A presentation made at the annual MARPA conference in Las Vegas (2012) on how PMA, STC, MRO and FBOs etc can avoid or manage liability for PMA parts manufacturing. A vital tool to increase acceptace of PMA parts.

1. AV O I D I N G
L I T I G AT I O N
LIABILITY IN
A V I AT I O N P A R T S
M A N U FA C T U R I N G
THOMAS DUNLAP, ESQ,
Where aviation,
business and law meet.

2. QUESTIONS TO BE ANSWERED
1. Can I be sued?
2. How does a “case” arise?
3. When is an aviation product defective?
4. What is strict liability?
5. What are defenses to strict liability?
6. How do I reduce the chance of getting sued?
7. How does GARA fit in?
8. Solutions and strategies – things you may not have considered.
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3. BACKGROUND
The Nightmare:
Served with a lawsuit:
- people died
- Who is at fault – blame game
Issue is not avoiding lawsuits - CODB
Can you get out of or win the suit? And how fast
and inexpensively.
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4. PILOT ERROR
Lawsuit! – First thought of manufacturer = PILOT ERROR
OK - Roughly 75% of accidents are ultimately attributed to pilot
error.
1. 75% 2. ultimately
1. 25% 2. intervening period
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5. WHOSE FAULT?
In almost every case the legal issue is who caused the accident or
injury. Was it caused by:
- Pilot
- Machine
- Some combination of the two (see comparative fault)
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6. WHAT MUST THE INJURED PARTY PROVE?
Injured person must prove that the pilot was negligent and that
negligence was a cause of the crash.
To sue a manufacturer of any kind the injured person must prove:
1. negligence by manufacturer OR
2. manufacturer can be held “strictly liable” even without proof
of negligence if there is a defect in the product itself, including
the way it works as part of the entire system.
Focus of strict liability is on the safety of the product – Question? Is
it a defective product?
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7. WHEN IS AN AVIATION PRODUCT DEFECTIVE?
Laws vary from state to state: in almost half of the US the
standard is strict product liability is a product that
is "unreasonably dangerous" for use by an ordinary
consumer. See the problem?
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8. NEW STANDARD
Majority of US states have newer standard
Part 1 - product “fails to perform as safely as an ordinary
consumer would expect when it is used in an intended or
reasonably foreseeable manner”
Part 2 – is does the “risk associated with the design of the
product outweighs the benefits of the design.”
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9. ESTABLISHING STRICT LIABILITY
Plaintiff must show that:
• The product was defective when it left the defendant's
control;
• That the product was used in the intended manner or a
reasonably foreseeable manner;
• That the product caused plaintiff's injury.
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10. TYPES OF STRICT LIABILITY
Design Defect - whole product line or model is dangerously
deficient.
Manufacturing Defect - manufacturer fails to fabricate the
product the right way.
Failure-to-Warn Defect - product is so complicated it needs
adequate instructions in order to use it safely (two kinds of
failure-to-warn defects:
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11. FAILURE TO WARN – TWO TYPES
1. General instructions like operating limits, weight and CG
limits, etc.
2. Specific warnings of a danger like emergency procedures,
placards in a cockpit, warning labels on equipment, etc.
Chainsaws. . . .
Big risk – Reference GARA’s treatment and see the Solutions
Section
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12. PILOT RECOVERIES - COMPARATIVE FAULT
Operator versus the manufacturer (you versus the pilot)
Key points:
Jury must assign a percentage of liability to each
Who has more comparative fault?
Injured pilot's recovery be reduced by his percentage of
comparative fault
contributory negligence of the pilot bars recovery in a few
jurisdictions..
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13. PRACTICAL POINTS
Pilots are “poor”
Manufacturers are seen as having “deep pockets”.
Not a question of “IF” – it is a question of “WHEN”.
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14. MYTHS
Myth 1 - FAA Certification of a part precludes liability
Nope.
Myth 2 - After 18 years there is no liability under GARA.
Wrong - State SOLs.
Myth 3 – Stay away from the FAA.
Not always.
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15. GARA IN THE LITIGATION CONTEXT
GARA (General Aviation Revitalization Act) is a Statute of Repose is not
a Statute of Limitations. GARA simply cuts off the general aviation
insurance product liability "tail"
- PMAs do get the benefit of GARA. Burton v. Twin Commander
Aircraft, LLC, 254 P.3d 778, 2011 Wash. LEXIS 314 (2011).
- GARA claims based upon allegedly defective maintenance manuals
are not barred by GARA. Scott v. MD Helicopters, Inc., 2011 U.S.
Dist. LEXIS 74778 (2011).
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16. LITIGATION TOOLKIT ITEMS - PMA EQUIVALENCE
In 2008, the FAA RAFT (Repair, Alteration and Fabrication Team) study
reported: “.. the team did not find substantive evidence of failures or unsafe
conditions arising from non-TC/PC holder (non-OEM) developed data. The general
population of PMA parts and non-TC/PC holder repairs and alterations has increased
substantively in past years particularly in the commercial aviation sector yet the
occurrence of service difficulties and airworthiness directives on such parts for design
or compliance shortfalls have not increased proportionally.”
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17. OPERATIONAL SOLUTIONS
Procedures:
• Report malfunctions, failures or defects in their products.
• Distribute the initial Instructions for Continued Airworthiness for your products.
• Make required design changes to preclude unsafe conditions and correct non-
compliances when the FAA finds that an unsafe condition exists or is likely to
develop which requires an airworthiness directive to correct.
• Comply with all FAA audit requirements by criticality category (1,2 or 3)
• Develop and maintain a COS (Continuing Operational Safety) Plan
• Maintain all original FAA certification information, including computation and
testing data in your own files
• Create multiple manuals with excessive dummy proof instructions and try to
“foresee” any and all issues (see a chainsaw manufacturers guides. . .)
RUN A TIGHT SHIP!
Consider engaging a consulting company to help. Risk management through insurance.
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18. LEGAL SOLUTIONS
Ideas & tips for your lawyer:
- Strictly observe corporate formalities
- Consider setting up multiple companies to “risk pool” your
operation – i.e. leasing equipment back, renting space etc.
- Review and audit your disclaimers and contracts annually to
keep up with changes in the law and changes to use and
relationships
- Move your IP to another company and license it back to your
self
- Consider owning your company in a collapsible trust
BUILD STRONG WALLS!
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19. OTHER ISSUES – NOT DISCUSSED
BASAs, STCs, MRO, leasing issues, foreign suits and liability, US
venue and jurisdiction. . . the list goes on.
HUGE DISCLAIMER: Today is an overview to give you
ideas. It was not and is not legal advice upon which you
may rely. If you need operational or legal advice - - - -
call me – or your lawyer. Do not rely on PowerPoint
presentations!
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20. MORE QUESTIONS?
www.lexvolo.com
Aviation Consulting by former FAA, airline executives and aviation attorneys.
Fix the operation – Fix the problem.
www.DunlapWeaver.com
Business, intellectual property and litigation lawyers for aviation, businesses
and government contracts.
DC – VA – MD – FL - UK
tdunlap@dunlapweaver.com
800-747-9354
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