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The Claims are Paid, Now What? Subrogation!

The Claims are Paid, Now What? Subrogation!

by Scott Brooksby

“Sir, it is wrong to stir up law-suits; but when once it is certain that a law-suit is to go on, there is nothing wrong in a lawyer’s endeavoring that he shall have the benefit, rather than another.” –Samuel Johnson

Introduction

Subrogation is defined for present purposes as the substitution of one person in the place of another with respect to a lawful claim or right. Subrogation is the right that every insurance company reserves in all insurance policies to recover losses from a third-party who contributed to or caused the loss.  It is one of the oldest concepts in jurisprudence.  However, the doctrine is not well understood, even by lawyers and judges who may not deal with subrogation issues on a regular basis.

Webster’s defines subrogation as:

The assumption by a third party (such as a second creditor or an insurance company) of another’s legal right to collect a debt or damages

https://www.merriam-webster.com/dictionary/subrogation

Subrogation in the aviation context has important implications for insurers and insureds. When markets are rising, most carriers make money on their investments.  When markets are down, and especially when they crash, as they did in 2008 and 2009, carriers may lose money, in part because margins are somewhat limited by market performance.  However, subrogation claims, when carefully evaluated and handled, provide carriers a right to recover dollars that may be easier to collect than premium dollars.  Successful collection on subrogation claims may have significant impact on insurer financial performance.  Insureds also benefit from effective subrogation claims because ever-increasing deductibles can be recovered and result in better loss history and lower rates.

Brief Historical Overview: Roman Origins

Subrogation, as a legal concept, dates back to Roman times. Under the reign of Emperor Hadrian (AD 117-AD 138) Roman law began to shape the building blocks of subrogation.  The relation of suretyship could be created by stipulation.  Gary L. Wickert, The Societal Benefits of Subrogation https://www.mwl-law.com/defending-subrogation/. For broad historical perspective, see Saul Litvinoff, Subrogation, 50 La. L. Rev. (1990) http://digitalcommons.law.lsu.edu/cgi/viewcontent.cgi?article=5249&context=lalrev.

Although modern subrogation may have had its roots in Roman suretyship, scholars have generally noted that the Roman law required a more positive act to transfer rights before subrogation could occur. Therefore, many have raised the possibility that the modern doctrine arose somewhat independently of Roman and French antecedents as a purely English theory that seems to have had its origins in the courts of Equity.  M.L. Marasinghe, An Historical Introduction to the Doctrine of Subrogation: The Early History of the Doctrine I, 10 Val U.L. Rev. 45 (1975).

Commenting on Roman equity, one scholar expressed a view that subrogation was unknown to the Romans in the context in which it appears in the common law today. In Roman law, “subrogate” was a well-known term of constitutional law, providing for the replacement of one official by another or replacing one official’s actions with another’s action. Id., at 46, citing W.W. Buckland, Equity in Roman Law, 47-54 (1911).

Of subrogation, Buckland further reasoned that

“The corresponding right in English law, at least in case of a surety, amounts to actual subrogation, and is declared to be based on natural justice, no attempt being made to deduce it from any defined principle.” Id., citing Buckland at 54.

Therefore, under English common law, no express transference of rights has been required. Marasinghe, supra, at 46.

Brief History: Anglo-American Subrogation

“I do think that Magna Carta and international law are worth paying some attention to”

–Noam Chomsky

Despite its ancient roots, modern subrogation is a distinct concept, bearing little resemblance to the Roman version. It appears that the concept of subrogation was formally incorporated into the English common law in the Magna Carta, which provides:

Neither We nor Our bailiffs shall seize any land or rent for any debt so long as the debtor’s chattels are sufficient to discharge the same; nor shall the debtor’s sureties be distrained so long as the debtor is able to pay the debt. If the debtor fails to pay, not having the means to pay, then the sureties shall answer the debt, and, if they desire, they shall hold the debtor’s lands and rents until they have received satisfaction of the debt which they have paid for him, unless the debtor can show that he has discharged his obligation to them.  A.E. Dick Howard, Magna Carta, Text & Commentary 39 (rev. ed. 1998).

Although a complete historical analysis is far beyond the scope of this paper, the English judges linked subrogation to the equitable principle of contribution. Id., citing Pothier, Treatise on Obligation 259 (3d Amer. Ed. 1853).  By 1782 the common law courts had recognized the doctrine of subrogation and were using it “as if it had always been part of the common law of England.”  Marasinghe, at 49.  In Mason v Sainsbury, 3 Doug. 61, 64, 99 Eng. Rep. 525 (1782),  Lord Chief Justice Mansfield stated:   “Every day, the insurer is put in the place of the insured.  The insurer uses the name of the insured.” Id.

However, subrogation in the modern Anglo-American context has different meanings in different contexts. Modern subrogation can be generally categorized into three types:

Contractual subrogation, which is based on the contract between the parties such as subrogation language in an insurance policy. This is sometimes called “conventional subrogation”.

Equitable subrogation, sometimes called “legal subrogation,” is a product of equity. Equitable subrogation is not dependent on the existence of any contract assignment or privity.  It arises by operation of law out of the fairness doctrine.

Statutory subrogation is a mechanism that gives a carrier a right to recover certain benefits. Statutory subrogation may arise in areas such as workers compensation, hospital liens, and Medicare among other things.

Subrogation Waivers

A typical subrogation clause in an aviation insurance contract may read: “If we pay a claim under your policy, we will take over your right to recover that amount from any other person or organization.  You agree to cooperate with us and not to do anything that will interfere with our chances of recovery.”

The aviation industry is contract-intensive. Aviation-related contracts very often contain subrogation waivers in which each of the parties to the contract agrees to maintain its own insurance and also agrees to waive subrogation rights that may otherwise exist or arise with respect to insured losses. Waivers of subrogation most often apply to hull claims, but may sometimes be requested in product liability, airplane, airport, and hangar leases and pilot training.

A representative sample of a contractual subrogation waiver typically reads as follows:

“To the extent that any loss of any kind is covered or paid by any insurer, the contracting parties hereby waive subrogation or contribution rights against each other and their respective officers, agents and employees, and the contracting parties shall notify their respective insurers of this waiver of subrogation agreement and shall cause this waiver of subrogation agreement to be included in the insurance policies secured by each of the contracting parties.

A waiver of subrogation will result in the insurance carrier waiving the right to recover amounts paid under the policy from the person or entity that caused the loss. For example, a regional operator may contract with an FBO for pilot service.  Before a flight, the FBO requires execution of a subrogation waiver against the FBO related to the pilot service.  Assume further that the insurance company agrees to the waiver.  On the flight, the pilot fails to lower the landing gear, causing significant damage.  Without the waiver, the insurance company would have paid to repair the loss and then pursued a subrogation claim  against the FBO’s insurance.

As a practical matter, failure to provide a requested waiver may result in a failure to obtain the desired contract. However, before executing a waiver, insureds should recognize that there are significant downsides:

  • The insured could void the policy if the waiver is provided without receiving approval and endorsement from the insurer.
  • Losses that could have been subrogated may be fully charged against the policy loss record.
  • There may be a premium charge involved in providing the waiver.

The validity of waivers in aviation contracts has long been recognized. In Continental Manufacturing Corp. v. Underwriters at Lloyd’s of London, 185 Cal. App. 2d 545 (1960), the court held that an aviation insurer was not obligated to make a hull loss payment to its insured.  The insured had executed an earlier lease agreement that had released the party responsible, and therefore improperly defeated the insurer’s right of subrogation.

