INTRODUCTION
This Aviation Law Newsletter is designed to explain current
issues and areas of practice to interested parties, who are involved
with aviation accidents, incidents or business disputes. The Aviation
Law Newsletter emphasizes Aviation Accident Law, FAA Regulatory
Matters and Business Disputes, and also covers Mr. Kolczynski's
other practice fields, such as Federal Litigation, Insurance, Product
Liability, Admiralty and Military Mishaps. Please send proposed
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AVIATION ACCIDENTS - CAN WE RELY ON THE NTSB INVESTIGATION?
Accident victims sometimes wait for the results of an NTSB investigation
before deciding whether to bring a lawsuit. For various reasons,
this is not wise. One reason is that NTSB Probable Cause determinations
and conclusions are not admissible in evidence! 49 U.S. Code Section
1441(e). Private parties must prove the cause of the air crash to
a jury without the benefit of the conclusions of the NTSB Accident
Investigations. Many courts have allowed factual data in the Field
Investigator's "Factual Accident Report" into evidence, some courts
have allowed the jury to read portions of the NTSB "Blue Cover"
Aviation Accident Report of major air disasters. However, Federal
Courts have begun to follow 49. U.S. Code Section 1441(e) "literally,"
and have simply refused to allow the NTSB "Blue Cover" Aviation
Accident Report into evidence in airline disaster litigation (e.g.,
Sioux City United Airlines DC-10 Disaster.) There is good reason
for this caution because the Board's full report often has factual
findings intertwined with opinion and analysis, such that it would
be very difficult for a Judge to extract purely factual information
that will have meaning for the jury.
Judge's have even a greater concern - if they were to show the
jury the NTSB Report with opinions and conclusions, juries would
simply defer to the opinions of the federal investigators. Litigants
would, in effect, be denied their right to a jury trial because
the jury's prerogatives would be usurped by the findings of investigators
who had investigated a particular accident.
Some people might say, "What's wrong with that?" Aircraft accident
investigators know more about airplanes than jurors. Think about
how fair it would be if you had a complicated auto accident and
all the jury paid attention to was the Highway Patrol Officer's
Report that blamed you?
A new reason why the opinions in NTSB Reports release may not be
admissible into evidence is the fact that lawyers are no longer
able to ask NTSB Investigators in deposition, why they interpreted
the facts the way they did. NTSB Regulations allow lawyers to take
the depositions of the NTSB Investigators, but the investigators
are no longer permitted to reveal their analysis or express opinions
in the deposition. Thus, private litigants need to have their own
experts to analyze the evidence and reach opinions as to causation.
Helpful Tip: For a revealing analysis of the NTSB investigative
process read my In Depth Article - "NTSB
Accident Investigation Guide"
PRODUCT LIABILITY
When defective products cause serious personal injury, death or
substantial property damage, the manufacturer (including the distributor
and the seller) of the product can be sued, even if the injured
party cannot prove negligence. In many states, product liability
laws focus on whether the product is defective, rather than on whether
the conduct of the manufacturer was negligent. Thus, the injured
party can hold a manufacturer strictly liable if his attorney can
provide that a defect in the product caused the injury. This concept
is called, "strict" product liability because the courts decided
a long time ago, that manufacturers should be held to a stricter
standard than other parties with regard to products as compared
to services. The rationale for this stricter standard for manufacturers
and easier burden of proof for victims, is that it would be too
difficult for an ordinary consumer to prove engineering negligence.
Courts also believed that manufacturers were in a better position
to pay the damages if their product proved to be defective and caused
injury regardless of negligence.
Under most state laws, there are generally three types of product
liability - manufacturing defect, design defect and failure to warn
liability:
Manufacturing Defect: If the manufacturer fails to build
the product correctly, a manufacturing defect may exist. Thus, if
the finished product is substandard by comparison to identical products
in that product line, then the manufacturer may be held liable for
failing to catch the defect before it left the assembly line and
was sold to the consumer. Typical manufacturing defects include
the use of substandard materials, faulty assembly, inadequate quality
control, etc.
Design Defect: A design defect is one in which the whole
product line, or the same component in each product of that particular
model is dangerously deficient. In California, a product can be
considered defective in design if it fails to perform as safely
as an ordinary consumer would expect when using the product in the
normal fashion. Alternatively, defects can be shown revealing that
there are risks in the design which outweigh the benefits of the
design, coupled with proof that there was a feasible, safer design
but the manufacturer failed to use it. If there is more risk than
usefulness, then the product should have been designed differently
or adequate warning should have been issued considering the hazards
associated with the use of the product.
