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[Topics] [Phillip Kolczynski's Biography]
This section of the Aviation Law Forum is devoted to issues related to Aircraft Product Liability:
Design Defect, Manufacturing Defect, Failure To Warn,
Subcomponent Parts, Bogus Parts, Retailer, Risk Analysis.
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The new product liabilty laws as I understand them limit the liability of an
aircraft manufacturer after an airplane reaches a certain age. If this is true
does the manufacturer reassume the liability when he sells parts to the owner of
an airplane that the manufaturer is no longer liable for? Will this new product
liability law encourage manufacturers to not support the product when they are no
longer liable for the airplane?
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Thank you for the excellent question. The new product liability
law you refer to is the General Aviation Revitalization Act of 1994
(GARA). This legislation immunizes general aviation manufacturers, if
their small airplanes manage to fly without an accident caused by a
defect, for 18 years from the date it was sold.
If the manufacturer sells parts, sub-assemblies, systems, for the 18
year old aircraft, the subcomponents will have to operate for 18 years
without an accident caused by a defect in them, in order for the
manufacturer to be off the hook with regard to the subcomponent.
Whether the manufacturers will avoid selling parts for 18 plus year old
aircraft, will depend on how much profit they can make from selling
these parts, compared to the risk that the subcomponent may lead to an
accident if it is defective. Regardless of what the manufacturer
decides, there are many smaller businesses that can obtain Parts
Manufacturing Authority (PMA), from the FAA in order to design,
manufacture and sell replacement parts for older aircraft. Each
business will have to make its own decision with regard to the product
liability risk it will take under these circumstances.
IF, AFTER 18 YEARS OF LANDINGS, A SUBCOMPONENT HAS NOT CAUSED AN
ACCIDENT, IT IS HOME FREE. PHIL
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Would a consultant aerodynamicist who assists only in the
design of a plane for a client be exposed to any personal liability?
The client intends to personally build and fly the plane based on the
consultant's design.
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As a generalization, in some states, a consulting aerodynamics
design engineer can have personal liability exposure for a defective
aerodynamic design of an aircraft which is built and flown by a client.
A good analogy would be a consulting architect who draws up plans for a
home that is then built by the homeowner. If the structure crumbles,
and experts prove that it was due to a poor design and not faulty
construction, the consulting architect could be liable for the deficient
design baring special protection under some states' laws.
Your question, as worded, implies that the consulting aerodynamics
design engineer is personally designing an aircraft for a client. If
the question is changed slightly and the consultant is a contract
employee of an aerospace company that provides the design to a client
who then in turn builds the aircraft, the aerospace company will be the
party first exposed to design defect liability for what it's consultant
did wrong. In many states, the fact that the employer has liability
does not completely remove the exposure of the professional consultant.
If the error committed can be traced to an individual working for a
company, the company and the individual can both have liability
exposure.
THEY HAVE TO BE DESIGNED CORRECTLY BEFORE THEY CAN BE BUILT AND FLOWN TO
A SUCCESSFUL LANDING! PHIL
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Sir: I have a Lancair 235 that I built from a kit. I wish to dispose of this aircraft but
am afraid of the liability as the builder. If I were to gift this acft. to a museum or
charity with the previso that the aircraft is only used as a static display
or scrapped for components am I still liable even with the priviso in hand?
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Thank you for the intriguing question. If your kit aircraft is
used purely for static display, there is almost no risk of injury or
property damage; therefore, you should not have product liability
exposure. If the aircraft is salvaged for its components and you built
or modified the components, and if any of the components are reinstalled
in other aircraft without further change, then you may have some
liability exposure if the parts are shown to be defective.
The fact that a charity is involved does not immunize a defective
product manufacturer. Under many states' laws, the focus is on the
product not who is using it. (See, Aviation Law Forum Disclaimer).
Let's say, hypothetically, that you donate this kit aircraft to a
charity and the charity operates the aircraft for their own charitable
purposes. If the aircraft crashes into a school house, the victims are
going to want to investigate whether there was a defect in the product
that caused or contributed to the crash (particularly if the charity has
immunity or limited insurance). If there was a defect, then the
operator and all those in the distributive chain for the defective
product may have product liability exposure.
