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EF2454.A75%41975cop11r
S M U 1JW LIBRARY
SELECTED PROBLEMS IN AVIATION LITIGATION
Ninth Annual Symposium
Presented By The
Journal of Air Law and Commerce
Southern Methodist University School of Law
S M U LAW LIBRARI.PREFACE i57
This year, for the first time, the Journal of Air Law and Commerce is
distributing at the Symposium a bound volume containing most of the papers
to be presented. The papers are in the following order;
(1) Francis Hare: Discovery in Military Crash Litigation
(Plaintiff's Viewpoint)
(2) Frank Finn: Discovery in Military Crash Litigation
(Defendant's Viewpoint)(3) Robert S. Harkey: Manufacturer's Limitations of Warranties(4) Ronald L. Palmer: Express Warranties Arising from Advertising(5) H. Norman Kinzy: Current Aviation Decisions in Conflicts of Laws(6) Dale Milford: Proposed No Fault Legislation(7) Robert Martin: Manufacturer's Viewpoint: Small Aircraft(8) L. S. Carsey: Survey of Recent Aviation Decisions
The following speaker's papers will be distributed at the time of theirrespective speeches:
(1) Peter Martin: Death and Injury in International Air Transport(2) William F. Kennedy: No Fault Products Liability in Aviation(3) Victor E. Schwartz: No Fault Insurance For Products and Services--
A Forecast
The following speaker's papers will not be distributed at the Symposium butwill be published in Volume 41, issue number 3 of the Journal of Air Law and
Commerce.
(1) Arnold Hull: The Use of Weather Data in Aviation Litigation(2)Melvin Friedman: No Fault Products Liability in Aviation--
The Plaintiff's Viewpoint
(3) John V. Brennan: No Fault Products Liability in Aviation--The Insurer's Viewpoirt
, i- 9 .1 I
CHECKLIST FOR THE INVESTIGATION
AND
PREPARATION OF AN ARMY AVIATION CRASH
Vrancis T. Hare, Jr.Hare, Wynn, Newell & Newton
700 City Federal BuildingBirmingham, Alabama 35203
LEGEND OF ABBREVIATIONS
SAID HELICOPTER
SAID COMPONENT
SAID INCIDENT
ARMY
PAGE
BELL
NOTE:
Where ever this phrase is employed it isintended to refer to the helicopter referredto in the plaintiff's complaint or helicopterModel No. UH-ID, Serial No. 66-1074.
Where ever this phrase is employed it isintended to refer to the tail rotor hub as-sembly on said helicopter on the occasionof said incident and shall be deemed to in-clude all component parts which collectivelyassembled constitute the tail rotor assembly.
Where ever this phrase is employed it is in-tended to refer to that incident referred toin the plaintiff's complaint in which 'saidhelicopter" crashed on October 15, 1968.
Where ever this phrase is employed it isintended to refer to the United States Armyand any Office, Department or Agency ofthe United States Army, including any rep-representative working for or on behalf ofany such Office, Department or Agencythereof, including any civilian corporationdoing work for any such Office, Departmentor Agency of the United States under contractbut specifically excluding Page AircraftMaintenance ,, Inc.
Where ever this phrase is employed it isintended to refer to "Page Aircraft Main-tenance, Inc. " including its officers, agentsor employees.
Where ever this phrase is employed it isintended to refer to "Bell Aerospace Corpo-ration" including its officer, agents oremployees.
Where ever your response requires that a
document be attached, that is done with theunderstanding that the plaintiff agrees topay any reasonable cost incurred in re-producing and delivering said document.
INTRODUCTION:
This outline and checklist is arranged on the presumption that the aircraft
crash involves an ARMY aircraft. Many of the steps and procedures described
herein would be applicable should another branch of the military service be in-
volved, but much of the nomenclautre and any actual reference to a particular
agency would only be appropriate if the ARMY were involved.
The scope of this outline is limited to the issue of liability.
PHASE I.
INITIAL CHECKIST
A. EMPLOY \IENT AGREEMENT SIGNED BY PROPER PARTY: PROVISIONFOR DISBURSEMENT OF EXPENSES.
B. WRITE BREACII OF WARRANTY NOTICE TO DEFENDANTS (DO NOTSEND TO STATUTORY AGENT OR DEFENDANT'S ATTORNEY) . SENDTO DEFENDANT'S HOME OFFICE.
C. OBTAIN LETTERS OF ADMINISTRATION ( ARE ANCILLARY LETTERSNECESSARY?) OR MEDICAL AUTHORIZATION.
D. OBTAIN NECESSARY AUTHORIZATIONS FOR RELEASE OF INFORMATION.(Form attached).
E. WRITE CLIENT. (Form attached).
F. SET UP FILES ( See Secretary's Checklist).
1. OFFICE FILE: (Brown)
(a) REGULAR OFFICE FILE FOR ORDINARY CORRESPONDENCE,EXPENSES, CONTRACTS AND PERMITS. SEPARATE INTERNALFILES FOR FOLLOWING:
(I) CORRESPONDENCE.(2) ESTATE(3) DAMAGES(4) "ACTION" FILE (Keep on desk).
(b) PLEADINGS
(c) INTERROGATORIES.
(d) ADMISSIONS.
(e) PRODUCTION.
(f) DEPOSITIONS.
EXPENSES
II. MASTER EVIDENCE FILE (Red)
(a) COLLATERAL OFFICER'S REPORT.
(b) ARMY AVIATION ACCIDENT BOARDARADMAC Report)
REPORT (Including
(c) HISTORICAL RECORDS (Including TALCMOR).
(d) EQUIPMENT IMVPROVEMENT REPORTS (EIR s)
(e) ENGINEERING ORDERS (EOs) AND ENGINEERING CHANGEPROPOSALS (ECPs)
(f) PORTIONS OF APPLICABLE MANUALS.
(g) TWXs
(h) MAINTENANCE WORK ORDERS (MWOs) AND TECHNICALBULLETINS (TBs)
-2-
(i) MIL SPECS, etc.
(j) OTHER INCIDENTS (Check with USAAVS)
(k) SUBSEQUENT CHANGES.
III. WORKING FILE (Green).
(a) - (k) SAME AS MASTER EVIDENCE FILE.
(1) OFFICE MEMOS.
(m) WITNESS INFORMATION.
G. REQUEST INFORMATION LISTED ON NEXT PAGE
H. LOOK OUT FOR THESE PROBLEMS.
1. Conflict of laws.2. Statute of limitations.3. Jurisdiction and service of process.4. Venue.5. Identity of all defendants.6. Letters of administration.7. Government subrogation? ??
PHASE I
BASIC DOCUMENTS TO REQUEST
A. COLLATERAL INVESTIGATION REPORT (.1. A. G. Office at base wherecrash occurred or to which aircraft was attached)
B. ARADMAC fEPORT (ARADMAC, Material Analysis Division, Departmentof the Army, Corpus Christi, Texas 78419).
C. RELEASABIE PORTIONS OF AVIATION ACCIDENT BOARD REPORT(Judge Advocaie General Office, Chief General Branch, Litigation Division
Department of Army, Pentagon, Washington, D. C. )
D. IISTORICAL RECORDS ( J. A. G. Office at base where crash occurred orto which aircraft was attached) INCLUDING:
1. 2404 7. 2408-12 , if available.2. 2408-5 8. 2408-13, ofi aircraft
3. 2408-10 9. 2408-14 on aircraft4. 2408-15 10. 2408-16 on aircraft5. 2408-17 11. 2408-16 on component , if known.6. 2409
E. REQUEST FROM AVSCOM: (U. S. Army Aviation Systems Command, PostOffice Box 209, St. Louis, Missouri 63166)
1. ORIGINAL SPECIFICATIONS FOR AIRCRAFT PROVIDED BY ARMY ANDDOCUMENTS FURNISHED BY MANUFACTURER INDICATING HOW THEIRPROPOSED BID WOULD COMPLY.
2. CONTRACT WITH MANUFACTURER.
3. LIST OF ALL APPLICABLE MIL SPECS.
4. CORRESPONDENCE BETWEEN AVSCOM AND MANUFACTUER RE-LATING TO AIRCRAFT.
5. ALL APPLICABLE ENGINEERING CHANGE PROPOSALS (ECPs ) ANDENGINEERING ORDERS (EOs) *
6. ALL APPLICABLE EQUIPMENT IMPROVEMENT RECOMMENDATIONS(E IRs)
7. ,TALCOMR AND/OR RAMMIT.
8. TBs AND/OR MOWs
F. THE PART (LITIGATION).
G. TECHNICAL MANUALS (TMs) AND ALL CHANGES (ADJUCANT GENERALAND A VSCOM).
H. REPORT OF OTHER FAILURES (LITIGATION AND USAAVS, FT. RUCKER,
ALABAMA).
1. REQUEST FROM F. A. A. (Federal Aviation Administration, Department of
Transportation, 800 Independence Avenue, S. W. Washington, D. C.)
1. A. D. NOTES.
2. SERVICE BULLETINS.
-4-
BASIC DOCUMENTS TO REQUEST (Cont.)
3. DEFECT REPORTS FROM MANUFACTURER.
4. ENFORCEMENT ACTIONS AGAINST MANUFACTURER.
J. ANY APPLICABLE PATENTS ( U. S. Patent Office).
K. LITERATURE SURVEY.
L. DID MILITARY MAKE AN INVESTIGATION OF YOUR FAILURE MODE IN
OTHER BUT SAME MODEL AIRCRAFT? (AVSCOM)
NOTE: K EEP COPIES OF REQUESTS AND LETTERS IN ACTION FILE'
-5- PHASE I
INTER VIEWS
A. EYE WITNESSES.
B. USAAVS.
C. AVSCOM.
D. ARADMAC
E. MAINTENANCE PEOPLE.
F. COLLATERAL OFFICER.
G. AQAD.
H. CENTER SAFETY.
CHOICE OF EXPERTS
Expert opinion is essential in these cases firstin order to determine whether toaccept employment and if so as evidence during trial. So you may need an ex-
pert in the following fields: (1) Operation of aircraft; (2) Maintenance of air-
craft; (3) Design and manufacture of aircraft. Generally the sources for the
employment of experts are the academic world, industry and self-employed"shade tree" type. My personal preference is for the latter of the three.
Scholars frequently make unimpressive witnesses and those employed in in-
dustry identify with the defendant. There is no short supply of ex-helicopterpilots or ex-maintenance men; however, there are not many "shade - tree"aeronautical engineers and in this area the plaintiff's choice of experts is
limited,
Inquiry into your expert's qualifications should include the following:
1. General education.2. Special education.
3. Experience.4. Publications.5. Former testimony.6. Professional honors and/or societies.
If your expert has published ANYTHING READ IT'. The other side will.
You will almost have to have an expert help you read the historical documentsand investigative reports. You may select such a man with no intention of
calling him to testify and therebyprotect his knowledge from diselousre under
Rule 26(b)(4)(b). Such an expert should be generally familiar with (a) operationof helicopter (b) maintenance and (maybe most important of all) military recordskeeping procedure. It is the author's opinion that the plaintiff's attorney who
trys to prepare a military aviation case without the help of such a man is making
a bad mistake and is practicing false economy.
Whomever or how many ever you select, talk to your experts as soon AFTER
employed as possible . Make your choice carefully but make it quicklyK' Let
him help you in obtaining documentations as well as interpreting it. Do NOThowever, depend on him to obtain all your documents; the lawyer usually( not
just occasionally) will perceive of areas of proof which will require documentary
support that would never occur to the expert.
CONFERENCE WITH EXPERTS
As already stated, talk to your expert (s) as soon as possible.
Although you may not be prepared to do so at your initial interview, ultimately
make sure your expert(s) know everything about your case from a factualstandpoint. Tell him everything you know and find out from him everythinghe needs to know. Make a checklist and keep it up-to-date of every document
and source of information your expert(s) has that he considers in forming his
opinions. Your relationship with your expert(s) is going to be a living breathing
vital relationship. You will develop your concepts of recovery as you discoverthe pertinent facts. I personally make a point of explaining the applicable legal
principles (substantial and evidentiary) to my expert(s); e. g. distinction between"possible" and "probable" cause; avoid "safer" or "better"- defect must be"not
reasonably safe!'; entire industry may be negligent; limits of admissibility ofsubsequent changes; admissibility of authorative texts; effect of compliance withGovernmental regulations.
At this stage you have two major inquires:
A. The very first thing you must do ( as best you can at this stage) is todetermine the probable cause of the crash. The conclusion of the AviationAccident Board are usually correct but not 100%. Ascertain and analyze fromtwo mechanical and functional standpoints what your failure mode is ; chew onit, diges it and assimilate it so that you can deal with it as matter of intellectualreflex from all points of view. If in the final analysis it isn't reasonably ap-parent and reasonably simple to express in street language , you had better bailout - you'll never sell it to a jury.
B. The next large area of inquiry is to determine what (if anything) the de-fendant did "wrong" that permitted the failure mode to occur. Start with theoriginal performance specs for the aircraft - what exactly in a functionalsense is the anticipated environment of use?(Or flight envelope? ) Check thedefendant's bid proposal and applicable mil specs and define the manufacturers'design criteria. Compare this with its performance on the occasion of thecrash.
In conducting this two step analysis consider the following:
1. Conduct simple failure mode and effect analysis (FMEA).
2. Ascertain the dimensions of the risk; e.g., how likely is this failure modeto occur? (a) Actual reports of other incidents (b) Statistical Summaries ofsimilar occurrences (c) Studies and calculations predicting probability of oc-currence.
3. What preventative measure could defendants have taken to avoid occurrenceof your failure mode? What cost? What effect on function of aircraft?
4. State of art. What do other manufacturers do? Is your"fix ' technicallysimple or esoteric? Results of literature survey.
5. Analyze and summarize historical reoords. Was aircraft ever abused?Was it in substantially the same condition at time of first flight as it was whenit left defendant's possession?
Do you need:
(a) Models;(b) Charts;(c) Enlarged photographs.
Do you have:
(a) Results of patent survey?(b) All applicable military specification?(c) Authorative texts and survey of technical literature?(d) Original TMs and all changes?
(e) Statistics and data of other similar incidents including computer printoutI .... 'C1A A -C'O
-7-
PHASE II
ANALYZE AND SUMMARIZE REQUESTED RECORDS ANDTECHNICAL LITERATURE
THEN
1. FILE SUIT.
2. INTERROGATORTES ( First set).
3. ADMISSIONS ( First set).
4. PRODUCTION REQUEST ( First set).
ALL DONE SIMULTANEOUSLY.
REMINDER
1. CONFLICT OF LAWS?? ?
2. JURISDICTION AND SERVICE ? ?
3. VENUE????
4. JURY OR NON-JURY? ?
PHASE II
SAMPLE REQUEST FOR ADMISSIONS
1. PLAINTIFFS NAMED CORRECTLY (Attach Letters of Administration as an
exhibit)
2. DEFENDANTS NAMED CORRECTLY.
3. DEFENDANTS PROPERLY SERVED.
4. PLAINTIFF IS PROPER PARTY TO MAINTAIN SUIT ( See 1.)
5. JURISDICTION ADMITTED.
6. DEFENDANT NO. L DESIGNED, MANUFACTURED AND ASSEMBLED AIR-
CRAFT AND COMPONENT AND SOLD THE SAME TO U. S. GOVERNMENT.
7. DEFENDANT NO. 2 MAINTAINED AIRCRAFT UNDER CONTRACT WITH U..
S. GOVERNMENT.
8. DATE OF SALE AND DELIVERY OF AIRCRAFT TO ARMY AND FACT ARMYWAS OWNER OF AIRCRAFT AT ALL TIMES.
9. AIRCRAFT WAS ON ROUTINE AUTHORIZED FLIGHT.
10. PLAINTIFF'S DECEDENT WAS MEMBER OF ARMED SERVICES ON DUTY ATTIME OF CRASH AND AS SUCH WAS AN AUTHORIZED OCCUPANT OF AIR-CRAFT AND MEMBER OF CREW.
11. INCIDENT DID, IN FACT, OCCUR AT DATE AND PLACE REFERRED TO INPLAINTIFF'S COMPLAINT.
12. PLAINTIFF'S DECEDENT DID, IN FACT, DIE AS A RESULT OF INJURIESRECEIVED IN "SAID INCIDENT".
13. DEFENDANTS DID, IN FACT, RECEIVE A COPY OF NOTICE OF BREACH
OF WARRANTY ( attach copy as Exhibit).
14. AUTHENTICITY OF:
a. ARADMAC REPORT (Attach copy as an exhibit).b. LETTERS OF ADMINISTRATION (Attach as an exhibit)c. PORTIONS OF COLLATERAL ( Attach as exhibit)d. PORTIONS OF BOARD REPORT (Attach as exhibit).e. PORTIONS OF HISTORICAL RECORDS (Attach as exhibit)f. TWXs, Eirs, EOs, ECPs, TBs, MWOs, TMs (Attach as exhibit)g. AUTHORITATIVE TEXTS AND ARTICLES.
15. CORRECTNESS OF:
a. AIRCRAFT SERIAL NUMBER(S/N).b. COMPONENT SERIAL NUMBER AND PARTS NUMBER (PIN).c. NUMBER OF HOURS FLYING TIME ON AIRCRAFT AND COMPONENTS
(TTSN).
16. ORIGINAL SERVICE AND RETIREMENT LIFE AND ALL SUBSEQUENTCHANGES.
17. ORIGINAL REQUIREMENTS AS TO TYPE OF INSPECTION AND ALL CHANGES,
18. MODIFICATIONS TO COMPONENT. (a) Date of. (b) Fact of. (0) By whom
-9-
REQUEST FOR ADMISSIONS (Con't).
19. OTHER COMPLAINTS AND/OR CRASHES RESULTING FROM SAME ORSIMILAR CAUSE EITHER BEFORE OR AFTER SUBJECT CRASH . (a)Date of (b) Fact of.
20. AIRCRAFT AT TIME OF CRASH IN SAME CONDITION (NORMAL WEAR ANDTEAR EXCEPTED) AS IT WAS WHEN DELIVERED TO ARMY.
21. AIRCRAFT HAD ALWAYS BEEN FLOWN IN USUAL AND CUSTOMARY METHODFOR PURPOSE FOR WHICH IT WAS INTENDED AND NEVER INVOLVED INCRASH OR OTHER UNUSUAL INCIDENT.
22. WEATHER NOT CAUSE.
23. WEIGHT AND BALANCE NOT CAUSE.
24. PILOT ERROR NOT CAUSE.
25. " WAS OPERATOR OF AIRCRAFT.
26. " WAS PASSENGER ON AIRCRAFT.
-10- PHASE II
SAMPLE REQUEST TO PRODUCE
1. PERFORMANCE SPECIFICATIONS ESTABLISHED BY ARMY AT TIME AIR-CRAFT PUT UP FOR BID BY ARMY.
2. PROPOSAL SUBMITTED BY MANUFACTURER IN RESPONSE TO "A".
3. ORIGINAL CALCULATIONS AND REPORTS ON WHICH ORIGINAL DESIGN OjCOMPONENT BASED.
4. ORIGINAL TEST ON COMPONENT INCLUDING:
1. FATIGUE LIFE DETERMINATION REPORT.2. STRAIN GAUGE REPORTS.3. STRESS STUDY REPORT.
5. ALL TESTS AD/OR STUDIES RELATING TO RELIABILITY OF COMPONENi(e. g., FMEA).
6. COPY OF CONTRACT DOCUMENT, INCLUDING P.I. P. OBLIGATIONS.
7. ORIGINAL DRAWINGS AND BLUEPRINTS FOR SUSPECTED COMPONENTAND ALL CHANGES.
8. REPORTS OF ANY TESTS OR STUDIES RELATING TO COMPONENT CON-DUCTED OR MADE SUBSEQUENT TO ITEMS COVERED IN ITEM 4.
9. MILITARY SPECIFICATIONS MANUFACTURER OBSERVED IN DESIGNINGOR CONSTRUCTING COMPONENT.
10. TBs - MWOs RELATING TO COMPONENT.
11. ECPs AND/OR EOs, RELATING TO COMPONENT.
12. CORRESPONDENCE WITH AVSCOM RE: FACTS OF THIS CRASH AND THEIRINVESTIGATION: ANY PROPOSED CHANGES TO PART AND REPORTS.
13. RESULTS AND REPORTS (including Trip Reports) OF ANY AND ALL INVESTbGATIONS OF FACTS OF (a) THIS CR\SH OR (b) THIS FAILURE MODE.
14. REPORTS OF EXPERTS RELATIVE TO (a) INVESTIGATION OF THIS CRASH(b) FAILURE MODE.
15.
16.
17.
18.
DOCUMENTS RELATING TO CIVILIAN COUNTERPART AIRCRAFT, e. g.MAINTENANCE AND OVERHAUL MANUAL; ADs AND SERVICE BULLETINS.
THE COMPONENT.
ANY PATENTS RELATING TO COMPONENT.
ANALYSIS OF OTHER FAILED PARTS THOUGHT TO HAVE FAILED INCl TIt ff TT A T3 T-' A 0 LT-7T -iTJ A C! CT TYD TM f-4r 0 DA V T
PHASE II
INTERROGATOR IES
1. IDENTIFY DESIGNER AND DATE.
2. IDENTIFY MANUFACTURER AND DATE.
3. IDENTIFY ASSEMBLERS AND DATE.
4. PARTIES TO SALE AND DATE.
5. ALL OWNERS, TRACE PATH OF DISTRIBUTION.
6. HOW DO YOU SAY INCIDENT OCCURRED?
7. DO YOU CONTEND PLAINTIFF OR ANY MEMBER OF THE CREW WASGUILTY OF NEIGLIGENCE? IF SO, THEN STATE:
(a) SUMMARIZE SAID CONTENTION, WHO, WHEN, HOW, ETC.
(b) FACTS AND EVIDENCE UPON WHICH SAID CONTENTION IS BASED.
(c) NAMES AND ADDRESSES OF WITNESSES WHO YOU EXPECT WILLTESTIFY TO FACTS AND EVIDENCE STATED IN RESPONSE TO (b)ABOVE.
8. DO YOU CONTEND THAT THE ACT OR OMISSION OF ANY ONE ELSE PLAYEDANY PART IN CAUSING SAID INCIDENT TO OCCUR? IF SO, WHEN, WHERE?
9. WAS THE AIRCRAFT IN SUBSTANTIALLY THE SAME CONDITION ON THEDAY OF THE CRASH AS IT WAS WHEN IT LEFT YOUR POSSESSION?
10. DO YOU CONTEND THAT SAID AIRCRAFT WAS EVER FLOWN OUTSIDE THEFLIGHT ENVELOPE OR ABUSED OR MISUSED IN ANY WAY THAT PLAYEDANY PART IN CAUSING SAID INCIDENT TO OCCUR? IF SO, WHO, WHENWHERE?
ii. WHAT DO YOU CONTEND WAS THE PROBABLE CAUSE OF OCCURRENCEOF SAID INCIDENT? PLEASE STATE THE FACTS AND EVIDENCE UPONWHICH CONTENTIONS ARE BASED AND LIST ALL WITNESSES.
12. LIST ALL EXPERTS YOU HAVE CONCULTED WITH.
13. LISt ALL EXPERTS YOU EXPECT TO CALL AS A WITNESS. SUMMARIZETHE FACTS AND EVIDENCE UPON WHICH OPINIONS ARE BASED.
14. WROTE AND PUBLISHED TECHNICAL MANUALS UNDER CONTRACT WITHARMY, KNOWLEDGE OF OTHER SIMILAR INCIDENTS BEFORE AND AFTERSAID INCIDENT. KNOWLEDGE OF ALL COMPLAINTS, NOTICES, REPORTS,RELATING TO POSSIBLE MALFUNCTION OF SAID COMPONENT ON OTHERAIRCRAFT INCLUDING EIRs.
15. DID YOU CONDUCT ANY INVESTIGATION OF SAID INCIDENT? IF SO, WHOWHEN, WHERE, WHAT? WHO HAS CUSTODY OF REPORTS?
16. NAMES AND IDENTITIES OF ANY OTHER PERSON OR AGENTS THAT CON-DUCTED INVESTIGATION OF SAID INCIDENT. WHO HAS CUSTODY OF RE-PORTS?
17. IDENTIFY TESTING OF SAID COMPONENT.
-12-INTERROGATORIES (Cont'd)
18. ESTABLISH DESIGN CRITERIA COMPONENT INDLUDING ALL MIL SPECSAND OTHER AUTHORATIVE TEXT.
19. ANY AND ALL COPIES IN (a) DESIGN (c) MAINTENANCE PROCEDURE IN-CLUDING SERVICE LIFE AND RETIREMENT LIFE (c) METHOD OF OPERA-TION, WHO, WHEN, WHERE, WHAT?
PhIASE III
FORMAL DISCOVERY
You now have results of your own investigation and responses to your pre-
liminary discovery requests. You should now know the primary failure mode that
caused the crash and the basic facts of the defendant's liability.
Now your objectives are(a) to discover fully from defendant their position on
your theory of recovery and (b) put your evidence in admissible form, viz, depo-
sitions. Talk to your experts to decide what facts you must prove as predicate for
his opinions.
BIG TOPICS TO ESTABLISH
I. OTHER SIMILAR INCIDENTS BEFORE OR AFTER CRASH.
2. STATE OF ART.
3. HOW ARE OTHER MANUFACTURERS DESIGNING AND BUILDING SAME
COMPONENT.
4. CHANGES IN DESIGN OR CONSTRUCTION OR MAINTENANCE.
NOTES:
1. Dictate memorandum summarizing the probable cause of the crash and your
basic theories of recovery and briefly summarizing the chief facts and evidence you
must prove. Send copy to expert(s) for comments.
2. Progress letter to associate attorney and/or client.
3. Do you need evidence regarding damages?? ?
-14-
PHASE III
TYPICAL DEPOSITIONS
1. DEFENDANT'S CHIEF DESIGN ENGINEER.
2. DEFENDANT'S CHIEF OF STRUCTURES.
NOTE: Take both of these under 30(b)(6)?? Be sure and outline your questionsfor this witness. Do you want to have a technical expert in attendance? In anyevent, discuss deposition with your expert. Do you need an S. D. T. ? Leaveyourself plenty of time for this deposition.
BASIC APPROACH: FMEA - Identify hazards and establish dimensions of crash.all changes and why -- all tests (past, present and anticipated in the future-- allinvestigations (past, present and anticipated in the future) -- all opinions -- askhim for his opinion as to your own theories of recovery.
3. AVSCOM PROJECT ENGINEER.
4. ARADMAC.
NOTE: Go through channels to take these depositions well in advance. Try todo it at the witnesses' convenience.
Interview the witness well in advance of the deposition if possible, even if youhave to take two trips. If you cannot interview the witness, supply the JAGoffice with suggestions of the topic you will cover and what you expect to establishin his deposition.
You may need to take this before a federal judge.
5. COLLATERAL OFFICER.
6. PRESIDENT OF ACCIDENT BOARD.
7. MAINTENANCE PERSONNEL.
8. DEFENDANTS' EXPERTS.
9. ARMY TECHNICAL INSPECTORS (AQAD).
GENERAL COMMENTS:
A. PREPARE YOURSELF FOR THESE DEPOSITIONS'
B. ISSUE APPROPRIATE NOTICES.
C. SUBPOENA THE WITNESS PROPERLY.
D. DO YOU NEED AN S. N. T.
NOTE: Make sure you have copies of all documents ye1 7- + - -
-15-PHASE IV.
EVALUATION
You should now have all vital and necessary evidence in admissible form.
Sit down and take time to review your entire file alone without interruption
make notes and summarize approach - THEN - meet with your expert(s) and FULLY
REVIEW CASE. Summarize and outline his testimony, e. g., facts and evidence
he has examined, substance of his opinions, the basis of his opinion.
ARE ANY OF THE FOLLOWING INDICATED ?
1. FILE SUPPLEMENTAL INTERROGATORIES?
2. FILE SUPPLEMENTAL REQUEST FOR ADMISSION ?
3. FILE SUPPLEMENTAL REQUEST FOR PRODUCTION?
4. TAKE ADDITIONAL DEPOSITIONS?
5. HIRE ADDITIONAL EXPERTS?
6. MODELS AND EXHIBITS?
NOTE: You should be ready for pre-trial at this point. Get with attorney fordefendant and prepare agreed statement of facts and proposed pre-trial order,including complete list of witnesses and exhibits.
-16-PHASE V.
BEFORE PRE-TRIAL
PREPARE BRIEFS FOR COURT.
A. FACT BRIEF.
1. Terms and Nomenclature.2. Basic facts.3. Factual concept of liability, e.g., "defect" and what defendant did
wrong.
B. LEGAL BRIEF.
1. Conflict questions ? ? ?2. Statement of defendant's basic duties.3. Prior incidents- -.- , admissibility.
4. Subsequent incidents, admissibility.5. Subsequent changes, admissibility.6. Proof of defect.7. Admissibility of exper±topinion.8. Admissibility of authoritative texts.
II. EVALUATE CASE FOR SETTLEMENT AND WRITE DEFENDANT SETTLEMENTLETTER.
NOTE: Should it appear that a trial is necessary, you must preparetwo checklists for the particular case.
A. THINGS TO PROVE AND BY WHOM.
ORDER OF PROOF'
-17-
TRIAL
A. WHAT TYPE OF JURY WOULD BE BEST FOR THIS CASE?
B. QUESTIONS ON VOIR DIRE.
C. OPENING STATEMENT.
D. NEED MOTION IN LAMINE???
E. ALL WITNESSES AND CLIENT NOTIFIED AND ARRANGEMENTS FOR
ATTENDANCE??
DISCOVERY IN A MILITARY AIRCRAFT CRASHDEFENDANT'S VIEWPOINT
By Frank Finnand John H. Martin
The plaintiffs' bar has joined in today's popular
crusade against secrecy in government by attempting to force
production of confidential information generated following
each and every United States military aircraft disaster
which takes place. 1 This paper will attempt to deal with
several important problems confronting every defendant's
attorney who represents the manufacturer of military air-
craft or component parts when his client is sued following
the crash of a plane manufactured by it or for which it
furnished components. There have been several very recent,
well-written articles dealing with the subject of discovery
problems in aviation litigation, including military aircraft2
litigation. This writer will not attempt to rehash the
general principles of law covered so thoroughly by other
writers, but instead will attempt to focus on the problems
confronting the manufacturer's attorney in the preparation
of his case, with particular emphasis on several recent
developments in the law.
