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Scott Brooksby featured as moderator regarding helicopter accidents

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Scott Brooksby recently moderated a panel at a prominent aviation conference concerning helicopter accidents.  Scott’s panel was featured at the American Bar Association’s Aviation Litigation National Institute in New York regarding “Helicopter Accidents: A Review of Recent Cases of Interest”.

At this prominent aviation conference, Scott was part of a distinguished faculty, which highlighted current developments in aviation law and insurance topics including:

• Safety in the cockpit issues and precedents that developed from the 9/11 litigation and how they relate to the Germanwings tragedy

• The unique challenges involved in emergency medical helicopter services both from a legal and safety perspective

• Choice of forum and other legal issues and precedents arising from several high profile international disasters

• London market claims leaders’ perspectives on handling aviation disasters spanning the globe

• Flying special missions for government and industry from explosives to ebola

• New developments in the law of aircraft financier liability in connection with the tortious actions of lessees and operators

• Common themes and issues faced by the trial teams in domestic cases such as the Colgan Air 3407 and Comair 5191

• Ethical considerations when selecting and preparing experts in aviation accident litigation

• The future of aviation, aerospace law, and litigation in connection with drones and commercial space/sub-orbital travel

 Scott Brooksby is an aviation lawyer in Portland, Oregon, with experience in a broad variety of aviation topics, including helicopter litigation and crashes.
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Lease agreements and consent provisions

Lease agreements are common.  But what if your lease agreement says that you can’t do something without the consent of the lessor?  Olson Brooksby deals frequently with airplane lease agreements.  For example, the owner of an airplane might have certain repair facilities that it likes and the lease might contain a consent provision that requires the owner to consent to the repair facility if the plane needs repairs.  This can be very frustrating for the lessee, who has to pay for the repairs.  The lessee might be concerned that the lessor wants an expensive repair facility or a facility that requires transportation of the plane to a faraway place.  How do conflicts over these provisions get resolved?

The following is from Kristin Olson and Scott Brooksby’s article published in the International Association of Defense Counsel’s Business Litigation, “Consent Provisions in Lease Agreements: Must the Lessor Act Reasonably?”

CONSENT PROVISIONS IN LEASE AGREEMENTS: MUST THE LESSOR ACT REASONABLY? 

Experienced business litigators are generally familiar with a broad range of real estate, equipment, and other forms of lease agreements, as well as litigation stemming from such agreements.  But what happens when a lease contract has a provision that requires the consent of the lessor before the lessee takes a certain action?  Does the lessee have recourse against the lessor if the lessee’s consent is, for example, withheld arbitrarily?

Equipment or airplane leases provide a useful case study.  Provisions in airplane lease agreements, for example, may require consent of the lessor.  By way of illustration, an airplane owner (the lessor) leases an airplane to an airline (the lessee) and the lease agreement includes provisions that require that the owner consent to the choice of airplane repair facility if the airplane needs repairs.  In cases where there are those types of contractual provisions, the owner might argue that the lease effectively allows it to unilaterally choose the repair facility for the airplane.  Under that hypothetical lease provision, even if the airline is allowed to initially choose the facility, the owner must consent to the airline’s choice.  This may have serious economic consequences for the airline, which may be concerned that the repair facility chosen by the owner is a slower repair facility than the one that the airline would have chosen, forcing the airline to incur loss of use damages.  The airline may also be concerned that the repairs conducted at the facility approved by the owner will be more costly—this is particularly a concern if, under the lease, the airline is required to pay for the repairs or if the airline’s pilots or mechanics damaged the plane.  The airline may also be concerned that the repair facility chosen by, or approved by, the owner is far away (a common issue with airline repair facilities)—particularly if the lease requires that the airline pay for all transport costs to the repair facility.

So what happens?  Is the airline subject to the owner’s choices?  In the hypothetical above, does the owner get to dictate where the airplane is repaired?  The answers to those questions vary depending on jurisdiction and whether the lease explicitly requires that the lessor act reasonably, as explained in further detail below.

Does the lease explicitly require that the lessor act reasonably?

A lease may explicitly provide that the lessor’s consent “may not be unreasonably withheld.”  If the lease contains this explicit provision, that is obviously helpful to the lessee.  However, it still does not resolve the issue in some jurisdictions.  Some jurisdictions require an examination of the facts and circumstances in order to determine whether the withholding of consent was “unreasonable” under the explicit terms of the lease.

For example, in Georgia, even if there is an explicit provision requiring that a lessor’s failure to consent be reasonable, there are common law tests of “fairness and commercial reasonableness” that must be applied to the lessor’s conduct.  WPD Center, LLC v. Watershed, Inc., 765 S.E.2d 531, 534 (Ga. App. 2014).  In that case, the court found that there was “a jury issue” as to whether consent was unreasonably withheld concerning a proposed sublease.  Id. at 534-35.

In some jurisdictions, courts will not require a lessor to act reasonably unless the lease explicitly requires it.                                                                                 

In New York, if there is no explicit requirement of reasonableness in the lease, the court will not impose such a requirement on the lessor.

In General Electric Capital Corp. v. Gary, 2013 WL 390959, *1 (S.D.N.Y. 2013), the court examined a loan agreement for the purchase of an aircraft.  The loan documents “specified that any assignment, lease or other transfer of any interest in or possession of the Aircraft or any of its parts required prior written approval by the lender.  Notably, the agreement did not require the lender to have a reasonable basis for withholding such consent”.   Id. at *4.  The court explained that, under New York law, when “’a contract negotiated at arm’s length lacks specific language preventing plaintiff from unreasonably withholding consent, the Court can not and should not rewrite the contract to include such language which neither of the parties saw fit to insert in the contract.’”  Id. (quoting Teachers Ins. & Annuity Assn. of Am. v. Wometco Enters., Inc., 833 F.Supp. 344, 349 (S.D.N.Y. 1994)).

In the Second Circuit case of State Street Bank & Trust Co. v. Inversiones Errazuiriz Limitada, 374 F.3d 158, 170 (2d Cir. 2004), cert. denied, 543 U.S. 1177 (2005), the court applied New York law and held that a credit agreement allowed a bank to unreasonably withhold consent on a sale of assets if the other party defaulted on its loans because it was an arms length contract that did not put explicit restrictions on the consent provisions.