Aircraft Financing and Subrogation Waivers

Aircraft financiers typically require a waiver of subrogation to protect themselves from any action by the airline’s insurers who, at common law, are subrogated to all rights which the insured may have against third-parties, including financiers. Rod D. Margo, Aspects of Insurance in Aviation Finance, 62 J. Air L. & Com. 423, 455 (1996).  http://scholar.smu.edu/cgi/viewcontent.cgi?article=1428&context=jalc

Under English law, a waiver of subrogation clause cannot be relied on by a person who is not a party to the insurance contract. Id., at 456, citing National Oilwell (U.K.) Ltd. v Davy Offhsore Ltd., (1993) 2 Lloyd’s rep. 582, 602-04 (Eng. Q.B.); Enimont Supply SA v. Chesapeake Shipping Inc. (the “Surf City”), (1995) 2 Lloyd’s Rep. 242 (Eng. Q.B.).  Therefore, unless the financier has also been endorsed as an additional insured under the airline’s policy, a waiver of subrogation will likely be unenforceable for lack of privity of contract.

A waiver of subrogation is probably unnecessary where the financier is endorsed as an additional insured under the airline’s policy because the policies make it clear that an insurer cannot exercise any such rights of subrogation against their own insureds. Margo, supra, at 456.

Subrogation and the Non-Owner Pilot

Whether it is the owner or a lessor, some broad form of all-loss insurance is generally carried by the party that has the care, custody and control of the aircraft, and is responsible for maintaining the airworthiness of the aircraft and has dispatch authority. A non-owner pilot is the pilot named under the policy other than the owner, a pilot using the aircraft under the open pilot warranty or “permissive pilot” provision ,or a renter.

The insurance contract is an agreement between the insurer and the purchaser of the policy. Unless the pilot is an employee of the owner, he may be subject to a subrogation action.  For this reason, as discussed above, many contract pilots and pilot service companies usually demand that the aircraft owner or named insured provide the contract pilot with a waiver of subrogation and status as an “additional insured” under the policy.

The Importance of Spoliation Considerations in Aviation Subrogation

Complex issues arise when the insurer elects to undertake a spoliation investigation. For example, physical evidence which may be critical to insured and uninsured losses may need to be collectively preserved.  It may not even be clear which components or evidence in a subrogation claim relate to insured and uninsured losses for some time.  At the outset, it is necessary to determine who is responsible for preservation of any relevant evidence.  In most subrogation cases the plaintiff must preserve the evidence, but in aviation cases that responsibility generally falls to a potential defendant.

In aviation cases, preservation of evidence in subrogation cases is more complicated because the NTSB has complete authority to assume custody of evidence relevant to its investigation. .  Pursuant to 49 U.S.C. § 1901 et. seq., the NTSB also has the ability to limit party participation status.  See 49 C.F.R. § 831.11(a)(1).

Since the regulations also exclude persons who represent claimants or insurers from party status under 49 C.F.R. 831.11(a)(3), the NTSB and potential defendants typically have control of the investigation and the evidence during the important period between the time of the accident and the time the evidence is released to the owing party, often the hull insurer. The NTSB also prohibits lawyers or insurers or anyone whose role is the pursuit or defense of claims from participating in the process.

If the NTSB destroys, loses or otherwise is responsible for spoliation of the evidence, a lawsuit against the NTSB is precluded by the discretionary function exception to the Federal Tort Claims Act. See Black Hills Aviation Inc. v. United States, 34 F.3d 968, 976 (10th Cir. 1994).

The potential defendant manufacturers or other party participants to an NTSB accident investigation do not share the same protections or immunities. In Lowe v. TDU Industries, Inc., 2005 WL 1983750 (Cal. App 2d Dist. Aug. 18, 2005), an engine manufacturer lost the engine cylinders.  The court ruled that the plaintiff was entitled to an inference instruction that the cylinders would have supported plaintiff’s theory.  California, in particular, has created affirmative liability for spoliation of evidence.  See, e.g., Johnson v. United Services Automobile Association, 79 Cal. Rptr. 2d 234 (1998).

The Made Whole Doctrine

Among the many subrogation doctrines which is not well understood, and which takes many different state-specific forms, is the made whole doctrine. A complete discussion of the made whole doctrine is far beyond the scope of this article.

Because subrogation may lead to adverse consequences for insureds, the common law developed the made whole doctrine which limits the use of subrogation before an insured party receives full compensation for damages. As one scholar notes, the made whole doctrine is the “principal weapon used by contemporary courts to curb the harsh effect of contractual subrogation on the rights of the insured.”  Parker, Johnny C., The Made Whole Doctrine: Unraveling the Enigma Wrapped in the Mystery of Insurance Subrogation. Missouri Law Review, Vol. 70, 723, 723-775 (October, 2005) http://law.missouri.edu/lawreview/files/2012/11/Parker.pdf.

As originally developed, the made whole doctrine applied to subrogation, whether legal or conventional. Therefore, even where the insurer had paid all of the policy proceeds and included an expressed subrogation provision in the policy, the right to subrogation was stayed until the insured received complete compensation. Id., at 773.

However, many states have adopted a modified application of the made whole doctrine and have concluded that since the doctrine is of equitable origins and conventional subrogation is grounded upon a legal contract, the parties are free to agree that the rule does not apply. At least 14 jurisdictions have adopted a view that parties are free to agree that the made whole rule is inapplicable. Id.

The Anti-Subrogation Doctrine

Simply defined, the anti-subrogation doctrine provides that subrogation rights exist only as to third-parties.  The doctrine is a defense which provides that since the insurance company is standing in the shoes of its insured, it cannot sue its own insured, in whose shoes it stands.  The doctrine also prevents an insurer from pursuing a subrogation action against a third-party who qualifies as an additional insured.  The rule implicates public policy considerations, including the prevention of suits by insurers against insureds to recover for the very losses for which they have paid for coverage in the form of premiums and the avoidance of conflicts of interest.

Aviation insurance is a specialty line of coverage, often involving very large risks and more complex underwriting issues than most types of insurance. As a result, there are fewer aviation insurers, and the anti-subrogation doctrine may come into play more often.

If the potential defendant in a subrogation action is an insured or an additional insured on the same policy of insurance, a carrier paying a property damage claim cannot subrogate against an insured or additional insured on the same policy.

If the potential target of a subrogation action and the party sustaining the loss are both insured under different policies with the same insurer, there is a split of authority.

If a plaintiff property insurance carrier and a separate liability insurance carrier have both provided policies of insurance to the defendant, the anti-subrogation rule generally does not apply and subrogation is generally permitted if the companies are both members of the same family or group of companies.

Warranty Limitations That May Affect Subrogation Claims

Few lawyers enjoy working through situations that require analysis of the application of the economic loss rule. Although a complete discussion of the rule is far beyond the scope of this paper, it can be defined simply as the prohibition of the recovery of damages under tort theories such as negligence or strict liability when a product defect results in only economic loss, but does not cause personal injury or damage to any other property other than the product.  For a detailed explanation of the economic loss rule see Jamie Mayrose, “A “Simple” Explanation of the Economic Loss Rule”, Under Construction, Vol. 17, No. 3, Winter, 2016.  https://www.americanbar.org/publications/under_construction/2016/winter2016/economic_loss_rule.html

In its application, the economic loss rule precludes contracting parties from asserting tort causes of action as a means to recover economic or commercial losses arising out of a contract, and precludes a purchaser of a product from recovering from a manufacturer on a tort theory for damages that are solely economic.

The economic loss doctrine has implications in the context of aviation subrogation. In general, the economic loss doctrine applies to bar recovery if an allegedly defective part is part of the original bargain when an aircraft was purchased.  However, if the replacement part is not part of the original sale, the economic loss rule does not bar tort claims.  This is important in the context of aviation where contractual defenses such as warranty disclaimers and limitations of liability may severely restrict the ability to recover under contract theories.

