AOPA Pilot Magazine - March 2022 - 20

WAYPOINTS
Looking back,
looking forward
Stamping out frivolous lawsuits
A WOMAN STOPPED along the road to observe the fire caused by the
crash of a Piper aircraft was hit from behind by another vehicle.
She sued Piper because it had " created " a nuisance on the side
of the road and made her stop. The case was eventually thrown
out, but not before Piper had spent $100,000 defending itself.
Cessna and several of its component manufacturers were sued
for $4.5 million after a pilot crashed a Cessna while drunk. Three
hours after the accident the pilot's blood alcohol level was 0.2 percent.
The FAA allows a maximum of 0.04 percent. The suit was
settled for $50,000 following four years of litigation.
These are just a couple of examples of frivolous lawsuits that
I included in the final research paper I submitted to complete my
Cessna and several of its component manufacturers
were sued for $4.5 million after a pilot crashed a
Cessna while drunk.
MBA in 2006. The 80-page paper was an investigation into the
effects of the General Aviation Revitalization Act of 1994 (GARA)
a decade after its passage. I hadn't looked at the paper in years
until I was recently peppered with questions from an AOPA
member regarding the effects of product liability costs on general
aviation. The conversation caused me to dig back through
the report. Going down that rabbit hole, I spent a few hours rereading
the report and pondering 15 years later-28 years after
the legislation passed-whether it was still relevant. Certainly, it
seems the number of frivolous lawsuits has declined-or at least
we don't hear about them as much anymore.
Such lawsuits were not uncommon in the 1980s and early
1990s. GARA helped by implementing an 18-year statute of
repose, which basically meant that once a product reached 18
years of age without an incident, it was deemed safe and without
material defect and therefore the manufacturer could no
longer be sued if it crashed. There are exceptions for negligence
and a few other situations. As a result, legacy manufacturers
such as Cessna and Piper were able to eliminate tens of
thousands of aircraft older than 18 years from their liability
tails. The goal was to reduce the cost of liability insurance for
20
AOPA PILOT / March 2022
BY THOMAS B. HAINES / Editor in Chief
those manufacturers and create a more vibrant GA marketplace,
which was definitely in the doldrums in the early 1990s.
As I reported in the paper, most companies reported minimal
declines in their insurance costs after GARA was signed,
but what they gained was a stabilization of costs and a more
predictable insurance environment. At a time when product
liability premiums were rising rapidly, this was welcome relief.
Cessna got back into the piston airplane business, hiring hundreds
of workers for its new factory in Independence, Kansas,
and Piper emerged from bankruptcy.
New companies entered the GA space, such as Cirrus Aircraft
(née Cirrus Design) and Columbia Aircraft, which was later
acquired by Cessna. Both brought safety innovations and modern
designs that consumers had been asking for but couldn't get
because legacy companies had stopped investing in their products.
The lack of innovation was in part driven by fears from legacy
companies that if they infused new safety features into new products,
it would only open the door to more lawsuits against older
products that didn't include those features, even if those features
were not technically feasible at the time of manufacture. It can
be hard to get your head around that line of thinking, but it was
driven by real fears at the time.
GARA was far from a perfect solution. In many ways it simply
shifted some of the liability burden from airframe manufacturers
to other segments of GA, especially the maintenance industry. But
it without question provided a boost in confidence and innovation
needed at the time. Many believe that more reform is needed,
including federal preemption, which would basically mean product
liability claims would be immune from state laws and would be
heard at the federal level with one national standard. At that point,
FAA certification would become the de facto safety standard in
such cases. Currently, FAA certification provides minimal benefit
to defendants in cases heard at the state level.
However, there are many other tweaks that could be made to
liability laws that could help keep innovation alive without sacrificing
the rights of those who have legitimate liability claims.
Such additional reform is
unlikely to occur in today's
political climate.
thomas.haines@aopa.org
TOM HAINES has been
covering the general aviation
industry for 38 years.
AOPA Pilot Magazine - March 2022

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