, courts are not as likely to uphold lengthy restrictions in large metropolitan areas.  Id. at 1224.

Protectable Interests

Protectable interests include the sale of goodwill, Purchasing Assocs., Inc., 196 N.E.2d at 247-48; the employer’s trade secrets or “confidential customer lists, or protection from competition by a former employee whose services are unique or extraordinary”, BDO Seidman, 712 N.E.2d at 1223.

Customer lists are only protectable if they are trade secrets or are confidential.  Briskin v. All Seasons Servs., Inc., 206 A.D.2d 906, 906 (1994).  However, “an employer has sufficient interest in retaining present customers to support an employee covenant where the employee’s relationship with the customers is such that there is a substantial risk that the employee may be able to divert all or part of the business”  Service Systems Corp. v. Harris, 41 A.D.2d 20, 23-24 (1973).

Modification

New York courts exercise their “judicial power to sever and grant partial enforcement for an overbroad employee restrictive covenant.”  BDO Seidman, 712 N.E.2d at 1226.

Under New York law, if the noncompete is overly broad, the court will not simply invalidate it.  Id.  Rather, when

“the unenforceable portion is not an essential part of the agreed exchange, a court should conduct a case specific analysis, focusing on the conduct of the employer in imposing the terms of the agreement (see, Restatement [Second] of Contracts § 184).  Under this approach, if the employer demonstrates an absence of overreaching, coercive use of dominant bargaining power, or other anti-competitive misconduct, but has in good faith sought to protect a legitimate business interest, consistent with reasonable standards of fair dealing, partial enforcement may be justified”

Id. (some internal citations omitted.)

The Ninth Circuit

As explained in further detail below, the Ninth Circuit’s interpretation of a restrictive covenant or noncompetition agreement depends entirely on the state law that governs the agreement.  Generally, “Covenants by an employee not to compete have never been especially favored in equity but may be enforced if not unreasonable and if not broader than required for the employer’s protection.  There is no reason, however, to enforce a covenant which by its terms is no longer in effect.” Econ. Lab., Inc. v. Donnolo, 612 F.2d 405, 408 (9th Cir. 1979).

Reasonableness

Whether a noncompete is reasonable is either a question of fact or a question of law, depending upon the state law that governs the agreement.  Rent-A-Center, Inc. v. Canyon TV and Appliance Rental, Inc., 944 F.2d 597, 600 (9th Cir. 1991.)  Once the court determines the standard of review, it will use the appropriate state’s law to determine whether the agreement is reasonable.  Id.

Protectable Interests

The court will evaluate whether the interests that the employer or the drafter of the agreement seeks to protect are actually protectable under the applicable state law.  Safelite Glass Corp. v. Crawford, 25 Fed.Appx. 613, 2002 WL 22342, *1 (9th Cir., January 8, 2002).

Duration

The acceptable duration for a restrictive covenant or noncompetition agreement depends on the applicable state law, particularly what that state regards as reasonable in a restrictive covenant context.  Henry Hope X–Ray Prod., Inc. v. Marron Carrel, Inc., 674 F.2d 1336, 1342 (9th Cir. 1982).

Modification

The court will use the applicable state’s law to determine the scope, if any, of modification for a restrictive covenant or noncompete.  Four Seasons Freight Services, Inc. v. Haralson, 96 F.3d 1451, 1996 WL 506182, *1 (9th Cir., September 4, 1996).

California

California has statutes regarding restrictive covenants and noncompetes.  Generally, “there exists a clear legislative declaration of public policy against covenants not to compete.”  D’sa v. Playhut, Inc., 85 Cal. App. 4th 927, 933 (2000).  For example, California’s Business and Professions Code, section 16600, provides that, “Except as provided in this chapter, every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void.”