The following warranty limitation is representative of the type of clause typically contained in many types of aviation-related contracts such as overhaul facilities:

Limited Warranty for Services and Components: _________ warrants that the services performed hereunder will comply with applicable FAA regulations in effect as of the date the work is performed (as interpreted by the FAA office having jurisdiction over the facility at which the work is performed) and will be free from defects in workmanship and material, including new components manufactured by ________, under normal use for one (1) year and for ninety (90) days on used components refurbished by ________ from date of installation. The warranty on all other new and used components shall be limited to the warranty provided by the supplying manufacturer or vendor, if any. This warranty does not apply to (i) normal wear and tear, (ii) the consequences of accident, negligence, abuse or misuse, or of repair, removal, reinstallation or alteration other than by ___________ and (iii) to Customer furnished parts or equipment or to work which, at Customers direction, was not performed in accordance with ____________ standard operating procedures. The sole and exclusive remedy of Customer, and ___________ sole and exclusive liability, with respect to this warranty is limited to repair or replacement (at _____________ option) of the nonconforming or defective work or component. Such repair or replacement shall be performed at a ___________ facility and Customer shall be responsible for transportation costs. THE FOREGOING WARRANTY IS IN LIEU OF, AND THE CUSTOMER HEREBY WAIVES, ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR USE.

Limitation of Liability: In no event shall ___________ be liable for any special, incidental, consequential and/or punitive damages, including, without limitation, loss of profits, loss of goodwill, loss of use, loss of time, diminution of value, or inconvenience, even if informed of the possibility of such damages. In the event _________ physically damages Customer’s property, Customer’s sole and exclusive remedy, and ____________ sole and exclusive liability, is limited to the repair or replacement (at ______________ option) of the damaged portion of the property.

As the representative limited warranty and limitations of liability provisions above make clear, pursuit of subrogation claims for the full award of damages which would be recoverable in the absence of such limitation provisions becomes much more questionable.

Conclusion

In addition to many other important subrogation principles, subrogation in the aviation context requires particularly careful economic evaluation, and budgeting.  Both pursuing and defending aviation subrogation cases in an economically rational manner requires careful adherence to litigation budgets.

The economics of aviation subrogation and the efficient pursuit of the intended economic offset or recovery, or the successful defense of a subrogation claim both require careful assessment of the potential recovery, the technical issues associated with proving causation, the impact of NTSB investigations and the other logistics of the potential claim, such as location of the wreckage, discovery, and witnesses.

In addition, the economics which may drive whether or not to pursue or defend a subrogation claim in the aviation context will be influenced by factors such as subrogation waivers, aircraft financing contracts, the made whole doctrine, complex conflict and ethical issues, and even the variations on policies covering pilots.

Scott Brooksby will speak about aviation subrogation at the 2017 Aviation Insurance Claims Conference

Birds, pets, stowaways, lasers, and other hot topics in aviation
Scott Brooksby will be a featured speaker at a prominent aviation conference in Baltimore, Maryland.

Scott Brooksby will be a featured speaker at the Aviation Insurance Claims Conference (AViCON) held in Baltimore, Maryland on September 14-15, 2017.

AViCON is an annual conference focused on aviation industry accident investigation, and conflict and claim resolution.  This unique, two day format centers around a fictional case study and features discussions lead by legal and insurance experts.  Together, the group will explore considerations and complexities of the case from accident investigation, legal discovery, multi-party litigation, and resolution. This conference is designed for professionals involved in aviation insurance, including underwriters, claims managers, lawyers, risk managers, insurance brokers, airline flight safety directors, airline board members with flight safety responsibility, claims investigators, and aircraft product manufacturers.

AViCON case studies are set within an environment that includes many possible choices of forum and law.  The accident scenario is presented with state-of-the-art interactive animation prepared by RTI’s Imaging Sciences Studios, and highlights a fresh set of issues of current concern and debate within the aviation market. This event presents a unique opportunity to gain a fuller understanding of the entire range of complexities involved in aviation safety, in a concise and effective format.

For more information, please visit: Aviation Insurance Claims Conference 2017

Scott Brooksby to speak on pilot accidents and to serve on the Oregon Aviation Industries Board of Directors

The Oregon Aviation Industries Board of Directors voted unanimously on August 26, 2016, to approve Scott Brooksby’s nomination to serve on the Oregon Aviation Industries Board of Directors.

Scott’s aviation law knowledge includes pilot mental conditions that may lead to accidents.  He will be speaking on this subject at the Columbia Aviation Association, www.caapilots.com, on Thursday September 1, 2016, with a focus on Germanwings Flight 9525 that impacted a mountain in March 2015.

Scott’s many years of experience in aviation litigation, his industry connections and his wide range of talents will be a huge asset to ORAVI.

ORAVI is comprised of 400+ companies in aviation and related businesses.  These include aircraft and part manufacturers, flying services, heavy lift helicopter services, unmanned aerial vehicle systems, airports, maintenance and suppliers to these industries.

The Columbia Aviation Association, where Scott is speaking on September 1,  is located at the Aurora State, Oregon Airport (UAO).  CAA was founded in 1949 as a private organization devoted to flying.  After being located at the Portland International Airport (PDX) for forty five years, members completed the beautiful new Aurora clubhouse in 1996.  Membership is by invitation only and requirements include possession of a private pilots certificate.  Most of the club’s 260 members have advanced ratings and are aircraft owners who fly on a regular basis for business and pleasure.

Pilot mental fitness is a critical aspect of aviation safety.  As Jet Blue Founder and former CEO David Neeleman recently suggested, “nobody ever thought about having to protect the passengers from the pilots”.  In the wake of the tragic circumstances surrounding Germanwings 9525 and MH370, the FAA chartered the Pilot Mental Fitness Aviation Rulemaking Committee, which released its report in November, 2015.  But mental health issues are complex, and no system of detection, voluntary, or outside reporting is perfect.  Scott will discuss the circumstances in Germanwings 9525 and other notable incidents, which have spiked in the last two decades.  Scott will discuss the findings and recommendations in the FAA ARC final report.  He will also explore the issues surrounding the current system of pilot mental health from the perspective of the flying public, the airlines, the regulators, and pilots.

The MMTJA and the Battle to Establish General Personal Jurisdiction in Foreign Aviation Disasters

Scott Brooksby wrote the following article, which was published in the American Bar Association’s Mass Torts Summer newsletter:

The MMTJA and the Battle to Establish General Personal Jurisdiction in Foreign Aviation Disasters

By Scott Brooksby – June 21, 2016

Foreign aviation disasters very often result in litigation in the United States. Many cases arising from foreign crashes brought by foreign plaintiffs against foreign defendants are dismissed based on forum non conveniens. However, a recent case decided under the Multiparty, Multiforum Trial Jurisdiction Act (MMTJA), 28 U.S.C. § 1369, illustrates the exacting standard for establishing general personal jurisdiction in foreign aviation disasters when plaintiffs seek to litigate in the United States, even when national service of process is permitted. Siswanto v. Airbus S.A.S., 2015 WL 9489952 (N.D. Ill. Dec. 30, 2015).

The Montreal Convention
Before considering the MMTJA in the context of an aviation disaster, it is important to recall that claims against air carriers, in contrast to claims against manufacturers, are governed by the Montreal Convention. The Montreal Convention of 1999 was ratified by the United States in September 2003 and went into effect in November 2003. It limits the forums in which foreign plaintiffs can file lawsuits against air carriers. The Montreal 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 [hereinafter Montreal Convention].