The usual case arises when the injured serviceman,
or his representatives if he is deceased, brings an action
against the manufacturer alleging a design defect in the
plane, improper manufacture, or for negligent failure to
warn. This is the normal course charted by plaintiffs
because, while the Federal Tort Claims Act 3 does provide for
suits against the United States for negligent act of federal
government employees, the Supreme Court has ruled that a
soldier on active duty may not generally maintain a claim
against the government for injuries he received based on
activity incident to his military service. 4 Thus cases in
which the United States is a party under the Federal Tort
Claims Act involve non-garden variety situations such as
when a person on the ground is killed by a military plane.5
Suit under the Federal Tort Claims Act would also be allowed
on behalf of civilian employees aboard military aircraft
during a crash.6
In a typical case, then, the defendant manufacturer's
attorney finds himself representing a solitary defendant
confronted by the heirs or representatives of a deceased
military pilot or crewmembers.
In defending a products liability case as described
above, the manufacturer's attorney is also in a rather
unique position in that his client is faced with the diffi-
cult task of defending against allegations that a product it
manufactured was defective and unreasonably dangerous while
at the same time maintaining a satisfactory relationship
with its best, and perhaps only, customer to which it sold
the allegedly defective or unreasonably dangerous product,
-2-
namely the United States Government. Obviously, if it is
but hinted by the media, all be it erroneously, that a
manufacturer's planes tend to crash with great frequency,
its key customer relationship will be strained enough even
without disclosing information the government considers
confidential, notwithstanding the fact that such information
may not even be harmful to the defendant's case. It is
essential that the defendant's attorney be aware of this as
he determines how to deal with the plaintiff's requests for
discovery.
Interrelated problems are presented with respect
to several categories of information plaintiff is apt to
attempt to discover. Broadly speaking, documentation and
reports may be broken into two general categories: Those
produced after the crash by the manufacturer and those
generated by the government following the accident. A third
category is possible: Those generated by the manufacturer
after the crash while investigating the crash for the gov-
ernment.
Material Generated by the Defendant Itself
Generally speaking, following the crash of a
military aircraft its manufacturer makes every effort to
determine its cause. This is done both because the manu-
facturer desires to attempt to prevent future disasters and
-3-
because the government, desiring the information, hires the
manufacturer to do so. Often these reports are prepared for
the government whether or not litigation is pending or
threatened.
The key provision of the Federal Rules of Civil
Procedure applicable to discovery of the documents generated
by the manufacturer following the crash is the first para-
graph of Rule 26(b) (3), which reads as follows:
"Trial Preparation: Materials.Subject to the provisions of subdivision(b) (4) of this rule, a party may obtaindiscovery of documents and tangiblethings otherwise discoverable undersubdivision (b) (1) of this rule andprepared in anticipation of litigationor for trial by or for another partyor by or for that other party's repre-sentative (including his attorney, con-sultant, surety, indemnitor, insurer,or agent) only upon a showing that theparty seeking discovery has substantialneed of the materials in the preparationof his case and that he is unable with-out undue hardship to obtain the sub-stantial equivalent of the materials byother means. In ordering discovery ofsuch materials when the required showinghas been made, the court shall protectagainst disclosure of the mental impres-sions, conclusions, opinions, or legaltheories of an attorney or other repre-sentative of a party concerning thelitigation." (emphasis added)
Prior to the 1970 amendments to the federal dis-
covery rules, documents and other tangible things prepared
by an attorney were subject to production under the work
-4-
product doctrine when justice so required. When prepared by
others, they were subject to production on a showing of
"good cause" under Rule 34, as then worded. The addition of
Rule 26(b) (3) in 1970 and the deletion of the "good cause"
requirement from Rule 34 were designed to eliminate this
double verbal standard, leaving the district court with
broad discretion in determining whether the circumstances of
a particular case justified a requirement of disclosure.
Clearly, the 1970 amendments do not reject the policy of
protecting the privacy of the attorney in the preparation of
his client's case that under-lay the Supreme Court's land-
mark decision in Hickman v. Taylor. 7 As amended, the rules
no longer distinguish between materials prepared by the
attorney in the case and those prepared by other consult-
ants, sureties, indemnitors, insurers, or other agents of
the party, or by the party itself. Insofar as the work
product doctrine is concerned, each document sought to be
discovered will be judged upon the need to protect the
privacy of the mental impressions, conclusions, opinions, or
legal theories of the attorney or other representative of
the party. Discussing the 1970 change from the double
standard of "good cause" and work product to the single
standard outlined in Rule 26(b)(3), Professor J. W. Moore
has stated:
-5-
"While some showing of necessity in theinterest of justice over and beyond thefact that the material is relevant andnot privileged has clearly been necessaryto productions of documents, certainlythe courts have exercised quite broaddiscretion in the application of Rule34. Under Rule 26(b) (3), they will con-tinue to do so. Each case will be de-termined on its peculiar facts. Underthe Rule as presently worded the factorsto be taken into account in the exerciseof the district court's discretion arethe importance of the information soughtin the preparation of the case of theparty seeking it, and the difficulty itwill face in obtaining substantiallyequivalent information from other sourcesif production is denied."
8
In the process of amending the Federal Discovery
Rules, the advisory committee 9 adopted some of the language
from the case of Southern Ry. v. Lanham,1 0 especially with
regard to the requirement that the discovering party must
show that "he is unable without undue hardship to obtain the
substantial equivalent of the materials by other means".
The courts must consider the likelihood that a party who
obtains the information by independent means will not have
the substantial equivalent of the documents the production
of which he seeks. Consideration of this factor may lead a
court to distinguish between witness statements taken by an
investigator, on the one hand, and other parts of an in-
vestigative file on the other. The court in Lanham, although
addressing itself to the "good cause" requirements of the
-6-
pre-1970 Rule 34, pointed to certain circumstances under
which witness statements will be discoverable. For example,
the witness may have given a fresh and contemporaneous
account in a written statement while is available to the
parties seeking discovery only after a substantial time.11
Or he may be a reluctant or hostile witness. 1 2 On the other
hand, a much stronger showing is needed to obtain evaluative
materials in an investigative report.13
In order for documents generated by agents, attor-
neys, or other representatives of a manufacturer to be
protected from discovery, they must have been "prepared in
anticipation of litigation or for trial by or for another
party or by or for that other party's representative." In a
typical case, some of the material may have been generated
in anticipation of a lawsuit, while some was not. The
latter documents are not immune from discovery under the
Federal Rules whereas the former are protected to the extent
that the party seeking discovery must make the required
showing. The test has been stated to be whether the docu-
ment can fairly be said to have been prepared or obtained14
because of the prospect of litigation. The converse of
this is that even though litigation is already in prospect,
there is no work product immunity for documents prepared in
the regular course of business rather than for purposes of
litigation. Thus, a defendant railroad has been required to
-7-
produce accident reports made in the regular course of its
15business.
An obviously difficult question is presented as to
whether the routine reports prepared by the manufacturer for
the government whether or not litigation is in prospect were
in fact prepared "in anticipation of litigation." With
respect to the documents determined to have been prepared in
anticipation of litigation, the plaintiff would then have to
show (1) substantial need of the materials in the preparation
of his case, and (2) that he is unable without undue hardship
to obtain the substantial equivalent of the materials by
other means. It is important to recognize that Rule 26(b) (3)
protects only documents and other tangible things. It does
not mean that the information contained in these documents
may not be obtained through other discovery devices. At
this point, the traditional work product standards enunciated
in Hickman v. Taylor and codified in the last sentence of
the provision of Rule 26(b) (3) quoted above must be applied.1 6
That is, discovery may not be had of the mental impressions,
conclusions, opinions, or legal theories of an attorney or
other representative of a party concerning the litigation.
If discovery of the documents is denied under Rule
26(b) (3) and discovery is sought through depositions of
persons having knowledge of the contents of the documents,
then the provisions of Rule 26(b) (4) with regard to experts
-8-
may apply. The first three paragraphs of that rule provide
as follows:
"(4) Trial Preparation: Experts: Dis-covery of the facts known and opinionsheld by experts, otherwise discoverableunder the provisions of subdivision (b)(1) of this rule and acquired or devel-oped in anticipation of litigation orfor trial, may be obtained only as fol-lows:
(A) (i) A party may through interroga-tories require any other party to iden-tify each person whom the other partyexpects to call as an expert witness attrial, to state the subject matter onwhich the expert is expected to testify,and to state the substance of the factsand opinions to which the expert is ex-pected to testify and a summary of thegrounds for each opinion. (ii) Uponmotion, the court may order furtherdiscovery by other means, subject tosuch restrictions as to scope and suchprovisions, pursuant to subdivision(b) (4) (C) of this rule, concerningfees and expenses as the court may deemappropriate.
(B) A party may discover facts known oropinions held by an expert who has beenretained or specially employed by anotherparty in anticipation of litigation orpreparation for trial and who is not ex-pected to be called as a witness at trial,only as provided in Rule 35(b) or upona showing of exceptional circumstancesunder which it is impracticable for theparty seeking discovery to obtain factsor opinions on the same subject by othermeans."
These provisions, of course, will apply only if there are
persons who qualify as expert witnesses within the scope of
this rule.
-9-
Although the majority of military aircraft crash
litigation is in the federal courts, brief consideration
will be given to the Texas discovery rules.1 7 The 1973
amendments to the Texas discovery rules preclude the discovery
of work product. The pertinent provision of Rule 186(a)
reads as follows:
"Provided, however, that subject to theprovisions of the succeeding sentence, therights herein granted shall not extend tothe work product of an attorney or to com-munications passing between agents or rep-resentatives or the employees of eitherparty to the suit, or communications betweenany party and his agents, representatives,or their employees, where made subsequentto the occurrence or transaction upon whichthe suit is based, and made in connectionwith the prosecution, investigation, ordefense of such claim, or the circumstancesout of which same has arisen and shall notrequire the production of written statementsof witnesses or disclosure of the mentalimpressions or opinions of experts usedsolely for consultation and who would notbe witnesses in the case or informationobtained in the course of an investigationof a claim or defense by a person employedto make such investigation."
This provision of Rule 186(a) must be read in conjunction
with the requirement in Rule 167 that documents and tangible
things not privileged must be produced upon a showing of
"good cause". That is, under Texas law, it must first be
determined whether or not the documents are discoverable
under the work product rule outlined in Rule 186(a). If the
documents in question are not immune from discovery, they
must be produced upon a showing of "good cause" by the
-10-
requesting party. The Texas Rules do not contain the re-
quirements of the Federal Rules that the party seeking
discovery have substantial need of the materials in the
preparation of his case and that he be unable without undue
hardship to obtain the equivalent elsewhere. Thus, if the
documents in question can qualify as "communications between
any party and his . . . representatives . . . where made
subsequent to the occurrence or transaction upon which the
suit is based, and made in connection with the prosecution,
investigation, or defense of such claim," they are not
discoverable. Under the Federal Rules, on the other hand,
documents prepared in anticipation of litigation may be
discovered only upon a proper showing by the party seeking
discovery. Federal Rule 34 of the Federal Rules of Civil
Procedure no longer contains the requirement that "good
cause" be shown, unlike Texas Rule 167. Thus, if the docu-
ments do not qualify as having been prepared in anticipation
of litigation, the party seeking discovery must still show
"good cause" under the Texas Rules.
If discovery of the documents in question is
denied, the plaintiff may then seek to obtain the informa-
tion through other discovery devices such as depositions of
persons qualifying as expert witnesses. In this regard, the
Texas Rules are somewhat ambiguous. The second sentence of
Rule 186(a) clearly permits the discovery of the names of
-11-
any experts having knowledge of relevant facts. The last
sentence of Rule 186(a) specifically states that the reports
and opinions of an expert who will be called as a witness
are discoverable. This latter provision appears to conflict
with that provision of Rule 186(a) which states that informa-
tion obtained during the course of an investigation of a
claim or defense of a person employed to make such investi-
gation is immune from discovery. At any rate, until the
meaning of the rules becomes more clear, defendant's attor-
neys in Texas can be expected to rely heavily on the pro-
hibition against disclosure of information obtained in the
course of an investigation of a claim or defense by a person
employed to make such investigation.
The foregoing discussion of the federal and Texas
discovery rules presents only one aspect of the defendant's
armor. If the reports prepared by the defendant for the
federal government are not immune from discovery under any
of the provisions discussed above, it is imperative that the
defendant's attorney not accede to the plaintiff's insist-
ence upon production without close coordination with the
government, because much of the information contained in
these reports will be considered confidential by the gov-
ernment. A manufacturer's attorney must give his client's
key customer the opportunity to intervene and assert the
privilege of confidentiality. In addition to the customer
-12-
relations aspect, this may also provide the defendant with a
valid means of protecting damaging information from discov-
ery. While the claim of confidentiality is important with
respect to material generated by the defendant manufacturer,
it is of much greater significance with respect to the
reports and other material resulting from the government's
own investigations. It is also important to recognize that
the privilege of confidentiality belongs to the government
and must be asserted by it; it can neither be claimed nor
waived by the manufacturer. 1 8 Accordingly, we shall now
shift our focus to the reports and other documents compiled
by the government following a military aircraft crash,
keeping in mind the possibility that the government may
intervene and assert a claim of confidentiality with respect
to materials produced by the manufacturer. The vast majority,
if not all, of the cases dealing with the government's
attempts to invoke the privilege in cases in which it is not
a party are situations involving government-produced reports,
but these may be based upon reports and information supplied
by the manufacturer.
Reports and Other Documents Generated by the Government
Several reports are customarily produced following
a military aircraft crash. For example, when an air force
aircraft crashes there will be generally be a Collateral
Board investigation as well as an Air Force Aircraft Investi-
-13-
gation Board. These two investigations are generally con-
ducted concurrently, but independently, because they serve
two different purposes. The Aircraft Accident Investigation
attempts to determine the factors contributing to the acci-
dent for the purpose of initiating corrective accident
prevention action. In this regard, the military asserts the
fear that unless witnesses can be assured that their testi-
mony will be held confidential, the true facts will be sup-
posed. The Collateral Investigation serves a fact-finding
purpose to obtain evidence which may be used in litigation,
claims, disciplinary actions, and administrative proceedings.
Obviously, such information may be used against the witness
so the witness is not given assurances of confidentiality.
Consequently, the Collateral Investigation Report is routinely
furnished by the government upon request. Needless to say,
the existence of these two simultaneous, yet independent,
investigations having different purposes and methods of
operation makes the discoverability of the documents or
information contained therein extremely complex. This is
further complicated by the factor that in addition to the
rationale which the government asserts for nondisclosure
that it would be inimical to the public welfare in deter-
mining causes of accidents and increasing the efficiency of
flight safety programs through the cooperation of private
industry, the government also frequently asserts that dis-
-14-
closure, especially with respect to the Aircraft Accident
Investigation Report, would jeopardize military secrets.
In the 1972 Symposium on Federal Practice and
Aviation sponsored by this Journal, a presentation was made,
and an article subsequently published,1 9 dealing in con-
siderable detail with the assertion by the government of the
privilege based on maintaining the integrity of military air
safety programs and on confidentiality. As discussed at
that time, the rules with respect to privilege were set
forth in three leading cases. 2 0 Those cases stand for the
general rule that data and opinions supplied by private
industry investigations are privileged and nondiscoverable.
While final conclusions and policy recommendations of the
military investigation are privileged, facts and opinions of
individual government personnel are discoverable.2 1 Further,
it was held that when the Air Force voluntarily released the
documents to the manufacturer, the privilege was waived with
respect to facts contained in the reports but not waived
with respect to opinions contained therein, basing this
conclusion upon a balancing of interests between the neces-
sity for the plaintiff to obtain each type of information
against the public interest. 22 These cases, and the speaker
at the Journal's 1972 Symposium, have concluded that the
true rationale behind the privilege is to protect the con-
fidentiality of data and reports from private industry
-15-
relating to the causative factors of an accident. While the
privilege would not be viable when only the U. S. Government
is a defendant, the privilege should be upheld and all
information supplied by private industry should be excluded,
along with any opinions based on information supplied by
private industry.
Freedom of Information Act
As the speaker at the 1972 Symposium perceived,
the full story does not end here. Although, by late 1972 no
suit concerning military aircraft accident reports had been
reported under it, the Freedom of Information Act of 196623
had been enacted after the two privilege cases discussed
above, and that Act appeared ripe for use by plaintiff's
attorneys to broaden the scope of discovery of government
reports. The decision by a plaintiff's attorney to commence
a Freedom of Information Act suit means the start of a
separate lawsuit, because it cannot be joined as a part of
the main litigation. This aspect distinguishes such an action
from the two privilege cases discussed above because there
the plaintiffs attempted to obtain discovery through the
normal discovery rules, but were met with some success by
the defendant's claims of privilege.
The Freedom of Information Act provides that
government agencies shall make available to the public a
broad spectrum of information, including final opinions,
including concurring and dissenting opinions, as well as
-16-
orders, made in the adjudication of cases. 24 The Act does
not apply to matters that are:
(4) trade secrets and commercialor financial information obtained froma person and privileged or confidential;(5) inter-agency or intra-agency memo-randums are letters which would be avail-able by law to a party other than an ,25
agency in litigation with the agency....
The 1972 speaker at this Symposium concluded his
discussion of discoverability of military reports by stating,
"It is certainly apparent there is an emerging trend to
force disclosure. Injunctive relief to obtain military
reports, particularly when the government is not a party to
litigation, may be a versatile weapon in the arsenal of
discovery." 26 Since that time, there have been some cases
involving attempts by plaintiffs in military aircraft acci-
dents to obtain accident reports by means of the Act.
The door was seemingly thrown wide open by a
decision of the United States Customs Court in 1972.27
That court held that the Freedom of Information Act was
enacted to provide the public with the right to obtain
information from administrative agencies and agencies in the
executive branch of the government; it was not enacted to
provide discovery procedures for obtaining information
during litigation. That is, the fact that the Act provides
specified exemptions from its public information require-
-17-
ments does not in and of itself create a judidical discovery
privilege with respect to such exemptions. Following this
case and the articles written around 1972,28 it appeared
that the Freedom of Information Act had provided plaintiffs
with a way to get the government accident reports without
being limited by the exemptions contained in the Act itself.
Fortunately, the courts considering the question
during 1974 have not carried the above-described plaintiff's
theory to its farthest extreme. Instead, the courts have
taken a very realistic viewpoint and ordered disclosure of
matters which probably should be disclosed while protecting
elements deserving confidentiality.29
In Brockway v. Department of Air Force, the
father of an Air Force Second Lieutenant who had been killed
when his aircraft crashed during a training mission brought
an action pursuant to the Freedom of Information Act to
enjoin the Air Force from withholding certain information
from him regarding the death of his son. Following the
crash and pursuant to Air Force regulations, two investiga-
tions were conducted, a Collateral Accident Investigation
and a Safety Investigation. Proceeding through Air Force
administrative channels, plaintiff had requested all accident
investigation reports but the Air Force refused to produce
complete reports, asserting that certain portions thereof
were exempt from disclosure under exemptions (4) and (5) of
-18-
the Freedom of Information Act. Specifically, plaintiff
sought disclosure of the Cessna Aircraft Company Report and
the Safety Investigation Report, including statements made
by witnesses before the Aircraft Accident Investigating
Board.
Plaintiff contended that the Cessna Report should
not be exempt under exemption (4) because it was not "com-
mercial or financial information." The father further
asserted that the witness statements should not be exempt
under exemption (5) to the extent that they involve purely
factual or scientific material as opposed to opinions of the
witnesses or factual material inextricably intertwined with
the policy-making process.
The government contended that all factual material
contained in the various reports had been disclosed to
plaintiff and that only materials containing expressions of
opinion, conclusions, speculations, and recommendations were
being withheld. The Air Force contended that the Cessna
Report had been provided by a private commercial contractor
under a guarantee of confidentiality, thus being exempt
under exemption (4). The government further asserted that
witness statements were submitted under a guarantee of
confidentiality and that they should not be disclosed.
Finally, the Air Force argued that nondisclosure of the
witness statements and similar materials was necessary in
-19-
order for the defendant to be able to get the full informa-
tion relating to the cause of an aircraft accident so as to be
able to prevent similar accidents in the future.
While the Iowa District Court recognized that the
purpose of the Act was to increase citizens' access to
government records, it did not appear to recognize the
possibility that documents not subject to disclosure under
the act may nevertheless be subject to discovery by the
plaintiff in a lawsuit. Nevertheless, the court probably
reached the same result by its recognition that it should
strictly and narrowly construe the exemptions from the
disclosure requirements. On the positive side, the court
also recognized that it must seek to insure that agencies
enjoy a free flow of ideas essential to policy and decision
making, thereby clearly seeing the need for a balancing of
interests.
With respect to the Cessna Report and exemption
(4), the court recognized that the exemption covered only
(1) trade secrets and (2) information which is (a) commercial
or financial, (b) obtained from a person outside government,
and (c) privileged or confidential. Plaintiff admitted that
the report was obtained in confidence from a person outside
government, but asserted that it was not commercial or
financial information. The court, however, concluded that
the Cessna Aircraft Company, being a private defense con-
-20-
tractor, was unquestionably a commercial enterprise and the
reports it generates should be considered commercial informa-
tion which it would be unwilling to share with its competi-
tors. The report in question involved Cessna's findings and
opinions as to the possible causes of the accident and had
been submitted to the government by Cessna under assurances
of confidentiality. The court recognized that if such
information was not treated confidentially, the Air Force
will be hindered in obtaining valuable and necessary informa-
tion to enable it to determine the causes of accidents and
prevention of future similar occurrences. The court examined
a Cessna Report in camera and exempted it from disclosure on
the basis that it constituted confidential commercial informa-
tion obtained from a person outside the government.
With respect to the witness statements and exemp-
tion (5), these were made by persons within the government,
so the exemption provided by Section (4) was not available.
Accordingly, the court turned its attention to exemption (5)
which exempted inter-agency or intra-agency memorandums or
letters which would not be available by law to a party other
than an agency in litigation with the agency. The court
stated that the policy behind this exemption was to encourage
the free exchange of ideas during the policy-making process.
In order for the witness statements to be exempt,
-21-
the burden was placed on the government to establish that
they are inter- or intra-agency memoranda or letters which
would not be available to a party in litigation with the
agency based upon present discovery practices as regulated
by the courts. The court held that assuming that the written
statements are intra-agency memoranda or letters, such
statements would ordinarily be subject to discovery under
Rule 34(a) subject the scope limitations of Rule 26(b)(3) of
the Federal Rules of Civil Procedure, which have been discussed
in detail above. In determining what constituted "undue
hardship" and "substantial need", the court stated that the
relevant factors included the lapse of time since the accident,
the availability and location of witnesses, whether the
witnesses are employees or agents of an adverse party, the
availability of evidence after the accident and whether
there were any survivors. A court found that Mr. Brockway
had adequately established the undue hardship and substantial
need to justify disclosure. The court based its holding
upon the fact that the accident had happened nearly two
years previously, and that the statements made by witnesses
soon after the accident are more likely to be accurate than
their present recollections. Further, the court pointed to
the fact that many of the witnesses were government employ-
ees and thus likely to be dispersed throughout the country
-22-
and possibly reluctant to testify against the government.
Finally, since there were no survivors of the crash, it
would have been extremely difficult for plaintiff to deter-
mine what actually happened other than by obtaining the
facts and evidence in the government's possession.
Recognizing the complex interrelationship between
the federal discovery rules and the government's claim of
privilege, the court also considered the defendant's vigor-
ous contention that the witness statements were obtained
under a guarantee of confidentiality, the absence of which
would tend to compromise the Air Force's flight safety
program. Citing the three pre-Freedom of Information Act
cases alluded to above, 30 the court rejected the Air Force's
argument as it relates to factual materials such as witness
statements, as distinguished from materials containing
opinions, conclusions or recommendations. In short, the
court does not appear to have given the plaintiffs anything
under the Freedom of Information Act which they could not
have obtained under the holdings prior to that Act. The
court held that the government's claim of privilege would
not prevent plaintiffs from obtaining witness statements
which contain basically factual matters surrounding the
accident in question, but the plaintiffs were not permitted
to obtain witness statements of Air Force officers contain-
ing only character and ability evaluation. The latter were
-23-
exempt from disclosure by virtue of exemption (5).
In another 1974 case, Kreindler v. Department of
Navy of United States, 3 1 the court reached a similar, but
not identical, result. The New York court also refused to
prohibit disclosure of witness statements and also held that
portions of a JAG Report and portions of an AAR Report were
exempt from disclosure under the Freedom of Information Act
to the extent that they involved opinions and staff advice.
The court did, however, exempt from disclosure material from
those reports containing factual matters. On its face, this
appears to differ somewhat from the Brockway holding, but it
can probably be explained because the Air Force had already
produced all of the factual information in the reports,
whereas the Navy in the Kreindler case had not.
CONCLUSION
Manufacturers of military aircraft routinely
prepare reports following the crash of a government plane.
Whether the reports are considered by the court as not pre-
pared in anticipation of litigation and therefore subject to
disclosure under the federal discovery rules or as prepared
in anticipation of litigation, thereby requiring the plaintiff
to show "substantial need" and "undue hardship", the attorney
for the defendant may still be able, through the key customer
of his client, to forestall discovery by asserting a claim
-24-
of privilege. The Freedom of Information Act thus far has
not proven to be a significant weapon in the plaintiff's
assault on secrecy in government. At the present, defendants
cannot forestall discovery of the facts surrounding the
accident, but the plaintiff's efforts to probe into the
realm of opinion will undoubtedly continue to fail.
-25-
FOOTNOTES
1. The attack on governmental secrecy and especially onthe doctrine of executive privilege reached its climax inthe Supreme Court's important decision in the WatergateTapes case, United States v. Nixon, 41 L.Ed.2d 1039 (1974).
2. Sales, Discovery Problems in Aviation Litigation, 38Journal of Air Law and Commerce, 297 (1972); Watts andJohnson, Discovery Problems in Aviation Litigation, 23F.I.C. Quarterly 12 (1973).
3. 28 U.S.C. S1346, et. seq.
4. Feres v. United States, 340 U.S. 175 (1950). Therationale for this holding is that military discipline mightsuffer if servicemen were generally permitted to sue theirgovernment.
5. E.g., Cresmer v. United States, 9 F.R.D. 203 (E.D.N.Y.
1949).
6. Reynolds v. United States, 345 U.S. 1 (1953).
7. 329 U.S. 495 (1947)
8. J. W. Moore, 4 MOORE'S FEDERAL PRACTICE J126.64[3] (2ded. 1972). Some examples of documents which have been helddiscoverable because of the impossibility or difficulty ofobtaining substantially equivalent information are: (1)statements made contemporaneous with the occurrence, sincethese are considered unique; (2) photos of the scene of theaccident when the scene may have changed; (3) photos of acar junked after the pictures were taken; (4) statements ofwitnesses who have become available; and (5) statements ofhostile witnesses.
9. See Advisory Committee Notes to Rule 26.
10. 403 F.2d 119 (5th Cir. 1968).
11. Id. at 127-128; Guilford Nat'l Bank v. Southern Ry.,297 F.2d 921 (4th Cir. 1962).
12. Lanham, supa, note 10 at 128-129 Brookshire v. Penn-sylvania RR.1 f.R.D. 154 (N.D. Ohio 1953); Diamond v.Mohawk Rubber Co., 33 F.R.D. 264 (D. Col. 1963).
13. Lanham, supra, note 10 at 131-133; Pickett v. L. R.Ryan, Inc., 237 F.Supp. 198 (E.D.S.C. 1965).
-26-
14. Kelleher v. U.S., 88 F.Supp. 149, 140 (D.C.N.Y. 1950).
15. Burns v. New York Cent. R. Co., 33 F.R.D. 309 (N.D.Ohio 1963).
16. "In ordering discovery of such materials when therequired showing has been made, the court shall protectagainst disclosure of the mental impressions, conclusions,opinions, or legal theories of an attorney or other rep-resentative of a party concerning the litigation."
17. For a thorough treatment of Texas discovery rules seeWalker, Discovery-1973 Amendments to Texas Rules, 38 TexasBar Journal 27 (1975). The article was written by Ruel C.Walker, the Senior Associate Justice of the Supreme Court ofTexas.
18. Reynolds v. United States, 335 U.S. 1 (1953).
19. Sales, supra note 2.
20. Machin v. Zuckert, 316 F.2d 336 (D.C.Cir. 1963), cert.den'd, 375 U.S. 896 (1963); O'Keefe v. Boeing Co., 38 F.R.D.329 (S.D.N.Y. 1965); McFaddin v. Avco Corp., 278 F.Supp. 57(N.D.Ala. 1967).
21. See Machin v. Zuckert, supra note 20.
22. See O'Keefe v. Boeing, supra note 20.
23. 5 U.S.C. §552 (1970).
24. 5 U.S.C. §552(a) (2) (A).
25. 5 U.S.C. §552 (b) (4) and (5).
26. Sales, supra note 2 at 313.
27. Verrazzano Trading Corp. v. United States, 349 F.Supp.1401 (U.S. Customs Ct. 1972)
28. Supra note 2.
29. 370 F.Supp. 738 (N.D. Iowa 1974)
30. Supra note 20.
31. 372 F.Supp. 333 (S.D.N.Y. 1974).
-27-
MANUFACTURERS LIMITATIONS
OF WJARRANTIES: AIRCRAFT DAMAGE
Robert S. Harkey*
In most aviation litigation the attention centers around death and personal
injury claims. There is, however, another aspect which must be dealt with and
this is the damage or destruction of the aircraft. The purpose of this pre-
sentation will be to discuss, from the aircraft owner's standpoint, the effect and
validity of manufacturers' limitations of warranties with respect to aircraft
damage and to survey some of the theories and cases under which the effect and validity
of such limitations may be determined.
The warranty provisions applicable to a particular aircraft may be negotiated
and quite complex, as in the case of a contract between a manufacturer and an air-
line for the purchase of a large passenger aircraft. Or, the provisions may be
unilaterally imposed and no more complicated than an automobile warranty, as in the
case of the sale of small general aviation aircraft. In almost all cases, however,
the warranty provisions will include (1) an express warranty against defects in
material and workmanship, (2) a statement of the extent or limit of the manufacturer's
liability for any such defect, and (3) a disclaimer by the manufacturer of all other
warranties, whether express or implied.
When an aircraft is damaged or destroyed by a defect which the owner believes
to be the responsibility of the manufacturer, there are three basic theories of
liability under which the owner may attempt to avoid the manufacturer's attempts at
limiting its warranties: (1) express warranty, (2) implied warranty and (3) strict
liability. Each of these theories are discussed below.
* B.A. Emory University, LL.B. Emory University School of Law. Mr. Harkey is
General Attorney for Delta Air Lines, Inc., in Atlanta, Georgia.