Although the court in State Street acknowledged that New York law recognizes the implied covenant of good faith and fair dealing, it explained that the covenant must be consistent with the explicit terms of the contract before it is applied.  Id. at 169-70.  The court held that, under the terms of the agreement at issue in State Street, the bank had the right to “’withhold consent for any reason or no reason . . . .’”  Id. at 170 (quoting Teachers Ins. & Annuity Assn. of Am, 833 F.Supp. at 349).  The agreement did not explicitly restrict the bank’s right to refuse to consent to a sale of assets if the other party defaulted on its loans.  Id.  The court went on to note that, even if the implied covenant of good faith and fair dealing were hypothetically applied to these circumstances, “the bank’s refusal to consent to such a sale was neither unreasonable nor arbitrary” and was “made for a legitimate business purpose.”  Id.

Under South Dakota law, the implied covenant of good faith and fair dealing is generally applied to every contract. However, as long as the parties act honestly, South Dakota courts will probably broadly enforce most contractual terms that explicitly require consent.

In Taylor Equip., Inc. v. John Deere Co., 98 F.3d 1028, 1029 (8th Cir. 1996), Midcon was John Deere’s former industrial equipment dealer.  Midcon argued that John Deere breached the implied covenant of good faith and fair dealing by refusing to approve Midcon’s request to assign its dealership to a willing buyer.  Id.  at 1029-30.  As a result, Midcon had to sell its dealership to the approved buyers for a significantly lower amount of money.  Id. at 1030.  The contract between Midcon and John Deere provided that Midcon could not assign its dealership to any buyer “without the prior written consent of [Deere].”  Id. (internal quotation marks omitted.)  The court held that the implied covenant of good faith and fair dealing “cannot override this express term of the contract”.  Id.

Although “South Dakota law implies a covenant of good faith and fair dealing into every contract”, id. at 1031, the court explained that the definition of “good faith” is “’honesty in fact in the conduct or the transaction concerned.’”  Id. at 1032.  Additionally, under South Dakota law, the implied covenant of good faith and fair dealing “does not affect every contract term” and “cannot ‘block use of terms that actually appear in the contract.’”  Id.

The court explained that, as long as John Deere acted honestly, it had “an unrestricted right to withhold approval” under the contract.  Id. at 1034.  The court noted that, “’[I]n commercial transactions it does not in the end promote justice to seek strained interpretations in aid of those who do not protect themselves.’”  Id.

Michigan law recognizes the implied covenant of good faith and fair dealing. However, Michigan courts will generally refuse to apply the covenant of good faith or reasonableness to a contract that explicitly requires prior consent.

In James v. Whirlpool Corp., 806 F. Supp. 835, 838, 840 (E.D. Mo. 1992), the court applied Michigan law to a distributorship contract between St. Louis Appliance Parts, Inc. (SLAP), an appliance part distributor, and Whirlpool, the appliance manufacturer.  SLAP argued that Whirlpool breached its covenant of good faith and fair dealing because it refused to approve the sale and proposed assignment of SLAP to Aberdeen, another distributor.  Id. at 843.  The court explained that, “Michigan common law recognizes an implied covenant of good faith and fair dealing that applies to the performance and enforcement of all contracts.”  Id.  However, the court also noted that, under Michigan law, the implied covenant of good faith and fair dealing will only limit the parties’ conduct if the covenant does not contradict an explicit provision in the contract.  Id.  The court held that the contract explicitly restricted SLAP from assigning its rights under the contract without Whirlpool’s prior written consent.  Id. at 843-44.  The contract also provided that Whirlpool could terminate the contract “for a change in management or control which it found unacceptable.”  Id. at 844.  The court therefore refused to apply the covenant of good faith and fair dealing because it would “override the express terms” of the contract.  Id.

Under Minnesota law, prior consent requirements in contracts are generally upheld without restriction.

In In re Bellanca Aircraft Corp. v. Anderson-Greenwood Aviation Corp., 850 F.2d 1275 (1988), the court applied Minnesota law and held that Bellanca’s contracts with two companies to manufacture aircrafts were worthless assets because both contracts required the consent of the companies before Bellanca could assign the contracts to a different manufacturer.  Id. at 1285.  Under the contracts, “consent could be withheld for any reason whatsoever, arbitrarily or rationally.”  Id.  The court noted that the duty of good faith under the UCC did not prevent parties from negotiating provisions requiring consent that “may be reasonably or unreasonably withheld.”  Id.  Additionally, the court based its decision on the fact that that the parties did not cite to any common law supporting the idea that the UCC imposes “a duty not to withhold consent to assign unreasonably.”  Id. 

In Colorado, Alaska, Oregon, and Ohio, the courts generally apply the implied covenant of good faith and fair dealing, even if the contract does not explicitly state that the withholding of consent must be reasonable.

Colorado

In Larese v. Creamland Dairies, Inc., 767 F.2d 716, 717–18 (10th Cir. 1985), the court applied Colorado law and held that a franchisor may not unreasonably or arbitrarily withhold its consent to transfer rights to a franchise.  The court explained that, “the franchisor must bargain for a provision expressly granting the right to withhold consent unreasonably, to insure that the franchisee is put on notice.  Since, in this case, the contracts stated only that consent must be obtained, [the franchisor] did not have the right to withhold consent unreasonably.”  Id. at 718.

Alaska

In Alaska, “Where the lessor’s consent is required before an assignment can be made, he may withhold his consent only where he has reasonable grounds to do so.”  Hendrickson v. Freericks, 620 P.2d 205, 211 (Alaska 1980).