In most product liability trials, a jury is provided with technical
evidence to assist them in performing this balancing test. One of
the most important types of evidence that helps decide whether a
product is defective in design is expert opinion testimony. Experts
can explain whether there was an alternative, safer design that
was mechanically feasible at the time the product was built and
sold, and thus, tip the scales of the risk/utility balancing test
in favor of the product user.
Failure To Warn: Sometimes, a manufacturer is unable to
design a product to remove all risk. Similarly, the product may
be complicated to use, and may need adequate instructions in order
to use it safely. If the manufacture knows or should have known,
at the time of manufacture and distribution, that there were risks
associated with the use of the product, they have an obligation
to notify the user of the product in clear language about the risks.
If manufacturers fail to provide adequate warnings and instructions
for use, they can be held strictly liable on a theory of failure
to warn.
Helpful Tip: An area in which manufacturers are vulnerable
to product liability lawsuits involves the instructions for use
or manuals that accompany a product. These materials are often prepared
by technical writers who do not have a broad enough risk management
or accident prevention perspective. Ambiguities and inconsistencies
in instructions can lead to the dangerous use of the product.
Another area of product liability exposure involves "warnings."
In order for a warning to protect the manufacturer against product
liability, it must be deemed adequate by the court. The adequacy
of a warning depends on whether it conveys to the user the full
nature of any risk involved in the use of the product. The warning
must contemplate use of the product in an intended manner as well
as the foreseeable misuse of the product. Open up the user manual
and read the warnings on the equipment - are they adequate? For
an In Depth discussion of this subject read my article "Aviation
Product Liability."
FAA LICENSE VIOLATION INVESTIGATIONS
The following examples illustrate ways in which you can become
involved in a potential FAA Enforcement Action. A few are obvious,
some are not so apparent:
· The FAA sends an airman or an aviation business
a "Letter of Investigation" with a request to submit comments.
· Upon landing, ATC asks a pilot to call the Tower by telephone,
to answer a few questions.
· During a routine inspection of your aviation business,
the FAA Inspector requests more than paper - such as explanations
concerning previous flight operations or repair work.
· An Air Traffic Controller calls you up in flight, but
does not offer instructions, advisories or clearance; instead,
the Controller has questions about earlier flight activity
involving airspace, altitude or other aircraft.
· A "person" approaches a pilot or mechanic in the vicinity
of a hangar or ramp and asks numerous inquiries about a prior
flight or the condition of an aircraft.
What do these inquiries have in common? For one thing, each one
calls upon you to give some verbal statement that bears on your
responsibilities as an airman or business working under an FAA License.
(The FAA Prosecutor will call these "admissions.") Second, they
all deal with some occurrence in the past, either a matter of hours
or longer, concerning which an FAA employee has revealed unusual
curiosity. (Your friendly FAA FSDO representative is now a police
investigator). Third, most of us are likely to have a natural inclination
to provide quick and complete answers to such inquiries. We take
pride in what we do and feel we have nothing to hide (control this
tendency).
The problem is that an immediate response is not required nor is
it prudent. The license holder should find out why the inquiries
are being made. Is the airman or business being investigated on
suspicion of a license violation? In each of the examples listed
above, airmen frequently and unwittingly, make damaging admissions
which can be used against them in a FAA Enforcement Proceeding.
It is necessary to cooperate with the FAA to promote aviation.
All of those who do business with the FAA, understand the need to
display a cooperative attitude in order to avoid excessive FAA interference.
On the other hand, in each of the examples above, the FAA is simply
not inquiring about ways to make flying safer in the future or to
insure that the airman or business involved will comply with FAA
rules. The FAA is focusing on past conduct and this is what should
alert you to the need for caution.
There is rarely a circumstance which requires an immediate verbal
response to an FAA inquiry. Indeed, without a subpoena, the FAA
does not have the power to force you to say anything. Therefore,
it would be prudent to postpone any interview, phone call or other
response until you have had an opportunity to sit down and reflect
on what happened, check data and consult with an aviation lawyer.