1. Express Warranty
After providing that the aircraft will be free from defects in material and workma1
ship (and possibly from other defects such as defects in design, defects arising from
selection of material or defects in the process of manufacture), the typical warranty
provision will go on to provide that the extent of the manufacturer's liability for any
such defect will be to repair or replace the defective part or possibly to repair any
such defect in the aircraft.
Assuming that the aircraft is either destroyed or substantially damaged as a
result of a defect which is covered by the warranty, the initial question is whether
the manufacturer is liable for the damage under the express warranty. Upon receipt
of a claim, the manufacturer normally will deny the defect, but contend that in any
event its liability is limited to replacement of the defective part or to repair of
the defect. This, of course, amounts to no remedy at all if the aircraft is destroyed
or substantially damaged. Placing aside for the moment other theories of liability,
does the plaintiff have any basis to proceed under an express warranty theory? It
seems that the answer is yes. There are at least three approaches: (1) that the
warranty should be interpreted so as to include liability for damages resulting
from covered defects; (2) that if the warranty is not so interpreted it has failed
"of its essential purpose" under section 2-719(2) of the Uniform Commercial Code
(UCC), and (3) that the limitation on damages is unconscionable under section 2-719(3)
of the UCC.
Warranty Interpretation
The first approach is a matter of contract interpretation. The usual warranty
provision does not specifically address itself to the question of the manufacturer's
responsibility if the aircraft is substantially damaged or destroyed as a result of
a defect. Thus there may be an ambiguity as to the meaning of the warranty in such an(
-2-
event. What was intended by the parties if the contract was negotiated or what was
the purchaser reasonably to have understood in the case of a provision unilaterally
imposed by the manufacturer and/or dealer? Obviously, the answer to this question
will depend upon the circumstances of a particular case, the specific warranty
language involved and the law of the state under which the warranty must be inter-
preted. It may be quite feasible in many cases, however, to contend that the warranty
should be interpreted to mean that the manufacturer is liable for the entire cost of
repairing or replacing the aircraft and possibly for other damages.
Perhaps the leading case dealing with this approach is Rose v. Chrysler Motors
Corporation, 212 Cal. App. 2d 755, 28 Cal. Rptr. 185, 99 ALR 2d 1411 (1963), a case
involving a defect arising under a new automobile warranty. In that case the auto-
mobile was substantially destroyed by a fire which apparently resulted from a defect
in the wiring system. The warranty provided that the automobile would be free from
defects in material and workmanship and limited the liability of the dealer to "making
good at our place of business, without charge for replacement labor, any part or parts
* * * which our examination shall disclose... to have been thus defective."
Applying California contract interpretation principles to the language used and
to the circumstances of that case, the court concluded that the warranty could not
be intended to apply separately to "each of the thousands of connected and inter-
dependent parts," as the defendants contended. Instead the court found that the
warranty applied to the automobile as a whole and went on to say that "Without in
any way attempting to set the limits of responsibility created by this warranty agree-
ment it appears a reasonable interpretation thereof that * * * the responsibility of the
warrantors extends to making all necessary adjustments and replacing alb parts which
are required because of defective workmanship or materials existing in the vehicle
considered as a whole and without regard to whether or not an individual part was
originally defective, per se." The trial court's award of the full amount of damages1/
caused by the burning of the automobile was affirmed.
Since the Rose case, the rationale of interpreting the express warranty to apply
to the automobile as a whole so as to impose responsibility upon the warrantor for
damages to the vehicle flowing from a defect has been followed, more or less,
in a number of cases. See, for example, Vernon v. Lake Motors, 26 Utah 2d 269, 448
P.2d 302 (1971); Ford Motor Co. v. Reid, 250 Ark. 176, 465 SW ad 80 (1971) and Russo
v. Lincoln Mercury, Inc., 479 SW 2d 211 (Mo. App. 1972); Seely v. White Motor Co.,
63 Cal. 2d 9, 45 Cal. Rptr. 17, 403 P.2d 145 (1965), and Cox Motor Car Co. v.
Castle, 402 SW 2d 429 (Ky. 1966). In the Cox Motor Car case, the court considered
a whole truck to be "one big defective part."
Interpretation of an express warranty therefore presents a possible basis for
recovery for damage or destruction of an aircraft, even though the language of the
warranty might at first appear to limit the manufacturer's responsibility to replace-
ment or repair of defective parts only.
Failure of Essential Purpose Under the UCC
A second approach to express warranty limitations is under section 2-719 of
the UCC. This section states that an agreement may provide for remedies in addition
to or in substitution for those provided in the UCC and that the agreement may limit
or alter the measure of damages recoverable as by limiting the buyer's remedies to a
return of defective goods and repayment of the price or to repair and replacement of
non-conforming goods or parts. It further provides in subsection (2) that:
0
I/ In the course of its opinion the court cited with approval Allen v. Brown, 181
Kan. 301, 310 P.2d 923 (1957); Cobb v. Truett (La. App.), 11 So. 2d 120 (1942);
and Peterson Co. v. Parrott, 129 Me. 381, 152 A. 313 (1930). See also Jarnot v.Ford Motor Co., 156 A. 2d 568, 191 Pa. Super. 422 (1959).
-4-
"Where circumstances cause in exclusive or limited remedyto fail of its essential purpose, remedy may be had as providedin this Act."
The Official Comment to section 2-719 says, with respect to subsection (2), that
"where an apparently fair and reasonable clause because of circumstances fails in
its purpose or operates to deprive either party of the substantial value of the
bargain, it must give way to the general remedy provisions of this Article."
Remedies provided under the UCC sales article include those specified in sections
2-714(3) and 2-715. Section 2-714(3) provides, with respect to breach by a seller,
that:
"In a proper case any incidental and consequential damagesunder the next section may also be recovered."
And Section 2-715 provides that:
"(1) Incidental damages resulting from the seller'sbreach include expenses reasonbly incurred in inspection,receipt, transportation and care and custody of goodsrightfully rejected, any commercially reasonable charges,expenses or commissions in connection with effecting coverand any other reasonable expense incident to the delay orother breach.
"(2) Consequential damages resulting from the seller'sbreach include
(a) any loss resulting from general orparticular requirements and needs whichthe seller at the time of contractinghad reason to know and which could notreasonably be prevented by cover orotherwise; and
(b) injury to personal property proximatelyresulting from any breach of warranty."[emphasis added]
Thus, where the circumstances show that a limited remedy fails of its essential
purpose, the UCC provides alternative relief which may include incidental and conse-
quential damages. In the case of damage to or destruction of an aircraft resulting
-5-
from a defect covered under the typical uarranty, but under which the remedy is
limited to replacement or repair of defective parts, it appears that section 2-719(2)
might often be applicable.
It would seem clear that the "essential purpose" of the warranty is to protect
the purchaser from defects covered under the warranty and the limited remedy of
replacement or repair of a defective part is perfectly adequate when a defective
part is discovered, or should be discovered, prior to causing any other damage.
This is the situation addressed by most warranties. On the other hand, when the
defect is not reasonably discoverable by the purchaser and it results in damage
to or destruction of the aircraft the remedv is totally inadequate and amounts to
no remedy at all. Indeed, there may have been no defective part at all, but only
a failure to properly assemble the aircraft, i.e., a defect in workmanship or
process of manufacture. Under these circumstances, if the contract is interpreted
to limit the liability of the manufacturer to replacement of defective parts, the
"essential purpose" of providing protection to the purchaser from defects completely
has failed. Moreover, if the limited remedy is applied, the purchaser would be
deprived of the "substantial value of the bargain" referred to in the Official
Comment mentioned above because the purchaser might have lost the entire value of
the airplane and be entitled to no remedy.
While no cases are found which apply section 2-719(2) to aircraft warranties,
there are several cases in which this section has been construed and the principles
of section 2-719(2) relied on in those cases would seem to have equal application
to limited or exclusive remedies in connection with aircraft warranties.
In one case, Neville Chemical Company v. Union Carbide Corporation,,294 F.Supp.
649 (USDC WD Pa. 1968), the court dealt with damages resulting from a chemical
contaminant which had been introduced into the product of the seller, but which was
not reasonably discoverable until after the product had been processed by the
purchaser, furnished to manufacturers and further processed into consumer goods.
The contract for the sale of the product required the purchaser to advise the
seller of any defects within 15 days and limited the remedy for any defect to
return of the purchase price.
With respect to this limited remedy, the court said:
"We come to a similar conclusion with respect to the
limitation of damages to the return of purchase price.Such a remedy would be wholly inadequate in the case of
a latent defect not discoverable within a reasonable
period after receipt of shipment. Like the fifteen day
limitation, it is obviously designed to cover a situationwhere the defect is discoverable upon receipt of ship-
ment, reasonable inspection and prompt discovery of
defects. The parties can be restored by prompt notifi-
cation to the seller, return of the purchase price, and
return of the material. But when the defect is not or-
dinarily discoverable until the material has been processed,
furnished to manufacturers, processed into materials, then
manufactured into consumer goods, passed through the whole-
sale and retail trade into the hands of consumers, then such
a remedy is far below a bare minimum in quantum, and is
ineffective under the Uniform Commercial Code, §2-719(2).
"Such limitations on time and damages, when the defect
is latent, are illusory and under the circumstances of this
case represent no remedy at all. They are comparable to the
limitation in the former standard automobile warranty which
limits the remedy to replacement of the defective part,
which was nullified in the landmark case of Henningsen v.
Bloomfield Motors, Inc., 32 N.J. 358, 161 A.2d 69, 75
A.L.R.2d 1 [1960]." 1/ (294 F.Supp. at 655)
Similarly, in the case of a latent defect in an aircraft which is not dis-
coverable until the defect has caused damage or destruction to the aircraft, the
limited remedy of replacing or repairing a defective part is of no value and unless
a remedy is provided under the law the purchaser would be deprived of "the substantial
value of the bargain". See Official Comment to section 2-719(2).
1/ The District Court's decision was affirmed by the Third Circuit Court of Appeals,
422 F.2d 1205 (1970), but the Circuit Court did not find it necessary to rule on
this specific point. See footnote 25 on pp. 1220-1221.
In two other cases, both arising in Illinois, section 2-719(2) was held
applicable where the seller was alleged to have repudiated its obligation under
an exclusive or limited remedy. This repudiation was considered to have caused
the restricted remedy to have failed of its essential purpose, opening to the
plaintiff the general array of remedies under the UCC. In Adams v. J. I. Case
Company, 261 N.E. 2d 1 (Ill. App. Ct. 1970), the court said:
"It should be obvious that they [the seller] cannotat once repudiate their obligation under their warrantyand assert its provisions beneficial to them. Thus,the allegations of Count II of plaintiff's complaintinvoke other provisions of the Uniform Commercial Code.Section 2-719(2) provides: 'Where circumstances causean exclusive or limited remedy to fail of its essentialpurpose, remedy may be had as provided in this Act."'(261N.E. 2d at 8)
The court went on to find that failure of the exclusive remedy was easily found
where the seller had willfully failed to honor its obligation thereunder and that
the plaintiff could recover damages under UCC section 2-714, including incidental
and consequential damages under section 2-715, if appropriate circumstances were
proved.
Jones & McKnight Corp. v. Birdsboro Corporation, 320 F. Supp. 39 (USDC ND Ill. 197
was a case raising similar questions because of the seller's alleged failure to honor
its obligations under a contract to manufacture and deliver certain equipment.
Following the Adams case, the court said:
"If the plaintiff is capable of sustaining its burdenof proof as to the allegations it has made, the defendantwill be deemed to have repudiated the warranty agreement
so far as restricting plaintiff's remedies, and theexclusive remedy provision of the contract will be deemed
under the circumstances to have failed of its essentialpurpose, thus allowing plaintiff the general array of
In disposing of the defendant's contentions that the exclusion of
consequential damages is authorized under section 2-719(3) the court said:
-8-
"However, 02-719(2) refers in all cases to the failureof an exclusive remedy, irrespective of the fact that theremedy may be generally authorized under the Code. The factthat the exclusion of consequential damages is authorizedunder §2-719(3) does not lead to the conclusion that o2-719(2)was not intended to cover the situation where, as here, aseller limits his liability to one exclusive albeit authorizedremedy. On the contrary, the Official Comment on this Sectionspeaks in broad and general terms:
'* * * Under (§2-719(2)), when an apparently
fair and reasonable clause because of circumstancesfails in its purpose or operates to deprive eitherparty of the substantial value of the bargain, itmust give way to the general remedy provisions ofthis Article.'" (320 F.Supp. at p. 44)
The Adams and Birdsboro cases were followed in Koehring Co. v. A.P.I. Incor-
porated, 319 F. Supp. 882 (USDC ED Mich. 1974), which contains a discussion of
several other cases construing section 2-719(2). The section was applied by a
district court to an automobile warranty limitation in Riley v. Ford Motor Company,
442 F.2d 670 (5th Cir. 1971). In that case the Fifth Circuit Court of Appeals found
that excessive damages had been awarded by the jury, but found no error in appli-
cation of section 2-719(2) to the fact situation. In Reynolds v. Preferred Mutual
Insurance Co., 11 UCC Rep. 701 (Mass. 1972), it was held that the section was
applicable where a contractor had installed defective gutters which restuled in
damage to the purchaser's house. The court concluded that if damages were limited
to replacement of the gutters as provided in the warranty, without remedy for
damages to the house, the purchaser would be deprived of the substantial value of
the bargain. It was held, therefore, that the exclusive remedy had failed and that
plaintiff could recover for damages to the house.
In view of these cases, it seems clear that section 2-719(2) could and should
be applied to aircraft warranties where the circumstances show that a limited or
exclusive remedy has failed of its essential purpose.
-9-
Unconscionable Limitations Under the UCC.
A third approach to attacking the validity of a warranty limitation on damages
arises under section 2-719(3) of the UCC. That section provides that:
"Consequential damages may be limited or excluded unlessthe limitation or exclusion is unconscionable. Limitationof consequential damages for injury to the person in the caseof consumer goods is prima facie unconscionable but limitationof damages where the loss is commercial is not."
Section 2-302 of the UCC also provides generally that a court may refuse to enforce
contract provisions which it finds to be unconscionable as a matter of law.
It would seem clear that under appropriate circumstances the limitation of a
manufacturer's liability to replacement of parts or a similar limitation could be
unconscionable and therefore uneforceable. In determining unconscionability the
courts can be expected to weigh all of the circumstances including the commercial
setting,the relative bargaining positions of the parties, the availability of
alternative sources of the product and other similar considerations. The statement
of a Massachusetts court in Reynolds v. Preferred Mutual Insurance Company, 11 UCC
Rep. 701 (Hass. 1972) probably demonstrates the typical factors which would be
considered in applying section 2-719(3). There the court said:
"Whether a contract or any clause of the contract isunconscionable is a matter for the court to decide againstthe background of a contract's commercial setting, purposeand effect. [Citation Omitted] 'The principle is one ofprevention of oppression and unfair surprise.'[CitationOmitted] Unfair surprise is determined by many factors.'These factors include the relation of the parties, whetherthe seller sought out the customer or whether the customersought out the seller, the sales techniques involved,whether all form contracts in this industry contain the sameclause, thereby preventing this buyer from shopping onbetter terms, and how unexpected the clause is in this typeof transaction.'" (Citing R. J. Nordstrom, Handbook of theLaw of Sales, 1970, at p. 128)
Where the totality of circumstances indicates essential unfairness which the
purchaser could not have been expected reasonably to avoid, it seems likely that
-10-
unconscionableness will be found. The chances of such a finding would appear to
decrease as the size and sophistication of the purchaser increases. An individual
faced with a standard contract certainly would be in a better position to advance
unconscionability as a basis for voiding a limitation on damages than a large
corporation which is on a relatively equal footing with the manufacturer.
For example, a statement in a Georgia case involving an individual consumer
indicates that a clause in an automobile warranty which limits the seller's
liability in any event to replacement or repair of defective parts is unconscionable
per se. Jacobs v. Metro-Chrysler Plymouth, Inc., 125 Ga. App. 462, 188 SE 2d
250 (1972). On the other hand, in Southwest Forest Industries, Inc. v. Westinghouse
Electric Cor~oration, 422 F.2d 1013 (9th Cir. 1970),where both parties were sizeable
corporations, a warranty provision limiting damages to repair or replacement of
parts was upheld. See also Delta Air Lines, Inc. v. Douglas Aircraft Company,
Inc., 238 Cal. App. 2d 95, 47 Cal. Rptr. 518 (1965), a pre-UCC case which does not
deal specifically with unconscionableness, but with related concepts.
Unconscionableness thus may be a feasible basis for striking down a limitation
of a manufacturer's warranty in the case of an individual purchaser of a small
general aviation aircraft. In theory it should also apply, under appropriate cir-
cumstances, to corporate purchasers, but as a practical matter it would not appear
to be as viable where the aircraft purchaser is an airline or other sizeable
corporation.
2. Implied Warranty
It is in connection with the second basic theory of liability--implied warranty--
that manufacturers most specifically attempt to limit their liabilities.4 The actions
of manufacturers in this regard result, no doubt, from the specific provisions in
connection with implied warranties laid out in the UCC. Section 2-314 of the UCC
provides for an implied warranty of merchantability and section 2-315 provides for an
-11-
implied warranty of fitness for a particular purpose. Section 2-316, however,
sets out rules under which these warranties may be excluded or disclaimed. The
question which normally will arise when an aircraft is damaged or destroyed is
whether the manufacturer successfully has utilized the disclaimer rules.
The most pertinent portions of section 2-316 of the UCC provide as follows:
"(2) Subject to subsection (3), to exclude ormodify the implied warranty of merchantability orany part of it the language must mention merchant-ability and in case of a writing must be conspicuous,and to exclude or modify any implied warranty offitness the exclusion must be by a writing andconspicuous. anguage to exclude all impliedwarranties of fitness is sufficient if it states,for example, that 'There are no warranties whichextend beyond the description on the face hereof.'
"(3) Notwithstanding subsection (2)
(a) unless the circumstances indicateotherwise, all implied warranties are excludedby expressions like 'as is', 'with all faults'or other language which in common understandingcalls the buyer's attention to the exclusion ofwarranties and makes plain that there is noimplied warranty;"
Questions might arise as to the validity of an attempted disclaimer because
of ambiguity in the disclaimer language, failure of the language to comply with
the specific requirements of section 2-316 of the UCC or for a variety of reasons
which might be present in any particular case.
A typical case is Boeing Airplane Co. v. O'Mally, 329 F.2d 585 (8th Cir.
1964). In that case the court found that an implied warranty of fitness for
a particular purpose resulted from the negotiations of the parties with respect
to the sale and purchase of a used helicopter. The seller had actually ointed
out and demonstrated particular uses to which the helicopter could be put. The
warranty language of the contract contained no specific warranty against defects
and provided that a warranty of title was "accepted in lieu of any and all other
warranties, expressed or implied, arising out of the sale of the helicopter."
-12-
It was contended by the seller that this exclusion of warranties covered any
implied warranty of fitness. Applying Pennsylvania's 1958 version of the UCC,
which applied to the contract in question, the Court concluded that the disclaimer
did not exclude the implied warranty of fitness because the disclaimer was not in
"specific language" and was ambiguous, contrary to the requirements of the UCC
for an effective disclaimer. The court went on to say that the result would
have been the same under the 1959 version of the UCC, because the writing was
not "conspicuous", as required under the later version. The court noted that
the type was of the same color and size as that of other provisions of the contract.
In Holcomb v. Cessna Aircraft Company, 439 F.2d 1150 (5th Cir. 1971), a
similar result was reached in connection with implied warranties in general. In
that case the warranty was quite typical. It covered defects in material and
workmanship, limited the manufacturer's obligation to replacement of defective
parts and provided that:
"This warranty is expressly in lieu of anyother warranties, expressed or implied, including
any implied warranty or [of] merchantability or
fitness for a particular purpose...."
Relying only upon the language of the UCC itself, the court concluded that since
the disclaimer language was in the same size type as the rest of the agreement,
implied warranties were not excluded by the disclaimer. The court specifically
relied on section 1-201 of the UCC in interpreting the "conspicuous" requirement
of section 2-316. Section 1-201 provides, inter alia, that language is conspicuous
"if it is in larger or other contrasting type or color."
Other questions can arise in connection with the validity of a disclaimer,'p
such as whether or not it was actually part of the agreement between the parties.
here, for example, the disclaimer is contained in a warranty which is not delivered
to the purchaser until after the sale is complete, the disclaimer may be held to
-13-
have no effect. Ford Motor Company v. Taylor, 446 S.W. 2d 521, 60 Tenn. App. 271
(1969). See also Trane Co. v. Gilbert, 73 Cal. Rptr. 279, 267 Cal. App. 2d 808
(1968). It would seem that these cases might be applicable to some sales of general
aviation aircraft.
There are literally scores of cases dealing with the validity of disclaimers
and they are by no means consistent. It is necessary, therefore, with respect to
any particular case to examine the decisions applicable to the circumstances of
the case in the jurisdiction where the action will be brought.
3. Strict Liability
While strict liability in tort by definition is not a warranty theory of
recovery, its application has the practical effect of emasculating any attempt by
a manufacturer to limit its warranty obligations, or at least of making them
unimportant. As provided for in section 402A of the Restatement of Torts (Second),
strict liability applies to one who sells a product in a defective condition
unreasonably dangerous to the user or his property, whether or not the seller
has exercised all possible care.
The doctrine of strict liability, of course, now has become well-established
in American jurisprudence although it is not consistently accepted and applied in
all jurisdictions. While the cases are not consistent, it would appear that at
least in many jurisdictions strict liability may be applied to aircraft damage
or destruction, even though no personal injuries are present.
In Manos v. Trans World Airlines, Inc., 324 F. Supp. 470 (USDC ND Ill.
1971), a federal court in Chicago held that the doctrine of strict liability as
expressed in section 402A of the Restatement had been adopted in the state of
Washington, citing Ulmer v. Ford Motor Company, 75 Wash. 2d 522, 452 P.2d 729
(1969). The court applied the doctrine to Boeing, the manufacturer of an aircraft
which had crashed in Rome, Italy, due to a defect in a thrust reverser system.
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Although the Manos case did involve deaths and personal injuries, the rationale
of that case and of the Restatement does not depend upon personal injury being
involved. Indeed, the Restatement refers to physical.harm "caused to the ultimate
user or consumer, or to his property."
The basis for the initial development of strict liability was to keep
defective products from making their way to the market place where they become
a menace to the public and part of the rationale of the doctrine is to discourage
the marketing of such products.
In the landmark strict liability case of Greenman v. Yuba Power Products_,Inc.,
59 Cal. 2d 57, 27 Cal. Rptr. 697, 377 P.2d 897, 13 ALR 3d 1049 (1962), the California
Supreme Court relied, inter alia, on the rationale set out in a concurring opinion
in the earlier case of Escola v. Coca Cola Bottling Co., 24 Cal. 2d 453, 150 P.2d
436 (1944). In Escola the court said:
"It is to the public interest to discouragethe marketing of products having defects thatare a menace to the public. If such products
nevertheless find their way into the market it
is to the public interest to place the res-ponsibility for whatever injury they may cause
upon the manufacturer, who, even if he is not
negligent in the manufacture of the product, is
responsible for its reaching the market."
The reasons for the doctrine of strict liability apply equally to physical
harm to the person and physical harm to property and it was so recognized in
Seely v. White Motor Co., 63 Cal. 2d 9, 45 Cal. Rptr. 17, 403 P.2d 145 (1965).
There the California Supreme Court said:
"Physical injury to the property is so akin to
personal injury that there is no reason for
distinguishing them."
In Vandermark v. Ford Motor Company, 61 Cal. 2d 256, 37 Cal. Rptr. 896, 391 P.2d
168 (1964), it was held that contractual attempts to limit liability through warranty
-15-
disclaimers are immaterial. Justice Traynor said:
"Since Maywood Bell is strictly liable in tort,the fact that it restricted its contractual liability
is irmaterial. Regardless of the obligations it
assumed by contract, it is subject to strict liability
in tort because it is in the business of selling
automobiles, one of which proved defective...." l/
A similar result was reached in Greeno v. Clark Equipment Co., 237 F.Supp. 427
(USDC ND Ind. 1965), where the court said "the seller cannot disclaim or by
contract alter a duty which the law would impose upon him." And in the Seely
case the court said "Moreover, this liability could not be disclaimed, for one of
the purposes of strict liability in tort is to prevent a manufacturer from defining
the scope of his responsibility for harm caused by his products."
In several other cases strict liability has been held applicable to property
damage, including the defective product itself, Santor v. A.M. Karagheusian, Inc.,
44 NJ 52,207 A.2d 305 (1965), and to property damage as between commercial entities
Lamphier v. Skagit Corporation, CCH Products Liability Reprots 16714 (Washington
Court of Appeals, January 19, 1972), and Dealers Transport Co. v. Battery Distri-
buting Company, 402 SW 2d 441 (Ky. 1965).
It seems clear then that strict liability is a very viable basis for recovery
for damage to aircraft resulting from defects which might also be breaches of
warranty, even if the manufacturer has disclaimed its warranty liability or limited
it to replacement or repair of defective parts.
There are two recent cases, however, which seem to be contrary to Vandermark,
Greeno and Sel because they hold that a manufacturer may by contract relieve itself
from strict liability obligations to an aircraft purchaser. These cases are
Keystone Aeronautics Corp. v. R. J. Enstrim Corp., 364 F.Supp. 1063 (USDC WD Pa. 1973)
1/ It also was held in Vandermark that the doctrine applies to dealers as well asmanufacturers.
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and Delta Air Lines, Inc. v. McDonnell Douglas Corporation, 350 F.Supp. 738 (USDC
ND Ga. 1972), aff'd 503 F.2d 239 (5th Cir. 1974). In both of these cases the courts
relied heavily on the prior case of Delta Air Lines, Inc. v. Douglas Aircraft
Company, Inc., 238 Cal. App. 2d 95, 47 Cal. Rptr. 518 (1965) in which the doctrine
of strict liability was not before the court as such.
The Keystone court, in applying Pennsylvania law, simply made a policy
decision that in a commercial setting corporate parties should be allowed to allocate
the risks and that it would be unwise to hold that strict liability applies in such
circumstances. In the second Delta case the court was applying California law, but
did not attempt to distinguish cases such as Vandermark, Greeno and Seely. Instead
it noted that while the court in the first Delta case did not expressly mention strict
liability it had discussed Greenman v. Yuba Power Products, supra, the leading case
on strict liability, and nevertheless held that Douglas could exculpate itself of
tort liability. The court thus concluded that under California law" strict liability
could be disclaimed as between two large commercial entities.
Since I personally was involved in the second Delta case on behalf of Delta,
I respectfully disagree that this is a correct interpretation of the law of Cali-
fornia. It would seem that at least in cases involving parties other than Delta
and Douglas it may be contended that Vandermark, Greeno and Seely apply. It is
clear, however, that if large corporate parties are involved, the plaintiff will be
met with the contention that the Delta cases should apply.
Conclusion
In summary, the cases show that there are a number of possibilities for recovery
for damage to an aircraft, despite the manufacturer's attempts to limit 'its warranties.
Much depends, however, upon the particular language of the warranty, the circumstances
of the case, the decisions of the applicable jurisdiction, the status of the parties
and other factors which may be important in a particular case.
-17-
EXPRESS WARRANTIES ARISING FROM ADVERTISING
by: Ronald L. Palmer
"Promise, large promise, is the soul ofan advertisement"
Samuel Johnson,The Idler No. 41
I. GENERAL BACKGROUND
Since the height of the Industrial Revolution, and
particularly in this century, the merchants and manufacturers
of our nation have found their business responsibilities and
obligations constantly changing as courts evolved and re-
defined the rules.governing the traditional "manufacturer-
merchant-consumer" relationships. "Caveat emptor" has made
an osmotic migration from the law of "sales" to the realm
of legal history, while such concepts as "strict liability
in tort" and "implied warranty" have become the 20th century
judicial response to 20th century marketing and technology.
In this evolutionary period nearly every aspect of the
"manufacturer-merchant-consumer" relationship has received
judicial scrutiny. Advertising has been no exception. In
the late 1920's and early 1930's, at a time that was coinci-
dental with the beginning of mass advertising efforts in the
United States, the courts began to express concern about the
advertising aspect of the "manufacturer-merchant-consumer"
relationship. Most early cases which considered false or
misleading advertisements were analyzed in terms of "neg-
ligence ' or "misrepresentation.''2 Soon, however, the
courts abandoned these rather cumbersome analyses and began
generally to characterize and analyze actions based on
false or misleading advertisements as stating claims for
breach of express warranty. Today, the great majority, if
not all, jurisdictions use the "express warranty" analysis
in considering damage claims based on false or misleading
advertisements.3
1/ E.g. Jones v. Raney Chevrolet Co., 197 S.E. 757 (Sup.Ct.N.C. 1938); Hruska v. Parke, Davis & Co., 6 F.2d 536(8th Cir. 1925).
2/ E.g. Alpine v. Friend Bros. Inc., 138 N.E. 553 (Sup.Ct.Mass. 1923).
3/ Courts have had occasion to consider nearly all advertisingmethods in connection with "advertising" warranties:
(a) newpapers--Lane v. Swanson, 278 P.2d 723(Ct.App.Calif.1955);
(b) pamphlets--Hansen v. Firestone Tire andRubber Co., 276 F.2d 254 (6th Cir. 1960);
(c) catalogues--Baxter v. Ford Motor Co.,12 P.2d 409 (Sup.Ct.Wash.1939);
(d) radio--Bahlman v. Hudson Motor Co., 288N.W. 309 (Sup.Ct.Mich.1939);
(e) billboards--Bahlman, supra.;(f) magazines--Pritchard v. Liggett-Myers
Tobacco, 295 F.2d 292 (3rd Cir. 1961);(g) advance bulletin--Sawan, Inc. v. American
Cyanimid, 88 S.E.2d 152 (Sup.Ct.Ga.1955);(h) pictures--Sylvestri v. Warner & Swasey,
398 F.2d 598 (2d Cir. 1968);(i) "all media"--Ford Motor Co. v. Lemieux,
418 S.W.2d 909 (Tex.Civ.App.1967).
-2-
II. BENCH-MARKS IN THE EVOLUTIONOF "ADVERTISING" WARRANTIES
As previously indicated, some courts initially
tended to analyze false and misleading advertisements in
the context of actions for negligence or misrepresentation.
The landmark case of Baxter v. Ford Motor Co., 12 P.2d 409
(Sup.Ct.Wash 1932), however, ordained the coming of age of
"advertising" warranties. In 1930, Mr. Baxter bought a new
Model A Ford Town Sedan from his local Ford dealer. In the
course of reaching his decision to purchase the auto, Mr.