Oregon

In Oregon, the lessee has an objectively reasonable expectation that the lessor will consent, especially if the lessor has no objective reason to refuse its consent.  See Hampton Tree Farms, Inc. v. Jewett, 892 P.2d 683, 693 (Or. 1995) (“jury could find that [seller’s] unilateral action in discontinuing to supply logs frustrated [buyer’s] objectively reasonable expectation”).  Oregon courts recognize the implied covenant of good faith and fair dealing as long as it does not contradict an express contractual term.  Stevens v. Foren, 959 P.2d 1008, 1012 (Or. App. 1998).  In other words, the court will require reasonable conduct as long as the contract does not contain an explicit provision that allows the lessor to unreasonably withhold its consent.   Oregon, what is “reasonable” generally depends on the facts and circumstances.  Reasonable expectations include the right of either party to further its own legitimate business interests.  U.S. Genes v. Vial, 923 P.2d 1322, 1325 (Or. App. 1996).

Ohio

In Littlejohn v. Parrish, 839 N.E.2d 49, 50 (Ohio App. 2005), the court found that there was an implied covenant of good faith and fair dealing in a mortgage note, which stated that prepayment was subject to the mortgagee’s approval, but did not explicitly include a requirement that the mortgagee act reasonably.  The court noted that, under Ohio law, “there is an implied duty of good faith in almost every contract.”  Id. at 53.

Best Practices

If you are assisting parties in negotiating a contract, it is best if you include explicit provisions concerning consent.  If you represent the airplane owner in the introductory hypothetical, you may want to include a provision that states that consent is required and may be unreasonably withheld.  If you represent the airline, you obviously want to omit any consent provisions.  However, if the airplane owner requires a consent provision to do business, the airline should try to negotiate for a provision that explicitly states that consent may not be unreasonably withheld.  The airline could also try to negotiate for a specific list of agreed-to repair facilities in advance.

 

 

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Is it still safe to travel by plane?

Apparently at least 150 people died in the French Alps when a German flight from Barcelona to Dusseldorf crashed this week.  According to Slate.com, this is the fifth crash in the last year to result in the death of more than 100 people.

Although it seems like it’s becoming less and less safe to fly, the Aviation Safety Network reports that last year was the safest year on record for the total number of airplane crashes.

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Number of commercial crashes per year.
Courtesy of aviation-safety.net; Slate.com

Airplane crashes, particularly when they involve a large plane full of people, are high-profile and they are obviously scary.  However, airplane travel continues to be one of the safest modes of transportation.  According to Slate.com, “If you look at crashes per number of flights as estimated by the International Civil Aviation Organization, 0.0001 percent of flights have crashed in the past 10, years resulting in one death for every 38,549 flights.”

Olson Brooksby practices a wide variety of aviation law.  We have experience representing airlines, aviation insurers, aviation product manufacturers, and airplane owners.  Our attorneys have handled a broad variety of aviation law matters, including personal injury defense; product liability defense litigation; contract and lease drafting; contract negotiation and disputes; and general aviation commercial litigation.

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

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In Lease Agreements With Provisions Requiring the Consent of the Lessor, Consent May Not be Unreasonably Withheld, Unless There is an Express Provision Stating Otherwise

Olson Brooksby works with many commercial industries, including airline owners and airline insurers, regarding lease agreements.  A common issue in lease agreements is whether the lessee is totally at the mercy of the lessor if there is a provision in the lease that requires the lessor’s consent.  May a lessor unreasonably withhold consent?

Under Oregon law, a lessor may not unreasonably withhold consent to a lease provision.

Take this hypothetical, for example.  Let’s say that there is a provision in the lease that requires the lessor’s consent before the lessee can fly the plane over a certain number of miles.  What if the lessee unexpectedly needs to exceed the mileage in that lease provision and the lessor refuses to consent?  Under Oregon law, a lessor may not unreasonably withhold its consent.  To do so would be a violation of the implied covenant of good faith and fair dealing. The key issue is what is “unreasonable”?  If the lessor proffers a reason that would seem objectively reasonable to an average juror, the lessor has met its burden and the lessee probably may not fly the plane beyond the agreed-upon mileage amount.

The standard is whether an objectively reasonable juror would believe that the lessor’s withholding of consent was unreasonable.

Oregon courts have held that every contract includes an implied covenant of good faith and fair dealing, also known as a “duty of good faith”.  See Uptown Heights Associates v. Seafirst Corp., 320 Or 638, 645, 891 P2d 639 (1995); Pacific First Bank v. New Morgan Park Corp., 319 Or 342, 344 n 1, 876 P2d 761 (1994) (Oregon courts use the terms “duty of good faith” and “duty of good faith and fair dealing” interchangeably).  This covenant implies that neither party will engage in any act that will “have the effect of destroying or injuring the right of the other party to receive the fruits of the contract.”  Perkins v. Standard Oil Co., 235 Or 7, 16, 383 P2d 107, 383 P2d 1002 (1963) (quoting 3 Arthur Linton Corbin, Corbin on Contracts §561, at 278 (1960)).  The Oregon Supreme Court has “sought through the good faith doctrine to effectuate the reasonable contractual expectations of the parties.”  Pacific First Bank 319 Or at 351 (internal quotation marks and citations omitted).

The lessee has an objectively reasonable expectation that the lessor will consent, especially if the lessor has no objective reason to refuse consent.  See Hampton Tree Farms, Inc. v. Jewett, 320 Or 599, 616, 892 P2d 683 (1995) (“jury could find that [seller’s] unilateral action in discontinuing to supply logs frustrated [buyer’s] objectively reasonable expectation”).

The lessor must act in good faith and within the bounds of the “objectively reasonable expectations” of the parties.  Uptown Heights Associates, supra.  The express terms of a contract help to define the objectively reasonable expectations of the parties.  Uptown Heights Associates, supra; see Pacific First Bank, supra; Stevens v. Foren, 154 Or App 52, 58, 959 P2d 1008 (1998) (“[t]he duty of good faith and fair dealing cannot contradict an express contractual term, nor does it provide a remedy for an unpleasantly motivated act that is permitted expressly by contract”).  Reasonable expectations include the right of either party to further its own legitimate business interests.  U.S. Genes v. Vial, 143 Or App 552, 559, 923 P2d 1322 (1996).

If there are consent provisions in a lease, it is best if there is an express contractual provision requiring the parties to act in good faith. 