California allows noncompetes when selling a business.  Specifically, California’s Business and Professions Code, section 16601, provides that:

“Any person who sells the goodwill of a business, or any owner of a business entity selling or otherwise disposing of all of his or her ownership interest in the business entity, or any owner of a business entity that sells (a) all or substantially all of its operating assets together with the goodwill of the business entity, (b) all or substantially all of the operating assets of a division or a subsidiary of the business entity together with the goodwill of that division or subsidiary, or (c) all of the ownership interest of any subsidiary, may agree with the buyer to refrain from carrying on a similar business within a specified geographic area in which the business so sold, or that of the business entity, division, or subsidiary has been carried on, so long as the buyer, or any person deriving title to the goodwill or ownership interest from the buyer, carries on a like business therein.”

Under section 16601, in order to uphold a noncompete, “The transaction must clearly establish that it falls within this limited exception.  The practical effect of the transaction and the economic realities must be considered.”  Hill Med. Corp. v. Wycoff, 86 Cal. App. 4th 895, 903 (2001).  Courts will evaluate whether goodwill was considered in determining the sales price “[i]n order to restrain the seller’s profession, trade, or business”.  Id.  In other words, there must be a showing that the buyers were entitled to protection “from competition from the seller which competition would have the effect of reducing the value of the property right that was acquired.”  Id. (internal citations and quotation marks omitted.)

Similarly, when a seller transfers all of her corporate shares and when those shares constitute only a small amount of the corporate shares, the court should evaluate the agreement according to the same factors, specifically, “did the transaction take into account corporate goodwill?”  Id. at 903-04.   The seller must have sold “the goodwill of the corporation.”  Id. at 904 (internal citation and quotation marks omitted).  In other words:

“Simply selling shares to an individual vendee or back to the corporation does not necessarily demonstrate that goodwill is part of the agreement. To hold otherwise, would result in the enforceability of all covenants not to compete involving the sale of all of the vendors shares, in violation of the purposes behind sections 16600 and 16601.”

Wycoff, 86 Cal. App. 4th at 904.

Noncompetes are also allowed in the context of the dissolution of a partnership (Cal. Bus. & Prof. § 16602), or the sale or dissolution of a limited liability corporation (Id. at § 16602.5).

Attempts have been made to persuade courts to adopt “a narrow-restraint exception to section 16600”, Ret. Group v. Galante, 176 Cal. App. 4th 1226, 1236 (2009), but courts have generally held that, “Section 16600 is unambiguous, and if the Legislature intended the statute to apply only to restraints that were unreasonable or overbroad, it could have included language to that effect.” Id.  In Galante, the court left “it to the Legislature, if it chooses, either to relax the statutory restrictions or adopt additional exceptions to the prohibition-against-restraint rule under section 16600.”  Id.

Reasonableness

Generally, the above statutes will control the validity of a restrictive covenant.  However, “time, circumstances and public policy may change the reasonable interpretation of a  restrictive covenant.”  Welsch v. Goswick, 130 Cal. App. 3d 398, 405-06 (1982).  For example, in Welsch, the court looked at “whether social, economic and legal conditions have changed such that the covenant, limiting use of subdivision lots to single-family residential purposes, would currently be interpreted to prohibit operation of a residential care facility serving six or fewer persons.”  Id. at 406.

Protectable Interests

Goodwill is protectable, as explained above.  Trade secrets are also protectable.  “[It is not the solicitation of the former employer’s customers, but is instead the misuse of trade secret information, that may be enjoined.  Galante, 176 Cal. App. 4th at 1237 (emphasis in original).

Customer lists constitute trade secrets and are protectable.  Id. at 1238.  As long as the customer lists do not contain public information that is “readily ascertainable”, or easily identifiable, the lists may be protected.  Id. (internal citations and quotation marks omitted).

Preventing disruption in the workplace is generally a protectable interest.  “The restriction presumably was sought by plaintiffs in order to maintain a stable work force and enable the employer to remain in business.”  Loral Corp. v. Moyes, 174 Cal. App. 3d 268, 280 (1985).