Baxter was furnished certain Ford advertising material. This
material included certain references to the "Triplex Shatter-
Proof Glass Windshield" which was constructed so "that it will
not fly or shatter under the hardest impact." Unabashed, Ford
continued by noting that "this is an important safety factor
because it eliminates the dangers of flying glass." Shortly
after the purchase, a pebble proved conclusively that the
Triplex Shatter-Proof Glass Windshield would, under certain
circumstances, shatter. Mr. Baxter was injured and brought
suit against Ford based on the "shatter-proof" advertisement.
Ford urged that no warranty could exist without "privity"
and, further, that express warranties "do not attach them-
selves to, and run with, the article sold." The Washington
Supreme Court, at page 412, responded with language that was
to become the oft-quoted basis for "advertising" warranties:
-3-
"Since the rule of caveat emptor was firstformulated, vast changes have taken placein the economic structures of the Englishspeaking peoples. Methods of doing businesshave undergone a great transition. Radio,billboards, and the products of the printingpress have become the means of creating alarge part of the demand that causes goods todepart from factories to the ultimate consumer.It would be unjust to recognize a rule thatwould permit manufacturers of goods to createa demand for their products by representingthat they possess qualities when they, in fact,do not possess, and then, because there is noprivity of contract existing between the con-sumer and the manufacturer, deny the consumerthe right to recover if damages result fromthe absence of those qualities, when suchabsence is not readily noticeable."
In 1936, the Hudson Motor Company, not to be outdone
in the marketplace by Ford's Triplex Shatter-Proof Glass Wind-
shield, heavily advertised its new Hudsons and Terraplanes as
possessing "safety engineered" bodies embodying "an improved
seamless steel roof." Much like Mr. Baxter, Mr. Bahlman
purchased a new 1936 Model Hudson Eight Sedan after reading
the advertisements. Shortly thereafter, Mr. Bahlman had a
"roll-over" type accident in his Hudson and suffered severe
lacerations from a welded seam in the roof above the driver's
seat--with the result that the facts underlying Bahlman v.
Hudson Motor Car Co., 288 N.W. 309 (Sup.Ct.Mich.1939) became
history. The Michigan Supreme Court wholeheartedly embraced
the Baxter rationale and Bahlman became the confirmation of
the Baxter approach to "advertising" warranties.
-4-
More recently the Supreme Court of Ohio and the
New York Court of Appeals favorably re-examined the historical
bases for "advertising" warranties in Rogers v. Toni Home
Permanent Co., 147 N.E.2d 612 (Sup.Ct.Ohio 1958) and Randy
Knitware v. American Cyanamid Co., 181 N.E.2d 399 (Ct.App.
N.Y.1962), respectively. In Randy Knitware the Court noted
that Baxter had "breached the citadel of privity" and then
further stated: (at page 402)
. . . in the 30 years which have passed sincethat decision, [Baxter] not only have the courtsthroughout the country shown a marked, and almostuniform, tendency to discard the privity limit-ation and hold the manufacturer strictly account-able for the truthfulness of representationsmade to the public and relied upon by the plain-tiff in making his purchase, but the vast major-ity of the authoritative commentators have ap-plauded the trend and approved the result."(footnotes omitted)
In 1965, the law of "advertising" warranties was
distilled into the Restatement of Torts 2d, Section 402B:
"One engaged in the business of sellingchattels who, by advertising, labels, orotherwise, makes to the public a misrepre-sentation of a material fact concerning thecharacter or quality of a chattel sold byhim is subject to liability for physicalharm to a consumer of the chattel caused byjustifiable reliance upon the misrepre-sentation even though:
(a) it is not made fraudulently ornegligently, and
(b) the consumer has not bought thechattel from or entered into anycontractual relation with the seller."
-5-
Similarly, the Uniform Commercial Code, Section 2-313
provides:
"(1) Express warranties by the seller are createdas follows:
(A) Any affirmation of fact or promisemade by the seller to the Buyerwhich relates to the goods andbecomes part of the basis of thebargain creates an express war-ranty that the goods shall conformto the affirmation or promise."
Numerous cases have held that Section 2-313 encompasses "adver-
tising" warranties.4
Thus, "advertising" warranties not only have achieved
considerable vitality in modern case law but have also been
codified and widely adopted in that form.
III. THE LAW OF "ADVERTISING" WARRANTIES
In broad overview, the establishment of an action
based on "advertising" warranty requires proof as to the
following:
1. Falsity: Any claim based on breach of an
"advertising" warranty must establish that the portion of the
advertisement in question is false (i.e. is a "misrepresent-
/ Hawkins Construction Co. v. Matthews Construction Co., 12UCC Reptr. Service 1013 (Sup.Ct.Neb.1973); Speed Fasteners,Inc. v. Newsom, 382 F.2d 395 (10th Cir. 1967); CapitalEquipment Enterprises v. North Pier Terminal, 254 N.E.2d542 (Ct.App.IIl.1969).
-6-
ation"). As in libel and slander, "truth" is a defense.5
Normally, courts refer to the "falsity" issue in terms of
showing the "breach" of the warranty.
2. Reliance: A consumer asserting a claim founded
on an "advertising" warranty must show reasonable reliance
on the particular portion of the advertisement being chal-
lenged. 6 Some courts have articulated the "reliance" in
terms of requiring the advertisement to "induce the purchase
or use of a product.7 The Uniform Commercial Code requires
that the advertisement become a "basis of the bargain," while
the Restatement uses the phrase "justifiable reliance."
Besides constituting an independent element of
modern warranty actions, reliance on the advertisements also
constituted an underpinning for the movement against the
privity requirement.8
5/ See e.g., Schemel v. General Motors Corp., 261 F.Supp.134 (S.D.Ind.1966).
6/ Capital Equipment Enterprises, Inc. v. North Pier TerminalCompany, 254 N.E.2d 542 (App.Ct.Ill.1969); Pedroli v.Russell, 320 P.2d 873 (Ct.App.Calif.1958); Bleacher v.Bristol-Myers Co., 163 A.2d 526 (Sup.Ct.Del.1960); Ghernav. Ford Motor Co., 55 Cal.Reptr. 94 (Ct.App.1966).
7/ E.g., Alpine v. Friend Bros., Inc., 138 N.E.553 (Sup.Ct.Mass.1923).; Brown v. Globe Laboratories, 84 N.W.2d 151 (Sup.Ct.Neb.1957).
8/ See e.g., Rogers v. Toni Home Permanent Co., 147 N.E.2d612 (Sup.Ct.Ohio 1958); Randy Knitware v. AmericanCyanamid Co., 181 N.E.2d 399 (Ct.App.N.Y.1962); Baxterv. Ford Motor Co., 12 P.2d 409 (Sup.Ct.Wash.1932).
-7-
3. Proximate cause: A claimant bringing an
action for breach of an "advertising" warrant must establish
that the breach of the warranty was a proximate cause of the
damages sought.9 It should be specifically noted that proof
of "reliance" in the purchase or use of the product in ques-
tion and proof of causation between a breach of the warranty
and the damages sought are two independent elements to be
established.
4. Intent: Proof of the advertiser's specific
intent to "warrant" need not be shown in order to establish
a cause of action, at least where a reasonable buyer would
believe the words used had the purpose of inducing a sale.1 0
Of course, an advertisement is, almost by definition, in-
tended to contain words to induce a sale. Thus, in practical
terms, there is no requirement of "intent."
5. Language Used In The Advertisement. Probably
the most "substantive" aspect of a claim based on breach of
an "advertising warranty relates to the actual language used
in the alleged warranty. The advertising must be examined to
_/ E.g., Bahlman v. Hudson Motor Car Co., 288 N.W.309 (Sup.Ct.'Mich.1939); Sylvestri v. Warner & Swasey Co., Inc., 398 F.2d598 (2d Cir. 1968); Brown v. Globe Laboratories, 84 N.W.2d151 (Sup.Ct.Neb.1957).
10_ E.g., Hansen v. Firestone Tire And Rubber Company, 276 F.2d254 (6th Cir. 1960); Turner v. Central Hardware Co., 186S.W.2d 603 (Sup.Ct.Mo.1945).
-8-
determine if it can be characterized as "fact," "material
fact," "opinion," "comparison," "specific," "general,"
"description," "estimate," "judgment," "condition," "dealer's
talk," "puffing," "praise" or any one of a multitude of other
characterizations the courts have used in particular cases.
In its essence, the advertisement language relied on to
constitute an express warranty must represent some "fact."
The categorization of the types of statements that cannot be
the basis of an "advertising" warranty was typically stated
by the Nebraska Supreme Court in Brown v. Globe Laboratories,
Inc., 84 N.W.2d 151 (Sup.Ct.Neb.1957), at page 161, as follows:
"representations which merely express thevendor's opinion, belief, judgment, orestimate do not constitute a warranty.Dealer's talk is permissible; and puffing,or praise of the goods by the seller, isno warranty, such representations fallingwithin the maxim simplex commendatio nonobligat." (quoting from Ralston Purina Co.v. Iiams, 10 N.W.2d 452 (Sup.Ct.Neb.1943)
Unfortunately, these classifications, while easy to
state, are much more difficult to apply. Like beauty, the
distinction between "facts," "opinions," "sales talk," etc.
seems often to be affected by the eye of the beholder. How
does one then determine what language can establish an "adver-
tising" warranty? It is settled that the language need not
expressly use terms like "warrants," "guarantees" or words of
-9-
similar import.I I Most authorities, however, indicate that
a strict requirement of a specific "factual" assertion is
required to establish a warranty. These authorities are
typified by the statement in Adkins v. Ford Motor Company,
446 F.2d 1105 (6th Cir. 1971), that "a particular and
specific statement concerning quality or fitness" is re-
quired (at 1108, applying Tennessee Law). The "specificity"
element, however, has occasionally been relaxed, as where an
Ohio court deemed the words "good condition" to be a warranty
when used in an advertisement in connection with the sale ofa secondhand piano.12
The "advertising" warranty cases most signifi-
cant to practitioners in the field of products liability
and particularly in the aircraft litigation area, are those
involving advertising language relating to safety. A case
which typifies courts' reaction to "safety" language is
Turner v. Central Hardware Co., 186 S.W.2d 603 (Mo.--1945).
The defendant ran an advertisement describing its "safety-
first" ladders wherein it was stated," in designing our
_I/ E.g., Hansen v. Firestone Tire And Rubber Co., 276 F.2d254 (6th Cir. 1960); Turner v. Central Hardware Co.,186 S.W.2d 603 (Sup.Ct.Mo.1945).
i2/ Schwartz v. Gross, 114 N.E.2d 103 (Ct.App.Ohio 1952).
-10-
ladders the prime consideration was safety--and that's what
you'll find in these splendid ladders." A rung broke--the
plaintiff fell--and the Missouri Supreme Court ultimately
said that the "safety" language in the advertisement con-
stituted an express warranty. The Court specifically rejected
the contention that the language was only "opinion" or "sales
talk." Similarly, advertisements extolling a home-permanent
as being "safe and harmless, a toy pistol as being "abso-
lutely harmless" 1 4 and skin cream as being "clinically proven
and absolutely safe" 1 5 have been held to provide proper bases
for "advertising" warranties. Insofar as "safety" language
is concerned, however, one dissenting view has been expressed
where the manufacturer advertised that "their product offered
unprecedented safety." The Court in question held this was
a mere "opinion" and permissible "puffing."'1 6
13/ Rogers v. Toni Home Permanent Co., 147 N.E.2d 612 (Sup.
Ct.Ohio 1958).
i4/ Crist v. Art Metal Works, 243 N.Y.S. 496 (Sup.Ct.N.Y.1930).
i5/ Spiegel v. Saks 34th Street, 252 N.Y.S.2d 852 (Sup.Ct.N.Y. 1964).
16/ Hoffman v. A. B. Chance Co., 339 F.Supp. 1385 (M.D.Pa.1972)•
-11-
In determining if certain advertising language gives
rise to an express warranty, a California Court has held that
the language must be construed liberally in favor of the buyer.17
Also, in cases involving large scale multi-media advertisements,
judicial notice has been taken of the advertisements.18
6. Disclaimer. The unusual circumstance whereby
an advertiser would attempt to "disclaim" the language used
in an advertisement and then rely on such disclaimer" as a
defense in an "advertising" warranty case has not been directly
litigated. One would presume, however, that courts would be
as reluctant to enforce disclaimers in this area as they have
been in other "sales" cases and would impose all the require-
ments of conspicuousness, specificity, etc. One court which
has considered an alleged disclaimer of an "advertising"
warranty demonstrated considerable hesitancy in recognizing
this defense.1 9
7. Dealer's Responsibility For Manufacturer's
Advertising. Generally, the entity making an express warranty
is liable for the breach thereof and an entity which has not
17/ Lane v. C. A. Swanson & Sons, 278 P.2d 723 (D.Ct.App.1955).
18_/ Gherna v. Ford Motor Company, 55 Cal.Reptr. 94 (Ct.App.1966).
19/ Cooper Painting & Coatings, Inc. v. SCM Corporation,457 S.W.2d 864 (Ct.App.Tenn. 1970).
-12-
joined in the warranty cannot be liable. In the case of
"advertising" warranties made by a manufacturer, however,
it appears that the dealer is liable for breach if the
manufacturer's pamphlets or written advertisements which
establish the warranty are furnished by the retailer to
the consumer.2 0 Generalizing, a dealer risks liability
for the manufacturer's "advertising" warranties by bringing
them to the attention of the purchaser. This would appear
to be the case even though the dealer may not actually or
expressly affirm the warranties.
IV. CONSIDERATIONS AND REFLECTIONS ON THEUTILIZATION AND DEFENSE OF CLAIMS FORBREACH OF AN "ADVERTISING" WARRANTY.
The facts giving rise to many product liability cases
make the strict liability in tort approach much more attractive
than breach of an "advertising" warranty. In this day and age,
lawyers, courts and probably juries are more attuned to the
"defect" and "unreasonably dangerous" concepts embodied in the
strict liability in tort theory. Lawyers should be aware,
however, of possible benefits in combining the "advertising"
warranty and "strict liability in tort" actions in some factual
situations.
20/ Silverstein v. R. H. Macy & Co., Inc. 40 N.Y.S.2d 916(Sup.Ct.N.Y. 1943).
-13-
If a manufacturer or seller has been overzealous
in advertising its product and if the consumer can show
reliance thereon, a claim for breach of an "advertising"
warranty should be seriously considered. In some instances
a warranty claim may be even more attractive than one based
on strict liability in tort, since no proof of a "defect"
is required with the former. 2 1 In essence, an advertiser
may raise the legal standard of care which it owes to the
purchasing public by making express representations in its
advertising. The concept is succinctly stated in Bryer v.
Rath Packing Company, 156 A.2d 442 (Ct.App.Md. 1959), at page
446:
"In the instant case the packer of the chickenset its own standard of care and increased thenecessary amount of care by expressly represent-ing on the cans sold that the product was readyto serve and boned."
Stated another way, "[T]he seller has bound himself unqualifiedly
as to the existence of the characteristics of qualities warranted;
and absolute liability against the warrantor is available to the
buyer who is injured by the non-existence of such characteristics
or qualities."'2 2
21/ Syvestri v. Warner & Swasey Co., Inc., 398 F.2d 598(2d Cir. 1968).
22/ Hansen v. Firestone Tire And Rubber Co., 276 F.2d 254
(6th Cir. 1960), at page 257.
-14-
Lastly, some circumstances may arise where particular
advertisements can be effectively used to persuade the fact finder
that a "defect" existed in connection with a strict liability
in tort claim. In these circumstances, the easiest way to get
the advertising evidence admitted may be to include a claim for
breach of an "advertising" warranty. At least one court has
taken judicial notice of advertisements, and, in light of evidence
as to the product's non-conformity with the advertisements, con-
cluded that the ad was probative evidence of a "defect."2 3
From the defense lawyer's standpoint, if it appears that
the advertising complained of in the "advertising" warranty count
could be of aid and comfort to the plaintiff's combined strict
liability in tort action, a motion for severance should be seri-
ously considered. This is particularly true where it can be per-
suasively argued that the standard of care that the advertiser has
imposed on himself by the advertising is higher than the legal
standard of care (unreasonably dangerous) imposed by strict
liability in tort theory. It seems certain that asking a jury to
segregate evidence in the two different causes of action and to
23/ McCann v. Atlas Supply Company, 325 F.Supp. 701 (W.D.Pa. 1971), at page 704:
"Prospective purchases are the objects ofsustained and vigorous advertising cam-paigns extolling the touchness of auto-mobile tires, their reliability and de-pendability. Common experience indicatesthat no owner of a tire expects it to failwith less than 2,000 miles on its treads."
-15-
apply different standards of care thereto militates in
favor to severance.
Insofar as the defense of "advertising" warranties
actions are concerned--forget "privity" and, except for some
limited types of consequential damages, forget "disclaimers."
In most instances, the most vulnerable portion of the plain-
tiff's case is "reliance" and "proximate cause" and this
evidence can and should be rigorously attacked. A somewhat
less effective defense is the "puffing" or "dealer's talk"
exception to "advertising" warranties. To make this defense
effective, a defendant has to overcome the inherent weakness
of the "we said it, but you shouldn't have believed it"
position. Finally, the fundamental defense of "truth"
(absence of breach) may be available.
CONCLUSION
Throughout the last half of the 19th Century and
through most of this Century, the pattern of commodity
production in our nation has shifted from small-scale,
"cottage-type" to large-scale, mass-oriented production.
With the tremendous rise in our productive capabilities,
private manufacturers have sought to utilize various
means to maintain higher and higher levels of consumer
demand for their goods. Advertising has provided a major
-16-
tool for this demand-maintenance. Through the use of
advertising on a national and regional scale, the manu-
facturers themselves have reached directly into the
marketplace of consumer transactions. Through reliance
on these advertisements, the consuming public has made
direct "contact" with manufacturers in this marketplace.
Meanwhile, the small retail enterprise, which formerly
provided direct market contact with the consumer, has
faded into a relatively faceless and exchangeable entity,
more often than not under some direct or indirect control
of the manufacturer.
It is no mere coincidence that cases involving
the automobile industry, and Ford Motor Company in par-
ticular (i.e. Baxter) has been involved in landmark
decisions in the "advertising" warranties field. This
industry pioneered the use of assembly-line techniques of
production which so expanded our productivity. This
resulting rise in output paralleled the growth in mass-
distribution advertising. Objectively viewed, the ascendancy
of "advertising" warranties probably reflects the capacity
of American law to comprehend the changing American economic
infrastructure and to mold itself in accordance with new
problems and needs presented thereby.
-17-
CURRENT AVIATION DECISIONS IN CONFLICT OF LAWS
H. Norman Kinzy*
During the last several years, many notable decisions
have been handed down which involve both aviation litigation
and "conflict of laws" or "choice of law" problems. The
term "conflict of laws" has been defined as the conflict
-existing between litigants as to which sovereignty's laws
will be invoked to determine the issues in controversy. It
concerns the rights of persons within the territory and
dominion of one sovereignty by reason of acts, public or
private, done within the territory of another sovereignty,
and is based on the broad general principal that one sovereignty
or forum will respect and give effect to the laws of another
so far as can be done consistently with its own interests.1
Many in-roads of course have recently been made into this
general statement of the basis of conflict of laws rules.
This paper does not extend to a discussion of (1) those
*BBA, University of Texas Tech, 1963; LLB, University_--6fTexas, 1966; Attorney at Law, Dallas, Texas, Associate in
the Firm of Strasburger, Price, Kelton, Martin & Unis, andactive member of Texas, Dallas, and American Bar Associations.
112 Tex. Jur.2d Conflict of Laws Sl, page 303.
acts which may subject a manufacturer to jurisdiction in a
certain state, except insofar as those acts may be a basis
for the exercise and application of the law of the forum, or
the "lex fori",. or (2) to any situation other than those
normally involving tortious liability, whether it be in the
form of negligence, strict liability, or breach of warranty,
including closely related matters. In other words, this
paper does not extend to questions of choice of law involving
contracts, or other matters, except insofar as they may
arise by virtue of the contractual aspects of actions for
breach of warranty.
Similarly, where no aviation cases have been decided,
but a general principle is necessary for better understanding,
non-aviation cases or general reference materials including
ALR Annotations have been used as a beginning point for
further research as necessary.
GENERAL PROPOSITIONS
Historically, a long established rule in resolving conflicts
of law has been that the law of the place of the wrong, the
lex loci delicti, governs the substantive rights of the
parties to a tort action, a rule which has in years past
--been universally recognized, and which is today recognized
2.
2by a large number of jurisdictions.
In recent years, and really since 1963, almost an equal
number of jurisdictions have departed from the lex loci
delicti rule and have adopted one or more variants of a
2Annotation - 29 A.L.R.3d 603, 613; A recent reviewindicates that the following jurisdictions remain adherantsof the doctrine of lex loci delicti as their choice of lawrule in multi-state tort si tuations: Alabama - Spencer v. MaloneFreight Lines, 298 So.2d 20, (Ala. 1974); Arkansas - McGintyv. Ballentine Produce, Inc., 408 S.W.2d 891; 241 Ark. 533(Ark. 1966); Connecticut - Landers v. Landers, 216 A.2d 183,153 Conn. 303 (Conn. 1966); Delaware - Folk v. York-Shipley,Inc., 239 A.2d 236 (Del. 1968); Florida - Hopkins v. Lockheed
--Aicraft Corp., 201 So.2d 743 (Fla. 1967); Georgia - Whitakerv. Harvell-Kilgore Corp., 418 F.2d 1010 (5th Cir. 1969);Guam -Pederson v. U.S., 191 F.Supp. 95 (D.C. Guam, 1961);Kansas - McDaniel v. Sinn, 400 P.2d 1019; 184 Kan. 625 (Kan.1965); Maryland - Cook v. Pryor, 246 A.2d 271; 251 Md. 41(Ct. of App., Md. 1968); Massachusetts - Doody v. JohnSexton & Co., 411 F.2d 1119 (1st Cir. 1969); Michigan -Abendschein v. Farrell, 170 N.W.2d 137 (Mich. 1969); McVickersv. Chesapeake & Ohio Ry. Co., 194 F.Supp. 848 (D.C. Mich.1961); Nebraska - Epperson v. Christensen, 324 F.Supp. 1121(D.C. Neb. 1971); Nevada - Wells Fargo & Co. v. Wells FargoExp. Co., 358 F.Supp. 1065 (D.C. Nev. 1973); New Mexico -
Smith v. Greyhound Lines, Inc., 382 F.2d 190 (10th Cir.1967); North Carolina - Cobb v. Clark, 143 S.E.2d 103,265 N.C. 194 (N. Car. 1965); Puerto Rico - DeVane v. U.S.,259 F.Supp. 18 (D.C. Puerto Rico, 1966); South Carolina -Oshiek v. Oshiek, 136 S.W.2d 303; 244 S.C. 249 (S.Car.1964); South Dakota - Heidemann v. Rohl, 194 N.W.2d 164 (S.
Dak. 1972); Tennessee - Winters v. Maxey, 481 S.W.2d 755(Tenn. 1972); Texas - Marmon v. Mustang Aviation, 430 S.W.2d182 (Tex. 1968); Utah - W.W. Clyde & Co. v. Dyess, 126 F.2d-719 (9th Cir 1942); Virginia - McDonough v. Kellogg, 295 F.
Supp. 594 (D.C. Va. 1969); Washington - Huddleston v. AngelesCooperative Creamery, 315 F. Supp. 307 (D.C. Wash. 1970);West Virginia - Chase v. Greyhound Lines, Inc., 195 S.E.2d810 (W.Va. 1973).
doctrine known as the "most significant contacts or relationship"
doctrine, which doctrine requires that the forum court
analyze all of the facts and factors involved to determine
what law is most appropriate for application, under the
particular analytical theory or process employed, to govern
the party's rights and liabilities with respect to any issue3
in tort.
3Annotation, 29 A.L.R.3d 603, 622; Alaska - Armstrongv. Armstrong, 441 P.2d 699 (Alaska 1968); Arizona -Schwartzv. Schwartz, 447 P.2d 254 (Ariz. 1968); California - Reichv. Purcell, 432 P.2d 727, 63 Cal. Rptr. 31 (Calif..1967); Colorado - First-National Bank v. Rostek, 514 P.2d314 (Colo. 1973); D.C. - Meyers v. Gaither, 232 A.2d 577(DC. Ct. of App., 1967); Idaho - Rungee v. Allied Van LinesInc., 449 P.2d 378 (Idaho 1968); Illinois - Wartell v.Formusa, 213 N.E.2d 544 (Ill. 1966); Graham v. General U.S.Grafnt Post No. 2665, 230 N.E.2d 856 (Ill. Civ. App., 1968);Indiana -Witherspoon v. Salm, 237 N.E.2d 116 (Ind. Ct. ofApp., 1968); Iowa - Fuerste v. Bemis, 156 N.W.2d 831 (Iowa1968); KentuckFv- Wessling v. Paris, 417 S.W.2d 259 (Ky.App. Ct. 1967); Louisiana - Romeo v. State Farm Ins. Co.,227 So.2d 649 (Louisiana 1973); Maine - Beaulieu v. Beaulieu,265 A.2d 610 (Me. 1970); MinnesoEa- Schneider v. Nichols,158 N.W.2d 254 (Minn. 1968); Kopp v. Rechlzigel, 141 N.W.2d526 (Minn. 1966); Mississippi - Mitchell v. Craft, 211 So.2d509 (Miss. 1968); Missouri - Kennedy v. Dixon, 439 S.W.2d173 (Mo. 1969); North Dakota - Issendorf v. Olsen, 194N.W.2d 750 (N. Dakota 1972); New Hampshire - Clark v. Clark,222 A.2d 206 (N.H. 1966); New Jersey - Mellk v. Sarahson,229 A.2d 625 (N.J. 1967); New York - Babcock v. Jackson, 191N.E.2d 279 (N.Y. 1963); Ohio - Fox v. Morrison Motor Freight,Inc., 267 N.E.2d 405 (OhTo-971); Oklahoma - Williams v.Texas Kenworth Company, 307 F. Supp. 748W.D. Okla., 1969);Oregon - Casey v. Manson Construction and Engineering Co.,428P.2d 898 (Ore. 1967); Pennsylvania - Kuchinic v. McCory,222 A.2d 897 (Pa. 1966); Rhode Island -Woodward v. Stewart -243 A.2d 917 (R.I. 1968); Wisconsin - Wilcox v. Wilcox, 133N.W.2d 408 (Wisc. 1965). It is beyond the scope of this paperto attempt to go into the numerous variants that have beenemployed by these jurisdictions in determining which contactsor interests are most significant and controlling. For ananalysis of this nature see Annotation, 29 A.L.R.2d 603, 622,et seq.
It will be noted from review of these cases that while
there has been a definite trend away from lex loci delicti
by many jurisdictions in the past 12 years, there have been
numerous instances where courts have recently reviewed the
doctrine of lex loci delicti, and have refused to abandon it4
for the "most significant relationship" doctrine. Furthermore,
in considering choice of law problems, it frequently becomes
necessary to determine where the tort was committed or the
"place" of the tort. The general rule by far is that the
"place" of the tort, within the contemplation of the rule
-that the law of the place of the tort or wrong governs
-liability and other substantive matters, is the place where
the injury or death was inflicted and not the place where
the allegedly wrongful act or omission took place.5
This rule has been held applicable in the majority of claims
for recovery for tortious acts, whether the right to recover
6be alleged in terms of negligence, or on grounds of strict
4Winters v. Maxey, 481 S.W.2d 755 (Tenn. 1972); Heidemannv. Rohl, 194 N.W.2d 164 (S.D. 1972); Abendschein v. Farrell,170 N.W.2d 137 (Mich. 1969).
5Annotation, 77 A.L.R.2d 1266, 1273; Page v. CameronIron Works, Inc., 155 F.Supp. 283 (S.D. Tex. 1957) rev'd onother grounds 259 F.2d 420 (5th Cir. 1958); Pack v. BeechAircraft Corporation, 132 A.2d 54 (Del. 1957); Restatementof Conflict of Laws, S377.
6Bostrom v. Seguros Tepeyac, S.A., 347 F.2d 168 (5th Cir.1965).
liability or defective design7 , and certainly is applicable
to situations involving airplane accidents.8
Of course certain courts have avoided the need for the
use of this rule by characterization of the plaintiff's
action as one for breach of warranty, in which case the
courts have utilized the contractual aspects of that action
to declare that the law of the state of sale or delivery
of the allegedly defective article governs the extent and
scope of the plaintiff's action and recovery under a theory
of a breach of implied warranty for fitness, or similar9
warranties,. In those.jurisdictions-which .have.-abandoned
lex loci delicti a determination of the "place" of the tort
has lost some of its significance since under the "significant
relationships" doctrine, the forum state will not necessarily
apply the law of the "place" of the'tort, but of course
determination of the "place" of the tort might be factually
necessary in order that the forum court would know from
which jurisdictions its ultimate selection of applicable law
might come.
With this forenote, let us examine some of the current
aviation decisions involving conflict of laws.
7Pack v. Beech Aircraft Corporation, supra, note 5,----Uppgren -v.- Executive -Aviation -Services, Inc. T 26--F.-Supp.
709 (D.C. Md. 1971).
8Annotation 77 A.L.R.2d 1266, 1277.
9See Section IV(C) Infra.
I. Negligence Cases
A. Lex Loci Delicti
In 1964,.an airliner operated by Trans World Airlines
crashed in Rome, Italy, resulting in 12 cases for death and
injury against Boeing Company and Trans World Airlines.
Applying Illinois Conflict of Laws principles as substantive
law, the United States District Court for the Northern
District of Illinois in Manos v. Trans World Airlines, Inc.,'1
held that on the issue of liability, i.e., whether or not a
tort in fact had been committed, Italian law would be applied,
-while on the issue of damages, with which Italy had no
---concern,-the law-of-the individual-states containing the
people or estates which would receive the recoverable
damages, if any, for said deaths and injuries would govern.
Applying its interpretation of the Illinois Conflict of Laws
rule, which the District Court termed a "relaxation of the
lex loci delicti rule", the court declared that the plaintiffs'
fears about the rendition of many different decisions if
the lex loci delicti rule was not applied were unfounded
since, the laws of the various states being substantially
similar, mainly "false conflict" questions were presented.
1 0Manos v. Trans World Airlines, Inc., 295 F.Supp. 1170(D.C. Ill. 1969); see also Manos v. Trans World Airlines,Inc., 295 F.Supp. 1166 (D.C. Ill. 1968); and Manos v. TransWorld Airlines, Inc., 324 F.Supp. 470 (D.C. Ill. 1971).