If you are airborne, try to put off the discussion until after you
have landed. When you talk to the FAA person involved, try to ask
questions rather than give answers. Never mis-state or misrepresent
any fact. Do not speculate or offer opinions. Make it clear that
you want to cooperate, but you want to understand all the reasons
for the inquiry. If you are uncertain as to whether you can answer
without risk, then do not answer. Promise to be back in touch with
the FAA person as soon as possible, but retain an aviation lawyer
before you do.
Helpful Tip: For an in depth discussion and analysis of
the problems, procedures and issues facing any FAA License Holder
being investigated by the FAA, read my in
depth article entitled, " Protecting Yourself Against FAA
Enforcement Actions."
AVIATION BUSINESS DISPUTES
I frequently receive telephone calls or e-mail, from aviation business
or owners regarding maintenance services which are unpaid. The FBO
or mechanic says that the aircraft owner/operator has improperly
refused to pay their bill. The owner/operator claims that the FBO
or mechanic performed unauthorized or shoddy work on their airplane.
Usually the dollar amounts involved are relatively low, such that
hiring an attorney would cost as much as settling the dispute for
a compromise amount. Indeed, Small Claims Court is the best forum
for many such disputes.
Maintenance business disputes are usually the result of inadequate
documentation. The legal rights and remedies of the parties in such
matters are controlled by State law; therefore, I cannot offer specific
advice in this Newsletter to resolve anybody's dispute without knowing
all of the details, but I will prescribe some preventative legal
medicine.
Both the customer and the service provider should put their agreement
in writing. This can take the form of an invoice signed by both
parties, an aircraft service and repair agreement, or a similar
contract. It is important to discuss the work that will be performed
and parts that will be used. Discuss a timetable for completion,
any sign offs that will be required and how much will be charged.
Provisions should also be made for problems that arise during the
process of providing the maintenance, so that the contract can be
modified with a clear and mutual agreement. If a leaseback aircraft
is to be repaired, all parties involved should have written agreements.
Written contracts for repair and maintenance are important, not
only for the customer, but also for the aviation business involved.
Many lien laws require that a written agreement exist before a lien
can be enforceable.
There are generally two types of liens - possessory and non-possessory.
General Aviation Possessory Liens usually require that in addition
to having a written agreement for the work to be performed, the
service provider must retain possession of the aircraft for the
lien to be effective. The aircraft may be sold to pay the bill if
the customer does not fulfill his or her responsibilities. General
aviation non-possessory liens may include a requirement that the
written agreement be recorded with the Federal Aviation Administration
Aircraft Registry, which will then give the service provider a statutory
right to recover for repairs performed.
Helpful Tip: FBOs and mechanics would be wise to obtain payment
by certified check, credit card or cash before releasing possession
of a aircraft that they have worked on. If, for some reason, payment
is not feasible. Check with a lawyer in your state ahead of time.
Alternatives may include having the owner sign a Promissory Note
for the amount due and a Security Agreement giving the service provider
a creditors security interest in the aircraft. These documents can
be filed with the FAA Registry in Oklahoma City, Oklahoma, to provide
some protection. In this regard, a title search of the FAA Registry
records may be wise, so as to determine if there are any prior liens
already on file against the aircraft.
DEATH OR SERIOUS INJURY LITIGATION
One of the most controversial issues in our legal system is the
Contingent or Contingency Fee Agreement. Many people believe that
contingency fees encourage unnecessary lawsuits. Even if this were
true, many people do not have sufficient money to pay a lawyer's
hourly fees. As a result, a Contingency Fee Agreement is the only
way many people can get skilled representation.
It is often to the client's advantage to get the attorney to handle
the case on a contingency fee. In a Contingency Fee Contract, the
attorney joins with the client in taking the risk of recovery. The
attorney is often asked to advance thousands of dollars to pay for
the court costs, travel expenses, expert fees, investigators, etc.,
that are necessary for handling a complex air crash case which may
not be recovered if the case is unsuccessful. The expenses and costs
alone, in a serious air crash matter involving experts, which proceeds
to Trial, can involve tens of thousands of dollars. If there is
"no" recovery or merely a "low" recovery, the attorney may have
to absorb the costs and expenses advanced on behalf of the client.
These risk factors are major reasons why the Contingency Fee Contract
is to the client's advantage.
Newspapers have publicized cases where attorneys have recovered
over one-third of the Million Dollar awards resulting from successful
verdicts; however, I have not heard of any plaintiff's attorneys
issuing Press Releases about the cases they lost or the ones that
were reversed on Appeal resulting in no award. I am privy to conversations
wherein attorneys have acknowledged that they settled for less than
they spent on case preparation, or many cases where they settled
for an amount that compensated them in an amount equivalent to a
low hourly rate.