Duration

“[D]uration alone of a restrictive agreement is not determinative of its enforceability.  Id. at 279.

Modification

“Generally, courts reform contracts only where the parties have made a mistake and not for the purpose of saving an illegal contract.”  Kolani v. Gluska, 64 Cal. App. 4th 402, 406-07 (1998) (internal citations omitted).  Courts may save noncompetes by narrowly construing them, but they will do so only when the contract is not statutorily void (a court could save a noncompete if, for example, it is ancillary to the sale of goodwill and not invalid on its face).  Id. at 407.  Courts have ‘blue penciled’ noncompetition covenants with overbroad or omitted geographic and time restrictions to include reasonable limitations.”  Strategix, Ltd. v. Infocrossing W., Inc., 142 Cal. App. 4th 1068, 1074 (2006).

Specific Professions

Lawyers—Lawyers generally may not be restricted from practicing.  Howard v. Babcock, 6 Cal. 4th 409, 416 (1993).  However, “An agreement that assesses a reasonable cost against a partner who chooses to compete with his or her former partners does not restrict the practice of law. Rather, it attaches an economic consequence to a departing partner’s unrestricted choice to pursue a particular kind of practice.”  Id. at 419.

Accountants—Accountants may be restricted if they withdraw from a partnership and if the noncompete is limited to a small geographic area.  Id. at 416.

Doctors—Doctors generally may not be restricted from practicing, “but a withdrawing partner may contract that if he exercises that privilege he will compensate his former partners to some extent at least for the business which he expects to take from them.  Id. (internal citation and quotation marks omitted).

Oregon

Noncompetes in an employment context are governed by a lengthy statute, ORS 653.295, which provides that:

“(1) A noncompetition agreement entered into between an employer and employee is voidable and may not be enforced by a court of this state unless:

“(a)(A) The employer informs the employee in a written employment offer received by the employee at least two weeks before the first day of the employee’s employment that a noncompetition agreement is required as a condition of employment; or

“(B) The noncompetition agreement is entered into upon a subsequent bona fide advancement of the employee by the employer;

“(b) The employee is a person described in ORS 653.020(3);

“(c) The employer has a protectable interest. As used in this paragraph, an employer has a protectable interest when the employee:

“(A) Has access to trade secrets, as that term is defined in ORS 646.461;

“(B) Has access to competitively sensitive confidential business or professional information that otherwise would not qualify as a trade secret, including product development plans, product launch plans, marketing strategy or sales plans; or

“(C) Is employed as an on-air talent by an employer in the business of broadcasting and the employer:

“(i) In the year preceding the termination of the employee’s employment, expended resources equal to or exceeding 10 percent of the employee’s annual salary to develop, improve, train or publicly promote the employee, provided that the resources expended by the employer were expended on media that the employer does not own or control; and

“(ii) Provides the employee, for the time the employee is restricted from working, the greater of compensation equal to at least 50 percent of the employee’s annual gross base salary and commissions at the time of the employee’s termination or 50 percent of the median family income for a four-person family, as determined by the United States Census Bureau for the most recent year available at the time of the employee’s termination; and

“(d) The total amount of the employee’s annual gross salary and commissions, calculated on an annual basis, at the time of the employee’s termination exceeds the median family income for a four-person family, as determined by the United States Census Bureau for the most recent year available at the time of the employee’s termination. This paragraph does not apply to an employee described in paragraph (c)(C) of this subsection.

“(2) The term of a noncompetition agreement may not exceed 18 months from the date of the employee’s termination. The remainder of a term of a noncompetition agreement in excess of 18 months is voidable and may not be enforced by a court of this state.

“(3) Subsections (1) and (2) of this section apply only to noncompetition agreements made in the context of an employment relationship or contract and not otherwise.