The court however did recognize, determine and resolve the
true conflicts questions regarding (1) statutes of limitations
and (2) plaintiff's allegations of breach of express or
implied warranty, which are discussed in Section IVC, infra.
In Heidemann v. RohlI I the South Dakota Supreme Court
in a case involving a claim for wrongful death arising out
of an aircraft crash occurring in Nebraska where plaintiff's
decedent was a resident of South Dakota, refused to adopt "a
modern fragmented approach to the settlement of multi-state
conflict of laws problems because of the lack of discernable
and-suitable --guidelines. " ---Aithoxgh South--Dakota -has a
- -bor-rowing " --statute --which inc-orporates f-or-eign -statutes
of limitation applicable to foreign causes of action, which
the South Dakota Supreme Court also interprets as allowing
the enforcement of causes. of actions for wrongful death
arising under foreign state statutes in South Dakota courts,
this was not determinative, and in a case of apparent first
impression in South Dakota as far as its Supreme Court is
concerned (Opinion, page 167), the court adopted lex loci
delicti, stating that:
. .. We prefer to retain the traditional 'place-of wrong' rule with its built-in virtues of certainty,-simplicity, and ease of application. An impressivenumber of other courts have recently assessed the
llHeidman v. Rohl, 194 N.W.2d 164 (S.D. 1972).
merits of the 'modern rule' and have refused to adoptany variant of it. (citing cases)"
In this case it is interesting to note that the flight
involved was a return trip from Colorado Springs, Colorado
to the decedent's home in Sioux Falls, South Dakota, and
Nebraska had absolutely nothing to do with the parties to
the lawsuit.
Likewise, see also Pratt v. Royder1 2 where the Texas
Court of Civil Appeals affirmed the trial court's dismissal
of the plaintiff's petition for wrongful death and damages
to the estate under the Survival Act, Article 5525, V.A.T.S.,
which arose from the death of plaintiff's husband in an
aircraft accident occurring in Mexico. Plaintiff's decedent
was a resident of Maine, the defendant a resident of Texas,
and the only other contact that Texas had with the crash was
the fact that a portion of the flight involved originated
from Dallas. The affirmance of the dismissal was based upon,
inter alia, the fact that the Texas Wrongful Death Statute,
Article 4678, V.A.T.S., as interpreted in Marmon v. Mustang13
Aviation, Inc., had no extra-territorial effect, and thus
the law of Mexico would control plaintiff's cause of actions
both as to their existence and extent, including the measure
of damages recoverable, rather than the law of either
Maine or Texas.
12Pratt v. Royder, 517 S.W.2d 922 (Tex.Civ.App. 1975).
_-13Marmon v. Mustang Aviation, Inc., 430 S.W.2d 182
(Tex. 1968).
B. "Most Significant Relationship" Doctrine
In 1973, in First National Bank v. Rostek; 14 the Colorado
Supreme Court, dealing with an aircraft accident that occurred
in South Dakota where a husband and wife, both Colorado
residents, were killed in a Colorado registered aircraft,
reversed the trial court's summary judgment for the defendant
based upon the application of the South Dakota Aviation Guest
Statute under the doctrine of lex loci delicti, and adopted
as the Colorado rule, the "most significant relationship"
doctrine of the Restatement (Second), Conflict of Laws,
--Volume 1,-Section 145 1969). In adopting this doctrine because
of its belief that a more flexible approach was necessary,
the Colorado Supreme Court noted disagreement between various
commentators as to which approach should be used and indicated
its general disregard for the "ad hoc" approach with no
guidelines at all. Thus for the host-guest situation, which
was actually the main issue for decision before the court
in this case, the Colorado Supreme Court reviewed the recent
Neumeier v. Kuehner decision, 15and with regard to the host-
guest area of conflicts law adopted the first two sections
of Judge Fuld's rules set forth at page 457 of the Neumeier
-1 4First National Bank v. Rostek, 514 P.2d 314 (Colo. 1973);cf: -Murphy v. Colorado Aviation, Inc., 353 F.Supp. 1095(D.C. Colo. 1973) decided before Rostek, supra.
1 5Neumeier v. Kuehner, 286 N.E.2d 454 (N.Y. 1972).
10.
decision. Going further, the court adopted the Restatement's
"most significant relationship" doctrine for situations in
multi-state tort controversies involving other than the
host-guest issue, and indicated that it would in the future
"lay down more specific choice of law rules governing other
areas, as we have done today in the area of guest statutes."1 6
17In Brickner v. Gooden, the Oklahoma Supreme Court in
a suit involving personal injuries of Oklahoma residents
sustained in a airplane crash which occurred near Mexico
City, Mexicoon a trip that began and was to end in Oklahoma,
- --addr-essed-it-self-to -the app-l-iabklity -of- the -1ex loci delicti
-doctrine,-and determined that henceforth in Oklahoma in
multi-state tort actions, the rights and liabilities of the
parties with respect to a "particular issue" in tort will be
determined by the local law of the state which, with respect
to that issue, has the "most significant relationship" to
the occurrence and the parties, which of course is taken
almost verbatim from the Restatement (Second), Conflict of
Laws, Section 145 (1969).18
In O'Keefe v. Boeing Company, a very complex negligence
and products liability case was tried which arose out of the
crash of an Air Force B-52 bomber manufactured by Boeing.
16First National Bank v. Rostek, footnote 14, supra, p. 320.
1 7Brickner v. Gooden, 525 P.2d 632 (Okla.. 1972).1 8O'Keefe v. Boeing Company, 335 F.Supp. 1104 (D.C. N.Y. 1971).
11.
Though at least nine individuals were on board, of whom seven
were killed, the opinion is not clear as to which parties were
actually plaintiffs and in that regard the opinion's usefulness
is somewhat limited. The aircraft in question was designed,
manufactured, sold and delivered by the defendant to the Air
Force in the state of Washington, and thereafter stationed
in Massachusetts. It crashed in Maine and the crew members
were from all over the United States. Decedent, O'Keefe was
the only citizen of New York, where suit was brought.
Citing New York law, the Federal District Court held that a
New York forum, essentially neutral in a given death action,
need not necessarily look at all to the lex loci delicti,
and that under the "most significant relationship" doctrine
19-espoused in Babcock v. Jackson, that the law of the place
of design, manufacture, sale and delivery of the aircraft in
question, the state of Washington, governed the plaintiffs'
claims for both negligence and breach of warranty, as opposed
to Maine, the place of the accident, or any other jurisdiction.
The court concluded that the state of Washington was the
state with the greatest concern with the specific issues of
manufacturer's liability insofar as this case against Boeing
was concerned.
1 9Babcock v. Jackson, 191 N.E.2d (N.Y. 1963).
12.
S ff M LIBqARYC. Comment
Though not an aviation case, the recent decision of20
Neumeier v. Kuehner, which involved a host-guest situation
is interesting to note with regard to all states that have
adopted the "most significant relationship" doctrine since
it comes from the state that originated the move away from
the doctrine of lex loci delicti. It is also appropriate to
comment thereon since the Colorado Supreme Court in First
National Bank v. Rostek2 1 adopted the first two parts of the
Neumeier rule. In Neumeier, the New York Court of Appeals22
recognized-that the decision in-Babcock v. Jackson resulted
in quite inconsistent decisions by the New York courts. The
Neumeier v. Kuehner decision, coming just nine years after
Babcock v. Jackson, formulated more precise rules intended
to reinject the element of consistency removed by the
Babcock v. Jackson decision. The Rhode Island Supreme Court23
in Labree v. Major, has interpreted the Neumeier v. Kuehner,
decision, as signalling a retreat by New York courts from
their earlier adoption of the "most significant relationship"
-doctrine and a reacceptance of the lex loci delicti rule.
-2 0 Supra, footnote 15.
... . -pra, footnote 14.2 2Supra, footnote 19.
2 3Labree v. Major, 306 A.2d 808, 817 (R.I. 1973).
-1 ft
In effect, the Neumeier v.Kuehner rule, and Rostek, supra,
by virtue of its acceptance of the first two portions
thereof, is one of (1) lex loci "domicile", and (2) lex
loci delicti. The Colorado Supreme Court has not gone so
far as to adopt the third portion of the Neumeier rule,
which of course is by its own terms "normally" lex loci
delicti, but has elected to cast the Colorado courts adrift
into the same sea of "significant relationships" from which
24New York has recently and substantially returned.
II. Strict Liability
-Generally -speaking, since the-doctrine of -strict lia-
- bility is an action-sounding in tort rather than
2 4See Rogers v. U-Haul Company, 342 N.Y.S.2d 158 (App.Div. N.Y. 1973), an automobile case where the defendant re-sided in New York, while plaintiff's decedent, a passenger,lived in Alabama. The defendant, U-Haul Company, was alsodoing business in New York, and the motor vehicle was leasedin New York for a one-way trip to Alabama. During that tripan accident occurred in Pennsylvania. Against Plaintiff'scontentions, the trial court followed Neumeier v. Kuehner,supra, footnote 15, and held that section 3 of Judge Fuld'sNeumeier decision was applicable and that the law of the placeof the accident, Pennsylvania, would be applied, resulting indismissal of the complaint against the defendant, U-Haul. ° :It is interesting to note that the court found no' .coxpellingreason to apply New York policy and law and further declinedto apply the law of the plaintiff's residence, Alabama, whichit noted to be the ". . . state most interested. . .," allin adherence to Neumeier. The trial court obviously abandonedthe "most significant relationship" doctrine, stating thatthe question was only whether New York or..Pennsylvania law,the place of the accident, was applicable. Affirmance by theAppellate Division indicates a correct resolution of the issueunder Neumeier.
14.
contract,2 5 the applicable choice of law rules will either
be, as in the case of negligence actions, lex loci delicti
or the "most significant relationship" doctrine depending on26
the forum state. This is not true of course with regard
to those cases involving claims for breach of implied warranties
where the emphasis, for choice of law purposes, is placed
upon the contractual aspects of the action, thus selecting
the place of sale or delivery of the item as the source of
applicable law. See Section IV, infra. This dichotomy is
remarkable in view of the generally recognized view that
strict liability in tort -and liability -under implied warranty
-without the -requirement of privity are merely different ways27
of describing the very same cause of action.
Compare for instance the unusual result reached in the
second Manos v. Trans World Airlines, Inc. case 2 8 and the29
third Manos case, both of which cases dealt with the crash
of a TWA airliner in Rome, Italy. In the second Manos
2 5Doss v. Apache Powder Co., 430 F.2d 1317 (5th Cir.
1970).2 6Smith v. General Motors Corporation, 382 F.Supp. 766
(D.C. Tex. 1974).2 7 0'Keefe v. Boeing Company, 335 F.Supp. 1104, 1114
(D.C. N.Y. 1971).
..... -Manos v. Trans World Airlines, Inc., 295 F.Supp. 1170(D.C. Ill. 1969).
2 9Manos v. Trans World Airlines,. Inc., 324 F.Supp. 470(D.C. Ill. 1971).
15.
case, the district court, though noting that Illinois
conflict of laws principles require the application of the
law of the place of the tort to determine whether or not a
tort was committed, nevertheless held at page 1176 that the
plaintiffs' allegations of express or implied warranty must,
under other applicable Illinois conflict of laws principles,
be defined and limited by the law of the state where the
article was sold, i.e., Washington. In the third Manos
case, the court then looked to the law of Washington, to
'!define and limit" the action for alleged breach of implied
warranty, and found that Washington did not have such a
cause of action, but that the law of Washington was strict
liability, a tort concept, under Section 402A of the Restatement
of Torts (Second). The district court therefore applied
Washington law regarding a Washington tort cause of action,
whereas had the true tortious nature of the action for
breach of warranty been recognized under Illinois choice of
law rules, rather than the contractual "place of sale"
aspects of the action, the litigation would possibly have
been governed by the substantive tort law of Illinois,
Italy, or another jurisdiction. The most rational explanation
for the court's characterization of this breach of warranty
-act-ion -as -cont-ractual -rather than-tor-tious, and its resultant
selection of the applicable Illinois choice of law rule, is
16.
the rule that the law of the forum will always be applied to
characterize the nature of the cause of action for choice of
30law purposes.
1iL.4 Breach of Warranty
A. Lex Loci Delicti:
Recent aviation cases applying the choice of law rule
of lex loci delicti to allegations of breach of warranty31
include Uppgren v. Executive Aviation Services, Inc.,
where the Federal District Court in Maryland heard a case
concerning the crash of a helicopter in Minnesota which took
-the1?ife-of-a- innehta-residentwhere--the helicopter was
--sold and delivered in Maryland-to the-United States Interior
Department. Despite the contentions of both parties that
either the law of Maryland or the law of the District of
-Columbia should control the cause of action with regard to
breach of warranty, the District Court noted the historical
tortious background of the action for breach of warranty,
found it to be so closely related to tort that it should be
subject to the lex loci delicti rule of Maryland, the state
in which the District Court was sitting in this diversity
matter, and held Minnesota law, the site of the crash, to be
applicable to Plaintiff's breach of warranty claims, which
30Parrish v. B. F. Goodrich Company, 207 N.W.2d 422,
424 (Mich. Ct. App. 1973).31Uppgren v. Executive Aviation Services, Inc., 326 F.
Supp. 709 (D.C. Md. 1971).
17.
of course made applicable the Minnesota statutory wrongful
death damage limitation.
Clearly it would seem that actions for wrongful death
or personal injury based upon allegations of breach of
implied warranty of fitness or merchantability, or upon
other similar breaches of warranty, simply are more closely32
akin to a tort than a contract, but the reluctance of some
courts to recognize this, leads to the possibility of situations
such as that almost faced by the Third Circuit Court of
Appeals in Paoletto v. Beech Aircraft Corporation. In
--that case the Federal- District Court, sitting in Delaware in
a diversity wrongful death cause of action arising out of an
airplane crash in Alaska where the plaintiff alleged negligence
and breach of warranty, applied Delaware choice of law rules
and found that the characterization of the action as breach
of warranty created a problem, in that where cause of action
for breach of warranty was alleged, Delaware choice of law
rules would select as controlling the law of the state of the
sale, i.e., Kansas in this case, whereas had the action been
characterized a multi-state tort, then Delaware choice of
law would have selected as applicable law the law of Alaska
under the doctrine of lex loci delicti. In this case, the
3 2McDevitt v. Standard Oil Company of Texas, 391 F.2d364 (5th Cir. 1968).
33Paoletto v. Beech Aircraft Corporation, 464 F.2d 976
(3rd Cir. 1972).
18.
Third Circuit found the law of Alaska in strict liability
cases to be the same as Kansas product liability law in
breach of warranty cases, and thus a "false conflict" was
presented which did not require the resolution of the choice
of law question. Nevertheless the possibility of a divergent
characterization of a breach of warranty cause of action for
wrongful death or personal injuries as either tortious or
contractual in nature, particularly in cases where alle-
gations of both negligence and breach of warranty are en-
countered, continue to pose potential problems which may in
fact constitute "real conflicts". The more enlightened view
would seem to be that taken by the Third Circuit in Raritan
Trucking Corporation v. Aero Commander, Inc., 34 where the
cour stated at page 1113 that:
"Although actions based on breach of implied warrantyof fitness and those based on strict liability in tortmay be distinguished, in New Jersey the two actionshave tended to become merged."
The merger of the two doctrines, if the end result is
deemed to be tortious in nature, would eliminate the possibility
of the type conflict almost experienced by the court in
Paoletto, supra, and the type of conflict which will almost
always be experienced by. a court where both negligence and
breach of warranty are alleged by the plaintiff in the same
suit, and breach of warranty is deemed contractual for choice
of law purposes by the forum state. See Section IVC, Infra.
3 4 Raritan Trucking Corporation v. Aero Commander, Inc.,458 F.2d 1106 (3rd Cir 1972); see also O'Keefe v. Boeing
--Company, 335 F.Supp. 1104, 1114 (D.C. N.Y. 1971).
19.
B. "Most Significant Relationships" Doctrine
As previously noted, the Federal District Court in
35O'Keefe v. Boeing Company, held under the context of New
York's "most significant relationship" choice of law doctrine
that the law of the state of Washington, the place of design,
manufacture, sale and delivery of the B-52 bomber in question
governed the plaintiffs' claims for recovery under allegations
of both negligence and breach of warranty.
C. Place of Sale or Delivery:
A not uncommon approach to choice of law where allegations
-of breach of warranty are concerned is that set forth in36
Quandt v. Beech Aircraft Corporation where the Delaware
Federal District Court applied the Delaware conflict of laws
rule with regard to breach of warranty actions and held that
the substantive law of Kansas, the state of manufacture and
sale of the aircraft would govern. In the same case, the
Federal District Court, again applying the Delaware choice
of law rule with regard to torts, held that the allegations
of negligence against Beech Aircraft Company would be governed
by the law of Italy, the place where the accident occurred, this
-3 50'Keefe v. Boeing Company, 335 F.Supp. 1104 (D.C.N.Y. 1971).
36Quandt v. Beech Aircraft Corporation, 317 F.Supp.1009 (D.C. Del. 1970); see also Prashker v. Beech AircraftCorporation, 258 F.2d 602 (3rd Cir. 1958); Hopkins v. LockheedAircraft Corporation, 201 So.2d 743 (Fla. 1967).
20.
37being a true case of a Paoletto-type conflict, which
arises from the mere characterization of the nature of the
claim.
See also Manos v. Trans World Airlines, Inc. 38 where
the Federal District Court in Illinois applied the Illinois
choice of laws rule to plaintiffs' allegations of breach of
express and implied warranties, and upon finding that the
aircraft in question had been manufactured, sold and delivered
by Boeing in Washington state, declared Washington law to
govern the definition and limits of the action for alleged
breach of expressed and implied warranty.
In Holcomb v. Cessna Aircraft Company and Continental
Motors3 9 the Fifth Circuit apparently approved the Florida trial
court's holding, in a suit to recover for engine defects on
.a Cessna aircraft, that the liability of the defendant under
allegations of breach of expressed and implied warranties
was to be governed by the law of Kansas, the place of the
sale, and under the Kansas Uniform Commercial Code. The
aircraft however, though sold in Kansas, was delivered to
the purchaser in Louisiana, and at page 1156, the court stated
that a manufacturer could not be held liable on the theory
of implied warranty in absence of proof of a defect in the
3 7Paoletto v. Beech Aircraft Corporation, 464 F.2d 976(3rd Cir. 1972).
38Manos v. Trans World Airlines, Inc., 295 F.Supp. 1170
(D.C. Ill. 1969).3 9Holcomb v. Cessna Aircraft Company and Continental
Motors, 439 F.2d 1150 (5th Cir. 1971).
article "on the date of delivery". Thus an unresolved
question arises as to whether ot not, if the date of
delivery is controlling, the law of Louisiana, which was
the place of delivery, should control as opposed to the law
of Kansas, the state of the sale.
D. Uniform Commercial Code:
The advent of the Uniform Commercial and its effects
in situations involving allegations of breach of warranty
has not yet been fully felt. In the absence of relevant
aircraft cases dealing with the implied warranties found in
Sections 2.314 and 2.315 of th& Uniform Commercial Code it
is enough to note the choice of law provisions set forth in
Section 1.105 and the four-year statute of limitations set
forth in Section 2.725. For the manner in which one court
attempted to reconcile the Uniform Commercial Code provisions
to its tort oriented breach of warranty actions and its
general tort statute of limitations, see Parrish v. B. F.40
Goodrich Company.
IV. Limitations of Actions
-While normally statutes of limitations in a choice of
law context are termed either (1) substantive, as in statutory
wrongful death causes of action (and hence lex loci delicti
is appl-Lcable), or (- -procedural,--wherethe statute of
4 0Parrish v. B. F. Goodrich Company, 207 N.W.2d 422(Mich. Ct. "App. 1973).
22.
limitation merely bars the remedy and not the right (and
hence the lex fori applies) 4 1 the whole "substantive-procedural"
discourse maybe rendered moot by the application of the
"most significant relationship" doctrine as was done in42
Sergeant v. Eagle Flight Ways, Inc. where the Oregon
Circuit Court allowed a statutory cause of action for wrongful
death to be heard in Oregon when it was barred by the statute
of limitations under the law of British Columbia, the place
of the accident, the court having found that Oregon was the
state with the most significant contacts.
-- n-Ramsay v. Boeing-Company4 3 the Federal -District
Court applied the Mississippi "center of gravity" choice of
law doctrine which had been adopted by the Mississippi
courts from the Restatement (Second), Conflict of Laws,
which resulted in a finding that Belgium had the most
contacts with the accident and the application of Belgian
law, where the accident occurred, as well as the statute of
limitations of that jurisdiction to bar the plaintiff's
claims. None of the plaintiffs were residents of Mississippi,
the forum state. In this suit, plaintiffs had selected
Mississippi simply to take advantage of the six-year statute
4 .Francis v. Herrin Transporation Company, 432 S.W.2d710 (Tex. 1968); Ramsay v. Boeing Company, 432 F.2d 592 (5thCir. 1970).
4212 CCH Aviation Cases 18,128 (Ore.Circuit Court
1973).4 3Ramsay v. Boeing Company, 432 F.-2d 592 (5th Cir. 1970).
23.
of limitations, but the Fifth Circuit approved a finding
that the five-year Belgian statute of limitations was sub-
stantive and would be applied under Mississippi choice of
law rules to bar the plaintiffs' actions.
Of course, where the limitation involved is part of a
foreign statutory right of action, the expiration of which
extinguishes the right to sue, and the forum state adheres to
the lex loci delicti rule, then that foreign statute of limi-
tations will generally be held applicable to suits based
upon that statutory case of action and brought in the forum44
-state.
Frequently however, this general scheme is complicated
by the presence of a "borrowing" statute or the "Uniform
Statute of Limitations on Foreign Claims Act". 4 5
These "borrowing" statutes generally provide that:
"The period of limitation applicable to a claim ac-cruing outside of this state shall be either thatprescribed by the law of the place where the claimaccrued or by the law of this state, whichever bars theclaim." 46
Thus, where there are statutes of limitation outside
the forum state which are shorter than that of the forum
state, a choice of law question is presented which requires
44pack v. Beech Aircraft Corporation, 132 A.2d 54 (Del.1--957).
45See for example Michigan Code of Laws Annotated
S600.5861; New York C.P.L.R. S202.4 6Michigan Code of Laws Annotated S600.5861(2).
-24.
determination of the place that the claim "accrued". This
question may provide different answers depending upon whether
the claim is characterized a tort in the nature of strict
liability or negligence, or a breach of warranty with con-
tractual aspects, and the greatest problems will occur of
course with breach of warranty actions which may be character-
ized either way by different courts.47
In Manos v. Trans World Airlines, Inc. for instance,
the Federal District Court applied Illinois' "borrowing
statute" which had been interpreted by Illinois' courts to
-require a-determination of,-and-application of, the law of
the "place where the last act occurred to create liability"
to determine whether or not the statute of limitations of
that "place" would bar Plaintiffs' action. The District
Court found that the lack of proof of the statute of limitations
of Italy, the air crash having occurred in Rome, was sufficient
to prevent the granting of a summary judgment in favor of
defendant based upon the defense of limitations.
Such "borrowing statutes", which in the Manos case
read:
"When a cause of action has arisen in a state orterritory out of this state, or in a foreign country,_and, by the laws thereof, an action thereon cannot bemaintained by reason of the lapse of time, and actionthereon shall not be maintained in this state."
4 7Manos v. Trans World Airlines, Inc., 295 F.Supp.1170, 1175 (D.C. Ill. 1969).
25.
are really statutory embodiments of the rule of lex loci
delicti with regard to statutes of limitation which will
be applied even though the forum state has in itself
adopted the "most significant relationships" doctrine of
choice of law.
The same choice of law inquiry was found in O'Keefe48
v. Boeing Company. Although the New York "borrowing"
statute is slightly different from that of Michigan since
it provides that New York residents will be affected only by
the New York statute of limitations, in this case the effect
was adetermination by the District Court-that the cause of
actions of the plaintiffs "accrued" for limitation purposes
in -Washington state and that the Washington statute of
limitations period for the negligence cause of actions
alleged was three years, which began to run from the time of
the crash, thus allowing the maintenance of the negligence
cause of actions, whereas those actions would have been
barred had the law of Maine been applied as defendant Boeing
Company urged. The New York "borrowing statute" 49 did not
by its own terms, however, prevent the six-year New York
statute of limitation for actions based upon breach of
implied warranty of fitness, which runs from the date of
4 80'Keefe v. Boeing Company 335 F.Supp. 1104 (D.C. N.Y.1971); see also Braniff Airways, Inc. v. Curtis-Wright Cor-
ration, 424 F.2d 427 (2nd Cir. 1969); George v. DouglasAircraft Company, Inc., 332 F.2d 73 (2nd Cir. 1964).
49New York C.P."L.R. 5202.
26.
sale, from running to the detriment and bar of O'Keefe,
the only New York resident plaintiff.
VL Contribution and Indemnity
Generally speaking, under the law as it prevails today
it is well settled that the right to contribution or indemnity
between joint tortfeasors is governed by the law of the place
where the tort has been committed, or lex loci delicti.50
Nevertheless, a determination of which jurisdiction's law of
contribution and indemnity should be applied has also been
reached through the application of the "most significant
-relationship"' doctrine, and it -may be-other-thanthe place
51of the injury or place of the tort.
Conversely, in some states the application of the
doctrine of contribution, and, by probable implication the doctrine
of indemnity also, is held to be procedural, remedial law,
going to the remedy only, and thus, being procedural, the
law of the forum or the lex fori will be applied in questions
of contribution and indemnity.52
Nevertheless, and despite this well-established body of
state law, the United States Court of Appeals for the
Seventh Circuit in Kohr v. Allegheny Airlines, Inc.5 3
5 0Annotation, 95 ALR2d 1096, 1099.5 1Kantlehener v. U.S. v. Boeing Co., 279 F.Supp. 122
(D.C. N.Y. 1967).
52 Perqz v. Short Line Inc., 231 A.2d 642 (Sup. Ct. Del 1967).
53Kohr v. Allegheny Airlines, Inc. ,-504 F.2d 400 (7th Cir.1974) application for writ of certiorari pending).
27.
reversed the trial court in part and held, in a mid-air col-
lision case under the jurisdiction of the Judicial Panel on
Multi-District Litigation, that it was unnecessary to determine
the availability of contribution or indemnity under state choice
of law rules since there was, now, by the declaration of the
Seventh Circuit, a federal law of contribution and indemnity
governing "mid-air collisions" such as that involved in this
diversity case.
Basing their decision on the commerce clause of the
United States Constitution, the federal interest in uniform
air law regulation, Section -IO8 of -the Federal Aviation Act
of 1958, the fact that a mid-air collision was involved, the
fact that the United States was a party under the Federal
Tort Claims Act, and that the litigation was under control
of the Multi-District Litigation Panel, the Seventh Circuit
concluded that there was no reason why federal law should
not be applied to determine the rights and liabilities of
the parties involved in "aviation collisions" insofar as
contribution or indemnity was concerned and then declared
that the federal rule for contribution or indemnity in such
cases should be based upon a "comparative negligence basis,"
among the responsible defendants. The court also spoke to a
situation where settlement hadoccurred, holding that it
would be a burden of proof upon the party claiming contribution
to also establish that the amount paid in settlement was a
reasonable settlement under the circumstances before
28.
contribution or indemnity would be allowed for the full
extent of said voluntary settlement payment. An application
for a writ of certiorari to the United States Court is now
pending, and it would appear that the Seventh Circuit has
obviously ignored the mandate of Erie Railroad Company v.54
Tompkins, unless of course the matter of contribution and
indemnity is truly procedural and goes only to the remedy,
rather than substantive rights. In this event, and under55
the analysis spoken of above such rule may be sustainable
on the basis that it is actually a rule of federal procedural
--- aw-and--n-t-an-im-va-ion-into-the-domain of state substantive
law. The opinion was not footed on this premise, however,and
clearly, the decision is one which is contrary to other.
multi-district panel litigation cases that have been previously
decided, such as Multi-District Civil Actions Involving the
Air Crash Disaster Near Dayton, Ohio on March 9, 1967,56
where the Ohio District Court applied Ohio law regarding
rights to contribution or indemnification among joint tort-
feasors in that air disaster litigation.
5 4Erie Railroad Company v. Tompkins, 304 U.S. 64, 82L.Ed. 1188 (Sup. Ct. 1938).
5 5See footnote 52, supra; and also 2 Moore's FederalPractice, paragraph 1. 0414,_p._227- 1967.
5 6Multi-District Civil Actions Involving the Air CrashDisaster Near Dayton, Ohio on March 9, 1967, 12 CCH AviationCases 17,299 (D.C. Ohio 1972).
VI. Releases
It has also been generally held throughout the country
that the law of the place of the wrong,. or the lex loci
delicti, governs the question whether the release of one57
tortfeasor operates to release all joint tortfeasors, and58
this rule was recently reaffirmed in Heidemann v. Rohl,
where the Supreme Court of South Dakota in determining the
effect of a release of liability for damages arising from
an air crash which occurred in Nebraska held, even though
the release itself was executed in South Dakota in favor of
--apparently a South Dakota resident defendant, that the law
of Nebraska, the lex loci delicti must be applied since "the
effect of a release is governed by the substantive law of
the place where the alleged tort occurred."
Of course this is not always the case, and in other
jurisdictions it has been held that the law governing the
effect of a release given by a injured party to one tort-
feasor may be determined either under the analysis of the
"most significant relationship" doctrine5 9 or the lex
57Annotation, 69 ALR2d.1034, 1035.
58Heidemann v. Rohl, 194 N.W.2d 164 (S.D. 1972).
59See-Root v. Kaufman, 265 N.Y.S.2d 201 (Civil Ct. N.Y.City 1965), where in obedience to Babcock v. Jackson, 191 N.E.2d279 (N.Y. 1963), the New York City Civil Court held that theeffect of a release executed in New Jersey which concernedliability arising out of a New York accident would be construedby the law of New Jersey, the state with the "preponderance ofcontacts between the parties".
30.
60fori.
VII. Res Judicata and Collateral Estoppel
The effect of a state court judgment, under doctrines
of res judicata or collateral estoppel, may also involve
choice of law considerations, i.e., what law prescribes the
effect to be given to a prior judgment under one or both of
said doctrines for those claiming the benefit or protection
of the former judgment? In Lowenstein v. Executive Air61
Fleet Corporation, et al, it was held that since "the
nature and extent of the estoppel effect of a judgment
depended on the law of the state where the judgment was
rendered", that New York law should govern the effect of a
previously rendered New York State Court judgment.