The Montreal Convention applies to “all international carriage of persons, baggage or cargo performed by aircraft for reward.” Montreal Convention, supra, art. 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. Id. at 176. In light of the holding in Tseng, other 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 forum non conveniens motions, Article 33 of the Montreal 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 principal 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. Under the Montreal Convention, the principal and permanent residence is the “one fixed and permanent abode of the passenger at the time of the accident.” Montreal Convention, supra, art. 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 his or her 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 or 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. Montreal Convention, supra, art. 33 § 3(a).

The MMTJA and Foreign Aviation Disasters
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 they addressed only aviation-related cases against carriers. In 2002, the MMTJA was enacted to create greater efficiency in disaster cases in the federal system. The MMTJA grants district courts original jurisdiction where minimal jurisdictional requirements are met and where the cases arise out of a “single accident, where at least 75 natural persons have died in the accident at a discrete location[.]” 28 U.S.C. § 1369(a). The permissible lawsuits include both wrongful death and personal injury.

The first case arising under the MMTJA was the Station nightclub fire in West Warwick, Rhode Island, 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 MMTJA widely broadens federal jurisdiction in mass disaster cases and provides that the district courts will have original jurisdiction wher

(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 from hearing 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.

Siswanto v. Airbus S.A.S., 2015 WL 9489952 (N.D. Ill. Dec. 30, 2015), arose from the December 28, 2014, crash of Air Asia Flight No. 8501, an Airbus A320-216 flying from Indonesia to Singapore. During flight, a rudder system malfunctioned. Subsequent miscommunication between the pilots and a crew member’s removal of a circuit breaker disengaged the autopilot and caused the plane to roll and enter a prolonged stall before crashing into the Java Sea. All 155 passengers and 7 crewmembers were killed. The investigation was handled by the Indonesia National Transportation Safety Committee, which released its final report on December 1, 2015. Komite Nasional Keselamatan Transportasi, Republic of Indonesia, Final Aircraft Accident Investigative Report (2015).

The heirs and personal representatives of the deceased brought product liability and negligence claims against several defendants, including Airbus. 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 reasoned that because the case was brought under the MMTJA, Federal Rule of Civil Procedure 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 with 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, 2015 WL 9489952, at *1.

Early in its jurisdictional analysis, the court noted that despite the geographic expansion of service and, in turn, the initial scope of personal jurisdiction, Rule 4(k)(1)(C) and section 1697 do not override the controlling constitutional limitations of the court’s exercise of general or specific personal jurisdiction imposed by the Fifth Amendment’s Due Process Clause. Siswanto, 2015 WL 9489952, at *2 (citing KM Enters., Inc. v. Global Traffic Techs., Inc., 725 F.3d 718, 723, 730–31 (7th Cir. 2013)). The court noted that the traditional “minimum contacts” test from International Shoe Co. v. Washington, 326 U.S. 310, 316 (1945),still governs even when the basis of personal jurisdiction involves a statute providing for nationwide service of process. Siswanto, 2015 WL 9489952, at *2.

Judge Blakey reasoned that when defendants are domiciled in the United States, the due process analysis under a nationwide service of process is straightforward. Because domestic companies and individuals “almost by definition” have minimum contacts with the United States, there may be general personal jurisdiction in any federal court in the country.Id. at *3.

The court noted that because Airbus is not a domestic company, the plaintiffs must show its contacts with the United States are sufficient to support either general or specific jurisdiction, and that general personal jurisdiction required “continuous and systematic general business contacts” such that Airbus is “essentially at home in the forum,” here, the United States as a whole, and not just the state of Illinois. Id. at *4 (citing Abelesz v. OTP Bank, 692 F.3d 638, 654, 656 (7th Cir. 2012)). The court concluded that, under Abelesz, the court’s inquiry is not whether Airbus’s contacts with the forum are simply “extensive in the aggregate.” Id. at *3 (internal citations omitted).

There was no dispute that Airbus was incorporated and had its principal place of business in France. For at least the five previous years, Airbus had not maintained any offices or employees or owned or rented property in the United States. All manufacturing on the aircraft occurred in Europe, and none of Airbus’s subsidiaries in the United States undertook this work. The A320-216 had been issued a type certificate by the European Safety Agency but not by the Federal Aviation Administration (FAA). 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. Id. at *2.

The plaintiffs argued that four categories of contacts between Airbus and the United States warranted the court’s exercise of general personal jurisdiction. First, the plaintiffs pointed to aircraft sales in the United States, which amounted to 811 aircraft, or 6.73 percent of Airbus’s sales. The court rejected this argument, ruling that none of the sales gave rise to the crash, and noted that the Supreme Court has instructed that imputing general personal jurisdiction from a defendant’s sales in the forum, even if sizable, would stretch general personal jurisdiction beyond its reach. Id. at *4 (citing Daimler AG v. Bauman, 134 S. Ct. 746, 760–62 (2014)).

Second, the plaintiffs argued that Airbus spends 42 percent of its aircraft-related procurement in the United States. The court also rejected this argument, stating 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. (citingHelicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 418 (1984)); accordDaimler, 134 S. Ct. at 757.

Third, the plaintiffs argued that contacts from Airbus’s “separately incorporated” subsidiaries should be imputed to Airbus because they maintained a physical presence in the United States. The court rejected this argument on the basis that the general rule is that jurisdiction contacts of a subsidiary are not imputed to the parent. Id. (citing Abelesz, 692 F.3d at 658–59 (internal citations omitted)).

Fourth, the plaintiffs cited a 2006 article showing that the FAA certified another aircraft model, the Airbus A380. The court also rejected this argument, finding that the isolated fact of the certification of another model aircraft had no special significance as far as personal jurisdiction is concerned. Id.

Having rejected the plaintiffs’ jurisdictional arguments, Judge Blakey turned to the plaintiffs’ alternative argument that venue in the Northern District of Illinois was proper because at least one other defendant, Motorola, resided in that district. The court rejected that argument, noting that establishing venue does not establish jurisdiction and that there was no legal basis for the court to conflate jurisdiction and venue. Id. at *6.

Thus, on December 30, 2015, the court granted Airbus S.A.S.’s Rule 12(b)(2) motion to dismiss for lack of personal jurisdiction. In doing so, the court rejected the plaintiffs’ argument that dismissing Airbus would set the dangerous precedent of effectively exempting Airbus from the MMTJA. The court reasoned that “[a]lthough Airbus’ contacts with the United States may have been extensive, plaintiffs have fallen far short of showing the de factorelocation that the Supreme Court has required for a foreign corporate defendant to satisfy general personal jurisdiction.” Id. at *5 (emphasis in original).

Conclusion
The significance of Siswanto and the MMTJA is that jurisdiction is analyzed on a nationwide basis, and not merely on a state-by-state basis or by looking at any particular state. Airbus’s contacts with Illinois or any other individual state are not discussed. Therefore, under the MMTJA, the court could have found that if Airbus was subject to jurisdiction in any state, jurisdiction would have been proper in Illinois as the state where the MMTJA case against Airbus was pending. Even under the statute’s broad jurisdictional sweep, encompassing the United States as a whole, a major non-American aircraft manufacturer was not in Siswanto, and may well not be in future cases, subject to personal jurisdiction anywhere in the country

Birds, Pets, Lasers, Stowaways, and Other Hot Topics in Aviation

Hot topics in aviation litigation include birds, pets, lasers, and stowaways.  Each pose the danger of catastrophic mass torts.

Bird and animal strikes pose an increasing danger to commercial, military and general aviation.  Strikes result in death and serious injury to passengers and crew, and soaring costs for aircraft damage.  Bird strikes are the second leading cause of death in aviation accidents.

