Courts Continue to Reaffirm Preemptive Effect of Statute Protecting Aircraft Lessors

by Holland & Knight LLP
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HIGHLIGHTS:

  • A U.S. District Court for the District of Hawaii decision reaffirmed the proposition that an owner, lessor or secured party not in actual possession or control of an aircraft is shielded from liability for injuries to persons on board an accident aircraft.
  • The court cited several prior federal and state court decisions, holding that the express language and legislative history of 49 U.S.C. §44112(b) demonstrates congressional intent to preempt state statutes and common law claims that impose liability on owners or lessors not in actual possession or control.

A decision out of the U.S. District Court for the District of Hawaii joins a growing list of holdings reaffirming the proposition that an owner, lessor or secured party not in actual possession or control of an aircraft is shielded from liability for injuries to persons on board an accident aircraft.1 The litigation arose out of the November 2011 crash of a Eurocopter helicopter on the Hawaiian island of Molokai during a roundtrip sightseeing flight from Maui. The pilot and four passengers died.

The plaintiff, the personal representative of the estate of the pilot, asserted state law claims for negligence and strict products liability against the manufacturer and the owner of the helicopter. At the time of the accident, the helicopter was on a long-term lease to the operator. The owner/lessor moved to dismiss the claims on the basis that 49 U.S.C. §44112(b) preempted it from liability because it did not have actual possession or control of the helicopter.

The Federal Statute

The federal statute, 49 U.S.C. §44112(b), provides that an owner, lessor or secured party does not have liability for an aircraft accident when not in actual possession or control of the aircraft:

Liability. – A lessor, owner, or secured party is liable for personal injury, death, or property loss or damage on land or water only when a civil aircraft, aircraft engine, or propeller is in the actual possession or control of the lessor, owner, or secured party, and the personal injury, death, or property less or damage occurs because of –
(1) the aircraft, engine, or propeller; or
(2) the flight of, or an object falling from, the aircraft, engine, or propeller.

The majority of courts have held, or suggested in dicta, that the statute provides immunity to owners, lessors and secured parties not in actual possession or control of the aircraft for state law claims arising out of injuries to persons, regardless of whether they are on board the accident aircraft.2

Courts in a minority of jurisdictions, however, have limited the preemptive effect of the statute depending on whether the injured party was on the ground or a passenger on board the aircraft. Most notably, in Vreeland v. Ferrer, the Florida Supreme Court found that the "limitation on liability would apply only to individuals and property that are underneath the aircraft during its flight, ascent, or descent."3 Under the Vreeland approach, there is no preemption for claims made by or on behalf of persons on board the accident aircraft.

State Law Causes of Action "Stand as an Obstacle" to Federal Statute

The court found that the state law causes of action were preempted because they "stand as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress in enacting the Limitations on Liability Provision of the Federal Aviation Act, 49 U.S.C. 44112, that limits liability for financiers, owners, and long-term lessors of aircraft." The court cited several prior federal and state court decisions, most recently a 2015 decision out of the U.S. District Court for the Northern Mariana Islands,4 holding that the express language and legislative history of the statute demonstrate congressional intent to preempt state statutes and common law claims that impose liability on owners or lessors not in actual possession or control.

The court found "unpersuasive" the minority view expressed in Vreeland and quoted the Vreeland dissent that it "defies reality" to make a distinction based on the location of the injured persons. The court determined the preemptive effect of the federal statute by finding an absence of actual possession or control, which included that the helicopter owner had entered into a long-term lease with the operator, that the express terms of the lease provided that "the Helicopter will at all time be and remain in the possession and control of Lessee," and that the operator would be responsible for the maintenance, repairs and inspection.

The court disagreed with the plaintiff's assertion that the statute was not applicable because the lessor and operator had the same owners and similar management, and because the lessor "could have chosen" to operate the helicopter. The court noted that the federal statute limits liability unless the owner/lessor is in "actual" possession or control.

No Liability If Lessor Not in Actual Possession or Control

Claims seeking to impose liability on owners, lessors and secured parties remain a possibility based on the uncertainty created by undue preemption limitations suggested by Vreeland. But this recent decision from the District of Hawaii further cements the majority view that Vreeland's requirement that the injured person be underneath the aircraft is not found in the express language or legislative history of the statute. As recognized by the court, the preemptive scope of the statute is very broad, subject only to the express limitation of "actual possession or control."
   

 

Notes

1Escobar v. Nevada Helicopter Leasing LLC, 2016 WL 3962805 (D. Haw. July 21, 2016).

2See, e.g., Matei v. Cessna Aircraft Co., 35 F.3d 1142 (7th Cir. 1994) (predecessor statute to 49 U.S.C. §44112 and Illinois bailment law precluded liability against aircraft owner because owner did not retain possession or control of aircraft and did not have knowledge of alleged defects); In re Lawrence W. Inlow Accident, 2001 WL 331625 (S.D. Ind. Feb. 7, 2001) (49 U.S.C. §44112 precluded liability of sublessor of helicopter following death of passenger hit in head with rotor while disembarking); Mangini v. Cessna Aircraft Co., 2005 WL 3624483 (Conn. Super. Dec. 7, 2005) (49 U.S.C. §44112 preempted negligence claims on behalf of deceased passenger against owner whose aircraft made emergency landing and crashed); Esheva v. Siberia Airlines, 499 F. Supp. 2d 493, 499 n.4 (S.D.N.Y. 2007) (stating in dicta that aircraft lessor would be "absolutely immune for such liability in the United States" for claims of derivative liability brought on behalf of passengers of airplane that crashed).

3See, e.g., Vreeland v. Ferrer, 71 So. 3d 70 (Fla. 2011), reh'g denied (Sept. 13, 2011), cert denied, 132 S. Ct. 1557 (U.S. 2012); see also Storie v. Southfield Leasing, Inc., 282 N.W.2d 417 (Mich. Ct. App. 1979), aff'd sub nomSexton v. Ryder Truck Rental, Inc. 320 N.W. 843 (1982). For a further discussion of Vreeland, see Holland & Knight Centerline article.

4See Lu v. Star Marianas Air, Inc., 2015 WL 2265464 (D.N.Mar.I. May 12, 2015). For a further discussion ofLu, see Holland & Knight Centerline article.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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