And while normally federal district courts must apply
the substantive law of the state in which it sits, or in the
case of a court which hears a case from another district
referred to it by the Judicial Panel on Multi-district Liti-
gation, the law of the transferor court, consider the case62
of In Re Air Crash Disaster, Dayton, Ohio on March 9, 1967,
where the court decided that predominant federal interest in
the effective and efficient administration of the federal
judicial system required that federal law, and not state
6 0Annotation, 69 ALR2d 1034, 1974 Later Case Service.
6 1Lowenstein v. Executive Air Fleet Corporation, et al,11 CCH Aviation Cases 17,895 (D.C. N.Y. 1970).
6 21n Re Air Crash Disaster, Dayton, Ohio on March 9,
1967, 350 F.Supp. 757 (D.C. Ohio 1972), 12 CCH AviationCases 17667.
law, should determine the preclusive effect under the doc-
trine of collateral estoppel to be given to a previously
rendered federal court judgment in diversity actions in
subsequent federal suits involving the same issue. The
court noted that it had earlier assumed, without benefit of
briefs, that it should, with regard to the issue of the
effect of a prior federal court judgment, apply the choice
of law rules of the transferor state of Michigan and that a
Michigan choice of law rule would then direct the application
of the law of Ohio where the tort occurred to determine the
--estoppel effect of the prior judgment. However, the court
reversed itself as stated above, and in doing so avoided the
mandate of Erie Railroad Company v. Tompkins 6 3 by characterizing
the res judicata effect of a former federal court judgment
as a procedural, as opposed to a substantive, matter which
did not go to the "essence of a state created cause of
action".
The district court found "entirely different considerations"
to be involved in this case and so "related to an overriding
federal interest in the effective administration of justice
in the federal court system," that federal law must govern
the preclusive effect, or res judicata issues, raised in
that litigation.
The court then utilized the collateral estoppel rules
found to be applicable to hold that in the context of mid-air
6 3See footnote 54, supra.
collision disaster multi-district litigation it was not
a violation of due process to hold a plaintiff barred from
relitigating the issue of a defendant's liability for the
mid-air disaster where the defendant's liability had been
previously fully litigated in a prior action, even though
the instant plaintiff had not been a party to that previous
action.
The aggrieved plaintiff then appealed this ruling
against him to the Sixth Circuit which reversed the trial64
court's opinion in Humphreys, et al v. Tann, et al.
In reversing the trial court, the Sixth Circuit found that
due process was violated by the application of collateral
estoppel against one who was never a party to the prior
action, but in reaching this ultimate decision, the Sixth
Circuit, while noting that the trial court had clearly
applied federal law to determine the application or not of
collateral estoppel or issue preclusion, did not reverse the
trial court on the grounds that such was not a proper resolution
of the applicable law. Instead, the Sixth Circuit sidestepped
the question by stating that "unless there exists a federal
rule of collateral estoppel which is different from that of
Ohio, however, it is not necessary to decide which law
.-controls," and then finding inferentially that there was no
6 4Humphreys, et al v. Tann, et al, 487 F.2d 666 (6thCir. 1973).
33.
difference which required this decision. Accordingly,
it is entirely possible that a federal law of collateral
estoppel or issue preclusion will be applied by federal
courts in the future, especially in multi-district mid-air
collision disasters.
viz. Res Ipsa Loquitur
In O'Keefe v. Boeing Company 6 5 it was held that the
applicability and availability of the doctrine of res ipsa
loquitur, where for instance the plaintiff has also offered
evidence of specific acts of negligence, would be governed
by New York law, the lex fori, since res ipsa loquitur
is a "procedural rule of evidence" and a matter of procedure
to be controlled by the law of the forum even though the
accident involved occurred out of the forum state.
CONCLUSION
In conclusion, it appears that a practical and effective
way to attack a question of conflict of laws is to proceed
by the following steps:
1. Determine the state of the forum court;
2. Determine the legal theories and issues alleged by
the plaintiffs, i.e., whether negligence, breach of warranty,
strict liability, res ipsa loquitur, or availability of
-.--limitations, etc.,
6 50'Keefe v. Boeing Company, 335 F.Supp. 1104 (D.C. N.Y.1971); see also Citrola v. Eastern Airlines, Inc., 264 F.2d815 (2nd Cir. 1959).
3. Determine the choice of law rule or doctrine,
whether statute or decisional law, of the forum state applicable
to the plaintiff's allegations of legal theories of action,
or defensive issues for that matter, and
4. If necessary, the forum state's characterization of
the nature of plaintiff's causes of action or other issues,
and then,
5. Determine and simplify the basic facts of the case
to see which jurisdiction's law will control under the
applicable choice of law rule and characterizations determined
above, i.e., determine the plaintiff's residence, the defendant's
residence, the place of design, manufacture, sale and delivery
of the aircraft in question, the place of the accident, and
any other outstanding interests or contacts that one jurisdiction
may have with the matter under consideration as opposed to
another jurisdiction.
Upon conclusion of this analytical approach, it should
be possible to determine the jurisdiction whose law will
control the resolution of the material issues in litigation
by fitting the simplified fact situation to the applicable
choice of law rules.
35.
Mr. Peter Martin's paper will be distributed at the time of his speech.
Mr. William F. Kennedy's paper will be distributed at the time of his speech.
"A NO-FAULT AVIATION INSURANCE PLAN"
PRESENTED BY: TO: JOURNAL OF AIR LAW AND COMMERCE
Congressman Dale Milford Southern Methodist University
24th District of Texas School of Law
April 5, 1975
The presentation of this paper to a group of trial
attorneys will probably be about as popular as 'catnip in the
colosseum'. However, relative popularity must give way to a
vital need to solve some serious problems that are facing the
safety of the flying public and the survival of the entire
aviation industry.
Hopefully, the legal profession and the Journal of
Air Law and Commerce will forgive me for the form and style in
which this paper is presented; its lack of case references,
latin phrases -. and footnote references. You must remember,
I do not practice law -- I only write them.
Tragically, one of the weaknesses of our political
system stems from the fact that many legislators write laws
without having a practical knowledge of the effects and the
practical application of the statutes.
The purpose of this paper is to:
(1) outline certain serious problems that are
threatening public safety and the Aviation
Industry;
(2) outline one possible solution;
(3) Solicit your criticisms, advice, suggestions
and assistance in improving this or substituting
another plan.
From the beginning, it should be clearly understood
that I have only one advocacy: The welfare of the traveling public.
I am neither pro-plantiff, pro-defense nor pro-industry.
Furthermore, I would like to remain free -- as much as possible --
from these competitors that arise within the legal profession.
Page 2
In this paper, an attempt will be made to define these problems
and then to explain a possible solution. I do not suggest that the
solution herein is the answer. I do contend that it is an answer.
My goal is to find the best solution to the stated problems.
Prior to becoming a Member of Congress, my field of expertise
wa.; Aviation and Meteorology. These fields hardly gualify me as a
legal technician. Hopefully, with my famialarity with aviation and
your expertise in the legal profession, we will be able to find a
-air and workable solution to the problems that I will outline.
If you do not like the proposed solution that will be offered, I chall-
enqe you to produce an alternative that will provide equivalent
pblic protection factors.
Identification of Problems
The public safety and national welfare are being seriously
threatened by the following aviation-related problems:
1. Inadequate safeguards to assure complete, accurate and
comprehensive investigations of aviation accidents; hence,
the possibility that unsafe aircraft may be in operation now
or at a later date.
2. Fxcessive consumer costs, passed through by the aviation
industry, attributable to liability insurance premiums paid
by aircraft manufacturers and air carriers.
3. A threat of business termination, of major segments in the
aviation industry, due to single catostrophic aircraft accidents.0
Page 3
4. Retardation of technological advancements and improvements,
within the aviation manufacturing industry, resulting in a
threat to this nation's position as the world's leading
aircraft manufacturers.
Aircraft Accident Investigation Defects
The complex technology involved in the manufacturing of today's
aircraft presents a monumental task for accident investigators. The
National Transportation Safety Board (NTSB) is responsible for in-
vestigating all major aviation accidents in this country.
Recently, accidents are investigated by means of technical teams
of experts provided by the federal government and the aviation industry.
In effect, manufacturers of airframes, engines and the various aircraft
operational systems are appointed to literally investigate their own
products. This situation is necessary because no other person or agency
possesses the necessary technological expertise. Government members
primarily administer major aviation accident investigations.
In years past, under the old Civil Aeronautics Boards (CAB) in-
vestigations, the accident board and individual team member investigation.
were confidential. Their work products, notes, reports, tec., could
not be used in civil litigation. The original purpose of the accident
board was to find causative factors, with no regard for liability or
fault.
In recent years, Congress passed the Torts Claim Act and the Freedom
of Information Act. These acts now permit the work products of accident
investigation boards to be subpoenaed in civil liability litigation.
Unfortunately these acts have brought an end to effective investigations
of major aircraft accidents.
Page 4
The government does not have personnel with the
necessary technological expertise to solely conduct investiga-
tions of major aviation accidents. Furthermore, under present
laws, both industrial and governmental members of accident
investigating boards have a definite conflict of interest.
Their own survival or welfare may hinge on the results of the
investigation.
An example of this conflict would be as follows:
assume that a Boeing 747 is involved in a major accident. Only
Boeing has the necessary expertise to examine the ruins of the
crash and determine whether or not a defect was present in the
air-frame. Yet, if the Boeing accident investigators admit to
the presence of a defect, the company will be found liable and
must pay all damages and related costs of the accident. This
situation creates a potential hazard to the public. As these
airplanes become older, that potential hazard increases.
Due to the complexities of modern day aircraft, it
is virtually impossible to positively and completely eliminate
all potential defects or "bugs" prior to placing the airplanes
into operation. Furthermore, "bugs" may not show up until after
millions of flying hours. These defects are potential killers.
It is vitally important for public safety for bugs
or aircraft defects to be discovered and eliminated immediately.
In the past, all segments of the aviation industry were eager to
find any possible defect and to correct it. Now the situation is
different.
Page 5
The cost of a Boeing 747 accident (total settlement)
can be as high as $100,000,000. Such a figure can virtually
wipe out an airline company or aircraft component manufacturer.
It is unreasonable to believe that any industry
investigator would voluntarily admit to a defect that would put
his company out of business. Therefore, present NTSB investi-
gations are not working in a manner that will assure public pro-
tection. The individual accident investigating team members
certainly could be motivated or concerned with "being sure that
their own company's skirts are clean", rather than determining
cause of the accident.
Excessive consumer Costs _.
Civil liability law suits involving aircraft are
particularly threatening the existence general aviation. Unlike
an automobile manufacturer, the maker of an aircraft--in reality--
assembles parts from many different manufacturers. Engines come
from one maker, instruments from another, still other manufactur-
ers will make the landing gear, hydraulic system, avionics, etc.
The smallest aircraft assembler will use parts and components
from more than 100 manufacturers.
Following an accident, plaintiffs will normally sue
each of the major component manufacturers. Therefore, each maker
must prepare a costly defense, even though their product may
have been completely fault-free. More often than not, the
plaintiff is "judgement proof", therefore the manufacturer has
no way of reclaiming his legal defense costs.
Aviation Insurance underwriters are becoming reluctant
to provide product liability insurance to aviation manufacturers--
Page 6
at any price. Those that are insured must pay extremely high
premiums. Obviously, these costs are passed on to the public
consumer. Soaring costs are forcing some segments of general
aviation out of business.
Retardation Of Technology Improvements
Aircraft technology and product improvements are being
seriously hampered as a result of civil liability law suits.
Aviation, being a new technology, has a past history of constant
and immediate improvements of their products. This practice
has been slowed considerably.
The production of a new high-technology aircraft can
amount to a risk that could bankrupt the manufacturer. Therefore,
rather than take the chance, he will stay with his 'safe' older
model, even though the newer one is really the safer one. The
manufacturer is fully aware of the extremely difficult task of
trying to explain a complicated technology to lay jury, during
a liability law suit, with the bereaved widow and her children
sitting in the court room.
Manufacturers are also reluctant to make product im-
provements or modifications lest the change amount to an admission
that the older version was deficient and thereby breed a rash
of law suits.
In the Congress, we are receiving a considerable number
of complaints, that can best be discribed as a "legal abuse of
process". This involves one of the grey areas of our laws that
Page 7
does not constitute a "legal violation" or even an "ethical
violation". Yet, in fact, it is an abuse of process and one that
is very peculiar to the Aviation Industry.
As mentioned previously, even the smallest aircraft
will be assembled from the parts of a hundred or more manufacturers.
Any one of these parts could be the cause of an accident.
According to the complaints we are receiving, some
attorneys simply file law suits against all of the component
manufacturers. This forces each to wage a costly defense.
The Plaintiff then begins a round of negotiations
with each defendant with offers to settle for a sum below the
defense cost. With several defendants being involved, the
collective settlement amount can be substantial.
Aviation's Special Category
Aviation is unique in so far as public protection is
concerned. Other means of mass passenger transportation, avail-
able to the American public, are older than aviation. The
airplane was the last development in mass transportation.
Laws governing all modes of mass transportation -- other
than aviation -- consist of a hodge-podge collection of local,
state, federal and international laws or regulations. Only
in the case of the airplane do we find positive federal protective
laws involving licensing, manufacturing, operation, modifications,
maintainance and training.
Page 8
Any 'shadetree' mechanic or even totally untrained per-
sons can build, modify, repair, sell or operate an automobile
without federal scrutiny. Similar situations exist for boats,
trains and buses. The federal government becomes concerned
only when interstate factors are involved with these vehicles,
and even that involvement is minimal.
The airplane differs from other modes of transportation
in another important way. It is a hand-built machine, wherein
every single piece has been engineered, tested, and proven to
the satisfaction of the United States government, before it is
allowed to be placed in operation.
Before any airplane can carry a passenger, even without
charge, the manufacturer must prove to the Federal Aviation
Administration (FAA) that the craft is safe. Before that
manufacturer can sell his aircraft or use it to transport
paying passengers, he must go through a complex FAA Type
Certification program and prove the craft not only to be safe
and airworthy, but to also establish safe operating life of all
major components.
No other means of mass transportation has the built-in
federally-supervised safety measures as those found in aviation.
Therefore, it is reasonable to conclude that aviation contains
public protective factors that are not present in other modes
of transportation.
Page 9
The theory of the common law recovery based on
negligence was devised as a public protective measure. In the
uncontrolled modes of transportation, this liability law is
very important. In aviation the Federal Government adds a
protective measure that makes common law recovery unnecessary.
Recommended Solution to the Stated Problems
Since aviation is uniquely different from other
forms of transportation, an arguement is made that the common
law form of recovery based on negligence should be abandoned
and replaced with a form of absolute liability with a set
amount of recovery.
Under this plan, a death caused by an aircraft accident
would warrant immediate payment of the maximum recovery. Injuries
would be treated in the manner of present personal injury practice
up to the maximum allowable. Damaged parties would have no other
recourse.
Federal law would mandate that all operators of
aircraft would be required to carry sufficient insurance to
satisfy any passenger or crew claims under the provisions of
the absolute liability law. Air carriers would be required to
offer or make available the sale of additional trip life insurance
for any passenger who deemed his estate to be of greater value
than the absolute limits provided by the carrier.
Precedents and Experiences
This type of recovery has already been applied to
several fields of law, a set amount of recovery in aviation was
established, for International Flights, under the Warsaw Agreement
Page 10
and now exists in modifications of that original agreement.
Summary
The entire intent of this paper is to identify certain
problems that threaten the safety and welfare of the public.
It is proposed herein to remove aviation from the
provisions of Common Law Recovery, based on negligence and to
replace it with strict liability, with recovery based on provable
damage up to a set amount.
If anyone has a better plan to provide solutions to
these problems, it will be most welcome.
Mr. Victor Schwartz's paper will be distributed at the time of his speech.
Mr. Melvin I. Friedman's paper will be distributed at the time of his speech.
THE MANUFACTURER'S VIEW OF "NO FAULT"*
Shortly after lift-off from an airport in the
Midwest, a successful businessman and private pilot lost
power in his light twin and made an emergency crash landing.
The aircraft was a total loss but the pilot walked away. He
sustained painful back injuries, but he recovered. He was
a pilot with considerable time and thoroughly familiar with
his aircraft. He concluded that after taking off he had
subjected the aircraft to maneuvers and attitudes which he
should have avoided because he knew he was almost out of fuel
in both main tanks. He consulted with his own lawyer, was
advised of the applicable statute of limitations, and as he
put it, "I was not interested in suing anyone, and as far as
I was concerned, the matter was then laid to rest." Shortly
after the accident the pilot purchased another aircraft of
the same make and model.
The hull carrier developed a more aggressive
program. Suit was filed against the airframe manufacturer
for the subrogated hull loss. When payment of the amount
demanded was refused, counsel for the hull carrier suggested
that amended claims and pleadings might be filed seeking
Robert Martin: Martin, Pringle, Schell & Fair, Wichita, Kansas
recovery for personal injuries and punitive damages unless
the settlement demand was promptly met. At this point in
time any claim by the pilot had been barred by the applicable
statutes of limitations and, of course, the hull carrier was
a stranger to any such cause of action.
At about the same time demands were being pressed
against the manufacturer for payment of the hull loss, the
pilot commenced to receive telephone calls from a lawyer two
thousand miles away offering to represent him in a personal
injury suit to be brought against the manufacturer. The
offer was declined several times. Finally the lawyer asked
for a meeting and traveled two thousand miles to see the
"prospective client". He related that he and his professional
colleagues were expert in suits against this manufacturer
and, indeed, had recovered verdicts in the millions of
dollars. When the statute of limitations point was raised,
the lawyer assured the "prospective client" that there was
really no problem; he had figured out a way to get around
that. Statements were made that the lawsuit would cost the
plaintiff not one penny. Assured of a large recovery without
risk or cost, the "client" finally agreed to join in the
venture on a contingent fee contract.
-2-
Suit was filed for ten and a half million dollars
in a western jurisdiction, utterly unconnected with the
crash or the personal or business residence of the plaintiff.
It was, however, directly connected with the professional
residence of the soliciting lawyer who, to the surprise of
no one, proved to be the same lawyer who had pressed demands
for settlement of the insured hull loss by threats of an
action for personal injuries and punitive damages.
The personal injury claimant was not told by the
"solicitor" that he had been representing the hull carrier.
When suit was filed the plaintiff was not favored with a
copy of the complaint or even notice of its filing. The
plaintiff had no idea that in his name claims for millions
of dollars in punitive damages had been asserted against the
manufacturer.
Discovery in the case brought to light enough of
the facts outlined above to cause the court to dismiss the
action on the ground that the statute of limitations had
run.
An airframe manufacturer offered, as optional
equipment for light aircraft, a landing gear safety device
which automatically lowered the gear when air speed and
power settings were within the regimen for approach to
-3-
landing. A kit was developed and approved by FAA for instal-
lation in single engine aircraft. Adaption of the device to
twin engine aircraft, obviously more complex, was limited to
factory installation.
A fixed base operator modified and supplemented
the single engine kit so as to install it on a twin engine
aircraft. Later the aircraft, with the pilot only aboard,
went out of control and crashed. The wreckage and ground
witness accounts tended to support the conclusion that the
pilot lost control of the aircraft when the improperly
installed landing gear safety device lowered the gear.
Suit was instituted against the fixed base operator
who sold and installed the landing gear device with the
manufacturer of the airplane joined as a co-defendant.
The complaint, brought in the name of the widow of the
deceased owner and pilot of the aircraft, claimed damages
for wrongful death, loss of the aircraft and punitive damages.
The case was ultimately settled before trial. The airplane
manufacturer made only a token contribution, with the fixed
base operator and its carrier assuming the burden of the
settlement.
When the final order was entered in the case, it
became clear that in large part, the litigation had been
-4-
little more than a sham -- a series of maneuvers by the hull
and workmen's compensation carriers to adjust their losses
and, hopefully, to compel a substantial contribution by the
airframe manufacturer who was not involved with or responsible
for the'malfunction, if there was one, of the gear-down
device. The widow and adult heirs of the deceased did not
receive one penny of the settlement proceeds. The use of
the widow's name as plaintiff in claims for wrongful death
and punitive damages was apparently mere window-dressing,
calculated to provide local flavor and the emotional impact
of sudden death.
The last document in the court file, an order
approving the disbursement of the settlement proceeds, will
fascinate critics of the profession in any quarter. It
recites that the adult heirs of the deceased are emancipated
and self-supporting. The bereaved widow and her minor son
were found to have ". . . . more than adequate funds accruing
to them from the proceeds of life insurance, workmen's
compensation and a trust fund .... " Clairvoyance is
suggested by the finding that " .... there is no likeli-
hood of financial need arising [to the widow or children]
from these present circumstances."
Most intriguing, however, is a finding which
justifies the payment of 100% of the settlement proceeds to
insurance carriers because they prosecuted the lawsuit,
which the court found would have been "economically unfeasible"
for the widow. At this point the imagination of those who
drafted the order seems to have deserted them for the order
contains no rationalization of the widow's financial inability
to pay costs of litigation with the earlier conclusion that
her resources and entitlements are so vast that she, her
minor son and her other children would have no present or
future need for money.
About 4:00 o'clock one afternoon in the early fall
of 1971, the president of a substantial business concern,
holding a private, multi-engine license, loaded his wife, two
other couples and their baggage in the corporate twin.
After what must have been the briefest of pre-flight pre-
paration, he applied takeoff power at the end of the runway.
Shortly after lift off, the aircraft stalled and crashed
with the engines still developing takeoff power. All occupants
were killed. The pilot had made an almost inconceivable
series of mistakes; tragic mistakes. The plane, with occupants,
baggage and gasoline, was over its allowable gross weight
-6-
for flight and the load was distributed so as to place the
center of gravity aft of the c.g. envelope. Disregarding
written checklists and at least two checks for freedom of
controls before take-off, the pilot took off with the aileron
and elevator gust lock pin in place in the control column.
Overloaded, out of c.g. limits, with take-off power and
controls locked, the aircraft, when it stalled, was utterly1/
uncontrollable.
Litigation was brought on behalf of all decedents
against the manufacturer, but neither the negligent pilot
nor his employer, assuming this was a business flight, were
joined as defendants. In fact, the estate and heirs of the
pilot appeared as plaintiffs. The theory of the case was that
the manufacturer had improperly designed the control lock
because it was possible for a man with strong hands to
remove the throttle hood which held the throttle levers in
full retard position to prevent starting of the engines
without disengaging the control lock pins. In short, it was
contended that the manufacturer was responsible for the
crash because it had not made it utterly impossible for the
pilot to misuse the control lock intentionally and disregard
checklists and standard pre-flight procedures.
Had the pilot shut down the power at any point in thetakeoff roll or even after lift off but before thestall, the aircraft would have settled back on what wasabout one-half mile of unused runway, probably withoutany injury to anyone aboard.
-7-
As the cases progressed the defense came into
possession of secret written agreements negotiated between
the insurance carrier exposed for the pilot's negligence and
the estates of the decedents. In essence these agreements
guaranteed the claimants that if they would prosecute litigation
against other parties (to be precise, the manufacturer,
although the target defendant was not named or described)
the liability carrier would, in effect, guarantee a recovery
of $100,000 per claim. Interesting variations of the
"guarantee agreement" concept were that the $100,000 was to
be a net recovery after expenses of litigation and attor-
neys' fees; the guarantor advanced $50,000 which, of course,
was then available to finance the litigation; and finally,
the guarantor retained effective control of the litigation
by the device of requiring its consent to any settlement.
It cannot be denied that the insurance carrier who
was obligated to respond for the pilot's negligence had
acquired a contingent interest in the outcome of litigation
by other parties against the manufacturer. If successful,
the insuror escaped liability completely and even recovered
its advances. The carrier was in a position to control, or
at least frustrate, a settlement at any figure which
could force a contribution by the guarantor. With guarantee
-8-
agreements in hand the carrier rejoiced and put the plaintiffs in
touch with counsel who promptly sued the manufacturer.
"No fault" is a commonly used term to describe a
device or system by which financial responsibility for casualty
losses is assessed without regard to causation or fault. From
the standpoint of the manufacturer, any debate on whether no
fault should be applied to aviation cases is largely academic.
The incidents just described are, in the last analysis, examples2/
of no fault: no fault by conspiracy and ambush.
Those who question these conclusions or wish to defend
guarantee agreements and similar schemes and devices to promote
collusive or questionable litigation should take note of another
incident in the parade of horribles attending recent aviation
cases. A perceptive and courageous federal judge in a western
jurisdiction, upon discovering the existence of guarantee agree-
ments underlying litigation brought against a manufacturer, found
that the guarantee agreements:
"were made in bad faith for the purpose of prosecutinga collusive suit and therefore constituted maintenance,champerty, and barratry and are therefore contraryto public policy and illegal".
2/These are by no means isolated symptoms; more have beendiscovered and others will be. Insurors, especially membersof underwriting groups and managed pools, have met themselvescoming and going in "the jungle". In one instance, managersand agents for a pool in which some members of an underwritinggroup participated negotiated guarantee agreements whichproduced claims for punitive damages and eventually a largeverdict against a single defendant who was insured by under-writers in the same group. To protect the appeal, underwriterspurchased a supersedeas bond for which a sizable premium waspaid to an affiliate of one of the companies that had guaran-teed out with the plaintiff.
The parties to the guarantee agreements and their agents were
brought into the litigation and the agreements held null and
void.
Philosophically, aircraft manufacturers are and should
be opposed to no fault in any form. They recognize that no fault
has been applied, with poor results, in the automobile negligence
sector and that those plans are not applicable in principle or in
practice to aviation. The two areas have little in common except
that both involve vehicles designed for the transportation of
human beings.
The manufacturers are also aware that the international
treaties (Warsaw and Guatemala, in force or proposed), do not
provide a solution for product liability exposure. Indeed, it
can be reasoned that at least the number of product claims would
increase rather than diminish under any presently known system of
"no fault", with changes only in the identity of the plaintiff
and perhaps, the forum for adjudication.
Historically, no fault has always involved the laying
on of the strong hand of government. Inequities are imposed and
perpetuated in the cause of risk-spreading and social justice.
Manufacturers are no less repulsed than other responsible citi-
zens and segments of the social and economic community by the
-10-
spectacle of a system which protects the negligent from respon-
sibility for injury to others or requires the diligent and the
careful to pay the freight for the slovenly and the careless.
Regardless of general attitudes and philosophical considerations,
manufacturers surely recognize that for causes presently to be
discussed they and the users of their products are the victims of
no fault by secret agreement as practiced in aviation litigation.
If forced to make a choice between extra-legal no fault and no
fault by legislative enactment, the manufacturers would be foolish
not to choose the latter. Imagination and careful study may
devise a legislative formula and an administrative structure for
aviation no fault which will avoid the shortcomings and pitfalls
of presently defined plans. Representative Milford is obviously
struggling with just those problems. If he is successful, and
other conditions do not improve, there will be a market for his
product.
To remove any possibility that those who read or listen
may not get my message, it is this: in the United States today,
the bench, the bar and the casualty insurance fraternity have
countenanced or ignored conduct at ethical and moral levels which
have seriously undermined the wholesome concept of fault-oriented
-11-
responsibility for injury and even the adversary system itself.
Without effective reforms, initiated immediately, the legal
profession and eventually the insurance fraternity will be forced
to give up their responsibilities and their professional and
business incomes in an increasing number of areas, as they drop
from the scene just as automobile personal injury litigation is
now disappearing. In my judgment, among the first of these will
be aviation casualty. Another may be medical malpractice. A
further loss to the profession may come in the form of severe
restrictions on the use of the class action device which has
been subject to some similar abuses.
The symptoms cannot be ignored. The first reported
judicial involvement with guarantee agreements in the modern3/
tradition arose out of an automobile negligence case. In the
medical malpractice arena, guarantee agreements have been en-4/
countered and denounced.
3/Booth v. Mary Carter Paint Co., 202 So. 2d 8 (Fla. Ct.App.1967). But see Ward v. Ochoa, 284 So.2d 385 (Fla. 1973);Maule Ind., Inc. v. Rountree, 284 So.2d 389 (Fla. 1973); andGeneral Portland Development Co. v. Stevens, 291 So.2d 250(Fla. Ct. App. 1974) which indicate the courts of Floridaare being forced to reappraise their initial reaction to the"Mary Carter Agreement".
4/In Lum v. Stinnett, 87 Nev. 402, 488 P. 2d 347, 351 (1971) thecourt stated:
"We deem agreements whereby insurance carriersagree to pay any consideration to foster litigationin which they are not interested, in order toavoid their own liabilities, contrary to law andpublic policy."
In assessing the accuracy of the prediction that absent
prompt reform, aviation cases will find their way out of the
adversary system and the free insurance market, we should con-
sider:
First, aviation cases have unusually high verdict
potential. This is especially true of general aviation cases,
because most often the occupants of the airplane are in the high
income groupings and their survivors actually suffer and can
demonstrate a large economic loss. Sudden death in an aircraft is
also inflammatory. There are those on every jury who are not
accustomed to air travel. They can become emotionally involved
with vivid descriptions of an airplane streaking down, out of
control, with the occupants alive and agonized at the prospect of
certain death. Wrongful death awards of a million dollars per
seat are not unusual. This is the fertile soil in which to plant
the seeds of questionable ethical conduct.
Second, regrettably, but almost always, the pilot and
the occupants of the aircraft, who are in the best position to
know what actually happened, lose their lives in the crash.
Ground witnesses rarely supply any evidence bearing directly on
the cause of the crash and only occasionally does evidence pro-
duced from radio communications materially assist the inquiry for
-13-
probable cause. Aircraft casualty cases are tried almost en-
tirely on the analysis and testimony of experts of varying de-
grees of qualification. The opportunities for perversion of
fact, or opinion, or both are almost limitless. By comparison,
the ability of jurors and even judges to test the credibility of
the expert, the plausibility of his conclusions, or even the
facts or assumptions he has used is severely limited because they
lack formal training and experience in the pertinent scientific
disciplines. In theory, the layman's margin for error in scien-
tific judgments should be offset by careful adherence by the
courts to sound rules of procedure and evidence and by the im-
peccable ethics of the legal and scientific professions. The
system is in trouble simply because the conduct of some members
of each group has fallen short of the mark.
Third, the trial lawyer is the first indispensable part
in the machine of adversary justice. A good trial, like a good
painting, should be an accurate, miniature reproduction of a
related segment of human experience. In this sense a trial
lawyer becomes an artist. For best results he must approach his
task with detached professionalism and a passion for presenting
an accurate picture of the truth as best he can perceive it.