What's a fair contingency in an air crash case? Here are some considerations
that should be evaluated by the attorney and the prospective client
when negotiating the Contingency Fee Contract:
· The attorney's expertise and experience for the
particular type of case
· The amount of risk involved in proving defendant's liability
and plaintiff's damages
· The likelihood of finding a collectible defendant even
if liability is proven
· Special defenses and immunities available in the law to
protect defendants
· With pilots, the comparative fault which is attributable
as an offset against the heir's recovery, for the pilot errors
made by the decedent.
Helpful Tip: Most people hire an attorney simply because
someone they trust recommended that attorney. Many people provide
recommendations because they like an attorney or the attorney helped
them with a general practice matter. Take the extra effort to evaluate
the attorney's actual litigation experience and success in handling
Trials similar to the one involved. Here's a test - evaluate how
well the attorney explains the Contingency Fee Contract to you.
If the attorney cannot explain this clearly, how's he going to persuade
a jury to award you substantial damages for your loss?
ADMIRALTY LAW UNJUST FOR AIR CRASH VICTIMS
There is a serious injustice in the Federal law regarding fatal
air crashes on the high seas. Federal law will deprive a family
of full recovery just because of the fortuity that the crash occurred
in the ocean. If a fatal crash occurs outside the territorial limits
of the United States or its possessions, a Federal Admiralty Law
called The Death On The High Seas Act (DOHSA) will severely limit
the heirs' monetary damage recovery by only allowing recovery for
lost support. If a fatal crash occurs within a state's territorial
waters, or on land, state law will usually apply, and the heirs
can often recover for lost support and the loss of care, comfort
and society of their loved one. The difference may amount to twice
as much as may be awarded in accordance with the typical wrongful
death laws in most state courts.
DOHSA is an anachronism in the law. It was initially designed by
Congress to help people who could not bring wrongful death lawsuits
in admiralty. Nowadays, it is an unfair trap which deprives heirs
of the right to recover for the loss of the care, comfort and society
of their loved ones who died. A classic example of how the Death
On The High Seas Act can limit the damage recovery of airline crash
victims includes the Korean Airlines 007 disaster which occurred
on the high seas.
Help may be on the way in the form of a Bill introduced in Congress
which would amend the Death On The High Seas Act to allow victims
to recover their normal state damages in air crash cases on the
high seas (H.R. 2005). The Bill is in Committee and it remains to
be seen whether there will be sufficient political support to insure
its passage.
Helpful Tip: In 1988, President Reagan extended the territorial
sovereignty of the United States from 3 miles to 12 miles, from
the shore of the U.S., its territories and possessions. Proclamation
5928 (Dec. 27, 1988) 54 Federal Register 777 (1989).
AVIATION INSURANCE CLAIMS
Most homeowners and general liability insurance policies will not
provide coverage for aviation accidents - they usually contain "aviation
use" or "operations" exclusions. An aviation owner or operator needs
to acquire aviation insurance to cover liability exposure in the
event of an air crash accident. Aviation insurance is not as uniformly
regulated by the Government as other types of insurance. Thus, aviation
policies differ and it is necessary to review a specific policy
with reference to a particular accident to determine the nature
and extent of any coverage.
If you are a pilot or aviation business and have aviation insurance
to cover your aviation operation, immediately notify your aviation
broker or the insurance company at the address found on the policy.
Most people will use the telephone, but I strongly encourage a follow-up
letter.
An insurance claim letter should state the date and location of
the air crash accident and give a broad preliminary description
of the injuries and damages which have occurred. Do not discuss
who may be at fault. The letter should also ask the insurance company
to immediately acknowledge that they have received the claim. Request
a quick confirmation that the insurer will acknowledge coverage
and that they will provide a defense (providing a defense means
hiring a lawyer for you and paying that attorney's fees and costs).
Generally speaking, aviation insurance companies will do one of
three things after an accident:
· Acknowledge coverage and provide a defense
· Provide a defense, but reserve rights as to whether or
not they will acknowledge coverage
· Deny coverage and refuse to provide a defense
If there is any reluctance on the part of your insurance company
to give you an unqualified assurances of coverage and a defense,
hire your own attorney to defend you in the air crash and to evaluate
the coverage issues. Insurance coverage laws vary from state to
state, but generally, where there will be a claim against you with
potential for liability under an insurance policy, an insurance
company has the duty to defend their insured.