“(4) Subsections (1) and (2) of this section do not apply to:

“(a) Bonus restriction agreements, which are lawful agreements that may be enforced by the courts in this state; or

“(b) A covenant not to solicit employees of the employer or solicit or transact business with customers of the employer.

“(5) Nothing in this section restricts the right of any person to protect trade secrets or other proprietary information by injunction or any other lawful means under other applicable laws.

“(6) Notwithstanding subsection (1)(b) and (d) of this section, a noncompetition agreement is enforceable for the full term of the agreement, for up to 18 months, if the employer provides the employee, for the time the employee is restricted from working, the greater of:

“(a) Compensation equal to at least 50 percent of the employee’s annual gross base salary and commissions at the time of the employee’s termination; or

“(b) Fifty percent of the median family income for a four-person family, as determined by the United States Census Bureau for the most recent year available at the time of the employee’s termination.

“(7) As used in this section:

“(a) “Bonus restriction agreement” means an agreement, written or oral, express or implied, between an employer and employee under which:

“(A) Competition by the employee with the employer is limited or restrained after termination of employment, but the restraint is limited to a period of time, a geographic area and specified activities, all of which are reasonable in relation to the services described in subparagraph (B) of this paragraph;

“(B) The services performed by the employee pursuant to the agreement include substantial involvement in management of the employer’s business, personal contact with customers, knowledge of customer requirements related to the employer’s business or knowledge of trade secrets or other proprietary information of the employer; and

“(C) The penalty imposed on the employee for competition against the employer is limited to forfeiture of profit sharing or other bonus compensation that has not yet been paid to the employee.

“(b) ‘Broadcasting’ means the activity of transmitting of any one-way electronic signal by radio waves, microwaves, wires, coaxial cables, wave guides or other conduits of communications.

“(c) ‘Employee’ and ‘employer’ have the meanings given those terms in ORS 652.310.

“(d) ‘Noncompetition agreement’ means an agreement, written or oral, express or implied, between an employer and employee under which the employee agrees that the employee, either alone or as an employee of another person, will not compete with the employer in providing products, processes or services that are similar to the employer’s products, processes or services for a period of time or within a specified geographic area after termination of employment.”

ORS 653.295 is construed broadly, and applies to non-solicitation agreements. First Allmerica Fin. Life Ins. Co. v. Sumner, 212 F. Supp. 2d 1235, 1238 (D. Or. 2002) (stating that, “Plaintiffs’ attempt to draw a distinction between a prohibition against solicitation of former employees and a prohibition against inducing customers to terminate their relationship with the plaintiffs is misplaced given the Oregon court’s broad construction of the statutory reach of ORS 653.295.”).

Under ORS 653.295(1)(a), “Any non-de minimis delay, between the commencement of employment and when the agreement was signed, is fatal.” Konecranes, Inc. v. Scott Sinclair, 340 F. Supp. 2d 1126, 1129 (D. Or. 2004)

If an employee refuses to sign a noncompete and is fired, there is no claim for wrongful discharge.  Dymock v. Norwest Safety Protective Equip. for Oregon Indus., Inc., 45 P.3d 114, 116 (Or. 2002) (stating that, “Because ORS 653.295 does not confer on plaintiff the right to refuse to sign the agreement that is at issue in this case * * * our inquiry is at an end. Plaintiff has failed to state a claim for wrongful discharge.”).

The noncompete is enforceable even if the employee is fired.  Nike, Inc. v. McCarthy, 285 F. Supp. 2d 1242, 1246 (D. Or. 2003) aff’d, 379 F.3d 576 (9th Cir. 2004).  In McCarthy, the court explained that:

“Similarly, the fact that defendant may have been forced out of the company bears no direct relation to the validity of the contract—the severance pay package alleviates any unfairness, unconscionability or “unclean hands” in enforcing the non-compete for a 1–year period. Further, nothing in the terms of the contract invalidates its provisions based upon the voluntary or involuntary nature of defendant’s separation from the company.”

Id.