Professionalism of this caliber is frustrated by the unbridled
use of contingent fee contracts which, in an aviation cases, can
generate fees of hundred of thousands and even millions of dollars;
i A-
fees which may bear little or no relationship to professional
time, quality of service, devotion to professional ethics and the
search for truth and justice which is supposed to be the touch-
stone of the fault and adversary systems. In cases which produce
contingent fees of such magnitude, lawyers can and do become the
real party in interest within the very essence of that concept.
Fourth, the aviation defense bar cannot escape its
share of responsibility for misconduct within the profession. The
manipulation of litigation against others through guarantee
agreements and similar devices is often initiated by someone on
the defense side of the case; more often than not with the know-
ledge and probably the active participation of counsel. No
doubt, serious minded plaintiffs' lawyers sometimes cooperate
reluctantly, in the mistaken belief that they are acting to the
best interest of their clients. The most disgusting single
spectacle on the entire scene is the defense lawyer who has
secretly guaranteed a recovery to the plaintiff but stays in the
case. By subtle and deceptive moves and the cooperation of his
client, who probably is called as a witness, he casts his lot
with the plaintiff for a high verdict in order to insure that
the award will be above the top limit of the guarantee; a
deceitful abuse of the adversary system.
Fifth, some insurance carriers and their managers
have become sponsors of the "no-limit high stakes game" of
aviation casualty litigation. Many carriers who insure owners,
pilots and fixed base operators are exposed on policies with
inadequate limits of coverage supported by inadequate premiums.
The manufacturers of airframes, engines and components have
become their natural prey in a battle for the control of busi-
ness. If the burden of losses can be shifted to the manufacturer
they may continue to dominate other sectors of the market with
premium rates below what they should be to sustain the risk. The
manufacturer, it is reasoned, has unlimited resources because it
is a large industrial concern and because the costs of product
liability, whatever they are, can be passed along to the con-
sumers. It is one purpose of this paper to suggest that events
may prove this to be a very shortsighted view.
Sixth, there are second level victims of the practices
under discussion; they are the consumers: those who buy air-
planes, pilot them, or use them as a passenger for business or
pleasure. The cost, whether it be of the airplane itself or its
use will eventually reflect, in terms of price, quality or
availability, the consequences of what we are now confronting.
More to be regretted, as the technical staff of manufacturers and
the FAA devote more and more of their time to the defense of
bloated and unjust claims and to minute criticisms of designs
(sometimes 20 or 30 years old) by an unfair comparison to the
current state of the art; as more and more legislatures, acting
under pressure from those who support high stakes litigation,
declare that improvements in the state of the art and the product
are admissible to prove defects in earlier designs or articles,
the safety, reliability and improvement of American airplanes
will lag. Like any malignancy, the system feeds on itself and
everything at hand: less progress means more litigation; more
litigation means less progress.
Seventh, if there is any enterprise in which the bench
should lead the bar, it ought to be in the discouragement of
unseemly litigation. As stewards of a system for the pursuit of
truth, supported, as presently it is, by the most liberal rules
of disclosure and discovery, judges should condemn secret or
oppressive agreements, whether they be for guaranteed recovery or
for extravagant counsel fees which promote litigation. In most
jurisdictions, courts have made little or no effort to regulate
contingent fees in wrongful death and personal injury litigation.
For this, in part, those involved in automobile negligence work
are now paying a price. Unless controlled by the enforcement of
carefully formulated ethical standards, the high award potential
of aviation litigation, like medical malpractice cases and class
actions, represents an aggravated threat to fault-orientied
adversary systems of justice. It may not be true that every man
has his price, but it is true that a high price has its takers.
The professions are not an exception.
The potential for an extravagant verdict harbors
oppression. If the financial risk in a single case is high
enough, defendants and their insurors may be reluctant to spend
present costs which now can approach a quarter-million dollars in
scientific research, fees of experts and lawyers, and months
of formal discovery and trial, even for a successful defense.
The assertion of groundless claims for punitive damages, now
common practice in aviation litigation, may divide the defendant
and his insurors on issues of coverage. Under these conditions,
the nuisance value (settlement at or below the certain costs of
defense) may be an attractive option even at six figure levels,
with the result that the evils of a system prosper.
It is not unusual for aviation cases to be filed without
any real evidence, and perhaps no idea at all, of the cause of
the crash. It is sometimes the hope of plaintiff's counsel that
in discovery he will turn up some thread of a case from which a
settlement demand or a jury argument can be mounted.
Rule 11, F.R.C.P., reads in part:
"The signature of an attorney constitutes acertificate by him that he has read the pleading;that to the best of his knowledge, informationand belief there is good ground to support;' * * For a willful violation of this rulean attorney may be subjected to appropriatedisciplinary action."
The pertinent parts of this rule have not changed since 1938. In
recent years, similar rules have been adopted by most state
courts. I have been unable to find a single case in which
discipline under this rule has been enforced or even threatened
-18-
in a product case or in litigation of any kind where excessive or5/
unfounded claims for actual or punitive damages have been made.
In fairness, it should be pointed out that lawyers on the defense
side of the case have not been disciplined for pleading matters
in defense for which they can provide absolutely no support.
Admittedly, the rule should be enforced wisely and sparingly.
Neither lawyers nor their clients should be penalized for good
faith allegations on which proof ultimately fails or is insuf-
ficient. But when it has become a matter of general knowledge
within the profession, and indeed, a tactic, to charge malice,
wantonness or fraud and claim punitive damages merely in the hope
that such claims will induce settlement, it is not reactionary to
suggest that the bench has an obligation to bring Rule 11 to the
attention of the bar to insure that the halls of justice do not
take on the appearance of casinos in which the odds are long and
the stakes are high.
From the standpoint of the manufacturer, prospects for
improvement in the product picture are dim. Figures collected by
one group in general aviation indicate that during the past ten
years the number of product liability claims has increased by a
factor of ten to one. The costs of insuring, defending and paying
product liability claims have increased at twenty to one. The
5/Only where facts documented in public records have beenmisrepresented by a lawyer does it appear that Rule 11 hascome into play. Nichols v. Alker, 126 F. Supp. 679 (E.D.N.Y.1954); American Auto. Ass'n., Inc. v. Rothman, 101 F. Supp.193 (E.D.N.Y. 1952).
1 f~
total dollar amount of claims asserted -- the sum of all demands
in all pending cases -- would provide an interesting index of the
present state of affairs. Unfortunately such figures are not
available, but an educated guess would place the number above
one billion dollars. Although the number, cost and magnitude of
claims and litigations is still on the increase, it is signi-
ficant that the sharpest increase occurred in the five years 1967
through 1971. This time frame coincides with the introduction of
guarantee agreements and other devices for conspiratorial no
fault into the arena of aviation litigation.
Even if the filing rate for new claims and litigations
should level off or decline, costs for insuring, defending and
paying claims will obviously continue to increase for several
years and at unacceptable rates. The size and risk of cases, the
extensive use (sometimes abuse) of discovery and the time con-
sumed in preparation and trial in any case of serious proportions
has become monumental. It is usually a labor of years. The rate
of disposition, including settlements, cannot keep pace with the
rate of filing and the extended case life, much less the increase6/
in total dollars claimed.
6/
Aviation lawyers are now beginning to be afflicted with whathas plagued the automobile negligence bar for so long: polari-zation. In some cases, lawyers waste time simply devilingeach other and, where possible, the clients. A professionalgroup thus divided may find it almost impossible towork toward a solution of ethical problems; this may beanother sign of the direction in which things are moving.
-2-
Estimates of the efficiency of the fault-adversary
system as it now functions in the aviation casualty sector are
difficult to make. Much depends upon the selection of correct
parameters for such variables as time, investment in the system
and the cost of money. Most calculations show that the aviation
accident victims, their estates and heirs, ultimately receive no
more than 15% to 20% of the total amount spent in insuring,
defending and paying claims and litigation. No industry producing
goods for sale could tolerate this kind of inefficiency. Insurance
carriers and lawyers who are supposed to provide a service as their
product will not long be able to support it. The clients of lawyers,
those insured by underwriters, consumers of aviation products and
taxpayers who support our institutions of justice, will not
tolerate such inefficiency when they find out why it exists, what
it costs and who is picking up the tab.
Reform from within the profession of law, the bench and
the bar, will probably be slow in coming, for the basic evils --
irresponsibility and extravagance -- have flourished in a long
period of unprecedented growth and prosperity for the profession.
There are, however, signs of the beginning of a turn-around: courts
are beginning to realize that guarantee agreements and their
equivalent do not, as originally supposed, promote settlements.
They foster litigation. Some courts have seen them for exactly
what they are, examples of champerty, maintenance and barratry which
-21-
are serious civil wrongs and, in some jurisdictions, crimes.
The engagement of expert witnesses on contingent fee
contracts, although tolerated or ignored in many jurisdictions,
has been condemned by a few courts who recently have commenced to
realize the obvious: such arrangements have a tendency for the8/
perversion of justice and the encouragement of perjury.
7/Lum v. Stinnett, supra, Note 4, Opinion p. 352:
"Manifestly, in view of these considerations, the champertousagreement between respondent and the insurance carriers forGreen and Romeo called for improper conduct on the part ofall attorneys concerned; and while we recognize they becameinvolved only out of devotion to their clients, the agree-ment nonetheless contravened policy expressed in the Rulesof Professional Conduct, S.C.R. 153 et seq."
Pinder v. Cessna Aircraft Corporation, U.S.D.C. Utah Cent. Div.No. C205-71 (unreported 1973), ref. supra p. 9. The ArizonaState Bar Committee on Rules of Professional Conduct has brandedparticipation by defense counsel in litigations where guaranteeagreements actually align them with the plaintiff as unethical.
8/Western Cab Co. v. Keller, 523 P. 2d 842 (Nev. 1974); Laos v.Soble, 503 P. 2d 978 (Ariz. 1973); Belfonte v. Miller, 243 A.2d 150 (Penn. 1968); Van Norden v. Metzer, 75 Cal. App. 2d. 595,171 P. 2d 485 (1946), Wright v. Corbin, 190 Wash. 290, 67 P. 2d868 (1937). See also In Re Imperatori, 136 N.Y. Supp. 675,in which a lawyer was suspended from practice for engaging arealtor to testify as an expert on contingent fee. For casesapproving engagement of experts to testify on contingent fee,see Buckelew v. State, 48 Ala. App. 411, 265 So. 2d 195, cert.denied, 288 Ala. 735, 265 So. 2d 202 (1972); Provident Say.Life Assur. Soc. v. King, 216 Ill. 416, 75 N.E. 166 (1905);Lack Malleable Iron Company v. Graham, 147 Ky. 161, 143 S.W.1016 (1912); Reed v. Fireman's Insurance Company of Newark,78 N.J.L. 549, 74 A. 477 (1909); and Potomac, F. & P. R.Company v. Chichester, 111 Va. 152, 68 S.E. 404 (1910).
-22-
The best prospect for immediate and effective reform probably
rests with the insurance community. The aviation insurance
fraternity, as compared to other segments of the industry, is
thin in numbers and not too unwieldy. A concerted effort by the
dominant underwriters and pool managers to stamp out guarantee
agreements, spurious subrogation claims and sham party actions,
could significantly reduce the number and size of claims. I
believe there is a growing recognition among the better managed
underwriting groups and companies that the eradication of these
practices is essential to the growth and prosperity of the
industry and, perhaps, to its survival. Some underwriters and
companies have consistently refrained from engaging in these
practices; some have unwittingly become involved. Hopefully,
they will now bring pressure to bear on less responsible members
to adopt more acceptable standards of conduct. A conscientious
effort in this direction from the insurance community could
accelerate reform in the legal profession, for the fault - adversary
system requires the participation of both.
There are presently two groups among the aviation
manufacturers who have under study projects and alternatives
designed to bring some of the problem areas under control and
improve the efficiency of the system to compensate those who
suffer loss by reason of an airplane crash. The concepts presently
-23-
under study envision the participation of insurors and underwriters
within the market structures as they exist today and without
resort to mandatory, government regulated no-fault. While I am
not at liberty to discuss the outlines or details of these ideas,
there is good cause to believe that they may contribute substantially
to the solution of the problems under discussion, perhaps in
rather short order.
Air travel is still on the increase. The industry
and its growth rate have responded well to recession and fuel
shortages. Critics of the industry may claim otherwise, but
the truth is that aircraft manufacturers remain dedicated to
research and product improvement for safety and reliability.
NTSB, FAA, groups of manufacturers and manufacturers individually
have vast amounts of data under study and work in progress to
determine the cause of crashes and how they may be avoided. These
efforts will contribute their share to the eventual solution of
current problems.
The real question, I submit, is whether those dedicated
to the preservation of the fault-oriented adversary system can
clean it up in time to avoid the imposition of a government
enforced, mandatory no-fault program for compensation of
aviation casualty losses. The federal government already
dominates almost every aspect of air transportation. No delay
can be counted on while the advocates of expanding government
solicit the cooperation of state legislatures; the "Feds" can
do it all. It is later than you think!
-') A
SURVEY OF RECENT AVIATION DECISIONS
I. Recent Decisions
Introduction
During the 1974 year there were a number of sig-
nificant developments in the area of aviation law. The
scope of this article will be limited to an overview dis-
cussion, highlighting the most significant decisions during
this period. The decisions set out and discussed herein are
indicative of the evolutionary trend of aviation law, to
meet the ever pressing needs of a modern technological
society wherein consumer protection occupies a position of
prominence in the hierarchy of the American Judiciary's
value system. In this regard, although generalizations are
usually not of significant value in an unsettled area of the
law, a few generalizations can be made. The courts continue
to: (1) construe insurance coverage questions against the1/
insurer and in favor of the insured, (2) construe guest2/
statutes unconstitutional, (3) broaden the overall duty of3/
the air carrier with regard to passenger safety, and
(4) render decisions which are mutually incompatible, based4/
primarily upon conflicts of law concepts.
For the sake of comprehension and analysis, the 1974
decisions are categorized herein according to subject
matter.
Air Carriers
In Saurez v. Transworld Airlines, Inc., the
Seventh Circuit Court of Appeals rendered a decision of
significant importance in the area of an air carrier's duty
toward a potential passenger who appears to be in a disabled
condition. In Saurez, the facts indicated that upon Mrs.
Saurez' arrival to the airport, she was placed in a TWA
wheelchair, and wheeled to the TWA ticket line. Thereafter,
some difficulties developed with regard to Mrs. Saurez'
right to purchase the airline ticket on an American Express
credit card. Due to complications in verifying the plain-
tiff's right to use the American Express credit card, the
plaintiff was left unattended in the airport lobby for some
two hours, and ultimately missed her flight. Since the
plaintiff had not purchased a ticket on the airlines, the
trial court refused to give the ordinary jury instruction
with regards to a common carrier's duty of care toward a
passenger, holding that the plaintiff was not a passenger.
Thereafter, the trial court rendered a judgment on the jury
verdict for the defendant. On appeal, the Seventh Circuit
Court of Appeals reversed the decision of the trial court,
holding specifically that under Illinois law "payment of the
fare is not a prerequisite to acquiring the status of a6/
passenger". Additionally, the court gave significance to
the fact that Mrs. Saurez was apparently disabled when she
reached the airport, stating that under Illinois law a
-2-
common carrier must bestow on disabled passengers a degree7/
of care "beyond that due an ordinary passenger." There-
after, the court specifically refrained from addressing the
issues of whether the public wheelchair itself was a common
carrier, or whether providing the wheelchair itself gave
rise to the duty to exercise extraordinary care for the pas-8/
senger. The answers to these questions are not necessary,
however, since the fact of the wheelchair's presence should
convey knowledge to the common carrier of the passenger's
"disabled" condition, thus giving rise to the carrier's duty
to exercise extraordinary care.9/
In Allegheny Airlines, Inc. v. United States,
the Seventh Circuit Court of Appeals affirmed a decision
holding a pilot training school responsible for the negli-
gence of a student pilot. The district court, applying
Indiana law, had held that the defendant company which
rented an aircraft and provided both ground and flight
instructions, was engaged in a joint enterprise with the
student pilot, and was therefore responsible for the pilot's
negligence. The court set forth the essential elements of a
joint enterprise as:
"(l) . community of interest in the object
and purpose of the undertaking; (2) An equal
right to direct and govern the conduct of the
other participant in respect thereto; and
(3) A contract, either express or implied to1_/
that effect".
-3-
12/The Allegheny Airlines decision is to be con-
trasted with a decision of the Texas Supreme Court in13/
Shoemaker v. Whistler, wherein the Texas Supreme Court
limited the responsibility for tort liability under the
joint enterprise theory to a joint enterprise having a14/
"business or pecuniary purpose". In-doing so, the Texas15/
Supreme Court overruled several precedents to the contrary,16/
adopting in toto Section 491 of the Restatement 2d of
Torts.
The Shoemaker court noted that the airplane was
engaged in a voluntary civil air patrol search mission at
the time of the accident, and thus the joint owners in the
airplane had no pecuniary interest in the common purpose of
the search; therefore, the negligence of the pilot owner17/
could not be imputed to the passenger-owner.18/
In Kohr v. Allegheny Airlines, Inc., the
Seventh Circuit Court of Appeals in a landmark decision
announced that midair aviation collisions are to be con-
trolled by the federal common law with regard to claims for19/
contribution and indemnity. In Kohr the court articu-
lated a number of reasons for applying a federal law of20/
contribution and indemnity to midair collisions, and then
formulated the new federal common law of contribution and21/
indemnity.
The Kohr decision is obviously of substantial
interest to the aviation industry as the decision could
-4-
provide some uniformity to aviation suits, at least with
regard to the federal courts. On the other hand, any
significant expansion of the federal common law to other
substantive issues could cause litigants to "forum shop".22/
In Cronin v. Delta Airlines, Inc., the Illinois
Appellate Court held that an air carrier has a duty to
exercise ordinary care in the maintenance of the portions of
the terminal that passengers can reasonably be expected to23/,
utilize. In Cronin the plaintiff, after deboarding, was
injured as a result of a fall on an escalator leading to
Delta's baggage claim area. The trial court held, as a
matter of law, that the carrier owed the passenger no duty
to maintain this area of the terminal. On appeal, the Ap-
pellate Court reversed, following a significant line of
decisions indicating that the air carrier's duty to care for
the passengers extends to areas in the terminal facilities24/
leased to it and reasonably utilized by the passengers.25/
In Goldhirsch v. Air France, the New York City
Civil Court, following a trilogy of the federal district
court cases, held that an air carrier is not required to
give "actual notice" of its reconfirmation requirements
since such requirements are contained in a tariff regulation
and passengers are charged as a matter of law with con-26/
structive notice of the carrier's filed tariffs.
The Goldhirsch decision is representative of the
1974 decisions applying the limitations contained in the
-5-
27/Warsaw convention and airline tariff agreements. The
courts have consistently afforded airlines the benefits of
these limitations, despite repeated attacks on their va-28/
lidity.
Guest Statutes
The 1974 decisions continue the trend established
in 1973 of holding airplane guest statutes unconstitutional.
Such statutes were held unconstitutional in Messmer v.29/ 30/
Ker, and Ayer v. Boyle. On the other hand, there is
a decisive split in the courts on the constitutionality of
automobile guest statutes. Automobile guest statutes were31/ 32/
held unconstitutional in Kansas, Idaho, and North33/
Dakota, whereas, such statutes were held constitutional34/ 35/ 36/ 37/ 38/
in Oregon, Colorado, Delaware, Illinois, Iowa,39/
and Nebraska.
Res Ipsa Loquitur
Among the legal problems to which the growth of
aviation has given rise is that of the application, in avia-
tion accidents, of the doctrine of res ipsa loquitur ("the
thing speaks for itself"). The doctrine of res ipsa
loquitur, as applied in negligence actions generally, has
been variously defined, and there is some difference of
opinion as to its application and effect. For the present
purpose it may be stated, very generally, to be that where
an injury is caused by an instrumentality which is under the
exclusive control or management of the defendant, and the
occurrence is such as does not ordinarily happen in the
absence of negligence, an inference of negligence on the
part of the defendant may be drawn from the occurrence it-
self, without proof of any specific negligent act or
omission, so as to support a finding in favor of the plain-
tiff in the absence of evidence to explain the occurrence on
any other reasonable hypothesis.
In the past the courts have split on the initial
question of whether the doctrine of res ipsa loquitur is40/
appropriate in aircraft crash cases. For example, in4l/
1964 the North Carolina Supreme Court stated:
"In a case involving an airplane crash the doc-
trine of res ipsa loquitur does not apply, 'it
being common knowledge that aeroplanes do fall42/
without fault of the pilot'."
In 1962, the Tennessee Supreme Court took the opposite view,43/
holding that the doctrine was applicable to airplane crashes.
This split in authority concerning the application
of the doctrine of res ipsa loquitur in aircraft crash liti-44/
gation continues in the 1974 decisions. In Newing v.45/
Cheatham, the California Court of Appeals, Fourth Dis-
trict, hel& that the doctrine of res ipsa loquitur was46/
applicable to a pilot's responsibility in an aircraft crash.
The court set forth the elements of a res ipsa case as
follows:
-7-
"(1) The accident must be of a kind which or-
dinarily does not occur in the absence of some-
one's negligence; (2) It must be caused by an
agency or instrumentality within the exclusive
control of the defendant; (3) it must not have
been due to any voluntary action or contribu-47/
tion on the part of the plaintiff."
Analyzing the first element, the trial court took
judicial notice of the state of air travel in this country,
and concluded that air travel is reputed to be among the
safest forms of travel, and that accidents seldom occur in
the absence of negligent or careless conduct of some type on
the part of the owner and/or operator of the aircraft, or48/
those who have control over it. The court did not ad-
dress the question of what proof must be offered to satisfy
the second element; rather the court simply stated that the
jury should be instructed as follows:
"[t]he trial judge should have instructed the jury
if it found from the expert testimony, common
knowledge and all the circumstances shown by the
evidence that the accident was more probably
than not the result of the pilot's negligence,
it could infer negligence from the happening49/
of the accident alone."-
-8-
Thus, the California Court of Appeals not only approved the
application of the doctrine of res ipsa to aircraft crashes,50/
but also approved a res ipsa instruction to the jury.
The Newing decision is to be contrasted with
Campbell v. First Nat'l Bank of Albuquerque, wherein the
United States District Court for the District of New Mexico,
applying New Mexico law, held that the doctrine of res ipsa
was not applicable to the pilot's negligence. The court
gave special attention to the requirement in a res ipsa case
that the plaintiff prove that his injury was "proximately
caused by an agency or instrumentality under the exclusive52/
control of the defendant" (emphasis added). The court
refused to apply the doctrine of res ipsa because the
plaintiff did not sufficiently demonstrate that the pilot
had control over the aircraft, in its "mechanical and opera-53/
tional aspects", so as to invoke the doctrine. The court
stated that the fact that federal regulations make the pilot
"directly responsible for . . . the operation of the air-
craft" did not compel the conclusion that the defendant had54/
"exclusive control" of the instrumentality. The Campbell
court reserved decision on the question of whether, because
approximately 83% of all general aviation accidents are at-
tributable to "pilot error", an airline accident is of the
"kind which ordinarily does not occur in the absence of
negligence of someone," so as to satisfy the first require-55/
ment of res ipsa.
-9-
Although the Campbell court avoided decision on
the ultimate question of whether the doctrine of res ipsa
loguitur should be applied, at all, to the responsibility
of an aircraft pilot with regard to an aircraft crash, the
implication of the decision is that the doctrine should not
be applied. This would appear to be the appropriate
resolution, since airline crashes can also be attributed to
a number of causes other than pilot error, for example, a
defect in either the design or manufacture of the aircraft,
or negligence on the part of any number of other individuals
associated with the flight of the aircraft. Moreover, one
of the predominant purposes of res ipsa is to place the
burden of proof on the one who is in the best position to
explain the accident--the defendant. If the pilot perished
in the crash he is obviously-not available to explain any-
thing. Thus, at least in the instances where the pilot's
lips are sealed by death, the initial justification for
invoking the res ipsa doctrine is not present. Under such
circumstances, it would appear that the doctrine should not
be applied.
Negligence
In Pilgrim Aviation and Airlines, Inc. v. North-56/
west Airlines, Inc., the United States District Court for
the Southern District of New York, applying Connecticut law,
held that a pilot's violation of Federal Aviation Regula-
tions is negligence per se if the pilot acted unreasonably.
-10-
In determining whether the pilot acted unreasonably the
court instructed that the pilot was to be judged under the
standards of a "reasonably prudent airline pilot." This
injection of the "reasonable man" standard to the negligence
per se doctrine is apparently unique to Connecticut law. In
any event, the real significance of Pilgrim lies in its
language concerning Sec. 91.29 of the Federal Aviation
Regulations, which places the responsibility for determining
the airworthiness of an aircraft for safe flight on the
pilot. The court states the fact that violation of this
regulation can serve as a basis for a finding of negligence57/
per se "is not open to question."
Insurance Coverage
A number of recent decisions concerning insurance
coverage reveal that the courts are continuing to act on the
general proposition that exclusion clauses are to be strictly
construed against the insurer.58/
In Pan American World Airways, Inc. v. Aetna,
the Second Circuit held that damages caused to the plain-
tiff's aircraft by members of the Popular Front for The
Liberation of Palestine (PFLP) were covered under the all-59/
risk policy. The facts indicated that Pan American
Flight 083, while on a regularly scheduled flight from
Brussels to New York, was hijacked in the sky over London
about 45 minutes after it had taken off from an intermediate
-11-
stop in Amsterdam. Two men acting for the PFLP forced the
crew of the aircraft to fly to Beirut, where a demolitions
expert and explosives were put on board. The aircraft was
then flown to Egypt, still under the control of the two men
of the PFLP. In Cairo, after the passengers were evacuated
the aircraft was totally destroyed. The insurance company
denied coverage under several exclusions to its all risk60/
policy. In an exhaustive opinion, the court applied the
doctrine of contra proferentem, i.e. that in order for the
insurance company to benefit from an exclusion it must
demonstrate that an interpretation favoring it is the only
reasonable reading of at least one relevant exclusion; it is
not sufficient to show a reasonable interpretation under61/
which the loss is excluded. The court gave detailed
attention to the meaning of each and every exclusion clause,
and concluded that none of the exclusions were applicable to62/
the specific facts of the instant case. The court felt
that hijacking was a known risk at the time the policy was
written, and that the insurance company could have excluded
hijacking by denominating "hijacking" as one of the specific63/
exclusions under the policy.64/
In Woods v. Insurance Company of North America,
the California Court of Appeals held that the fact that the
pilot's medical certificate had expired did not affect
coverage under the policy provision that a pilot was re-
quired to be "properly certified and rated for the flight of
65/aircraft." The Court implied that if the insurance
company felt that the medical certificate was relevant it could
place a specific exclusion into the policy for pilots who66/
are not covered by a current medical certificate.67/
In Southwest Life Insurance Co. v. Rowsey, a
Texas Court of Civil Appeals applied unusual logic in
affirming coverage for injuries caused in the crash of an
"experimental" aircraft. The policy denied coverage for
death in an aircraft crash unless ". . . death occurred as a
result of travel . . . exclusively as a passenger . . . in a
duly registered and certified passenger aircraft being68/
legally operated." The defendant insurance company
argued (1) that the aircraft was not a "certified passenger
aircraft" and (2) that the aircraft was not being "legally
operated." The insurance company argued that since the
airworthiness certificate provided that no person could be
carried in the aircraft during flight unless "that person
is essential to the purpose of the flight", the aircraft
could not be a "passanger" aircraft. The court avoided this
contention, reasoning that since the terms "registered and
certified passenger aircraft" were not defined in the policy,
and the FAL did not have classifications for "passenger
aircraft", this limitation should not be afforded any signifi-
cance. The court stated that since the experimental air-
craft in question was capable of carrying passengers, it was
a "passenger aircraft". The defendant argued that since
-13-
plaintiff claimed he was riding "exclusively as a passen-
ger," the aircraft was being operated in violation of the
provision in airworthiness certificate requiring that only
"persons essential to the flight" be on board; thus the
aircraft was being "unlawfully operated." The court re-
jected this contention, holding that the operation of the
plane in violation of the airworthiness certificate does not69/
mean that the plane is being "unlawfully operated". The
court noted that the insurance company could have excluded
operation of the aircraft in violation of an airworthiness
certificate, but did not do so, and therefore could not70/
complain.
The Aetna, Woods, and Rowsey trilogy of decisions
indicate that the courts are ostensibly looking to what the
insurance company could have excluded, and giving this find-
ing substantial weight in determining whether or not a given
situation is excluded under the general terms of the policy.
On the other hand, in Braun v. Insurance Company71/
of North America, the Fifth Circuit construed the word
"affiliate" in a policy exclusion to include a "parent
corporation." The court stated that the use of the word
"affiliate" in the exclusion was meant to include any of the
separate corporate entities within the corporate structure,72/
whether vertical, diagonal, or horizontal. And, in73/
Gustafson v. National Insurance Underwriters, a Texas
-14-
Court of Civil Appeals held that a person who had been
riding in an airplane, jumped from the wing of the aircraft
and, after landing on the ground, raised her hand which was
struck by the whirling blades of the propeller, was "alight-
ing" from the aircraft, and therefore was a passenger within
the meaning of the terms of the policy which excluded cover-74/
age for actions by passengers.75/
And in Melton v. Ranger Insurance Co., the de-
fendant Ranger insured Van under an aviation policy. Van
leased a plane to Melton which was involved in an accident
and Ranger denied coverage. Plaintiff alleged that the
policy was ambiguous in that it was stated in the Purpose of
Use that insured planes would be used for rentals, although
there was a specific provision that the policy did not cover
persons renting the aircraft. The Court held that the
implication of the Purpose of Use would not override the
express provision and that the policy did not cover the
renter of the plane.
Air Traffic Controllers77/
In Todd v. United States, the United States
District Court for the Middle District of Florida held that
an air traffic controller has a duty to issue altitude
clearances, over and beyond the duty to issue clearances in
accordance with FAA manuals, when such clearances are "reason-78/
ably designed to insure the safety of aircraft flight".
In doing so, the court added a fifth element to the stan-
dards of duty imposed upon the pilot and air traffic con-
troller under the prior decision of the Fifth Circuit in
American Airlines, Inc. v. United States. In this re-
gard, the court stated:
"In a very thorough consideration of the stan-
dards of duty imposed upon the pilot and ATC
the United States Court of Appeals for the Fifth
Circuit in American Airlines, Inc. v. United
States [11 Avi. 17,156] 418 F.2d 180 (5th Cir.
1969) set forth the following:
1. The pilot is in command of the aircraft,
is directly responsible for its operation,
and has final authority as to its operation.