It is best if there is an express contractual provision of good faith, but if there isn’t one, you can rely on the common law above to argue that the lessor, by unreasonably withholding consent, is not exercising good faith and fair dealing, which is implied under the contract.  Pollock v. D.R. Horton, Inc.-Portland, 190 Or App 1, 12–13, 77 P3d 1120 (2003).

The duty of good faith and fair dealing applies to lease agreements implicitly, even if there is not an explicit provision requiring good faith. 

In Pacific First Bank, 319 Or at 353, a landlord-tenant case, the Oregon Supreme Court held that the duty of good faith and fair dealing applies to lease agreements.  The court cited Milton R. Friedman, 1 Friedman on Leases § 7.303e2 (3d ed 1990), which notes that, “there is a rapidly growing minority to the effect that if [a] lease states ‘tenant may assign only with landlord’s consent’ or ‘tenant may not assign without landlord’s consent’ there is engrafted on this language by implication the phrase ‘which consent shall not be unreasonably withheld’”.  Pacific First Bank, 319 Or at 353.  The only way that the lessor could get around this is if there is a “’freely negotiated provision in the lease’” giving the lessor “’an absolute right to withhold consent’”.  Id. (quoting Restatement (Second) of Property § 15.2(2) (1977 & 1993 Supp) (emphasis added to the Restatement quotation by the Pacific First Bank court).

The Pacific First Bank case involved a tenant who had merged into its wholly owned subsidiary and a bank, the lessor, who refused to consent to the transfer and who argued that, under the terms of the lease, transferring the lease required the bank’s prior written consent.  Id. at 344.  The court found in favor of the tenant noting that, although there was a term in the lease that gave the lessor “a unilateral, unrestricted exercise of discretion,” in regard to the lease transfer provision, there was also a term in the lease that provided that the bank would “’not unreasonably withhold its consent to a sublease to a tenant’”  Id. at 354 (emphasis added by the Pacific First Bank court). 

It would thus be helpful if there is a term in the contract providing that the lessor cannot unreasonably withhold its consent—particularly if the lease also includes a term that gives the lessor a unilateral, unrestricted exercise of discretion in regard to the particular provision at issue.  However, in the absence of a unilateral, unrestricted exercise of discretion provision in favor of the lessor, it is not necessary to have a term providing that the lessor will not unreasonably withhold consent, given the court’s Friedman quotation above (“there is engrafted on this language by implication the phrase ‘which consent shall not be unreasonably withheld’”.  Id. at 353 (quoting Friedman, supra).

The lessor’s exercise of consent is thus tempered by the lessor’s duty of good faith and the lessor must not “unreasonably restrain” the lessee’s ability to conduct business in a reasonable and efficient manner.  Carey v. Lincoln Loan Co., 165 Or App 657, 670 (2000), aff’d, 342 Or 530 (2007).  In other words, the provision regarding the lessor’s consent is “not * * * absolute” or subject to the lessor’s “’whim.’”  Id.

 

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New FAA Air Traffic Organization Policy Order to Establish Air Traffic Organization Safety Management System

FAA

Introduction

Federal agencies, such as the Federal Aviation Administration (“FAA”), a branch of the U.S. Department of Transportation, are continuously working to improve air safety, and the enabling legislation for such agencies provides them with rulemaking power to accomplish the goal of improved safety.  With the recent series of commercial airline crashes, air safety is once again a source of anxiety for many air travelers.  Although statistically, decade after decade, air travel continues to prove itself as by far one of the safest modes of travel, air crashes capture the attention of the public in a way that is uniquely gripping as compared to other transportation disasters.  The recent commercial crashes, MH 370 on March 6 (location unknown), MH 317 on July 17 (Eastern Ukraine), Trans Asia Airlines flight GE 222 on July 23 (Penghu Islands) and Air Algerie flight 5017 on July 24 (Northern Mali) collectively represent approximately 700 fatal injuries to passengers and crew in the space of 138 days.

Although none of these incidents occurred inside United States-controlled airspace, parts of U.S. Airspace are unquestionably some of the busiest in the world.  Regulation and control of U.S. Airspace is controlled by federal law which preempts state law in all such matters.

On May 30, 2014, the FAA issued Order JO 1000.37A, entitled “Air Traffic Organization Safety Management System” (“Order”).  The Order will take effect on September 1, 2014.  This will provide a brief overview and summary of key aspects of the Order.

The mission of the Air Traffic Organization (“ATO”) is to provide a safe and efficient series of air navigation services in the National Airspace System and in the United States-controlled international oceanic air space.  This includes communications, navigation, surveillance and air traffic management services.  The Order specifically establishes the Safety Management System (“SMS”) as the foundation upon with the ATO’s safety efforts are conducted and measured.

Background

The SMS is a multidisciplinary, integrated, and closed-loop framework used to help maintain safe and efficient air navigation services and infrastructure.  The Order requires the ATO SMS to be a framework for three specific areas:

  1. The development of safety policy and processes
  2. The promotion of a safety culture that identifies and reports activities that are potentially or actually detrimental to system safety; and
  3. The identification, continuous monitoring, auditing, and evaluation of hazards and the assessment and mitigation of safety risk within the National Airspace System (“NAS”) and United States-controlled international/oceanic airspace.

Structure of The Safety Management System

The four structural components that make up the SMS are

  1. Safety Policy.  This contains the requirements, standards and guidance to establish and execute SMS and promote a positive safety culture.
  2. Safety Risk Management.  This contains the processes and procedures established and followed ty ATO safety practitioners to identify hazards, analyze and asses risks.
  3. Safety Assurance.  This consists of the processes and procedures within the ATO SMS that ensure the ATO is operating according to expectations and requirements.  Safety Assurance provides validation of SR< efforts for proper operations, systems and equipment and identification of adverse safety trends.
  4. Safety Promotion.  Communication of proper safety practices through advocacy of the principles of a positive safety culture, employee training and compliance with ATO orders.

Conclusion

The bulk of the contents of the Order provide the intended mechanics for implementation and execution of the SMS and are beyond the scope of this summary.  However, with the skies becoming ever more crowded and the recent concerns over pilot fatigue, deficient CRM with some airlines, fly-by-wire and ever more complex aircraft, SMS appears to be a step in the right direction.  Whether the framework and structural components can be executed remains to be seen.