NO FLYING = NO LANDINGS = NO EXPOSURE! PHIL
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You build a homebuilt aircraft and fly it for several years.
On a landing, you hit ice, plane is damaged and insurance co. totals it.
It is sold under blank bill of sale via insurance adjuster. Several
months later FAA tells you plane is not reregistered. You check around,
have every indication plane was reregistered with FAA with new serial
number and new N number. FAA and home state are asking about plane
(state wants property tax). Big question, as original manufacturer of
plane, do you still have liability for plane once it has been
questionably reregistered? Also, do you tell FAA what you know?
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Your potential liability as the builder will depend on someone's
ability to trace a defect in the aircraft, that causes an accident, back
to you. A typical defense in product liability cases is the
modification of the product by someone else which may, depending on your
state's laws, exonerate you. Be aware, that it is not the registration
status of the aircraft that protects a manufacturer or assembler, but
the non-defective condition of its product. A lawyer would need to know
more than you have explained in this question to really give you peace
of mind. A key to your defense, if ever needed, may be that the
insurance adjuster assumed primary responsibility for the condition of
the aircraft they presumably modified and sold. It would be interesting
to find out if they disclosed that it had been in an accident when they
sold it?
THE LAW, LIKE AN "ICE" LANDING, CAN BE SLIPPERY! PHIL
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I must sell my excellent Glasair IIFT aircraft,I cannot afford to suffer a probuct
liability lawsuit. Is there any way I can protect me and
my family from being liable for a pboblem that could arize after the sale? This
assumes, of course, that I did not intentially alloe a defect
to exist in the aircraft at the time of the sale
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Dear Glasair Owner:
There is nothing that can be done to completely immunize you from a
product liability lawsuit after you sell your aircraft. As you probably
already know, it is easy for somebody to file a lawsuit. However, there
is some good news! Sellers of used products are generally not subject
to "strict liability," unless they have rebuilt or reconditioned the
product and assumed the role of a manufacturer or assembler. Courts in
many states will not hold the sellers of used aircraft strictly liable
in that they have no control over quality assurance. They can't
disassemble and check all of the inside parts to make sure that the
aircraft was built correctly in the first place. Also, private parties,
who sell aircraft, usually have no relationship with the manufacturer,
or retailers, to provide feedback on possible defects. Finally, some
courts have held that consumers who buy a used product do not expect the
same level of safety as when they purchase a brand new product from a
retailer or a manufacturer. (Manufacturers and retailers can be held
"strictly liable" if their defective product causes injury, even if they
weren't negligent.)
Beware! If you are negligent in the maintenance or servicing of the
aircraft, or if your modification contributes to an accident, you can be
sued for negligence in many states. [See Aviation Law Forum
Disclaimer]
You may want to take a look at the answer I gave on this Forum under the
Topic - Product Liability to a gentlemen who was planning to assemble a
homebuilt aircraft and was worried about his product liability exposure
after sale. Take comfort, you may have "less" exposure than him because
it sounds like you are merely selling a used aircraft. You should check
with your lawyer in your state to find out exactly what your exposure
will be. It will probably be a good idea to confirm the sale in
writing, make sure the buyer understands they are purchasing the
aircraft "as is," strongly encourage them to have the aircraft inspected
and refrain from making any representations about the condition of the
aircraft or its performance.
YOU'LL MISS THE LANDINGS AFTER YOU SELL YOUR AIRCRAFT! PHIL
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I'm building a tube-and-rag two-place airplane from purchased commercially sold plans.
Life being what it is, I will eventually want to sell the airplane. As the person who
built the craft, what is my liability exposure if someone has a mishap with it?
Would I be better off to disassemble and sell it as a collection of parts, not a flying
airplane? Thanks.
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Thank you for the intriguing question about "Tube-and-Rag
Productions." I can't give you a specific legal opinion as to your
liability exposure in any one state; however,I can provide you with some
general analysis so you understand the problem.