According to Boeing, the first bird strike was recorded by the Wright Brothers in 1905.  The greatest loss of life directly linked to a bird strike occurred on October 4, 1960, when a Lockheed L-188 flying as Eastern Air Lines Flight 375, flew through a flock of common starlings during take-off from Logan Airport, damaging all four engines. The plane crashed into Boston harbor killing 62 of the 72 passengers on board. http://www.boeing.com/commercial/aeromagazine/articles/2011_q3/4/.  (Last visited 4/19/16).

Other major bird strike incidents include:

  • United Airlines Flight 297. On November 23, 1962, a Vickers Viscount 745D crashed near Columbia, Maryland after striking a flock of whistling swans while cruising at 6,000 feet.  The impact caused the horizontal stabilizer to separate, leading to loss of control.  All seventeen people on board were killed.
  • Ethiopian Airlines Flight 604. On September 15, 1988, a Boeing 737-200 ingested a flock of speckled pigeons as it took off from Bahir Dar, Ethiopia.  Both engines failed immediately, and the ensuing belly landing caused a fire that killed 35 passengers.
  • Leadair UniJet. On January 20, 1995, a Dassault Falcon 20 sucked lapwings into the No. 1 engine on takeoff, which caused an uncontrolled engine failure and a fire in the airplane’s fuselage; all 10 people on board were killed.
  • S. Air Force Boeing E-3. On September 22, 1995 the AWACS aircraft crashed shortly after takeoff from Elmendorf AFB. The aircraft lost power in both port side engines after the engines ingested several Canada geese during takeoff.  The geese had been disturbed during the takeoff of a Hercules transport moments earlier.  After reaching 250 feet, the plane crashed about two miles from the runway, killing all 24 crew members on board.
  • Ryanair Flight 4102. On November 10, 2008 a Boeing 737-8AS on final approach to Rome Ciampino Airport sustained 90 bird strikes, all from starlings.  After one engine was damaged, and the other engine ingested birds, the crew managed an emergency landing.  There were 10 injuries.  The plane, which was only eight months old, was a total loss.
  • US Airways Flight 1549. On January 15, 2009 an Airbus A320-214 lost power in both engines after multiple strikes with Canada geese shortly after takeoff from LaGuardia Airport.  About three minutes after the loss of all power, the flight crew conducted a water landing on the Hudson River.  150 passengers and five crew members sustained a total of 95 minor and five serious injuries.
  • PHI Inc., Charter. On January 4, 2009, a Sikorsky S-76C crashed into marshland about seven minutes after takeoff near Amelie, Louisiana, killing two pilots and six of the seven passengers. The helicopter’s impact with a red-tailed hawk jarred the fire suppression handles loose, which pushed the engine controls to idle, depriving the engines of fuel.

Boeing has compiled extensive data on bird strikes:

  • More than 219 people have been killed as a result of bird strikes since 1988.
  • Between 1990 and 2009, bird and mammal strikes cost the U.S. civil aviation complex $650 million per year.
  • The U.S. Air Force sustains approximately $333 million dollars in damage per year due to bird strikes.
  • About 5,000 bird strikes were reported by the Air Force in 2012.
  • About 9,000 bird and other wildlife strikes were reported for U.S civil aircraft in 2009.
  • The FAA has identified 482 species of birds involved in strikes from 1990-2012.
  • Between 2001 and 2011, 4066 engines were damaged in 3,935 bird strikes. This resulted in a wide range of outcomes including aborted takeoffs, engine shutdowns, and crashes.

http://www.boeing.com/commercial/aeromagazine/articles/2011_q3/4/.  (Last visited 4/19/16).  http://news.nationalgeographic.com/news/2013/10/131108-aircraft-bird-strikes-faa-radar.  (Last visited 4/19/16).

Factors Contributing to the Rise in Bird Strikes

  • 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.
  • A twelve 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.
  • 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.
  • Finally, the population of European starlings is now the second most prevalent bird species 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. http://www.boeing.com/commercial/aeromagazine/articles/2011_q3/4.  (Last visited 4/19/16).

Population Management Techniques

In January, 2009, U.S. Airways Flight 1549 landed on the Hudson River after both engines ingested Canada geese.  New York City Mayor Michael Bloomberg declared war on geese.  Suzanne Goldenberg, New York Declares War on Geese to Prevent Airport Bird Strikes, The Guardian (June 12, 2009) http://www.theguardian.com/environment/2009/jun/12/new-york-geese-cull.  (Last visited 4/19/16). A mayoral steering committee gave approval to the USDA to cull geese in a 450 mile area encompassing JFK, LaGuardia and Newark airports.  Principal methods of population control include:

  • Each summer teams of USDA goose catchers capture geese which, in the molting condition cannot fly, including offspring which are then take to slaughterhouses and killed. Between 2009 and 2010, 2911 geese were killed.
  • 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.
  • Discouraging nesting and grazing.
  • Letting grass grow taller, planting unpalatable grasses, reducing standing rainwater, and oiling eggs to prevent hatching.
  • Firing pyrotechnics and propane cannons.
  • Use of chemical repellants.
  • Population exclusion.
  • Use of visual repellants.
  • Tactile repellants.

http://www.boeing.com/commercial/aeromagazine/articles/2011_q3/4/.  (Last visited 4/19/16).

Potential Liability for Airport Operators

Airport managers must exercise due diligence in managing wildlife hazards to avoid serious liability issues.  The U.S. Code of Federal Regulations requires 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. Section 139.337 and FAA Advisory Circular 150/5200-36.  Failure to comply with the regulations can give rise to liability for airport operators. https://www.aphis.usda.gov/wildlife_damage/airline_safety/pdfs/Summary%20Report%20WS%20Airport%20Wildlife%20Hazards%20Program%20FY%2008.pdf.  (Comprehensive overview of applicable regulations and methods, last visited 4/19/16).

The USDA’s Airport Wildlife Hazards Program plays a leading role in the supervision and management of wildlife strikes with aircraft.  Wildlife challenges are by no means limited to birds.  Airports across the country are struggling with wildlife management.  http://www.post-gazette.com/sports/hunting-fishing/2016/01/17/Keeping-wildlife-off-tarmac-is-big-job-at-Pittsburgh-International-Airport/stories/201601170140.  (Last visited 4/19/16).

In addition to reports of aircraft strikes involving nearly 500 bird species, other wildlife strikes reported during the last decade involved nearly 100 terrestrial animals including mongoose, bears, badgers, moose, pigs, burros, horses, and even camels, in addition to 137 reptile strikes.

For additional background information, see “Wildlife Strikes to Civil Aircraft in the United States, 1990-2001”, United States Department of Agriculture, Federal Aviation Administration, United States Department of Agriculture, July, 2012.  Report published for the Federal Aviation Administration Office of Airport Safety and Standards.    https://www.faa.gov/airports/airport_safety/wildlife/resources/media/bash90-11.pdf.  (Last visited 4/19/16).  http://www.fws.gov/migratorybirds/pdf/bird-enthusiasts/birdstrikes.pdf.  (Alternate link, last visited 4/19/16).

Regulations for Aircraft and Engine Manufacturers

In response to the Eastern Airlines crash in Boston in 1960 mentioned above, The FAA issued Advisory Circular 33-1 “Turbine Engine Foreign Object Ingestion and Rotor Blade Containment Type Certification Procedures,” which provided guidance for compliance with FAA regulations §3313 and §3319 requiring that engine design minimize unsafe condition.  For additional information on the scope of required fan and engine construction, see Christopher Demers, “Large Air Transport Jet Engine Design Considerations for Large and for Flocking Bird Encounters”, DigitalCommons@University of Nebraska-Lincoln (2009). http://digitalcommons.unl.edu/cgi/viewcontent.cgi?article=1005&context=birdstrike2009.  (Last visited 4/19/16).

Aircraft Wheel Well Stowaways and Potential Mass Torts

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, and there are differing standards for investigation internationally.