Choice of law is generally not an issue because Oregon courts will likely always interpret noncompetes according to Oregon law.  ORS 653.295(1) (which states that a noncompete “may not be enforced by a court of this state” unless it meets the statutory requirements.  Similarly, “An Oregon employer cannot circumvent Oregon laws designed to protect Oregon workers simply by decreeing that the laws of another state will apply.  Konecranes, 340 F. Supp. 2d at 1130.

Reasonableness

“A noncompetition provision in an employment contract is a covenant in restraint of trade.”  Volt Servs. Grp., Div. of Volt Mgmt. Corp. v. Adecco Employment Servs., Inc., 35 P.3d 329, 333 (Or. App. 2001).  In order for a noncompete to be valid, three requirements must be met:

“(1) it must be partial or restricted in its operation in respect either to time or place; (2) it must come on good consideration; and (3) it must be reasonable, that is, it should afford only a fair protection to the interests of the party in whose favor it is made, and must not be so large in its operation as to interfere with the interests of the public.”

  1. P. Lumber Co. v. Moore, 551 P.2d 431, 434 (Or. 1976) (citing Eldridge et al. v. Johnston, 245 P.2d 239, 250 (1952)).

These requirements must be met “[e]ven if the covenant not to compete is not void under section 653.295[.]”  McCarthy, 379 F.3d at 584.

Whether a noncompete is reasonable “must be determined in view of what is reasonably necessary to safeguard the employer’s protectible interest.”  Volt Servs. Grp., 35 P.3d at 334.

A noncompete without geographic limitation is not automatically void.  Renzema v. Nichols, 731 P.2d 1048, 1049 (Or. App. 1987).  “If possible, the noncompetition clause should be interpreted so as to make the extent of its operation reasonable.”  Id.  Whether the noncompete is reasonable will depend on the facts.  Id.

Bird Strikes and Aviation: Facts and Fault

From Scott Brooksby’s article, “Bird Strikes and Aviation: Facts and Fault” published in the American Bar Association’s Mass Torts Practice Points on December 7, 2015:

Bird strikes are an increasing danger to commercial aviation and result in death and serious injury to passengers and crew, and soaring costs for aircraft damage.

According to Boeing, the first bird strike was recorded by the Wright Brothers in 1905. Now, aircraft-wildlife strikes are the second leading cause of aviation-related fatalities. Globally these strikes have killed over 400 people and destroyed more than 420 aircraft. In addition to birds, wildlife strikes have been reported involving horses, antelope, moose and many other mammals.

Potential Liability for Airport Operators
The USDA’s Airport Wildlife Hazards Program plays a leading role in the supervision and management of aircraft-wildlife strikes. The USDA notes that airport managers must exercise due diligence in managing wildlife hazards to avoid serious liability issues. The U.S. Code of Federal Regulations requires that Part 139-certificated airports experiencing hazardous wildlife conditions as defined in 14 C.F.R. section 139.337 to conduct formal wildlife hazard assessments. The certificated airports must develop wildlife hazard management plans as part of the certification standards. Airports are required to employ professional biologists trained in wildlife-hazard management. (14 C.F.R. § 139.337 and FAA Advisory Circular 150/5200-36). Failure to comply with the regulations can give rise to liability for airport operators.

Data Sampling
According to Boeing, the relevant wildlife-strike facts include:

1. More than 219 people have been killed as a result of bird strikes since 1988.

2. Between 1990 and 2009, bird and small and large mammal strikes have cost U.S. civil aviation $650 million per year.

3. The Air Force sustains about $333 million dollars in damage per year due to bird strikes.

4. About 5,000 bird strikes were reported by the Air Force in 2012.

5. About 9,000 bird and other wildlife strikes were reported for U.S civil aircraft in 2009.

6. The FAA has identified 482 species of birds involved in strikes from 1990-2012.

Factors Contributing to the Rise in Bird Strikes

1. The North American non-migratory Canada goose population increased from 1 million birds in 1990 to 4 million birds in 2009. Concentrations are particularly high at JFK airport and surrounding regions, with the ample grass and wetlands, but populations of various sizes are found near airports across the country.

