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January 26, 2018 | Publication| Preemption In Aviation Product Liability Cases

Laura Nicole Heft

This article is originally a publication of the Aviation Insurance AssociationBinder Vol. 42 No.4 Winter 2017. Legal opinions may vary when based on subtle factual differences. All rights reserved.

Preemption is still a valid defense for manufacturers in aviation products liability cases.  A recent case out of the District Court in Pennsylvania, Sikkelee v. AVCO Corp., No. 4:07-CV-00886, 2017 WL 3317545 (M.D. Pa. Aug. 3, 2017), on reconsideration, No. 4:07-CV-00886, 2017 WL 3310953 (M.D. Pa. Aug. 3, 2017, granted judgment against a plaintiff’s products liability claim alleging, in part, negligent design because the claims were conflict preempted and could not proceed.  The case adds a new nuance to existing preemption law in aviation cases relating to aviation safety and products liability.

What is Preemption?

Preemption is a doctrine coming from the Supremacy Clause of Article VI of the Constitution: 

This Constitution, and the Laws of the United States which shall be made in Pursuance thereof; and all Treaties made, or which shall be made, under the Authority of the United States, shall be the supreme Law of the Land; and the Judges in every State shall be bound thereby, any Thing in the Constitution or Laws of any state to the Contrary notwithstanding.

Because of the Supremacy Clause, federal laws will preempt or supersede conflicting state laws.  However, there is always a presumption against preemption, i.e., that a state operates within its traditional police power and that Congress has not derogated state law unless it is the “clear and manifest purpose of Congress” to preempt state law.  Abdullah v. Am. Airlines, Inc., 181 F.3d 363, 366 (3d Cir. 1999).

Preemption as a doctrine is not so straightforward.  Indeed, it is rare, although not unheard of, that Congress explicitly preempts state law.  See, e.g., 49 U.S.C. § 41713(b)(1) “[N]o State or political subdivision thereof and no interstate agency or other political agency of two or more States shall enact or enforce any law, rule, regulation, standard, or other provision having the force and effect of law relating to rates, routes, or services of any air carrier....”). 

Much more common, courts determine whether implied preemption applies.  In any implied preemption case, the court is tasked with determining legislative intent. Abdullah v. Am. Airlines, Inc., 181 F.3d 363, 366 (3d Cir. 1999) (“Accordingly, ‘[t]he purpose of Congress is the ultimate touchstone’ of pre-emption analysis.”).

Implied preemption can be in two forms: field preemption or conflict preemption.  Under field preemption, “federal law so thoroughly occupies a legislative field ‘as to make reasonable the inference that Congress left no room for the States to supplement it.’”  Abdullah v. Am. Airlines, Inc., 181 F.3d 363, 367 (3d Cir. 1999) citing  Fidelity Fed. Sav. & Loan Assn. v. de la Cuesta, 458 U.S. 141, 153, 102 S.Ct. 3014, 73 L.Ed.2d 664 (1982). 

Whereas conflict preemption exists when there is a direct conflict between federal and state law.  For conflict preemption to apply “compliance with both state and federal regulations [must be] impossible” or “a challenged state law [must] ‘stand[] as an obstacle to the accomplishment and execution of the full purposes and objectives of a federal law,’”  Sikkelee v. Precision Airmotive Corp., 822 F.3d 680, 688 (3d Cir.), cert. denied sub nom. AVCO Corp. v. Sikkelee, 137 S. Ct. 495, 196 L. Ed. 2d 433 (2016) (internal cites omitted).

Preemption plays an important role in aviation cases.  Indeed, aviation is unique in that it is almost entirely “federal.”  See Abdullah v. Am. Airlines, Inc., 181 F.3d 363, 368 (3d Cir. 1999) citing S.Rep. No. 1811, 85th Cong., 2d Sess. 5 (1958) (“[A]viation is unique among transportation industries in its relation to the federal government—it is the only one whose operations are conducted almost wholly within federal jurisdiction, and are subject to little or no regulation by States or local authorities. Thus, the federal government bears virtually complete responsibility for the promotion and supervision of this industry in the public interest.”).

Beginning almost immediately with the achievement of flight, Congress saw a need to regulate it.  The 1926 Air Commerce Act was a major step.  The Air Commerce Act gave power to the Secretary of Commerce to develop an Aeronautics Branch and to promote air commerce, establish airways, license pilots, issue airworthiness certificates and investigate accidents. 