Many, if not most, of these incidents arise from the unfortunate political, social, economic or family circumstance of the stowaway.  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, or climbs into the gear compartment before takeoff.  The force of the wind can easily make a stowaway fall to his or her death.  Alternatively, many stowaways are crushed in the confined space of the compartment when the gear is retracted.  Others appear to have died from the heat produced by the engines of the aircraft, or fallen while unconscious when the gear is extended.  The overwhelming majority of stowaways are young males.

According to the FAA, 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. http://www.faa.gov/about/office_org/headquarters_offices/ang/offices/tc/about/campus/faa_host/rdm/media/pdf/fy2011rdannualreview.pdf.  (Last visited 4/19/16).

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.  Id.

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 Colombia to JFK was one of the 13 wheel-well stowaway flights documented in a report by the U.S. FAA, Civil Aeromedical Institute (CAMI), and Flight Safety Foundation as having frozen to death. (FSF). https://www.faa.gov/data_research/research/med_humanfacs/oamtechreports/1990s/media/AM96-25.pdfhttp://flightsafety.org/hf/hf_may-jun97.pdf .  (Last visited 4/19/16).

Some experts suggest that survival rates in young people may be higher because their brains more readily approach to a “virtual hibernative state,” where their bodies become temporarily more adaptable to trauma.  http://time.com/70441/how-the-teen-stowaway-survived-his-trans-pacific-flight-in-a-wheel-well/.  (Last visited 4/19/16).

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

In 2014 a sixteen-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 5 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.  http://khon2.com/2014/04/20/fbi-investigating-stowaway-of-hawaiian-airlines-flight/.  (Last visited 4/19/16).

Similarly, in June, 2015, a 21-year old Indonesian man hid in the wheel well of a Garuda Indonesia flight from Sumatra to Jakarta. http://www.huffingtonpost.com/2015/04/08/stowaway-survives-flight-indonesia_n_7023396.html(Last visited 4/19/16).

Possible Liability

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:

  • In the event of a crash, mass tort litigation by innocent passengers against airlines, airports, governments and contractors arising from security breaches.
  • Widespread concern about security at public, airline, security provider, airport, and government levels which leads to additional legislation, regulation, or policy.
  • Other terrorist acts such as ransom demands or extortion of other conditions by extremists determined to cause a catastrophe through a stowaway with destructive or disruptive capability.
  • Government levied fines for airlines, airports, private security companies, local police, and federal agents based on security breaches.
  • Increased security measures imposed on airport, airline, local, state and federal authorities.
  • Lawsuits by agencies, airlines or security agents against the indigent stowaways are unlikely, although deportation is possible.

Wheel well stowaway events appear to be on the rise, and each event is highly publicized.  However, these events have not resulted in widespread litigation.  The only litigated case brought by the family of a stowaway involved sixteen-year-old Delvonte Tisdale.  Tisdale ran away from home on November 14th, 2010.  A day later his body was found mangled in a Boston suburb.  Authorities determined that Tisdale likely sneaked onto the tarmac of Charlotte-Douglas International Airport and climbed into the wheel well of US Airways Flight 1176, bound for Boston.

Tisdale’s family sued US Airways, The airport, and the City of Charlotte alleging that the defendants negligently failed to ensure people could not access restricted areas.  Among the failure to warn claims was an allegation that the defendants failed to warn of the dangers of entering an aircraft as a passenger through the wheel well.

http://www.greensboro.com/news/local_news/family-of-teen-stowaway-who-fell-from-plane-s-wheel/article_3e969954-8528-5211-99c8-88cc77529794.html.  (Last visited 4/19/16).

The judge ultimately disagreed with Tisdale’s family and dismissed the case.  Siding with Charlotte City Attorney Robert Hagemann, the judge ruled in July, 2013 that Tisdale was negligent in his actions and that the city is not responsible for people who breach security.  http://boston.cbslocal.com/2013/03/07/judge-dismisses-suit-filed-by-family-of-airplane-stowaway-delvonte-tisdale/.  (Last visited 4/19/16).

The breach of security in the Tisdale case raised questions about airport security.  If a 16-year-old, who had never flown before could evade airport security measures, then why not a terrorist?  With the proliferation of wheel well stowaways, it is likely only a matter of time until a tragic mass tort occurs.

Aircraft Laser Strikes

Reports of aircraft targeting with handheld ground lasers have been rising sharply.  In 2006, there were 384 reported incidents.  By 2014, there were 3,894 reported incidents.  In 2015, there were 7,702 reported incidents.  The FAA has recorded approximately 22 aircraft laser strikes per day in 2016.  https://www.faa.gov/news/fact_sheets/news_story.cfm?newsId=15774  (Last visited 4/19/16).  https://www.faa.gov/about/initiatives/lasers/laws/.  (Last visited 4/19/16).  https://www.justice.gov/usao-edca/pr/bakersfield-man-sentenced-striking-sheriff-s-helicopter-laser   (Last visited 4/19/16).  https://www.justice.gov/usao-edca/pr/bakersfield-resident-sentenced-pointing-laser-kern-county-sheriff-helicopter.  (Last visited 4/19/16).

In a widely publicized recent incident, a Virgin Atlantic flight originating at Heathrow bound for New York with 252 passengers on board was forced to turn back after a flight crew “medical issue” was caused by a laser strike shortly after takeoff.  http://.bbc.com/news/uk-35575861.  (Last visited 4/19/16).

Exposure to laser illumination may cause hazardous effects such as pain, watery eyes, headaches, flash-blindness, distraction or disorientation, loss of depth perception, and aborted takeoffs or landings, in addition to danger during lower level flight.

In the United States, an area with high numbers of laser strikes is the 34 counties encompassed within the United States Judicial District for the Eastern District of California, a judicial district which has been vigorously prosecuting laser strike offenders and securing a large number of convictions resulting in prison sentences and fines. (Albuquerque, Chicago, Cleveland, Houston, Los Angeles, New York City, Philadelphia, Phoenix, Sacramento, San Antonio, and San Juan all have high incidence of laser strikes.)  As recently as March 7, 2016, that office secured a guilty plea from a thirty-five year-old man with a powerful green laser, about the size of a flashlight in his pocket.  The man pleaded guilty to multiple strikes on a California State Highway Patrol airplane.  https://www.justice.gov/usao-edca/pr/clovis-man-pleads-guilty-laser-strikes-chp-plane (Last visited 4/19/16).

The increase in reports of ground based lasers targeting flying aircraft may be due to a number of factors, including the increased availability of inexpensive laser devices on the internet, higher power lasers which can strike aircraft at higher altitudes, and increased reporting by flight crews.  Regulatory power for laser light products is delegated to the FDA, and its regulations are found at 21 C.F.R. § 1010.

While some jurisdictions have made interdiction efforts using helicopters and other improved tracking methods, catching laser offenders is difficult.  The devices are small, and when extinguished can be easily concealed and the location of the user can be in sparsely populated areas.  To respond to the increasing attacks, the FAA launched the Laser Safety Initiative, which provides education on laser hazards and events, news, law and civil penalties, and encourages reporting.

The latest reports indicate that aircraft illuminations by handheld lasers involve green lasers rather than red.  This is significant because green lasers are 35 times brighter than red, and the wavelength of green lasers is close to the eye’s peak sensitivity when they are dark-adapted.  FAA flight simulation studies have shown that the adverse visual effects from laser exposure are especially debilitating when the eyes are adapted to the low-light level of a cockpit at night. http://www.faa.gov/pilots/safety/pilotsafetybrochures/media/laser_hazards_web.pdf.  (Last visited 4/19/16).

