The continuing evolution of US aerospace product liability litigation

Author:

Kevin R Sutherland
Clyde & Co US
San Francisco

A statute is sometimes enacted for a particular purpose, only to evolve and be used differently, in ways that were not necessarily contemplated at the time of its passage. In aviation law, one example of such statutory evolution is the Federal Officer Removal Statute, 28 USC Section 1442(a)(1).

The Federal Officer Removal Statute was originally enacted during the US Civil War to provide federal court access to federal tax collectors who feared prosecution by unfriendly local and state authorities for revenue-collecting acts conducted in the course of their federal duties. The statute was subsequently amended on several occasions, and now offers removal not only to actual officers of the federal government, but to all individuals and entities that "act under" a federal officer. Thus, the trend over the last 20 years has been to expand the scope of the Statute to apply not only to government officials, but also to private entities that act pursuant to instructions of the federal government.

Aerospace product manufacturers have followed this trend, arguing that the Federal Officer Removal Statute should apply to an entity that is sued for acts conducted in its role as a government contractor. The use of the government contractor defence as a basis for removal under the Statute has over recent years been appearing more frequently in aerospace litigation, largely as a result of losses arising in the wars in Iraq and Afghanistan. These efforts have typically been successful in securing removal of these types of cases to federal court.

For example, in a recent case captioned Getz v The Boeing Corporation, arising from the crash of a military helicopter returning from a combat mission in Afghanistan, helicopter manufacturer Boeing and a series of component manufacturers for the subject helicopter used the government contractor's defence as a basis for removal under the Federal Officer Removal Statute.

Removal on that basis is appropriate under the seminal US Supreme Court government contractor defence case, Boyle v United States, which holds that a government contractor was entitled to removal under the Federal Officer Removal Statute where it: (i) is a "person" as defined by the statute; (ii) is "acting under" a government official; and (iii) demonstrates a colourable federal defence. The Supreme Court has found that a corporation is a person, and has held that an entity "acts under" a government official when it conducts its works pursuant to a government contract. Similarly, a government contractor maintains a federal defence in these circumstances where it can demonstrate that it complied with government approved specifications when manufacturing the aviation product at issue. These factors commonly exist when aerospace government contracts are involved, particularly those that involve the military, thereby generally rendering removal under the Federal Officer Removal Statute proper.

The use of the Statute further evolved when it was recently extended by a Federal District Court in California to cover not only aerospace product manufacturers that act as government contractors, but also repair facilities that perform maintenance to and repair on civilian aircraft pursuant to an Air Agency Certificate issued by the Federal Aviation Administration and, thereafter, certify the aircraft as airworthy pursuant to Federal Aviation Regulations. In Weidler v Wood Group Turbopower, LLC, an aircraft maintenance company was sued in California state court following the crash of a Beechcraft King Air in Mexico, after the maintenance company allegedly performed repair work on one of the aircraft's engines, which it certified as airworthy pursuant to Federal Aviation Regulations.

The maintenance facility defendant removed the case to federal court, arguing that its act of certifying the aircraft as airworthy was made under authority delegated to it by the Federal Aviation Administration through the issuance of an Air Agency Certificate and, therefore, the maintenance facility qualified as a "federal officer" under the Federal Officer Removal Statute.

The federal court agreed. Citing the actual language of the Federal Aviation Act, the court recognised that the Act explicitly grants the Federal Aviation Administration the power "to delegate to a private person" matters relating to inspection and certification of aircraft. Because the Federal Aviation Administration delegates the power of certification and inspection to the maintenance facility, the facility was "acting under" the authority of the Federal Aviation Administration and was, therefore, entitled to the benefits of the Federal Officer Removal Statute.

The Weidler holding stands for the proposition that, where an entity is delegated the authority to certify aircraft or aircraft components as airworthy, it qualifies to remove an action that asserts this certification was conducted negligently. While this is a significant development, the court's holding in Weidler does not result in the applicability of the Federal Officer Removal Statute in every case in which Federal Aviation Regulations are implicated.

The law is clear that the Federal Aviation Act pre-empts state law in relation to issues of aviation safety. However, in the absence of a government contractor defence or evidence that the defendant certified the aircraft as airworthy pursuant to Federal Aviation Administration authorities, aviation entities are not guaranteed a federal forum for claims that arose against them. Indeed, while US courts generally hold that the legislature intended for the Federal Aviation Act to occupy the entire field of aviation safety, the aerospace industry's attempts to remove cases to federal court on the basis of Federal Aviation Act pre-emption have generally been rejected. This highlights the importance of an aerospace defendant determining early in litigation whether removal pursuant to the Federal Officer Removal Statute is available.

While the law permitting government contractors to remove claims for acts arising from work done in their capacity as government contractors now appears to be well-established, this does not mean that such removal creates a federal action that arises under federal law. Indeed, courts appear to have arrived at a consensus that no such federal action does arise from the mere removal under the Federal Officer Removal Statute, which creates no separate, independent federal cause of action.

This point may seem academic, but is relevant to practical issues that arise in modern aerospace litigation. For example, in a recent case, a group of aviation defendants were sued in California state court for damages arising out of the crash of a military helicopter in Afghanistan in a matter captioned Helman v Alcoa Global Fasteners, et al. The helicopter manufacturer removed the case to a federal court in California under the Federal Officer Removal Statute. Thereafter, a second defendant, based in the UK, moved to dismiss the claims against it for lack of personal jurisdiction, arguing that it had no minimum contacts with the State of California. Plaintiffs argued that, because the helicopter manufacturer had removed the case to federal court pursuant to the Federal Officer Removal Statute, plaintiffs' claims against the UK based defendant "arose under federal law." On that basis, the plaintiffs' argument continued, the court should apply Federal Rule of Civil Procedure 4(k), which permits a court to consider nationwide contacts of a foreign defendant when determining whether it has personal jurisdiction over a claim that arises under federal law.

The US Court of Appeals for the Ninth Circuit affirmed the District Court's order rejecting the plaintiffs' argument, and refused to consider the nationwide contacts of the UK based defendant. The Court of Appeals reasoned that the Federal Officer Removal Statute only creates a federal venue for claims against federal officers, and does not convert plaintiffs' state law causes of action to claims arising under federal law sufficient to permit a court to properly consider a defendant's nationwide contacts when evaluating personal jurisdiction.

The recent federal court decision extending the protections of the Federal Officer Removal Statute to aerospace service providers that do not have a contract with the US government is a significant development. The jurisprudence surrounding the Federal Officer Removal Statute and associated product liability defences will certainly continue to evolve. The aviation and aerospace community should keep a close eye on these developments as they may provide a new set of keys to open the doors to the federal courts.