July 27, 2011

Florida Supreme Court Finds No Federal Preemption Over Claims Against Aircraft Lessors

Holland & Knight Alert
Marc L. Antonecchia | John M. Toriello

The Florida Supreme Court has issued another ruling in a series of state court rulings on the issue of the liability of an aircraft lessor in connection with the death of a passenger arising out of an airplane crash.1 The decision, like prior decisions in Illinois and Michigan,2 refuses to enforce the federal statute that was intended to protect aircraft lessors, owners and secured parties (collectively, “aircraft lessors”) from passenger personal injury or wrongful death claims. These three rulings conflict with the holdings of other state and federal courts that have applied the preemptive protection of the federal law,3 thereby undermining the protection and insurance savings that Congress intended for aircraft lessors.

The applicable federal statute, currently codified at 49 U.S.C. § 44112(b), provides:

(b) 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 loss 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.4

In the Florida case, the aircraft was on lease from the owner, Aerolease of America, Inc. for a period of one year. During the lease term, the plane crashed after taking off from a Florida airport. The estate of the sole passenger filed a wrongful death action against Aerolease, contending the following:

  • As the airplane’s owner, Aerolease was vicariously liable for the pilot’s negligent operation of the airplane, a “dangerous instrumentality” under Florida law.
  • Aerolease negligently performed inspections and maintenance on the aircraft which directly contributed to the crash.
  • Aerolease published false information concerning the condition of the aircraft relied on by the lessee.

Aerolease moved for summary judgment on the basis that federal law preempts Florida’s dangerous instrumentality doctrine, which, as interpreted by Florida courts, imposes liability on an aircraft owner for certain acts and omissions of the pilot of its airplane. The motion was granted by the trial court and affirmed by the intermediate appellate court.

The Court’s Interpretation Eliminates Federal Statutory Protection

Conducting de novo review, the Florida Supreme Court held that there was federal preemption, but, in an awkward interpretation of the statute and one that blinks at reality, held that the preemption only applied to injuries or death “on land or water.” In short, the Court parsed the language of the statute (“personal injury, death, or property loss or damage on land or water only”) so as to apply the phrase “on land or water” as a qualifier of the earlier separate references to “personal injury, death, or property loss.” As a result, aircraft lessors are protected under the Florida Court’s interpretation only when the aircraft operations caused injury, death or property loss on the ground or water, but not when those events are caused by operations in the element in which the aircraft is primarily designed to operate, namely, the air. The mere statement of the holding would seem to demonstrate the absurdity of the result.

The court reviewed the legislative history behind the statute, finding that every version of the owner/lessor liability statute since its enactment in 1948 has referenced injury, death, or property damage that has occurred “on land or water” or “on the surface of the earth.” The court found particularly significant that “[a]t no time has Congress removed this geographic requirement from the federal statute.” While Aerolease contended, and as found by other courts, that Congress intended for the statute to cover any injury, death, or damage caused by a plane striking the surface of the earth, the plaintiff argued that separate statutes addressing injuries to airmen or passengers in an aircraft demonstrated congressional intent to not preempt state law with regard to injuries to passengers or aircraft crew.

The court concluded that Florida’s dangerous instrumentality doctrine conflicts with, and is preempted by, section 44112 only to the extent that the doctrine applies to injuries, damages, or deaths that occur on the surface of the earth. Here, however, because the death occurred while the decedent “was a passenger in a plane that crashed – not on the ground beneath the plane,” the dangerous instrumentality doctrine is not preempted.

The Plain Meaning of the Statute

A strongly worded dissent criticized the majority’s reasoning, claiming it “defies reality” and fails to explain why an airplane crash does not cause an injury on the surface of the earth regardless of whether the injured person was in the airplane or standing on the ground. According to the dissent, the plain meaning of the statute shields the owner or lessor of a civil aircraft from liability for the negligence of others committed when the aircraft is not in the owner’s or the lessor’s possession or control.5

The Florida Supreme Court’s rationale ignores the legislative history demonstrating that the predecessor statute was enacted to facilitate financing of the purchase of aircraft and protect a security owner not in possession or control of the aircraft from liability for damages. Cases interpreting 49 U.S.C. § 44112 have held that the recodification of the statute did not effect a substantive change in the law. Thus, congressional intent from the outset was to protect parties who did not have possession or control over the aircraft, but were integral to financing the acquisition of this complex and capital intensive equipment.

Owners, lessors and secured parties should take notice and, indeed, be concerned about the Florida Supreme Court’s decision because of the deleterious effect on insurance and indemnification, and the potential for increased litigation. The distinction drawn by the Florida Supreme Court signals potential liability to an aircraft lessor for every accident or incident which causes death or injury to a passenger on board the aircraft. Findings of immunity espoused by other courts present the better view because they recognize the importance of assessing liability against those who actually have operational control over aircraft. As inherently recognized by those other courts, shielding an owner, lessor, or secured party from injury to a person on the ground – but not to a person on the aircraft – is simply not what Congress intended. Given the federal interest in uniformity evidenced by the statute and the extensive federal regulation of air commerce as well as the conflicts that have now developed among the various courts regarding this federal statute, the likelihood of a successful petition for certiorari to the United States Supreme Court is no doubt significantly enhanced.

1 Vreeland v. Ferrer, __ So. 3d __, 2011 WL 2652187 (Fla. July 8, 2011).

2 See, e.g., Storie v. Southfield Leasing, 282 N.W.2d 417 (Mich. Ct. App. 1979), aff'd sub nom. Sexton v. Ryder Truck Rental, Inc., 320 N.W.2d 843 (Mich. 1982) (Michigan statute holding an owner, operator, person, or organization responsible for maintenance or use of an aircraft liable for an injury occasioned by the negligent operation of the aircraft not preempted by federal law); Retzler v. Pratt & Whitney, 723 N.E.2d 345 (Ill. App. Ct. 1999) (49 U.S.C. § 44112 does not preempt state law claims against aircraft lessors); Layug v. AAR Parts Trading, Inc., 2003 WL 25744436 (Ill. Cir. Ct., Cook Cty. May 16, 2003). The effect of Layug is further discussed in Charles L. Coleman, III, Aircraft Lessor Liability and Federal Preemption Under 49 U.S.C. § 44112: The Anomalous Case of Layug v. AAR Parts Trading, Inc. (Air Philippines Flight 541), See Aviation: Centerline, November 2008.

3 See, 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 the aircraft and did not have knowledge of the 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).

4 Section 44112(a) defines "lessor" as "a person leasing for at least 30 days a civil aircraft, aircraft engine, or propeller," "owner" as a "person that owns a civil aircraft, aircraft engine, or propeller," and "secured party" as "a person having a security interest in, or security title to, a civil aircraft, aircraft engine, or propeller under a conditional sales contract, equipment trust contract, chattel or corporate mortgage, or similar instrument."

5 Aerolease filed a motion for rehearing on July 20, 2011.

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