Olson Brooksby PC maintains an active aviation practice including the defense of aircraft and component part product liability claims and negligence claims resulting in personal injury and property damage and aviation related commercial disputes.

 

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Congratulations to Scott Brooksby on being included on the list of Super Lawyers for 2014!

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Congratulations to Scott Brooksby!  Scott Brooksby has once again been included on the list of Super Lawyers for 2014.  Super Lawyers selects attorneys using a patented multiphase selection process. Peer nominations and evaluations are combined with third party research. Each candidate is evaluated on 12 indicators of peer recognition and professional achievement. Selections are made on an annual, state-by-state basis.  Scott has been on the list every year since 2008, and no more than 5 percent of the lawyers in the state are included.

Scott Brooksby has extensive experience with product liability law through decades of representing national and international manufacturers, sellers, distributors, and suppliers. Scott can effectively settle and try product liability cases and he knows how to minimize risk and avoid future claims.

Scott is particularly skilled at working with a wide variety of product liability experts regarding complicated factual and medical issues.  He is familiar with federal and state product liability law and regulations, and he works with his clients to determine the best defense strategy when faced with a product liability lawsuit or potential lawsuit.

Three types of product defects are recognized in Oregon: design defects, manufacturing defects, and failure to warn.  Scott has defended companies against all three types of product defect claims and has successfully challenged product liability cases pleaded under both negligence and strict liability theories.

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

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

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Scott Brooksby Featured at Prominent Aviation Litigation Conference

SB Maverick

Scott Brooksby will be speaking at the 2014 American Bar Association’s Aviation Litigation Seminar on June 5, 2014, in New York.  Scott’s panel is entitled “Federal Rules of Evidence: New Treatment of NTSB Factual Reports and Underlying Findings.”

The American Bar Association’s Aviation Litigation Seminar enables aviation lawyers to stay up to date on current developments, ethical issues, and new trends in aviation litigation. Scott Brooksby will be featured as part of the distinguished faculty of seasoned litigators, who will address topics such as:

• Significant recent legal developments and case law
• The ethics of prepping and presenting witnesses for deposition or trial
• Impact of unmanned aerial vehicles in aviation litigation
• Effectively handling non-catastrophic aviation cases
• Pilot training issues and litigation
• Recent applications of the General Aviation
Revitalization Act
• Legal, regulatory, and insurance implications of space tourism
• New treatment of NTSB factual reports

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

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

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

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

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

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Aviation Fatalities: Most are Caused by Human Error

Developing and Following Good Standard Operating Procedures (“SOPs”) and Crew Resource Management (“CRM”) Procedures Are the Keys to Avoiding Aviation Fatalities

The National Transportation Safety Board (“NTSB”) recently released its statistical data calculating transportation fatalities across all modes of transportation in 2011.  There were 494 fatalities in aviation.  The breakdown was as follows: general aviation, 444; air taxi, 41; foreign/unregistered, 9; airlines, 0; commuter, 0.[1]

In comparing the 2011 data against the prior decade or so, there are certainly positive signs.  But, like all raw statistics, the numbers are most useful when integrated into a longitudinal data comparison from which conclusions are drawn.  The NTSB fatality statistics draw a conclusion that might not be obvious from the 2011 data alone: Human error absolutely dominates as the leading cause of aviation fatalities (and injuries).

There are two keys to avoiding aviation fatalities: developing and following good SOPs and CRM procedures.  This article will examine some of the persistent human causes of aviation accidents, many of which are merely outgrowths of the failure of aviation organizations to develop, adhere to, and not willfully disregard SOPs.  The second cause of aviation fatalities examined in this article is the failure of flight deck crews to follow CRM procedures.  Complications that lead to failure to follow CRM procedures include factors such as cockpit chaos; multi-lingual cockpits; failure to maintain cockpit discipline; surprise; and failure, during emergencies, to rely on the crew member with the most flight time, if appropriate given the constitution of the crew as a whole.

Accidents Can Be Avoided Through Proper Cockpit Procedures and Compliance With SOPs

On September 16, 2013, NTSB Member Robert Sumwalt (“Member Sumwalt”) gave a presentation to the Southern California Aviation Association[2] on the importance of SOPs.  Member Sumwalt, quoting from an NTSB accident report, noted that, “[w]ell-designed cockpit procedures are an effective countermeasure against operational errors, and disciplined compliance with SOPs, including strict cockpit discipline, provides the basis for effective crew coordination and performance.”[3]

Member Sumwalt then presented facts about what the accident data show regarding crew-caused accidents.  In an NTSB study of 37 crew-caused air carrier accidents between 1978 and 1990, procedural errors, such as not making required callouts or failing to use appropriate checklists, were found in 29 of the 37 (78%) reviewed accidents.  The accident data also show that, with respect to turbine-powered operations (2001-2010), the NTSB identified at least 86 accidents involving lack of adequate procedures, policies, or checklists, or lack of flight crew adherence to procedures, policies, or checklists.  These accidents resulted in 149 fatalities.[4]

Developing Effective SOPs

The development of SOPs in various industries has been accomplished through a variety of regulatory bodies, industry groups, and volunteerism.  One of the first groups to establish such guidelines was the International Conference on Harmonisation (ICH), which defines SOPs as “detailed written instructions to achieve uniformity of the performance of a specific function.”  The international quality standard (“ISO”) 9001 essentially requires the establishment of SOPs for any manufacturing process that could affect the quality of the product.  Although ICH’s implementation of the ISO 9001 SOPs was in the context of clinical drug trials, a substantially similar system has been expanded to other industries.[5]

In the context of aviation, the SOP provides a flight crew with a step-by-step guide to effectively and safely carry out operations.  A particular SOP must not only achieve the task at hand but also be understood by a crew of various backgrounds and experiences within the organization.  SOPs can also be developed over time to incorporate improvements based on experience, accidents, near misses, or innovations from other manufacturers or operators to suit the needs of a particular organization.  SOPs can also provide employees with a reference to common business practices, activities, or tasks.[6]  New employees use SOPs to answer questions without having to interrupt supervisors to ask how an operation is performed.[7]