2. A 12-pound Canada goose struck by an airplane moving at 150 miles per hour during takeoff generates the kinetic energy of a 1000 pound weight dropped from a height of ten feet.

3. Nesting populations of bald eagles increased from 400 pairs in 1970 to 13,000 pairs in 2010. Between 1990 and 2009, 125 bald eagle strikes were reported. The body mass of a bald eagle is 9.1 pounds for males and 11.8 pounds for females.

4. Finally, the population of European starlings is now the second most prevalent bird in America, numbering over 150 million. Often called “silver bullets,” they fly at high speed and have a body density that is 27 percent greater than gulls.

Prevention
In January 2009, U.S. Airways Flight 1549 landed on the Hudson River after multiple Canada goose strikes in flight.  As a result, New York City Mayor Michael Bloombergdeclared war on geese. Suzanne Goldenberg, New York Declares War on Geese to Prevent Airport Bird Strikes, The Guardian (June 12, 2009). A mayoral steering committee gave the go-ahead to the USDA to cull geese in a 450-mile area encompassing JFK, LaGuardia, and Newark airports. Other means of control include:

1. Each summer, teams of USDA goose catchers capture geese that, in the molting condition cannot fly, including offspring that are then taken to slaughterhouses and dispatched. Between 2009 and 2010, 2911 geese were killed.

2. The USDA reports that 80 percent of Canada geese are resident, and remain in place, rather than migrate. The government and airport operators strongly advocate for the culling of non-migratory birds.

3. Discouraging nesting and grazing.

4. Letting grass grow taller, planting unpalatable grasses, reducing standing rainwater, and oiling eggs to prevent hatching.

5. Firing pyrotechnics and propane cannons.

Conclusion
Given the rapid growth of non-migratory birds at some of the busiest airports, and the dramatic increase in flights, it may only be a matter of time before a catastrophic bird or wildlife strike will happen again, with more disastrous results than the extraordinary landing of Flight 1549 on the Hudson.

Scott Brooksby featured as moderator at prominent aviation conference

Oregon aviation lawyer Scott Brooksby will be featured as a moderator at the 2016 American Bar Association Aviation Litigation National Institute in New York, New York, entitled “Birds, Pets, Lasers, Stowaways, and Other Hot Topics in Aviation”.  The conference will take place at the University Club of New York.

Scott Brooksby will join other distinguished faculty at this prominent aviation conference, which will highlight current developments in aviation law including:

• Birds, pets, lasers, stowaways, and other hot topics
• Recent developments in case law in aviation and space law
• Defenses available in war zone tort actions
• Ethics—The preparation and testimony of witnesses during an aviation trial
• Improving aviation safety
• Defining the boundaries of federal preemption in aviation litigation
• Handling Air Traffic Control issues and aviation mishaps in air crash cases
• Carrier liability surrounding the failure to divert due to medical circumstances
• Liability issues surrounding foreign maintenance of American aircraft

Much of the firm’s practice is devoted to aviation law, and we are one of the few firms in Oregon with aviation trial experience.  Scott Brooksby leads our aviation practice, devoting a substantial amount of his time and practice to aviation-related matters.  Scott served as local counsel for one of the largest aviation manufacturers in the world in a nine-week trial in Oregon state court.  The trial involved product liability issues and concerned a helicopter crash that resulted in burns, permanent injuries, and multiple deaths.  Mr. Brooksby is on the aviation subcommittee of the American Bar Association’s Mass Torts section, and serves as a speaker on aviation matters at aviation law conferences across the nation.

Aircraft Wheel-Well Stowaways: Can Security Breaches Lead to Mass Torts?