Restricted airspace surrounding commercial airports, in particular, can provide federal, state and/or local criminal penalties for violation with a laser, even if the operator is not operating the laser within the space, but merely causes the beam to intersect the controlled airspace to target an aircraft.  In the United States, laser airspace guidelines can be found in FAA Order JO 7400.2 (Revision “G” as of April 2008).  Chapter 29 of the Order provides a comprehensive overview of the FAA’s laser guidelines.

In 2011, the FAA announced plans to impose civil penalties against people, including the parents of juveniles, who point a laser into the cockpit of an aircraft.  http://www.faa.gov/news/press_releases/news_story.cfm?newsId=12765.  (Last visited 4/19/16).  The maximum administrative penalty is a fine of $11,000.

The FAA released a legal interpretation which concluded that directing a laser bean into an aircraft cockpit could interfere with a flight crew performing its duties while operating an aircraft, a violation of FAA regulations.  http://www.faa.gov/news/media/Laser%20Memorandum%20Final%20060111.pdf.  (Last visited 4/19/16).  The FAA conducted an analysis of 14 C.F.R. § 91.11 which provides that, “[n]o person may assault, threaten, intimidate, or interfere with a crewmember in the performance of the crewmember’s duties aboard an aircraft being operated.”  However, the FAA standard for liability is higher than the standard for criminal liability under 18 U.S.C. §§ 32 and 39A.

Federal regulations prohibiting interference with a crewmember in the performance of their duties had initially been adopted in response to hijackings.  However, the FAA legal interpretation concluded that nothing in the regulation specified that the person interfering must be on the airplane.  Previously, the FAA had taken enforcement action only against passengers on-board the aircraft that interfere with crewmembers.  The maximum civil penalty is $11,000.  By June, 2012, the FAA had initiated 28 enforcement actions.  http://www.faa.gov/news/press_releases/news_story.cfm?newsId=13555.  (Last visited 4/19/16).

On February 14, 2012, President Obama signed Public Law 112-95.  The FAA Modernization and Reform Act of 2012, Section 311 amended Title 18 of the United States Code (U.S.C) Chapter 2 § 39, by adding § 39A, which makes it a federal crime to aim a laser pointer at an aircraft.  http://www.faa.gov/about/initiatives/lasers/laws/.  (Last visited 4/19/16).  Prior to 2012, federal prosecutions of laser illuminations of aircraft were initiated pursuant to 18 U.S.C. § 32(a)(5), which prohibits interference with the safe operation of an aircraft.  Aiming a laser at an aircraft is also prohibited by many state laws.

Between 2005 and 2013, there were 17,725 reported laser strikes in the United States, resulting in 134 arrests.  This data suggests that even when limiting the calculation to reported incidents, there is only a 0.75 percent chance of getting caught; a percentage that would decrease if unreported incidents were also considered.  There were 80 convictions among the 134 arrests. One reason for the conviction rate of 60 percent is that some who were arrested were minors who were never formally charged.  http://arstechnica.com/tech-policy/2014/05/blinding-light-the-us-crackdown-on-not-so-harmless-laser-strikes/3/.  (Last visited 4/19/16).

One high-profile case involved Sergio Rodriguez, who received a 14-year prison sentence after he was convicted of lasing police and medical helicopters in August, 2012.  Karen Escobar, the Assistant United States Attorney for the Eastern District of California who prosecuted the Escobar case, has pursued more cases against laser perpetrators than any other federal prosecutor.  Escobar was quoted as saying:

“At sentencing, [Rodriguez] did not accept responsibility for his actions; he blamed his 2- and 3- year-old children. I believe the evidence showed the laser was a dangerous weapon, and there was intention, supporting a guideline sentence of 168 months. I would not call it harsh. I would say it is a penalty that fits the crime, but I believe that it will have a deterrent effect, and I hope it will.”  Id.

The Ninth Circuit has since reversed Rodriguez’ conviction for violation of 18 U.S.C. § 32 and remanded for resentencing for the Section 39A violation.  The Ninth Circuit found that the evidence did not support proof of the willfulness requirement for a Section 32 violation, noting that Section 32 was intended to apply to the bin Ladens of the world, not knuckleheads like Rodriguez.  On remand, the district court imposed the maximum penalty of five years for the Section 32 violation.

Much of the current focus on laser strikes focuses on interdiction and criminal prosecution.  The potential for a laser beam disabling a flight crew, and resulting in a mass tort, creates civil liability questions which have yet to be resolved.

Animal Passengers: Is it a Pet, a Service Animal, an Emotional Support Animal, Or Something Else, and Does It Get a Ride?

Walking through any large airport in 2016, it is likely that departing and arriving passengers will see any number of animals and a wide variety of species, shapes, and sizes.  Dogs, cats, birds, rodents, reptiles, pigs and even miniature horses are all found in airports waiting to board.  The distinction between service animals, companion animals, emotional support animals, and pets may not always be clear.

Transport of service animals, including emotional support animals is governed by the Air Carrier Access Act (“ACAA”), 49 U.S.C. § 41705 (1986), which incorporates provisions consistent with the Americans With Disabilities Act, 42 USC § 126 (1990).  In contrast to service animals, transport of pets is generally done for an additional fee, which can be significant.  Transportation of pets is generally governed by airline and airport policy, so long as policy is consistent with FAA, TSA, USDA and DOT rules and regulations.  This can lead to arguably conflicting policies and practices by airports and carriers.

Animals and the Air Carrier Access Act

The ACAA prohibits discrimination by U.S. and foreign air carriers on the basis of physical or mental disability.  In 1990, the U.S. Department of Transportation promulgated the official regulations implementing the ACAA.  Those rules mandate nondiscrimination on the basis of disability in air travel.  14 CFR Part 382.

The implementation regulations in Part 832, and guidance publications prepared by DOT provide guidance for airline employees and people with disabilities in understanding and applying the ACAA and the provisions of Part 382 with respect to service animals in determining:

(1) whether an animal is a service animal and its user a qualified individual with a disability;

(2) how to accommodate a qualified person with a disability with a service animal in the aircraft cabin; and

(3) when a service animal legally can be refused carriage in the cabin.

The 1996 DOT ACAA guidance manual defines a service animal as “any guide dog, signal dog, or other animal individually trained to provide assistance to an individual with a disability. If the animal meets this definition, it is considered a service animal regardless of whether it has been licensed or certified by a state or local government.” “Guidance Concerning Service Animals in Air Transportation,” (61 FR 56420-56422, (November 1, 1996)).

In 2003, DOT clarified the previous definition of service animal by making it clear that animals that assist persons with disabilities by providing emotional or psychiatric support qualify as service animals.  The definition of service animal was modified to clarify that airlines had authority to require that passengers provide documentation of the individual’s disability and the medical necessity of the passenger’s travel with the animal in cases involving emotional support animals and psychiatric service animals

The DOT has continued to update the guidance materials.  Nondiscrimination on the Basis of Disability in Air Travel, 73 FR 27614, May 13, 2008 as modified by: Correction Notice of 74 FR 11469, March 18, 2009, Correction Notice of 75 FR 44885, July 30, 20010.  http://airconsumer.ost.dot.gov/rules/Part%20382-2008.pdf.  (Last visited 4/19/16).