Although reference is made to ISO 9001 in the context of clinical trials, the ISO 9000 family of standards is related to quality management systems and designed to help organizations follow consistent procedures to meet the needs of customers and other stakeholders.[8]  “AS 9000” is the Aerospace Basic Quality System Standard–an interpretation developed and adopted by virtually all the major aerospace manufacturers.  The current version is AS 9100C.  A new version of the standard will be published in September 2015 if the ISO members vote favorably in March 2015.[9]

The Failure of Flight Crews to Comply With SOPs and the Consequences

During his remarks on flight crew error, Member Sumwalt cited a Boeing study of accident prevention strategies where the data suggested that the single most important factor in prevention of hull loss accidents over a ten-year period was pilot flying (PF) adherence to SOPs.  Member Sumwalt noted that SOPs are typically not followed for three specific reasons.  He discussed each reason, and then used data from an NTSB investigation, or preliminary cause report, as support or illustration for each of the three reasons.

The reasons SOPs are typically not followed are:

(1) the organization lacks adequate SOPs;

(2) the organization doesn’t adhere to their SOPs; and

(3) flight crews intentionally disregard SOPs.

SOPs should be clear, comprehensive, and readily available in the manuals used by flight deck crew members.[10]  Member Sumwalt provided three real-life corollary examples:

  • The Organization Lacks Adequate SOPs – Crash of East Coast Jets, Hawker Beechcraft BAe 800, on July 31, 2008, Owatonna, Minnesota (8 fatalities)

The NTSB found that, although as a charter operator, East Coast Jets was not required to incorporate SOPs into its operations manual, if it had done so, it may have supported the accident pilots in establishing cockpit discipline and, therefore, a safer cockpit environment.  An example was provided where the SOP identifies the triggering event, designates which crewmember performs the action or callout, what the callout is, and what the action is.

  • The Organization Fails to Adhere to Its Established SOPs – Crash of Cessna 310, N501N, July 10, 2007, Sanford, Florida (5 fatalities)

In this case the organization did not adhere to SOPs.  The aviation director could not locate the SOP manual, which was viewed as merely a training tool.  The aircraft was to be used only for company business, but the accident flight was a personal flight.  The Pilot in Command (“PIC”) must possess an Airline Transport Pilot (“ATP”) Certificate/Rating, but the PIC did not possess the necessary ATP.  The last three maintenance discrepancies had not been addressed.  The NTSB noted that these lapses were contrary to industry guidelines directing that procedures should be written in accordance with the organization’s operating methods, and once the procedures are in place, the organization should make every effort to follow those procedures.  Having a strong commitment to standardization and discipline were among the key elements of safe operations observed in a Boeing study.  Cockpit procedural language is tightly controlled to maintain consistency and to avoid confusion from non-standard callouts.  Callouts and responses should be done verbatim.[11]

  • Flight Crews Intentionally Disregard Established SOPs – Hard Landing of US Airways Express, January 19, 2010, Charleston, West Virginia

The NTSB probable cause determination was “the flight crewmembers’ unprofessional behavior, including their non-adherence to sterile cockpit procedures by engaging in non-pertinent conversation, which distracted them from their primary flight-related duties and led to their failure to correctly set and verify the flaps.”  Intentional crew non-compliance was a factor in 40% of the worldwide accidents reviewed.[12]

NTSB Member Sumwalt concluded by noting that well-designed SOPs are essential for safety.  Making a strong commitment to procedural compliance should be a core value of the organization.  The SOPs must not merely exist, but they must be religiously followed as a way of doing business.

Well-Coordinated CRM is a Crucial Part of Accident Prevention

CRM[13] is a set of training procedures for use in environments where human error can have devastating effects.  Used primarily for improving air safety, CRM focuses on interpersonal communication, leadership, and decision making in the cockpit.

CRM grew out of an NTSB analysis of the crash of United Airlines flight 173 where the plane, a DC-8, ran out of fuel while troubleshooting a landing gear problem over Portland Oregon.[14]  The NTSB issued its landmark recommendation on June 7, 1979, to require CRM training for airline crews.  A few weeks later, NASA held a workshop on the topic, endorsing this innovative training.[15]  United Airlines was the first airline to provide CRM training for its cockpit crews in 1981.[16]

Since that time, CRM training concepts have been modified for application to a wide range of activities where people must make dangerous time-critical decisions.  These arenas include air traffic control, ship handling, firefighting, and medical operating rooms.[17]

The Difficulty of Precisely Executing CRM Procedures In a Multicultural Cockpit

Multiculturalism in the cockpit is a largely recent phenomenon.  Globalization and shrinking militaries around the world have led to a decrease in the availability of trained pilots, a lack of homogenous flight crews, and the emergence of multicultural cockpits.  In 2005, a Helios Airways Boeing 737-300, with its pilots incapacitated by hypoxia after they failed to recognize a cabin pressurization system malfunction, provides a good example of what can happen when communication and crew resource management break down in the multicultural cockpit.[18]  All 121 people on the airplane were killed when the 737 depressurized and ran out of fuel, the engines flamed out, and the airplane crashed, after what was to have been a flight from Larnaca, Cyprus, to Prague, Czech Republic, with a stop in Athens.