Businesswoman standing in airplane engine

From Scott Brooksby’s article, “Aircraft Wheel-Well Stowaways: Can Security Breaches Lead to Mass Torts?”, published in the American Bar Association’s Mass Torts, Practice Points on October 9, 2015:

In recent years, wheel-well stowaways have received increasing media attention and public interest. Statistics on the manner of death and the factors that keep stowaways alive are not precise.

Most of these incidents happen for refugee and humanitarian reasons. However, assuming the physiological obstacles of hypothermia and hypoxia are overcome, one major question remains: What legal implications are raised if a stowaway with destructive intent caused a major tragedy?

Usually, a stowaway jumps into an aircraft by hanging on to the airliner’s landing gear as the plane takes off, and the force of the wind can easily make a stowaway fall to his or her death. The overwhelming majority of stowaways are young males. Because stowaways must stay within the landing-gear area, they face other risks too, such as being crushed in a confined space when the gear retracts, falling when the plane is landing, or dying from the heat produced by the engines of the aircraft.

The Data
The following introduction is based on FAA data.

The first recorded case of an aircraft stowaway occurred on June 13, 1929. The Bernard monoplane Oiseau Canari, piloted by Frenchmen Assollant Lefevre, had trouble taking off in spite of its powerful Hispano Suiza engine. The crew later discovered the cause of the problem: a stowaway on board. Despite the overload, the plane landed in Spain after 22 hours of flight.

Physiological threats for a stowaway are minimal at altitudes up to 8,000 feet, but at higher altitudes, reduced atmospheric pressure and partial pressure of oxygen may have deleterious effects. At all cruising altitudes, the partial pressure of oxygen in a wheel well cannot sustain consciousness. Additionally, at altitudes of about 20,000 feet, stowaways may develop decompression sickness.

All of the scientific research suggests that, after takeoff, a stowaway faces two life-threatening conditions during flight: hypoxia and hypothermia. In 1993, the fatality of a 19-year old who stowed away in the wheel well of a plane bound from Columbia to JFK International Airport was one of the 13 wheel-well stowaway flights documented in a report by the U.S. Federal Aviation Administration (FAA), Civil Aeromedical Institute (CAMI), and Flight Safety Foundation (FSF) as having frozen to death.

According to the FAA, from 1947 to 2014 there have been 94 flights involving 105 people who stowed away worldwide. Of those 105 people, 80 died and 25 survived. The 25 people who survived represent a 23.8 percent survival rate.

In 2014 as discussed above, a 16-year old California boy jumped a fence at San Jose International Airport and squeezed into the wheel well of a flight bound for Maui, where he emerged five hours later, in good health. Experts surmised that the teen’s youth could be an advantage, as the brains of young people adapt more easily to hypothermia and hypoxia, for reasons that are not completely understood.

Similarly, a 21-year old Indonesian man hid in the wheel well of a Garuda Indonesia flight from Sumatra to Jakarta.

Some experts also believe that motivation for some (younger) stowaways to escape is prompted by politically dangerous homeland conditions that compel their departure under desperate circumstances. That can affect their brains by producing a “virtual hibernative state,” where their bodies become temporarily more adaptable to trauma.

Possible Outcomes
There may be a number of consequences of security breaches by aircraft wheel-well stowaways and their on-board actions, despite the present physiological obstacles. Among these include:

  • widespread concern about security at public, airline, security provider, airport, and government levels
  • direct action by, influence on, payment for, or extortion by extremists determined to cause a catastrophe through the use of an explosive device or alteration of a plane’s existing safety features
  • government-levied fines for airlines, airports, private security companies, local police, and federal agents based on security breaches
  • increased security measures imposed by airport, airline, local, state, and federal authorities
  • lawsuits by agencies, airlines, or security companies against the indigent stowaways are unlikely, although deportation is possible

With the proliferation of wheel-well stowaways, it is likely only a matter of time until a serious mass-tort tragedy occurs.