Also of note in the DOT guidance materials:

  • Pets are not service animals.
  • Some unusual service animals, including snakes, other reptiles, ferrets, rodents and spiders pose unavoidable safety and/or public health concerns and airlines are not required to transport them in the cabin.
  • Other unusual service animals such as miniature horses, pigs and donkeys should be evaluated on a case by case basis.
  • When Part 382 was first promulgated, most service animals were guide or hearing dogs. Since then, a wider variety of animal (g., cats, monkeys, etc.) have been individually trained to assist people with disabilities. Service animals also perform a wider variety of functions than ever before (e.g., alerting a person with epilepsy of imminent seizure onset, pulling a wheelchair, assisting persons with mobility impairments with balance) which can make it difficult for airline employees to distinguish service animals from pets, especially when a passenger does not appear to be disabled, or the animal has no obvious indicators that it is a service animal.
  • People with disabilities use many different terms to identify animals that can meet the legal definition of “service animal.” These range from umbrella terms such as “assistance animal” to specific labels such as “hearing,” “signal,” “seizure alert,” “psychiatric service,” “emotional support” animal, etc. that describe how the animal assists a person with a disability.
  • In a nutshell, the main requirements of Part 382 regarding service animals are:
    • Carriers shall permit dogs and other service animals used by persons with disabilities to accompany the persons on a flight. § 382.117(a).
    • Carriers shall accept as evidence that an animal is a service animal identifiers such as identification cards, other written documentation, presence of harnesses, tags or the credible verbal assurances of a qualified individual with a disability using the animal.
    • Carriers shall permit a service animal to accompany a qualified individual with a disability in any seat in which the person sits, unless the animal obstructs an aisle or other area that must remain unobstructed in order to facilitate an emergency evacuation or to comply with FAA regulations.
  • If a service animal cannot be accommodated at the seat location of the qualified individual with a disability whom the animal is accompanying, the carrier shall offer the passenger the opportunity to move with the animal to a seat location in the same class of service, if present on the aircraft, where the animal can be accommodated, as an alternative to requiring that the animal travel in the cargo hold § 382.117(c).
  • Carriers shall not impose charges for providing facilities, equipment, or services that are required by this Part to be provided to qualified individuals with a disability § 382.31.

In one recent case, a Washington State trial court analyzed the requirements of the ACAA as applied to an injury to a passenger caused by a Rottweiler service dog.  Sullivan v. Alaska Air Group, Inc., et al., Spokane County Case No. 15-02-00227-3, February 29, 2016.  Defendant owner of the Rottweiler was initially seated in back of the plane, but moved to row one to accommodate the size of the dog.  Plaintiff was seated in row two.  On arrival in Spokane, the dog allegedly bit plaintiff’s hand as she disembarked.

Plaintiff contended the airline had a duty to protect her and that the animal posed a foreseeable risk.  The airline argued that the ACAA preempted, either through conflict or field preemption, the plaintiff’s claims.  In conducting a preemption analysis, the court noted that airline passenger safety in regards to service animal is pervasively regulated by the ACAA sufficient to find that federal law expressly preempts and state standards of care.

The court granted the airline’s motion for summary judgement based on ACAA preemption.  The court noted that the requirements of 14 C.F.R. § 382.117 did not preclude the Rottweiler from riding on the plane.  The airline established, in satisfaction of the statutory requirements that the animal was, in fact, a service animal and they also determined that the animal did not present either a direct threat to the health and safety of others or a significant threat to the disruption of airline service.  Evidence was presented that the dog flew on the carrier or its partners twelve times previously without incident. Finally, there were harness markings or other credible assurances provided to establish that the dog was a service animal.

Animals present airlines and airports with a minefield of compliance, liability, public relations and customer service issues which range from fundamental flight safety, to combating abuses of the ACAA in order to obtain free plane tickets for pets.  In many cases, it may come down to a judgment call about whether the animal can safely be accommodated, or whether it will disrupt, or even endanger the flight.  Airlines also face very high fines for failing to accommodate legitimate service animal accommodation requests.

In January, 2016, a passenger brought a live turkey onto a Delta Airlines flight, claiming the animal was needed for emotional support.  Delta noted that the passenger had complied with the rigorous requirements of the ACAA which included providing documentation from a mental health professional that the animal’s companionship was necessary for travel.

Delta’s spokesperson noted that any therapist can sign off on any kind of animal, however, snakes, spiders and farm poultry are not acceptable.  Animals allowed to board as service or emotional support animals under the ACAA are accommodated free of charge, and are not allowed to block emergency exits or occupy seats designed for passengers. https://www.washingtonpost.com/news/morning-mix/wp/2016/01/15/someone-just-used-a-federal-law-to-bring-a-live-turkey-on-a-delta-flight/.  (Last visited 4/19/16).  http://www.nydailynews.com/news/national/turkeys-sitting-planes-emotional-support-animals-article-1.2496248.  (Last visited 4/19/16).

Scott Brooksby featured as speaker and moderator regarding birds, pets, lasers, and other hot topics in aviation

On June 1, 2016, Scott Brooksby was featured as a speaker and moderator on a panel entitled “Birds, Pets, Lasers, Stowaways, and Other Hot Topics in Aviation”, at the American Bar Association’s 22nd Annual National Institute on Aviation Litigation, at the University Club of New York in New York, New York.

Scott and the other distinguished panelists provided an overview of emerging security issues for airlines, airports, manufacturers, and governments with respect to bird and animal strikes, laser strikes, and wheel well stowaways. Each pose the danger of catastrophic mass torts.  The topics discussed included the following issues:

• Bird strikes are the second-leading cause of death in aviation, with more than 400 deaths globally. Learn about required airport wildlife management plans and mitigation techniques, and how airports and the government can address liability risks.
• Flight crews are increasingly targets of inexpensive, and increasingly powerful hand-held green lasers. More than 7,000 laser strikes were reported to the FAA in 2015. This panel will discuss efforts by prosecutors pursuing criminal charges, and liability issues arising from laser strikes.
• Pigs, snakes and turkeys are just some of the pets, or emotional support animals, that airlines are confronting. The safety of other passengers, who may be the victims of physical injury of property damage, present liability issues for airports and airlines.
• The number of wheel well stowaway incidents are rising which poses security risks for airports and airlines, and it is not inconceivable that the stowaway with destructive intent could cause a catastrophic mass tort.

Scott Brooksby featured as speaker on the Germanwings crash.

Scott Brooksby spoke on a panel in New York, NY at the  American Conference Institute’s 8th Annual Forum on Defending and Managing Aviation Claims and Litigation.  His panel was entitled “SPOTLIGHT ON FLIGHT CREW MENTAL HEALTH ISSUES Post-Germanwings: An In Depth Discussion of the Legal, Regulatory, Public Safety and Ethical Considerations”.   On June 27, 2016, Scott and other distinguished panelists spoke on the following topics:
• 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)
• Addressing current issues and challenges related to:
– Awareness and reporting of emotional
and mental health issues
– Methods used to evaluate pilot emotional
and mental health
– Barriers to reporting such issues
– Surveillance and oversight of designees and
aviation industry substance-abuse programs
• A discussion of the ethical challenges and
considerations, and how to best navigate them

Scott Brooksby featured as a speaker regarding Air France 447

Scott Brooksby was a featured speaker on a panel discussing District Litigation after Air France 447.   Scott was invited to speak at the 3rd Annual Western Regional CLE Program on Class Actions and Mass Torts for the Bar Association of San Francisco.  The conference took place in San Francisco, California on May 27, 2016.

Scott and other distinguished panelists discussed 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 discussed key aspects of establishing personal jurisdiction over foreign corporate defendants. The panel discussed the complex issues associated with international treaties, choice-of-law, the meaning of an “unavailable forum” and challenging jurisdiction and venue considerations that arise when both U.S. and foreign individuals
are involved.

Moderator: Ann C. Taylor, Locke Lord LLP, Chicago, IL
Panelists: Scott Brooksby, Olson Brooksby, Portland, OR              Thad Dameris, Arnold & Porter, Houston, TX
Steve Koh, Perkins Coie LLP, Seattle, WA
Steve Marks, Podhurst Orseck, P.A., Miami, FL

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.