In its final report on the accident, the Hellenic Air Accident Investigation and Aviation Safety Board said the crew had failed to recognize that the cabin pressurization mode selector was in the wrong position.  The Helios crew exhibited poor CRM before takeoff and during climb, and the difference in their nationalities and primary languages–the captain was German, the first officer was Cyprian–contributed to poor communication during the event.  A blaring cabin altitude warning horn and the illumination of master caution lights degraded the crew’s cognitive abilities and processes.  Inter-cockpit communications were reduced, perhaps in part because English was a second or third language for the crew.[19]

The CRM Lessons Learned From Air France 447–“Crew Coordination Vanished”

On March 27, 1977, two Boeing 747s crashed on the single runway on the Spanish island of Tenerife, killing 583 people.  More than 35 years later, it is still measured by the number of casualties, and is by far the worst aviation disaster in history.  One aspect of the accident, unlike many tragic and significant disasters, is that the non-aviation community was fixated on the Tenerife crash, the individuals involved, and exactly what the sequence of events was.  Arguably the next time both the aviation community and the non-aviation community became as fixated on an aviation disaster was the 2009 crash of Air France 447.[20]

Within four and a half minutes in the early hours of June 1, 2009, an Airbus A330-200 operating as Air France Flight 447 from Rio de Janeiro to Paris, departed from cruise flight at 35,000 feet and descended into the Atlantic Ocean, killing all 216 passengers and 12 crewmembers.  Glimpses of what may have gone wrong emerged from the several interim reports issued by the French Bureau d’Enquetes et d’Analyses (BEA) during the long investigation.  In July, 2012, the BEA issues a nearly 300-page final report.

According to the report, the trouble began when the A330’s pitot tubes were obstructed by ice crystals, causing the various air data sources to produce unreliable airspeed information.  Reacting as designed, the autopilot and autothrottle disengaged, and reverted to a lower control law that provides fewer protections against flight-envelope deviations.  Startled, the pilot flying (“PF”) inadvertently commanded a steep nose-up pitch change while leveling the airplane’s wings.  The flight crew–a copilot and a relief pilot filling in for the resting captain–recognized the loss of reliable airspeed data but did not conduct the associated checklist procedure.  As a result, “[c]onfusion reigned on the flight deck, and crew coordination vanished.” [21]  Without automatic angle-of-attack protection, the airplane entered a stall.  The crew either believed that the stall warnings were spurious or mistook the airframe buffeting as a sign of an overspeed condition.  When the resting captain was called to return to the flight deck, he continued to apply nose-up flight inputs, when, at such a low altitude, the only possible chance to get the plane back into the flight envelope would have been nose-down inputs.  In addition, the PF almost immediately took back priority without any callout and continued piloting.  The priority takeover by the PF contributed to the de-structuring of the task-sharing between the pilots.  No recovery action was taken, and the A330 remained in a stall as it descended into the sea.

Additional sections of the BEA final report comment on the fragmented nature of the augmented crew, and the fact that some junior officers had far more flight hours in type than some of the more senior crew members, further eroding the opportunity for effective CRM in a surprise situation.

SOPs and CRM Must be Properly Implemented and Adhered To

Disciplined implementation of, and adherence to, SOPs is inseparable from the disciplined implementation of, and adherence to, CRM.  Although this article only scratches the surface on data supporting this conclusion, it is an irrebuttable presumption that if flight crews fully embrace SOPs and CRM, flying will be safer.

[1] Data and Statistics-NTSB-National Transportation Safety Board http://www.ntsb.gov/data/index.html (last visited, October 18, 2013).

[2] Member Robert L. Sumwalt, Standard Operating Procedures:  The Backbone of Professional Flight Operations,  http://www.ntsb.gov/news/speeches_sumwalt.html  September 16, 2013 (last visited October 18, 2013) (unpaginated).

[3] Id. (citing from National Transportation Safety Board Accident Report NTSB/AAR-11/01, PB2011-910401, Crash During Attempted Go-Around After Landing, East Coast Jets Flight 81, Hawker Beechcraft Corporation, 125-800A, N818MV, Owatonna, Minnesota, July 31, 2008).

[4] Id.

[5] ICH Harmonized Tripartite Guidelines For Good Clinical Practice. (1.55.)  May 1, 1996.

[6] Green, R. G., Muir, H., James, M., Gradwell, D., & Green, R. L. (1996) Human Factors for Pilots (2nd ed). Ashgate Publishing Ltd (Hants, England), 1996.

[7] Anderson, Chris.  How to Write Standard Operating Procedures.  Bizmanualz, June 4, 2012.

[8] Poksinska, Bozena; Dahlgaard, Jens Jörn; Antoni, Marc (2002). The State of ISO 9000 Certification: A Study of Swedish Organizations. The TQM Magazine 14 (5): 297.

[9] Nigel H. Croft (2012). “ISO 9001:2015 and Beyond – Preparing for the Next 25 Years of Quality Management Standards“. ISO.

[10] FAA Advisory Circular AC 120-71.

[11] Reference to Lautman-Gallimore Study.  Member Robert L. Sumwalt, Standard Operating Procedures:  The Backbone of Professional Flight Operations  http://www.ntsb.gov/news/speeches_sumwalt.html  September 16, 2013 (last visited October 18, 2013) (unpaginated).

[12] R. Khatwa & R. Helmreich, cited in Member Robert L. Sumwalt, Standard Operating Procedures:  The Backbone of Professional Flight Operations  http://www.ntsb.gov/news/speeches_sumwalt.html  September 16, 2013 (last visited October 18, 2013) (unpaginated).

[13] Diehl, Alan (2013) “Air Safety Investigators: Using Science to Save Lives-One Crash at a Time.” Xlibris Corporation. ISBN 9781479728930. http://www.prweb.com/releases/DrAlanDiehl/AirSafetyInvestigators/prweb10735591.htm.

[14] UNITED AIR LINES, INC. “McDONNELL-DOUGLAS DC-8-61, N8082U PORTLAND, OREGON : DECEMBER 28, 1978.” National Transportation Safety Board. December 28, 1978. 9 (15/64).

[15] Cooper, G.E., White, M.D., & Lauber, J.K. (Eds.) 1980. “Resource Management on the Flight Deck,” Proceedings of a NASA/Industry Workshop (NASA CP-2120).

[16] Helmreich, R. L.; Merritt, A. C.; Wilhelm, J. A. (1999).  “The Evolution of Crew Resource Management Training in Commercial Aviation.”  International Journal of Aviation Psychology.  9 (1): 19–32.

[17] Diehl, Alan (June, 1994). “Crew Resource Management… It’s Not Just for Fliers Anymore.” Flying Safety, USAF Safety Agency.

[18] Hellenic Air Accident Investigation and Aviation Safety Board.  Aircraft Accident Report 11/2006, Helios Airways Flight HCY522, Boeing 737-315, at Grammatiko, Hellas, 14 August 2005.