Later, the 1958 Federal Aviation Act (“Act”) repealed the Air Commerce Act and centralized aviation regulation, formed the Federal Aviation Administration, and gave the power to regulate air safety to the Administrator of the FAA.  The Act was passed on the heels of a series of fatal air collisions between civil and military aircraft that were operating under separate sets of rules to provide uniformity and consistency in the skies.  United States v. Christensen, 419 F.2d 1401, 1404 (9th Cir. 1969).  The Act permits the FAA to form rules and regulations for safe flying. 

The vast array of regulations makes aviation cases rife with preemption issues.  Not long after the passage of the Act, cases began determining that federal law preempted state law in aviation.  See City of Burbank v. Lockheed Air Terminal Inc., 411 U.S. 624, 630, 93 S. Ct. 1854, 1858, 36 L. Ed. 2d 547 (1973).

Tort cases, in particular, commonly find preemption to be an issue.  Tort law is designed to protect individuals from harms suffered at the hands of another and is fundamentally state law, based on a state’s prerogative to protect its citizens from harm.

Sikkelee’s Contribution to Preemption

Recently, a district court in Pennsylvania added the final chapter to a long preemption battle. 

The case, Sikkelee v. AVCO Corp., No. 4:07-CV-00886, 2017 WL 3317545 (M.D. Pa. Aug. 3, 2017), on reconsideration, No. 4:07-CV-00886, 2017 WL 3310953 (M.D. Pa. Aug. 3, 2017, involved a deceased pilot’s wife suit against a number of manufacturers related to her husband, David Sikkelee, who died after crashing soon after take off in a Cessna 172N in 2005. 

The carburetor is the focal point of the case.  The main cause of the accident was the carburetor, which has two halves, the float bowl and the throttle body, that are bolted together.  These bolts became loose causing the engine to lose power shortly after take off.  (I say “main cause” because in the case it was not disputed that the pilot had relatively minimal hours in this plane, which may have been another contributing cause.)  This accident occurred only 400 hours after a complete overhaul. 

Sikkelee brought suit, in part, against Lycoming, the engine manufacturer, and Kelly, who performed the overhaul on the carburetor.  Kelly settled with Plaintiff in relatively short order for $2 million dollars, but the case continued as to Lycoming. Lycoming manufactured the engine, model O-320-D2C, that was in the plane at the time of the crash. 

Type Certificates v. Parts Manufacturer Approval

Important to the complexity of the case are the regulations relating to obtaining a type certificate. 

A manufacturer who wants to make a plane needs to have three certificates issued by the FAA:  a type certificate, a production certificate, and an airworthiness certificate.  Broadly speaking, a type certificate is the initial certification of plans for a particular aircraft or part, a production certificate allows replica parts to be made under a type certificate, and an airworthiness certificate is given to each individual plane produced.  A type certificate certifies a particular plane, engine, propeller, or other part “is properly designed and manufactured, performs properly, and meets [FAA] regulations and minimum standards.”  49 U.S.C.A. § 44704 (West).  Supplemental type certificates can be issued for changes to the design under the type certificate.  Id. 

Type certificated aircraft go through an extensive process with the FAA.  These submissions are no small feat, normally entailing hundreds of thousands of pages of drawings, schematics, reports, and thousands of flight test hours.  Once a type certificate is granted, the FAA prohibits any changes to the type design without explicit approval.  Changes to the type design are again subject to a rigorous approval process.  However, the FAA does allow certain documented minor alterations without prior approval as long as the alteration is completed using data acceptable to the FAA.  A major alteration is one that “might appreciably affect weight, balance, structural strength, performance, powerplant operation, flight characteristics, or other qualities affecting airworthiness.”  All other alterations are minor. 

Once a type certificate is issued, it belongs to the manufacturer who went through the process to get it.  It remains “effective until surrendered, suspended, revoked, or a termination date is otherwise established by the FAA.”  14 C.F.R. § 21.51.  This manufacturer can authorize other manufacturers to make replica parts under its type certificate through a licensing agreement.  Only the type certificate holder, or supplemental type certificate holder as the case may be, and a licensee may apply for a production certificate.  14 C.F.R. § 21.132.  The holder of a production certificate is only permitted to manufacturer and install parts identified in its production certificate.   14 C.F.R. § 21.142.