Some people are not aware that an insurance company controls your
defense, selects the lawyer who will defend you, how much money
will be spent on your defense and makes the decision, whether or
not to settle the lawsuits against you within the limits of their
coverage. Most aviation entities in the U.S., airlines, manufacturers,
airports, pilots, maintenance facilities, etc., are not defended
by their own lawyers after an air crash. They are defended by insurance
defense lawyers hired by the claims managers for aviation insurance
companies.
Aviation insurance policies routinely require that the insured
not interfere with the defense and that the insured cooperate with
appointed defense counsel. Does this mean that you have no say in
your own defense and that you are totally dependent on the insurance
company and their defense lawyers to protect your reputation and
assets?
In many states, case law has clarified that the insurance defense
attorney's duty of loyalty is primarily to the insured. Of course,
this loyalty can be tested when an insurance defense company routinely
sends assignments to the attorney and the attorney knows that the
insurance company is regularly paying his fees. An insured client
should stay involved in his defense to remind the attorney of his
duty of loyalty where necessary. You pay the premiums and your liability
exposure and reputation are on the line!
You may have more clout than you realize! If you have uninsured
exposure beyond coverage limits, the insurance people must be extremely
careful to protect your uninsured exposure. If the insurance defense
attorney is not acting in your best interest and ends up in a conflict
of interest, you may need to get your own attorney. In some states
such as California, the insurer must pay for an extra attorney where
there is a conflict of interest between doing what is best for the
insured or doing what is best to help the insurer avoid coverage!
Helpful Tip: If an insurance company assigned a lawyer to defend
you, but at the same time, reserves the right to question whether
they will provide full coverage, there is potential for a conflict
of interest. It may be wise to hire your own attorney to evaluate
the situation and ensure that your interests are protected.
NEW AVIATION LEGISLATION - AVIATION WHISTLEBLOWERS
The Aviation Safety Whistleblower Protection Act of 1997 (S. 480-481;
H.R. 915) if passed, may have significant impact on aviation safety.
The Bill would create whistleblower protections for airline employees,
and the employees of their contractors and subcontractors. The Bill
is designed to protect employees against discrimination by their
employer if they provide information to the FAA about aviation safety,
file claims of lawsuits concerning aviation safety, or testify in
proceedings regarding aviation safety.
A person who feels that they have been discriminated against as
a result of a complaint they made about aviation safety is entitled
to file a claim with the Department of Labor within six months of
the alleged violation. After an Administrative Review process, hearing
officers will decide whether a violation has occurred. If so, the
officer could order the restoration of the employee's job, benefits,
privileges, etc. and provide for payment of compensatory damages
to the complainant. In addition, the complainant could recover all
costs and expenses, including attorney and expert witness fees.
Frivolous complaints are punishable by an award to the prevailing
employer of the employer's reasonable attorney's fees in an amount
not to exceed $5,000.00.
What is particularly interesting about this legislation is that
it is written so broadly as to cover all "air carriers". "Air carriers"
are defined in Title 14, C.F.R., Part 1, as "a person who undertakes
directly, by lease, or other arrangement, to engage in air transportation."
Because the Bill purports to include the contractors and subcontractors
of an air carrier without defining the term "contractor" or "subcontractor,"
it arguably would include all manufacturers, service providers and
maintenance facilities who enter into contracts with airlines that
bear on aviation safety. Time will tell whether there will be sufficient
political "push" to ensure this Bill's passage and whether, if passed,
a new generation of "deep throats" will emerge.
Helpful Tip: If Congress plans to enact whistleblower protection
for air carrier employees, why not clarify any ambiguity about "contractors"
and include "manufacturers of air carrier aircraft and components"
in this legislation. What about General Aviation operators and manufacturers?
Should this legislation be extended to cover all aviation operations
currently regulated by the FAA?
Newsletter Disclaimer: The issues and
recommendations discussed in this Newsletter are based on
hypothetical situationsand do not constitute legal advice. My objective
is to alert you to some common issues so that you can avoid or minimize
legal trouble. Anyone with an aviation law problem should be guided
by the advice of his or her lawyer, under applicable federal and
state laws, after a full and confidential disclosure of all relevant
facts.