[19] Id.

[20] The following summary of the facts and conclusions associated with AF 447 is based on the English translation of the BEA’s “Final Report on the Accident on 1st June 2009 to the Airbus A330-203, Registered F-CZCP, operated by Air France, Flight AF 447, Rio de Janeiro-Paris”.  The report is available in English and the original French at www.bea.aero.

[21] Mark Lacagnina, Sustained Stall: Blocked Pitot Tubes, Excessive Control Inputs and Cockpit Confusion Doomed Air France 447, http://flightsafety.org/aerosafety-world-magazine/august-2012/sustained-stall (accessed October 22, 2013).

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Oregon Law Does Not Permit Experts to Testify in the Form of Legal Conclusions in Product Liability or Negligence Cases

Under Oregon law, witnesses are not allowed to testify as to legal conclusions.  See, e.g., Olson v. Coats, 78 Or App 368, 370 (1986) (excluding testimony by witness that certain road signs complied with statutory requirements).  “Each courtroom comes equipped with a ‘legal expert,’ called a judge, and it is his or her province alone to instruct the jury on the relevant legal standards.” Burkhart v. Washington Metro. Area Transit Auth., 112 F3d 1207 (D.C. Cir. 1997).  Examples of inappropriate testimony in the form of legal conclusions include, but are not limited, to:

  • Defendants were clearly reckless, acted in a reckless manner, or acted in a grossly reckless manner;
  • Plaintiff was negligent; and
  • The helicopter/engine had a known and recognized defect.

Neither plaintiff nor defendant should be permitted to elicit such legal conclusions at trial.  An increasing number of products liability cases have excluded similar expert testimony.  A district court was held to have correctly excluded expert testimony that “the lack of adequate warnings and instructions constituted defects which made the products unreasonably dangerous.”  Strong v. E.I. DuPont de Nemours Co., 667 F2d 682, 685-86 (8th Cir. 1981).  Similarly, in Harris v. Pacific Floor Machine Mfg. Co., 856 F2d 64, 67 (8th Cir. 1988), a district court was held to have properly refused to permit the plaintiff’s expert to opine as to the adequacy of the particular warning on the product.

Likewise, expert testimony that a party was “willful” was excluded in United States v. Baskes, 649 F2d 471, 478 (7th Cir. 1980).  On similar grounds, a federal district court excluded expert testimony that the plaintiff was “negligent.”  The court’s ruling also encompassed “any testimony . . . that contains a variation of the term ‘negligent,’” or any opinions that certain conduct was the “direct, proximate and efficient cause” of an accident.  Hermitage Industries v. Schwerman Trucking Co., 814 F Supp 484, 487-88 (D. S.C. 1993).

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The Restyled Federal Rules of Evidence and NTSB Fact Reports

The admissibility of NTSB fact reports depends at least in part on the judge’s interpretation of the Federal Rules of Evidence.  Many practitioners are not aware that the Federal Rules of Evidence were “restyled” and rewritten in plainer, easier-to-understand language in 2011.

Although the substance of the Rules largely did not change, the restyling meant that some subsections were deleted.  A formerly popular subsection that was deleted was FRE 803(8)(C) regarding the hearsay exception for public records that was used to admit NTSB fact reports.  Now, that exception is found under FRE 803(8)(A)(iii) and FRE 803(8)(B).

FRE 803(8)(C) used to provide, in part, that:

“The following are not excluded by the hearsay rule, even though the declarant is available as a witness: 

“* * * * *

“(8) Public records and reports.—Records, reports, statements, or data compilations, in any form, of public offices or agencies, setting forth

“* * * * *

“(C) in civil actions and proceedings and against the Government in criminal cases, factual findings resulting from an investigation made pursuant to authority granted by law, unless the sources of information or other circumstances indicate lack of trustworthiness.”

The new, restyled Rule 803(8) provides, in part, that:

“(8) Public Records. A record or statement of a public office if:

“(A) it sets out:

“* * * * * 

“(iii) in a civil case or against the government in a criminal case, factual findings from a legally authorized investigation; and

“(B) neither the source of information nor other circumstances indicate a lack of trustworthiness.”

The Committee Note to the restyled Rule 803 provides that:

“The language of Rule 803 has been amended as part of the restyling of the Evidence Rules to make them more easily understood and to make style and terminology consistent throughout the rules.  These changes are intended to be stylistic only.  There is no intent to change any result in any ruling on evidence admissibility.”

Therefore, the 2011 deletion of FRE 803(8)(C) does not change important cases regarding the NTSB admission of fact reports, such as Beech Aircraft Corp. v. Rainey, 488 US 153, 170 (1988).  In that case, the Supreme Court held that an investigative report into the cause of a naval aircraft crash was admissible under FRE 803(8)(C) despite the fact that it contained conclusions drawn from the facts investigated or expressed opinions concerning those facts.  488 US at 170.  At the outset, the Court noted that the term “factual findings” in the rule should not “be read to mean simply ‘facts.’”  Id. at 163-64.  Continuing, the Court stated that, “[a] common definition of ‘finding of fact’ is, for example, ‘a conclusion by way of reasonable inference from the evidence.”  Id.  It further noted that “the Rule does not state that ‘factual findings’ are admissible, but that ‘reports … setting forth * * * factual findings’ are admissible.”  Id. at 164 (emphasis in original).  “On this reading, the language of the Rule does not create a distinction between ‘fact’ and ‘opinion’ contained in such reports.”  Id.  The Court also looked to the legislative history of Rule 803 and found that it “contain[s] no mention of any dichotomy between statements of ‘fact’ and ‘opinion’ or ‘conclusions.’”  Id. at 166.  It thus concluded that, “unless the sources of information or other circumstances indicate lack of trustworthiness,” investigative reports are admissible regardless of whether they contain facts, opinion, or both.  Id. at 167.

Therefore, although practitioners can no longer cite to FRE 803(8)(C), the substance of the Rule is still good law under the restyled FRE 803(8) and seminal holdings such as Rainey continue to be good law as well.