2. Before a pilot can be held legally respon-
sible for the movement of his aircraft he must
know, or be held to have known, these facts
which were then material to its safe opera-
tion. Certainly the pilot is charged with that
knowledge which in the exercise of the highest
degree of care he should have known.
3. The air traffic controller must give the
warnings specified by the manuals.
4. The air traffic controller, whether or not
required by the manuals, must warn of dangers
reasonably apparent to him but not apparent,
in the exercise of due care, to the pilot.
418 F.2d at 193.
To these the court would add a fifth re-
quirement appropriate to the issues of this
case:
5. Determined by the facts of the particular
case, due care requires an air traffic con-
troller to issue clearances in accordance with
the FAA manuals, and over and beyond the require-
ments of the manuals, the clearances issued must
be reasonably- designed to insure the safety of80/
aircraft flight."81/
In addition to Todd v. United States, two other
decisions are of significant interest, based on their82/
factual distinctions. In Robinson v. United States, the
United States District Court for the Northern District of
Texas held that the air traffic controller did not have a
duty to warn of wake turbulence that occurred five minutes
before the accident. This finding was based upon the
general rule that air traffic controllers have a duty to
warn of wake turbulence only if it is reasonably forseeable.83/
In contrast, in Dickens v. United States, the United
States District Court for the Southern District of Texas
held that the air traffic controller, under the circum-
stances of that case (a three-minute lapse), was under a
duty to give a wake turbulence warning.
-17-
Wrongful Death - Admiralty
In Roberts v. United States, the Ninth Circuit
Court of Appeals held that the Suits in Admiralty Act (SIA),
as amended, encompasses aviation wrongful death actions
against the United States arising under the general maritime85/
law or under the Death on The High Seas Act. The court
recognized that the Supreme Court of the United States in86/
Executive Jet had expressly reserved decision on the87/
question presented. The court analyzed the facts pre-
sented in light of Executive Jet, and concluded that Execu-
tive Jet could be distinguished since the aircraft in the
instant case was engaged in "transoceanic transportation of
cargo" which was readily analogized with "traditional88/
maritime activity". In this regard, the court stated:
"An examination of the record provides several
bases for distinguishing the air accident in
this case from the crash which occurred in
Executive Jet. According to appellee's amended
complaint, the Flying Tiger Lines aircraft was
engaged in transporting cargo between Los Angeles
and Viet Nam; Okinawa was merely one of a number
of intermediate stopping points. Geographic
realities, therefore, do not make the cargo
plane's contact with navigable waters entirely
"fortuitous". More significantly, the trans-
oceanic transportation of cargo is an activity
which is readily analogized with "traditional
maritime activity". Indeed, before the advent
of aviation, such shipping could only be per-
formed by waterborne vessels. We therefore do
not interpret Executive Jet, supra, as preclud-89/
ing a maritime action on the facts of this case."
Hijacking90/
In Rosman v. Transworld Airlines, Inc., the
New York Court of Appeals was faced with a claim for mental
distress suffered in an airline hijacking situation. The
Court looked to Article 17 of the Warsaw Convention and
noted that recoveries were allowed thereunder for "bodily
injuries" only. The Court stated that the term "bodily in-
jury" connotes palpable conspicuous physical injury and
excludes mental injury with no observable "bodily" as dis-
tinguished from "behavioral" manifestations.91/
In Edwards v. National Airlines, Inc., the
court held that an air carrier could be responsible for
injuries plaintiff suffered by eating contaminated food in
Cuba. The plaintiff alleged the airline was negligent in
allowing the aircraft to be hijacked, and as a result of
that neglicence plaintiff was forced to reside in quarters
furnished by the Cuban government, and, in order to sustain
herself, to eat "dangerous and illness-causing" foods. The
court held that this complaint was sufficient to state a
-19-
cause of action, and that the damages were not so remote as92/
to render the complaint vunerable to a motion to dismiss.
In Northwest Airlines, Inc. v. Globe Indemnity93/
Co., the Minnesota Supreme Court held that the air
carrier could recover the ransom paid to recover a hijacked94/
aircraft, under the carriers "blanket crime policy."
The court held this was a "wrongful abstraction" within the95/
meaning of the policy. And, in Pan American World Air-96/
ways, Inc. v. Aetna (discussed in detail in the insurance
section), the Second Circuit upheld coverage under an "all
risk" policy for the destruction of plaintiff's aircraft by
hijackers. Both courts recognized the insurance company's
right to exclude damages caused by "hijacking", but stated
that such an exclusion would have to be specific.
Manufacturer's Liability97/
In Williams v. Cessna Aircraft Corp., the
United States District Court for the Northern District of
Mississippi, applying Mississippi law, held that a manu-
facturer was under no duty to design its seat and harness
assembly to withstand a high speed crash. The Court applied
the Mississippi substantive law commonly known as the
"second accident" doctrine and noted that since the "initial
accident" was the crash of the aircraft rather than the
failure of the seat and harness, the manufacturer of the98/
defective seat and harness assembly was not responsible.
-2f-
The Williams decision, supra, is contrary to
several other recent products liability cases which hold
that if a manufacturer of a product should be able to reason-
ably foresee that the product would be involved in some sort
of a crash the manufacturer has a duty to make the product
reasonably safe. For example, the courts are beginning to
recognize this "crashworthiness" concept in automobile acci-
dent cases, and are placing a duty on manufacturers to make
cars reasonably safe for the occupant's use in the event the99/
automobile is involved in a crash.
Noise - Inverse Condemnation100/
In Aaron v. City of Los Angeles, the California
Court of Appeals held that the municipal operator of an
airport is liable for a taking or damaging of property when
the owner of property in the vicinity of the airport can
show a measurable reduction in market value resulting from
the operation of the airport in such manner that the noise
from aircraft using the airport causes a substantial inter-
ference with the use and enjoyment of the property, and the
interference is sufficiently direct and sufficiently pecu-
liar that the owner, if uncompensated, would pay more than
his proper share to the public undertaking. Whether the
interference is "substantial" is a mixed question of fact101/
and law for the trial judge to determine. The Aaron
court rejected the theory that the aircraft must actually
-21-
violate the airspace above the plaintiff's land before102/
responsibility arises.103/
In a companion case, the California Court of
Appeals held that the air carriers operating at the munici-
pal airport which was involved in Aaron v. City of Los Angeles
would not be liable to the adjacent property owners in an
inverse condemnation action, since only governmental agen-104/
cies can take property. Further, the court refused to
hold the air carriers responsible to the municipality even
though the carriers had agreed to indemnify the municipality
since the municipality was not responsible under traditional105/
tort liability.106/
In Pueblo of Sandia v. Smith, the Tenth Circuit
affirmed a summary judgment for defendants stating that a
landowner cannot recover unless he alleges and proves that
low-level flights "are in the immediate reaches of, and107/
interfere with the actual use of, his land." The mere
traversing of airspace above a plaintiff's land, without
injury, is not actionable.
-22-
II. Amendments and Proposed Amendments to Regulations andStatutes:
Introduction
During the 1974 year a number of new laws, amend-
ments and proposals were announced which should be of some
general interest to the aviation bar. Some of these amend-
ments and proposed amendments are set out and discussed
herein for the general benefit of the seminar. This dis-
cussion is not intended to exhaust all 1974 amendments which
relate to aviation law.
Transportation Safety Act:
The President signed Public Law 93-633 on Jan-
uary 3, 1975, entitled the "Transportation Safety Act of
1974."
Title I of this enactment is titled the Hazardous
Materials Transportation Act and is designed to improve the
regulatory and enforcement authority of the Secretary of
Transportation to protect the nation adequately against the
risks to life and property which are inherent in the trans-
portation of hazardous materials in commerce. Among its
provisions, it requires the Secretary to issue regulations
regarding the transportation of radioactive materials on any
passenger-carrying aircraft. These regulations are required
to prohibit any such transportation unless the radioactive
materials involved are intended for use in, or incident to,
research, or medical diagnosis or treatment and are packaged
in such a way that they do not pose an unreasonable hazard
-23-
to health and safety. In addition, Title I amends Sec-
tions 901(a) and 902(h) of the Federal Aviation Act of 1958,
and Sections 6(c) and 6(f) of the Department of Transporta-
tion Act to conform the provisions of these sections to the108/
new act.
Noise Standards:
The Federal Aviation Administration has amended
Parts 21 and 36 of the Federal Aviation Regulations to
prescribe noise standards for the issue of normal, utility,
acrobatic, transport, and restricted category type certifi-
cates for propeller driven small aircraft; to prescribe
noise standards for the issue of standard airworthiness
certificates and restricted category airworthiness cer-
tificates for newly produced propeller driven small aircraft
of older type designs; and to prohibit "acoustical changes"
in the type design of those aircarft that increase their109/
noise levels beyond specified limits.
Multidistrict Litigation Rules of Procedure
The Judicial Panel on Multidistrict Litigation has
issued an extensive revision of its rules of procedure. The
new rules are to be effective on February 14, 1975. Among
the changes, the Panel has added specific rules regarding
matters submitted to the Panel on briefs on the effect of110/
the pendency of an action before the Panel.
Proposals
First Biennial Airworthiness Review:
The First Biennial Air Worthiness Review confer-
ence was held in Washington, D.C. on December 2 through
December 11, 1974. A number of significant proposals with
regard to federal aviation regulations were submitted for
review. These proposals mirror the dedication of the avia-
tion industry toward improving the overall safety of air
transportation. Representatives from more than 20 nations
registered for the conference along with a number of U.S.
Government agencies, trade organizations and individual
companies comprising the national and international aviation
community. With the inception of the Biennial Review Con-
ferences, the Federal Aviation Administration can now conduct
a comprehensive, across-the-board, substantive review of its
airworthiness regulations.
Proposals were made to establish stall and minimumill/
steady flight speeds where none currently exist, to
require an adequate stall warning in terms of a speed
and/or a time margin when entry to stall is made from yaw112/
flight or from an accelerated entry, to include a new113/
rule standardizing alarms, to require a takeoff warning
system to alert the crew when wing flaps, spoilers, leading
edge devices, elevator/stablizer trim and any other critical
devices are not in a position to assure a successful take-114/
off, to add a new section requiring a takeoff warning
-25-
horn which will indicate a flap setting error within preset115/
tolerances, to add a regulation requiring a comprehen-
sive standardized warning system, where none currently116/
exists, to provide for additional fire detector sys-117/
tems, to require a low fuel warning system to give an
oral or visual warning to the pilot whe- fuel reaches an118/
amount equal to that which would give 20 minutes flight,
to update the requirements for issuance of type certifica-119/
tion, to establish uniform continued air worthiness120/
instruction standards for all classes of aircraft, and121/
to require anti-collision warning lights.
Noise Standards:
The Federal Aviation Administration is considering
amending Parts 21 and 36 of the Federal Aviation Regulations
to reflect proposed regulations submitted to it by the
Environmental Protection Agency (EPA) regarding noise stan-122/
dards for propeller driven small aircraft.
The EPA proposals would prescribe noise standards
for the issue of normal, utility, acrobatic, transport, and
restricted category type certificates for propeller driven
small aircraft; prescribe noise standards for the issue of
standard airworthiness certificates and restricted category
airworthiness certificates for newly produced propeller
driven small aircraft of older type designs; and prohibit
"acoustical changes," in the type design of those aircraft123/
that increase their noise levels beyond specified limits.
The Federal Aviation Administration is also con-
sidering amending Part 91 of the Federal Aviation Regula-
tions to reflect an EPA proposal regarding noise abatement
minimum altitudes for turbojet powered aircraft in terminal
areas. Specifically, the EPA proposals would add a regula-
tory definition of the term "terminal area" to Part 91 and
would prescribe minimum altitudes for turbojet powered124/
aircraft within terminal areas.
Smoke Standards:
The Federal Aviation Administration is considering
amending Parts 25 and 121 of the Federal Aviation Regula-
tions to establish standards for the smoke emission charac-
teristics of compartment interior materials used in transport125/
category aircraft.
L. S. CarseyWilliam L. Maynard
-27-
FOOTNOTES
_/ Pan American World Airways, Inc. v. Aetna, F.2d
, 13 Avi. 17,340 (2d Cir. 1974); Braun v. Insur-
ance Company of North America, 488 F.2d 1066, 12 Avi.
18,386 (5th Cir. 1974); Woods v. Insurance Company
of North America, 38 Cal.3d 144, 113 Cal. Rptr. 82,
13 Avi. 17,145 (Cal. Ct. App. 1974)-; Southwest Life In-
surance Co. v. Rowsey, 514 S.W.2d 802 (Tex. Civ. App.--
Austin 1974, no writ); Insurance Company of North
America v. Maurer, 505 S.W.2d 931 (Tex. Civ. App.--
Austin 1974, writ ref'd n.r.e.).
2/ Ayer v. Boyle, 37 Cal. App. 3d 822 (1974) (airline
guest statute); Henry v. Bander, 518 P.2d 362, 213
Kan. 751 (1974) (automobile guest statute); Messmer v.
Ker, 524 P.2d 536, 13 Avi. 17,239 (Idaho S.Ct. 1974)
(airline guest statute).
3/ Saurez v. Transworld Airlines, Inc., F.2d ,
13 Avi. 17,139 (7th Cir. 1974). See, Allegheny
Airlines, Inc. v. United States, F.2d , 13
Avi. 17,290 (7th Cir. 1974); Cronin v. Delta Air-
lines, Inc., 313 N.E.2d 274, 19 Ill. App.3d 1001,
13 Avi. 17,150 (1974), But see, Shoemaker v. Whistler,
513 S.W.2d 10, 13 Avi. 17,173 (Tex. 1974).
4/ Compare Allegheny Airlinest Inc. v. United States,
F.2d , 13 Avi. 17,290 (7th Cir. 1974) with
Shoemaker v. Whistler, 513 S.W.2d 10, 13 Avi. 17,173
(Tex. 1974). Compare Kelly v. Central Nat'l Bank of
Richmond, 345 F. Supp. 737 (E.D. Va. 1072) and
Mann v. Henderson, 134 S.E.2d 626, 261 N.C. 338
(1964) with Colditz v. Eastern Airlines, Inc.,
329 F. Supp. 691 (S.D. N.Y. 1971) and Southeastern
Aviation, Inc. v. Hurd, 355 S.W.2d 436 (Tenn. 1962).
5/ Saurez v. Transworld Airlines, Inc., F.2d , 13
Avi. 17,138 (7th Cir. 1974).
6/ Id. at 17,140.
7/ Id. at 17,140-41. The Court stated:
Under Illinois law, "(W)hen a common
carrier knows that a passenger is affected by
a physical or mental disability which increases
the hazards of travel, a degree of attention
should be bestowed on his safety beyond that
due to an ordinary passenger in proportion to
the liability to injury from the want of it."
8/ Id. at 17,141.
9/ Allegheny Airlines, Inc. v. United States, F.2d
, 13 Avi. 17,290 (7th Cir. 1974).
10/ Id. at 17,295-96.
11/ Id. at 17,295.
12/ Id.
13/ Shoemaker v. Whistler, 513 S.W.2d 10, 13 Avi. 17,173
(Tex. 1974).
14/ Id. at 17,177.
15/ Id. at 17,177. The court stated:
"While the broader definition of joint enter-
prise (not requiring a pecuniary interest) has
-2-
been previously endorsed by this courti Leeper,
Straffus, Nelson, Bonney, we have determined
that the definition set forth in the RESTATE-
MENT S 491, comment c, is better reasoned and
is adopted. By limiting the application of the
doctrine to an enterprise having a business or
pecuniary purpose, we will henceforth be avoid-
ing the imposition of a basically commercial
concept upon relationships not having this
characteristic.
16/ RESTATEMENT 2d of TORTS, S 491, comment c (1965).
This section provides, in pertinent part:
"The elements which are essential to a joint
enterprise are commonly stated to be four:
(1) an agreement, express or implied, among
the members of the group; (2) a common pur-
pose to be carried out by the group; (3) a
community of pecuniary interests in that
purpose, among the members; and (4) an equal
right to a voice in the direction of the
enterprise, which gives an equal right of
contrcl."
L7/ Shoemaker v. Whistler at 17,178.
18/ Kohr v. Allegheny Airlines, Inc., -F.2d , 13 Avi.
17,297 (7th Cir. 1974).
-3-
19/ Id. at 17,299.
20/ Id. at 17,300. The court stated:
"The basis for imposing a federal law of con-
tribution and indemnity is what we perceive
to be the predominant, indeed almost exclu-
sive, interest of the federal government in
regulating the affairs of the nation's air-
ways. Moreover, the imposition of a federal
rule of contribution and indemnity serves a
second purpose of eliminating inconsistency
of result in similar collision occurrences
as well as within the same occurrence due to
the application of differing state laws on
contribution and indemnity. Given the pre-
vailing federal interest in uniform air law
regulation, we deem it desirable that a federal
rule of contribution and indemnity be applied.
• . . To that end, it has been recognized that
the principal purpose of the Act (Federal Avia-
tion Act) is to create one unified system of
flight rules and to centralize in the Adminis-
trator of the Federal Aviation Administration
the power to promulgate rules for the safe and
efficient use of the country's air space.
(citation omitted) When the notion of federal
preemption over aviation is viewed in combina-
tion with the fact that this litigation ensues
-4-
from a midair collision occurring in national
air space, that the Government is a party to
the action pursuant to the Federal Tort Claims
Act (28 U.S.C. §S 1346(b), et seq.), and that
this litigation has since its inception been
subject to the supervision of the Judicial
Panel created by the Multidistrict Litigation
Act (28 U.S.C. S§ 1407, et seg.), there is no
perceptible reason why federal law should not
be applied to determine the rights and liabili-
ties of the parties involved. The interest of
the state wherein the fortuitous event of the
collision occurred is slight as compared to the
dominant federal interest. Accordingly, the
rights and liabilities of Allegheny and the
United States are peculiarly federal in nature
and are to be governed by a federal rule of
contribution and indemnity."
21/ Id. at 17,300. The court stated:
"Having determined that a federal rule of con-
tribution and indemnity among joint tort-feasors
should control in aviation collisions, we reject
as being outmoded and entirely unsatisfactory,
the contention that the federal rule should be
one of "no contribution". We agree that "(t)here
is an obvious lack of sense and justice in a rule
which permits the entire burden of a loss, for
which two defendants were equally, unintention-
ally responsible, to be shouldered on to one
alone, according to the accident of a success-
ful levy of execution, the existence of liabil-
ity insurance, the plaintiffs' whim or spite,
or his collusion with the other wrongdoer, while
the latter goes scot free. (citation omitted)
"In our judgment the better rule is that
of contribution and indemnity on a comparative
negligence basis. Under such an approach the
trier of fact will determine on a percentage
basis the degree of negligent involvement of
each party in the collision. The loss will
then be distributed in proportion to the al-
locable occurring fault."
22/ Cronin v. Delta Airlines, Inc., 313 N.E.2d 279, 13 Avi.
17,150 (Ill. App. 1974).
23/ Id. at 17,152.
24/ Id.
25/ Goldhirsch v. Air France, 13 Avi. 17,307 (N.Y. Civ. Ct.
1974).
26/ Id. at 17,308. The court stated:
"Actual notice is not essential with respect to
matters required or authorized to be included
in a tariff or tariff regulation and passengers
-6-
are as a matter of law charged with constructive
notice of such tariffs as filed pursuant to law."
27/ Ludecke v. Canadian Pacific Airlines, Ltd., 13 Avi.
17,454 (Quebec 1974); Canadian Pacific Airlines Ltd. v.
Montreal Trust Co., 17 Avi 17,456 (Quebec 1974); Brent-
wood Fabrics Corp. v. KLM Royal Dutch Airliner, 13 Avi.
17,426 (N.Y. Cty. Civ. Ct. 1974); Butler's Shoe Corp. v.
Pan American World Airways, F. Supp. , 13 Avi.
17,182 (N.D. Ga. 1974).
28/ Id.
29/ Messmer v. Ker, 524 P.2d 536, 13 Avi. 17,239 (Idaho
S.Ct. 1974).
30/ Ayer v. Boyle, 37 Cal.App.2d 822 (1974).
31/ Henry v. Bauder, 518 P.2d 362, 213 Kan. 751 (1974).
32/ Thompson v. Hagan, 523 P.2d 1365, 96 Idaho 19 (1974).
33/ Johnson v. Hassett, 217 N.W.2d 771 (N.D. 1974).
34/ Duerst v. Limbocker, 525 P.2d 99 (Ore. 1974).
35/ Richardson v. Hansen, 527 P.2d 536 (Colo. 1974).
36/ Justice v. Gatchell, 325 A.2d 97 (Del. 1974).
37/ Adams v. Continental Cas. Co., 21 Ill. App.3d 111,
314 N.E.2d 495 (1974).
38/ Keasllng V. Thompson, 217 N.W.2d 687 (Iowa 1974).
39/ Hale v. Taylor, 192 Neb. 298, 220 N.W.2d 378 (1974).
40/ Compare Kelley v. Central Nat'l Bank of Richmond, 345
F. Supp. 737 (E.D. Va. 1972) and Mann v. Henderson, 134
S.E.2d 626, 261 N.C. 338 (1964) with Colditz v.
-7-
Eastern Airlines, Inc., 329 F. Supp. 691 (S.D. N.Y.
1971) and Southeastern Aviation, Inc. v. Hurd, 335
S.W.2d 436 (Tenn. 1962).
41/ Mann v. Henderson, 134 S.E.2d 626, 261 N.C. 338 (1964).
42/ Id. at 629.
43/ Southeastern Aviation, Inc. v. Hurd, 355 S.W.2d 436
(Tenn. 1962).
44/ Compare Newing v. Cheatham, 42 Cal.3d 593, 117 Cal.
Rptr. 30, 13 Avi. 17,408 (Cal. Ct. App. 1974) with
Campbell v. First Nat'l Bank of Albuquerque, N.M., 370
F.Supp. 1096, 13 Avi. 17,126 (D.N. Mex. 1974).
45/ Newing v. Cheatham, 42 Cal.3d 593, 117 Cal. Rptr. 30,
13 Avi. 17,408 (Cal. Ct. App. 1974).
46/ Id. at 17,412.
47/ Id. at 17,410.
48/ Id. at 17,411.
49/ Id. at 17,412.
50/ The Texas Supreme Court in Mobile Chemical Co. v.
Bell, 517 S.W.2d 245, 257 (Tex. 1974) approved the
following instruction in res ipsa cases:
"Among the definitions in the forepart of
the charge, the trial court may include an
explanation of res ipsa loquitur similar
to the following:
'You are instructed that you may infer
negligence by a party but are not com-
pelled to do so, if you find that the
-8-
character of the accident is such that
it would ordinarily not happen in the
absence of negligence and if you find
that the instrumentality causing the
accident was under the management and
control of the party at the time the
negligence, if any, causing the acci-
dent probably occurred.'"
51/ Campbell v. First Nat'l Bank of Albuquerque, N.M., 370
F. Supp. 1096, 13 Avi. 17,126 (D.N. Mex. 1974).
52/ Id. at 17,127-28.
53/ Id. at 17,128.
54/ Id. The court stated:
"We have no quibble with the plaintiff's as-
sertion that under the applicable federal regu-
lations Birdseye, as "pilot in command", was
"directly responsible for, and is the final au-
thority as to, the operation of the aircraft."
14 C.F.R. S 91.3(a) (1973). This does not, how-
ever, compel the conclusion that the aircraft was
under his exclusive control."
55/ Id. at 17,128.
56/ Pilgrim Aviation and Airlines, Inc. v. Northeast
Airlines, Inc., F. Supp. , 13 Avi. 17,458 (S.D.
N.Y. 1975).
57/ Id. at 17,460.
58/ Pan American World Airways, Inc. v. Aetna, F.2d
, 13 Av. 17,340 (2d Cir. 1974).
59/ Id. at 17,361.
60/ Id. at 17,349. The court stated:
"The all risk insurers rely on all of the
following words of exclusion in the all risk
policies:
'This policy does not cover anything herein to
the contrary notwithstanding loss or damage due
to or resulting from:
'1. capture, seizure ... or any taking .of
the property insured or damage to or destruc-
tion thereof ... by any military ... or usurped
power, whether any of the foregoing be done by
way of requisition or otherwise and whether in
time of peace or war and whether lawful or un-
lawful...;
'2. war, ... civil war, revolution, rebellion,
insurrection or warlike operations, whether there
be a declaration of war or not;
'3. ... riots, civil commotion.'
The all risk position is that the terms employed
define uninterrupted overlapping areas of exclusion
on a continuum of violence. They claim that in
terms of approximately increasing scale and organiza-
tion of violence, 'riot,' 'civil commotion,' 'in-
surrection,' 'military or usurped power,' 'rebellion,'
-10-
'revolution,' 'civil war,' 'warlike operations,'
and 'war' exhaust the possibilities, and that the
cause of the loss must be described by at least one
of the terms."
61/ Id. at 17,345-46.
62/ Id. at 17,349-362.
63/ Id.
64/ Woods v. Insurance Company of North America, 38 Cal.2d
144, 113 Cal. Rptr. 82, 13 Avi. 17,145 (Cal. Ct. App.
1974).
65/ Id. at 17,148.
66/ Id. See also, Insurance Company of North America v.
Maurer, 505 S.W.2d 931, 12 Avi. 18,239 (Tex. Civ.
App.--Austin 1974, writ ref'd n.r.e.).
67/ Southwest Life Insurance Co. v. Rowsey, 514 S.W.2d
802, 13 Avi. 17,314 (Tex. Civ. App.--Austin 1974, no
writ).
68/ Id. at 17,316.
69/ Id.
70/ Id.
71/ Braun v. Insurance Company of North America, 488 F.2d
1066, 12 Avi. 18,386 (5th Cir. 1974).
72/ Id.
73/ Gustafson v. National Insurance Underwriters, 517
S.W.2d 414 (Tex. Civ. App.--Eastland, 1974).
74/ Id. at 416.
75/ Melton v. Ranger Insurance Co., 515 S.W.2d 371 (Tex.
Civ. App.--Fort Worth 1974).
76/ Id.
77/ Todd v. United States, F. Supp. , 13 Avi. 17,260
(M.D. Fla. 1974).
78/ Id. at 17,264.
79/ American Airlines, Inc. v. United States, 418 F.2d 180,
11 Avi. 17,156 (5th Cir. 1969).
80/ Todd v. United States at 17,264.
81/ Todd v. United States, F. Supp. , 13 Avi. 17,260
(M.D. Fla. 1974).
82/ Robinson v. United States, F. Supp. _, 13 Avi.
17,333 (M.D. Tex. 1972) aff'd per curiam, F.2d
(5th Cir. 1973).
83/ Dickens v. United States, 378 F. Supp. 845, 13 Avi.
17,412 (S.D. Tex. 1974).
84/ Roberts v. United States, 498 F.2d 520, 13 Avi. 17,156
(9th Cir.), cert. denied, U.S. (1974).
85/ Id. at 17,159.
86/ Executive Jet Aviation, Inc. v. City of Cleveland, 409
U.S. 249, 12 Avi. 17,646 (1972).
87/ Roberts v. United States at 17,157. The Court quoted
from Executive Jet as follows:
"We need not decide today whether an aviation
tort can ever, under any circumstances, bear a suf-
ficient relationship to traditional maritime activ-
ity to come within admiralty jurisdiction in the
-12-
absence of legislation. It could be argued, for
instance, that if a plane flying from New York to
London crashed in the mid-Atlantic, there would
be admiralty jurisdiction over resulting tort claims
even absent a specific statute. An aircraft in that
situation might be thought to bear a significant
relationship to traditional maritime activity be-
cause it would be performing a function tradition-
ally performed by waterborne vessels."
88/ Id. at 17,157.
89/ Id.
90/ Rosman v. Transworld Airlines, Inc., 34 N.Y.2d 385,
13 Avi. 17,231 (N.Y. Ct. App. 1974).
91/ Edwards v. National Airlines, Inc., 13 Avi. 17,478
(Fla. App. 1974).
92/ Id. at 17,479.
93/ Northwest Airlines, Inc. v. Globe Indemnity Co., 13
Avi. 17,435 (Minn. 1975).
94/ Id. at 17,439.
95/ Id. at 17,438.
96/ Pan American World Airways, Inc. v. Aetna, F.2d
13 Avi. 17,340 (2d Cir. 1974).
97/ Williams v. Cessna Aircraft Corp., 376 F. Supp. 603,
13 Avi. 17,389 (N.D. Miss. 1974).
-13-
98/ Id. at 17,391-92. The Court stated:
"Mississippi law precludes imposition of
liability on the basis of a "second accident"
where the alleged defect did not cause or con-
tribute to the initial mishap and did not arise
from the intended normal use for which the product
was manufactured."
99/ Perez v. Ford Motor Co., 497 F.2d 82 (5th Cir. 1974);
Turcott v. Ford Motor Co., 494 F.2d 173 (1st Cir. 1974).
100/ Aaron v. City of Los Angeles, 115 Cal. Rptr. 162, 13 Avi.
17,267 (Cal. Ct. App. 1974), cert. denied, U.S.
(1975).
101/ Id. at 17,275.
102/ Id. at 17,272.
103/ City of Los Angeles v. Japan Airlines Co., 41 Cal.3d
416, 116 Cal. Rptr. 69, 13 Avi. 17,279 (Cal. Ct. App.
1974).
104/ Id. at 17,284.
105/ Id. at 17,286.
106/ Pueblo of Sandia v. Smith, F.2d , 17 Aiv. 17,130
(10th Cir. 1974).
107/ Id. at 17,131.
108/ 592 CCH AVIATION LAW REPORTS 1 (Jan. 21, 1975).
109/ Id. at 3.
110/ 28 USC S 1408 et. seq. (1974).
-14-
111/ Proposed Amendment to FAR 23.49.
112/
113/
114/
115/
116/
-117/
118/
119/
120/
121/
Proposed
Proposed
Proposed
Proposed
Proposed
Proposed
Proposed
Proposed
Proposed
Proposed
1401(f).
592 CCH AVIATION LAW REPORTS 4 (Jan. 21, 1975).
Id.
Id.
593 CCH AVIATION LAW REPORTS 4 (Feb. 17, 1975).
-15-
Amendment to FAR 23.207.
Amendment to FAR 25.
Amendment to FAR 25.659.
Amendment to FAR 25.1307(i).
Amendment to FAR 25.1322.
Amendment to FAR 23.1203.
Amendment to FAR 29.1305(a).
Amendment to FAR 21.51.
Amendment to FAR 25.1529(a).
Amendments to FAR 29.1401, 1401(b) and
122/
123/
124/
125/
- ' Tr -h'. "
e .A o%
