The General Aviation Revitalization Act (GARA) of 1994 was designed to be the savior of our GA aircraft companies. The case that brought about GARA involved a man who sued Piper because he claimed that, while sitting in the rear seat, he could not see out of the old Cub he was taxiing and he ran into a car on a runway. He won that case!
The principal part of the GARA was the 18-year statute of repose. Simply put, this statute states that if an aircraft was more than 18 years old, the company could not be sued when the aircraft crashed and did damage or injury to the passengers.
There are exceptions to the rule; crafty trial lawyers have since found many additional ways around it.
GA feels the pinch
However, the people who make parts like carburetors, exhaust components, spark plugs, and others are faced with the same problem. Similar to the plaintiff lawyers’ focus on maintenance repair facilities, the parts people have become a focus of legal claims.
Precision, for example, has been involved in so much litigation that its liability insurance premiums were said to have exceeded its income from the sale of carburetors and associated parts. This caused it to throw in the towel and give up that part of its production; this is why carburetors and parts kits for them have been so expensive. (See Recip Technology, AMT, January/February 2008.)
Parts manufacturers have come under the gun, even after going to the expense of getting their parts certified through the FAA process. Many manufacturers have to give up because of the high liability insurance premiums.
Many unfounded lawsuits are filed that include parts manufacturers who may have little or no exposure, but get sued anyhow. The costs to defend these frivolous lawsuits raise liability premiums to a point where they are no longer affordable.
A bellweather case
In August 2000, a Cessna 340 crashed and killed three employees of the company that owned the aircraft. The cause of the accident was alleged to be a crack in a turbocharger waste-gate elbow at the rear of the engine. This ultimately caused a fire which caused the shutdown of the engine and subsequent loss of control of the aircraft. Needless to say, claims for the death of the crew, passenger, and property damage followed.
The lead defendant was Cessna Aircraft, even though the aircraft was more than 18 years old and the statute of repose should have protected it from a lawsuit. It did not. Cessna claimed that it was exempt because the claims were barred by the 18-year statute of repose. The plaintiffs’ lawyers want to include the principal deep pocket in the lawsuit for the obvious reason that they have the most money and best liability insurance. The plaintiffs argued that since the turbocharger elbow that cracked was replaced by Ram, an engine overhaul facility, during an update to the engines, a new 18-year time period was started.
The rolling trigger date
This is referred to as the “rolling trigger date.” The statute does allow for this when the new part is installed and it is found to be the cause of the accident. However, Cessna did not manufacture the elbow that cracked, Ram did. The lawyers did not care who made the part (and proof was difficult); they simply included both in the lawsuit in the hope that they could keep Cessna in the lawsuit. The involvement of more defendants increases the likelihood of a higher settlement.
This so-called “rolling trigger date” is at the heart of the aircraft manufacturer’s problem with GARA. The rolling provision only restarts the 18-year repose period if the part was the cause of the accident.
According to Cessna, it is not in the business of making turbocharger elbows, but Ram is. However, evidence showed that Cessna did make them at one time. This means that Cessna would have to cross-sue Ram in this case. The dispute was over who made the part.
The court found that Cessna was not exempt from suit and that the rolling provision of the 18-year statute applied when the new waste-gate elbow was installed. This assumes that Cessna was considered the manufacturer of the part, which was still disputed. One can only wonder if the result would be the same if the part was simply repaired and replaced as serviceable. Would this trigger the re-running of the statute?
Additionally, the plaintiffs argued that because Cessna owned the type certificate for the C-340, it was responsible for any parts made pursuant to the type certificate specifications. The plaintiffs argued that even if Cessna did not manufacture the waste-gate elbow, federal aviation regulations mandate that Cessna is the manufacturer because Cessna owned the Type Certificate that included the aircraft and the exhaust system.
They were trying to maintain that the owner of the type certificate is always considered the manufacturer of the part for the purpose of the rolling provision of GARA. The court did not buy this alternate basis for liability, though it has a logical ring to it. Who knows, maybe another court might buy it. Since such a conclusion is not difficult to come to, the whole statute of repose is seemingly useless.
In this case, the part manufacturer and the aircraft manufacturer were both kept in the lawsuit because of the alleged defective part. The threats to parts manufacturers alone are still a grave concern.
Rebuilt and used parts
Another issue arises when a re-built part or another serviceable used part is installed on an aircraft that is more than 18 years old. Does this trigger the running of the 18 years again? Can I start the 18-year statute running again if I re-build the carburetor on my 60-year-old 1946 C-140? Attorneys will argue that a rebuilt part is a new part, and therefore the 18-year rule should start again when installed on an aircraft otherwise exempt due to its age. We all know that rebuilt parts must be tested to the same standards as the new part standards. Some rebuilt items can also be zero timed (like engines) as if they were new. The statute of repose, on the other hand, should protect an original manufacturer.
AC 20-62d seems to support this contention which will be argued by plaintiffs’ lawyers and others to support the trigger of a new 18-year statute.
However, an early federal case (1996) held that the aircraft manufacturer should prevail under the GARA 18-year rule where a failed part was also more than 18 years old but had been rebuilt several times before the accident. The finding here was that once a new part is delivered and installed on a new aircraft, the time limit starts to run. One might also conclude that the theory seems to be that a part manufacturer should also be protected after original delivery because it no longer retains control of the part once delivered to the aircraft manufacturer. This appears to be a logical result.
Some relief in sight
News reports indicate that legislation is proceeding in the Congress to get some relief to general aviation parts manufacturers. Congress is working on legislation to provide what some call common sense protections against lawsuits. They say, “These lawsuits are driving up insurance costs and forcing some manufacturers to stop production on parts already certified by the FAA.” These are the same arguments that aircraft manufacturers made in order to get the 18-year statute of repose passed. Just what these common sense protections would be are not described in the news note.
It would seem that the simple solution would be to include parts manufacturers and maintenance people by an amendment to the present 18-year rule contained in to the statute of repose. Although parts manufacturers and maintenance people were not included in the original statute, there is no reason that they could not be included at this time and offer some relief in that way.
New GARA?
It might be that the Act and the 18-year statue of repose should be re-rewritten to clear up the confusing, ambiguous areas of concern that have arisen in the last 14 years since the law’s enactment. Courts continue to disagree in their interpretation of the GARA. It clearly needs to be expanded and made more inclusive if the intent is to protect manufacturers and others from frivolous lawsuits.
The plaintiff’s lawyers, as a result of the present GARA, have shifted their attention away from the aircraft manufacturers and have begun to focus more litigation on repair facilities, parts manufacturers, and the owners and operators of aircraft. GARA presumes that an aircraft is safely constructed and designed after 18 years since manufacture; therefore, lawyers must now direct their lawsuits more toward maintenance providers, owners, and parts manufacturers.
Your thoughts are always welcome at [email protected].
Stephen P. Prentice is an attorney whose practice involves FAA-NTSB issues. He has an Airframe and Powerplant certificate and is an ATP rated pilot. He worked with Western Airlines and the Allison Division of GMC in Latin America, servicing commercial and military overhaul activities and is a USAF veteran. E-mail: [email protected].