Generally, a party who designs, manufactures, assembles, distributes or
sells products may be held strictly liable if the product proves to be
defective and causes injury. When you build this airplane, you may or
may not be considered a manufacturer, but will probably be considered an
assembler and as a result, you may have strict product liability
exposure in many jurisdictions. You may also have negligence exposure
if you perform below the standard of care with regard to the assembly,
modification, maintenance or issuance of warnings and instructions
concerning your final product. You might want to purchase product
liability insurance with "Tail" coverage to protect you even after your
sell this aircraft.
I do not believe that disassembling the aircraft and selling it as a
collection of parts will protect you. If it looks like a duck, walks
like a duck, and quacks like a duck, selling it's webbed feet, wings and
beak in a box, will not change the fact that you sold the fowl for
purposes of flight. Bear in mind that the courts bend over backwards to
protect victims of defectively manufactured, assembled or modified
aircraft. If somebody dies, the court is not likely to go easy on you
because you assembled in a garage or hangar as opposed to on an assembly
line in a factory. Indeed, most Judges would be stricter, on the theory
that you're exposing passengers, other aircraft and people on the ground
to the same risks, but without the FAA regulatory oversight of the
aircraft's assembly process, in a manufacturing plant. I would expect
that a court would hold you to the same engineering and quality
assurance standards that would be employed on the assembly line of a
General Aviation Manufacturer.
LIST "T & R PRODUCTIONS" UNDER "MANUFACTURERS" IN THE LANDINGS
DIRECTORY! PHIL
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North Dakota enacted product liability statutes for aircraft manufacture and component
manfacture, the only state to do so.
Any feeling as to how widely this information is known in the aviation industry and
doesn't it have great potential to reduce insurance costs by
manufacturers who meet the statutes requirements and therefore reduce the cost to the
consumer?
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Congress and many states have been considering product liability
reform statutes for many years. I have not read North Dakota's, but I
suspect that they are narrow in scope. Recently, about 16 states passed
State Product Liability Statutes of Repose like the General Aviation
Revitalization Act (GARA) which passed in our Federal Congress in 1994.
Statutes of Repose like GARA, narrow the time for lawsuits for certain
general aviation aircraft operations.
You have raised an interesting point on whether a state's product
liability statutes will have the potential to reduce insurance costs for
manufacturers who meet the statute requirements. The rule in many
states is that a manufacturer's compliance with statutes, codes or
regulations, does not by itself, immunize the manufacturer against a
product liability lawsuit! The reason is that depending on how the
statutes, codes or regulations are worded, they often only set minimum
standards for safety. Many of the FARs in Part 21 are a classic
example. State laws frequently hold manufacturers to higher than
minimum standards. Thus, if a plaintiff can prove that a product was
defective, the fact that the manufacturer complied with the minimum
state or federal standards, such as manufacturing FARs, may not preclude
liability. Of course, evidence of compliance is admissible, but it is
usually not conclusive. If there was a safer way the manufacturer could
have designed the product, or it was unreasonably dangerous as sold,
they may still be held liable.
Another factor that has to be considered in answering your question, is
the reality that a particular state's statutes help only when that
state's laws apply. Air crashes often have multi-state defendants and
issues. Thus, if plaintiffs choose to bring a lawsuit in a state other
than North Dakota, the North Dakota statutes will usually have no
applicability. An exception to this statement involves an esoteric
legal principle called, "conflicts of law" which may allow another state
to apply North Dakota law. Complicated? You bet!
SAFER TO LAND IN NORTH DAKOTA? PHIL
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What percentage of the price of a new general aviation aircraft, say the new Skyhawk or
the new Mooney Ovation, goes for product liability insurance?
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Thank you for the intriguing question. I do not have "reliable"
statistics on the cost per SkyHawk or new Mooney Ovation. However, the
cost of product liability insurance by comparison of the cost of
building the aircraft should be going down.