The rules are just as stringent on manufacturers who want to make parts but do not hold a production certificate.  These so-called “after-market” parts manufacturers go through a separate process to receive a parts manufacturer approval or PMA.  The PMA is required for any entity producing replacement parts for type certificated aircraft.  14 CFR 31.303.  Type certificate holders and PMA holders are generally competitors.  The FAA will issue PMA approval in one of three forms:  identicality with the type certificate with a licensing agreement, identicality with the type certificate without a licensing agreement, and tests and computations.  As a matter of practice, identicality without a licensing agreement is rare for most complex parts.  Identicality is only permitted to type certificated parts not to another PMA.  14 CFR 21.303(a)(4). The later involves the manufacturer submitting its own set of assessments, computations showing regulatory compliance, and testing.  The part is approved for installation only on specific aircraft.  14 CFR 21.311; 21.303. 

Unfortunately, this is a time-consuming process and the FAA cannot handle the extent of the approvals necessary to keep this system in order.  To make up for this deficiency the FAA certifies designated engineering representatives (DERs), who operate as an extension of the FAA in this role, even if they work for a manufacturer normally.  DERs recommend approval of PMAs. 

Sikkelee One

In Sikkelee Lycoming was the holder of a type certificate for its engine.  Kelly was the holder of a PMA relating to carburetor components.  Sikkelee claimed that Lycoming improperly designed and manufactured the engine, and brought claims alleging both strict liability and negligence.

The case’s first important brush with preemption came from the 3rd Circuit Court of Appeals in 2016, when it reversed the District Court’s determination that the claims against Lycoming were field preempted.  There the Court began its analysis with Abdullah v. American Airlines, Inc., 181 F.3d 363 (3d Cir.1999). 

In Abdullah, passengers who were injured in turbulence after the seatbelt sign had been illuminated, were preempted only as to the standard of care to be used in the case.  The passengers brought suit alleging a failure to warn the passengers of the impending turbulence.  The Abdullah Court held broadly that federal law preempts state law standards of care if the field of air safety, but preserves state law remedies.  Thus, in the field of air safety, federal standards of care apply in state tort cases. 

The 3rd Circuit in Sikkelee distinguished Abdullah noting that it related only to in-air operations, and cited various cases subsequent to Abdullah further demarking a line between cases in-air and cases once the plane has landed. 

The Sikkelee Court then determined that the presumption against preemption applied in aviation cases, noting that historically, aviation products liability claims have been controlled by state law. 

The Court went on to look for clear Congressional intent that the Federal Aviation Act was intended to preempt state products liability claims, but was unable to do so.  The Court noted that the Federal Aviation Act contains a saving clause allowing other remedies.  Additionally, the Act and the CFR for manufacturing are fundamentally different than those for in-flight operations.  The Court explained, “these regulations do not purport to govern the manufacture and design of aircraft per se or to establish a general standard of care but rather establish procedures for manufacturers to obtain certain approvals and certificates from the FAA.”  Sikkelee v. Precision Airmotive Corp., 822 F.3d 680, 694 (3d Cir.), cert. denied sub nom. AVCO Corp. v. Sikkelee, 137 S. Ct. 495, 196 L. Ed. 2d 433 (2016).  The Court also found that unlike aviation safety regulations, the type certificate regulations provide only “discrete, technical specifications,” which are “exceedingly difficult to translate into a standard of care that could be applied to a tort claim.”   Sikkelee v. Precision Airmotive Corp., 822 F.3d 680, 694 (3d Cir.), cert. denied sub nom. AVCO Corp. v. Sikkelee, 137 S. Ct. 495, 196 L. Ed. 2d 433 (2016).  Finally, the Court noted that unlike safety regulations, there is no catchall standard of care given for manufacturers.

The Court went on to decline to find that the issuance of a type certificate alone would preempt all state products liability claims, and instead found that courts should apply conflict preemption on a case by case basis.  Noting that the District Court had not examined the case on a conflict preemption basis, the case was remanded back to the District Court for further proceedings.  The Petition for Certiorari to the Supreme Court was denied on this case, and the case went back to the District Court.  AVCO Corp. v. Sikkelee, 137 S. Ct. 495, 196 L. Ed. 2d 433 (2016).

Sikkelee Two

In the latest chapter, Sikkelee v. AVCO Corp., No. 4:07-CV-00886, 2017 WL 3317545 (M.D. Pa. Aug. 3, 2017), on reconsideration, No. 4:07-CV-00886, 2017 WL 3310953 (M.D. Pa. Aug. 3, 2017), on remand in the District Court, Lycoming moved for summary judgment both on conflict preemption and on liability for third-party modifications.  The District Court ruled that the case against Lycoming is conflict preempted and also that the claims fail for lack of proximate causation under state law. 