In 1994, an aircraft of roughly comparable complexity to a SkyHawk
(Piper Warrior II) cost approximately $130,000. At that time, one of
the former General Counsel of Piper Aircraft Corporation, publicly
declared that the single largest component cost in the construction of a
single engine, propeller-driven, general aviation airplane was the cost
of product liability litigation. Product liability insurance pays for
the defense if the manufacturer is insured.
In order to evaluate how hard it is to come up with "reliable"
statistics on the costs of insurance or litigation when compared to
manufacturing, see Terry and Truitt, "Rhetoric and Reality: Tort Reform
and The Uncertain Future of General Aviation." 61 Journal of Air Law and
Commerce, Southern Methodist University School of Law, No. 1, September
- October, 1995.
As a result of heavy lobbying by the General Aviation Manufacturing
Industry and G.A. pilots, Congress passed the General Aviation
Revitalization Act of 1994 (GARA) which, created a Statute of Repose
with an immunity for general aviation airplanes which have been
operating for more than 18 years. Many general aviation aircraft still
flying were manufactured in the 1970's and early 1980's. They are now
reaching 18 years of age and it is estimated that the percentage of G.A.
Aircraft in operation, immunized by GARA will be 85% in 1998!
During Senate Aviation SubCommittee Hearings on GARA, manufacturing
representatives promised that 25,000 jobs would be created if GARA was
passed. In April, 1996, the first Cessna 172 was manufactured in ten
years! Since then, Cessna has had 300 deposit agreements to purchase
it's light aircraft (See, First New Cessna, 172 Flys, Aviation Week &
Space Tech., Page 21 (April 29, 1996).
During the time period from 1994 to present, studies conducted by non
profit foundations have revealed that the number of tort lawsuits
(including, product liability) has decreased annually. The Civil
Justice Digest, National Center For State Courts, The Roscoe Pound
Foundation, Volume III, No. 3 (Summer, 1996). Therefore, now that GARA
is law, and less lawsuits are being filed, manufacturers should be able
to get cheaper product liability insurance?
LAND BY THE NUMBERS, BUT DON'T TRUST STATISTICS! PHIL
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Dear Phil: I am in the general aviation manufacturing business and I am
disgusted with all lawyers and the law. Why does everybody sue the
manufacturer after an aircrash? Isn't there a new law preventing such
suits?
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A#1:
Dear Disgusted: It may seem to you like everyone sues the manufacturer
after an aircrash, but surprisingly, there are a number of cases where
the manufacturer is not sued. However, I agree that lawsuits have cost
the aviation manufacturing industry millions of dollars in the last few
decades. One big reason manufacturers get sued, is that many general
aviation pilots have insurance policies with only $100,000 per seat
limits for a particular occurrence. Thus, if some passengers are badly
injured or killed in a general aviation aircrash and they sue the owner
or operator of the airplane, they can only collect $100,000 worth of
insurance. Frequently, the general aviation owner/operator does not
have sufficient assets to pay for the expensive injuries suffered by the passengers.
The lawyer representing the passengers, or the pilot, has an ethical
obligation to try to recover sufficient compensatory damages to pay for
the lost wages and medical expenses, pain and suffering, etc. that his
clients have suffered. If there is some question that the airplane or
its subcomponent parts may have been defective and caused or contributed
to the crash, the lawyer should investigate that possibility.
Frequently, a pre-lawsuit investigation does not answer the question and
the lawyer is faced with either filing a lawsuit against the
manufacturer before the statute of limitations expires or foregoing his
client's rights.
A#2:
The Federal General Aviation Revitalization Act of 1994, cuts off the
right of plaintiffs to sue a general aviation manufacturer for accidents
occurring more than 18 years after delivery to a customer or dealer.
The Act has many exceptions and provisions, some of the major ones are
that the law only protects airplanes with a passenger capacity of 19 or
less. Also, when the aircraft is engaged in scheduled
passenger-carrying operations at the time of the accident, the Act does
not apply. Thus, most commuter and airline crashes are outside the
Act's protection.
GOOD AIRCRAFT MAKE LANDINGS! PHIL
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