Here, there was no dispute that Kelly rebuilt the carburetor using aftermarket parts; that Lycoming did not see the engine after 1969; that the engine went into storage for 29 years instead of being put into a plane; that it was taken out of storage and put into a plane that it was not type certificated for; that the engine operated in the plane from 1998 to 2004 for 1,262.6 hours problem free; that the plane was then struck by lightning, which necessitated the overhaul of the engine; and that as a part of that overhaul the carburetor was sent to Kelly to be rebuilt.  At the time the engine was made, and according to its type certificate, it was equipped with a Marvel-Schebler model MA-4SPA carburetor.  When Kelly rebuilt the carburetor, it used a hodgepodge of after-market parts from different decades.  Kelly and Lycoming did not have a licensing agreement to permit Kelly do the work on the carburetor, instead, Kelly worked under a separate PMA. There was no dispute that Lycoming not only did not approve of any of Kelly’s work, but that Lycoming, in fact, was not aware the work took place until this case. 

Plaintiff’s argument that Lycoming was responsible for the rebuilt carburetor centered on the type certification process, which made the Court delve deep into the depths of the Code of Federal Regulations that regulates the approval process both for original manufacturer and “after-market” manufacturers. 

The court noted that in conflict preemption, a state law will be preempted when it is impossible for an entity to comply with both state and federal requirements.  Indeed, “When federal regulations prevent the defendant from ‘unilaterally’ doing what state law required, the state law is conflict preempted.”  The Court then examined federal regulations relating to Lycoming’s responsibilities as a type certificate holder and compared those with duties imposed by state tort law.  Relying on cases involving the Food and Drug Administration, the Court held that Lycoming could not have independently made the changes Plaintiff suggested would have prevented the accident.  Indeed, Lycoming would have been required to go through the FAA to make any design changes to the carburetor.  Lycoming would have been forbidden to install even a different model carburetor, much less change the design.  Nor would Kelly have been permitted to alter the requirements of the PMA in its rebuild of the carburetor.  The Court noted that although historical approval is relevant, what is determinative is that approval is needed to implement any future changes.  This makes state tort law in this regard conflict preempted.  

Plaintiff continued to argue that Lycoming should be held responsible for Kelly’s changes to the carburetor because Kelly was bound to manufacture its carburetor parts as it did because of Lycoming’s type certificate.  This the Court rejected, citing to the separate PMA process.  The Court found particularly persuasive that even had Lycoming modified its type certificate, Kelly under a separate PMA was not required to follow suit.  The Court also rejected Plaintiff’s argument that although Kelly has the benefit of a preemption defense, Lycoming does not, finding in line with other precedent that defenses are both for the manufacturers and distributors. 

The Court also granted summary judgment both on strict liability and negligence counts on an independent basis of a lack of proximate cause.  The Court noted that generally a manufacturer is not liable if a safe product is made unsafe by subsequent changes.  The Court found that the engine was not defective when it left Lycoming in 1969, and that Lycoming could not have foreseen the introduction of the alleged defect.  The Court noted that the engine, which sat in storage for almost 30 years missed required overhauls, the replacement of bolts was a major change cutting the line of causation, and that it is too tenuous to hold Lycoming responsible for alterations 36 years after the engine left Lycoming’s hands. 

On reconsideration of a separate decision, Plaintiff argued that its claim against Lycoming under 14 CFR 21.3 for failure to report known defects should survive.  The Court noted Plaintiff’s claim here too fails because the regulation only applies to type certificate holders who also manufacture the product that caused the failure.  Sikkelee v. AVCO Corp., No. 4:07-CV-00886, 2017 WL 3310953, at *2 (M.D. Pa. Aug. 3, 2017).  Because Lycoming did not manufacture the carburetor, Plaintiff’s claim here failed.

The Sikkelee cases have clarified to a certain extent the preemption defense for manufacturers.  Although all product liability cases are not field preempted, it seems clear that, at least in the 3rd Circuit, a manufacturer operating under a type certificate will have the defense of preemption when Plaintiff’s claim involves changes that could have been made in the design of the part.  Because alterations under a PMA encompass a similarly rigorous approval process to that under a type certificate, it is likely that case can be expanded to apply to a PMA manufacturer as well.  The Third Circuit will have the opportunity to weigh in on the latest development, as a notice of appeal was filed mid-September. 

Laura Heft

An Associate at Butler Weihmuller Katz Craig LLP in Chicago, IL. Laura practices in our First-Party Coverage, Casualty Defense Litigation, Product Recall, and Aviation departments.

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