Dec 18 2019

Aviation Law – 12/18/2019

AIRPORT EXIT FEE AND ADA PREEMPTION
Cavalieri v. Avior Airlines, Inc., 2019 WL 1099860 (S.D. Fla. 2019)

Class action against airline asserting it improperly charged an exit fee at the airport of $80 per passenger, after Plaintiffs had paid the airfare price. Asserted that the ticket stated that the price “includes all taxes and fees” and as such, the $80 exit fee constitutes a breach of the contract. Court found the action preempted under the ADA.

The Court found the action preempted as the only contractual provision relied upon as having been breached was the language included at the bottom of receipts, which state that the price includes fees and taxes. The Court agreed that the identified breach was preempted by the ADA, because by its very terms, the airline ticket receipt refers to the airline ticket. Unlike in Wolens, where the Supreme Court excepted the breach of contract stemming from the frequent flier program, the express terms of the violated provision in this case expressly relate to pricing, and the claim is therefore, preempted.

SURCHARGE AND ADA PREEMPTION
Sabre Travel International Ltd. V. Deutsche Lufthansa AG., 567 S. W. 3d 725 (Texas 2019)

Airline brought declaratory judgment action against ticket seller, seeking declaration that airline's surcharge on certain tickets did not violate airline's contract with seller, and alleging breach of contract and tortious interference with contract.

Court upheld denial of motion to dismiss state law claim against ticket seller for tortious interference with contract as it was found the claim did not relate to airline's prices, routes, or services, necessary for ADA preemption. Court noted that airline’s allegations included that seller was inducing travel agents to breach agents' contract with airline by directing agents to book travel through airline's direct connections, where there was no booking fee surcharge, and then enter itineraries into seller's travel offering aggregator so that seller could collect booking fee from airline. Court noted that there was no evidence that circumstances giving rise to claim had any effect on airline prices, and claim was based on business dealings between two non-carriers, namely seller and travel agents.

PASSENGER CONDUCT: ADA PREEMPTION
Starker v. Spirit Airlines, Inc., 2019 WL 4194572 (S.D.N.Y 2019)

Passenger brought various state claims against airlines alleging mistreatment. Events were disputed but occurred following boarding with a dispute over whether passenger refused crew instruction to get off cell phone to listen to exit row briefing and whether he refused to move from exit row or was threatened with force if he did not disembark plane which he did.

Court held that ADA preempted claimant’s claims for assault and battery, negligent hiring and retention and intentional infliction of emotional distress. Court applied three step ADA preemption test, known as the Rombom test: (1) “whether the activity at issue in the claim is an airline service”; (2) “whether the claim affects the airline service directly or tenuously, remotely, or peripherally” and (3) “whether the underlying tortious conduct was reasonably necessary to the provision of the service.” Court found all three element were met to require ADA preemption noting that even accepting plaintiff’s version of the facts, defendants' alleged conduct did not rise to the level required to avoid preemption.

Court also held that claimant’s claim for breach of the implied covenant of good faith and fair dealing was likewise preempted under the ADA. “When the law of a State does not authorize parties to free themselves from the [implied] covenant [of good faith and fair dealing], a breach of covenant claim is pre-empted....” Court found that the Contract of Carriage was governed by Florida law, which imposes an implied covenant of good faith and fair dealing on all contracts thereby requiring ADA preemption.

Court held that breach of contract claim was not preempted. Court held that claimant asserted that airline violated the Contract of Carriage by refusing to transport him from New York to Fort Lauderdale and, as such, “this is a simple breach of contract claim between the parties, and, therefore, it is not preempted by the ADA.” Since there was a dispute as to the circumstances and reasons as to why plaintiff left the aircraft and was not flown to Fort Lauderdale the claim could not be resolved on summary judgment.

FEDERAL AVIATI0N ADMINISTRATION AUTHORIZATION ACT OF 1994 (FAAAA)
Eggelston v. United Parcel Service, Inc., 2019 WL 4853640 (S. Carolina 2019)

Medical patient brought action against delivery service alleging negligence and negligent entrustment for personal injuries allegedly received after service failed to timely deliver medication. Court held that claims were preempted by Federal Aviation Administration Authorization Act of 1994 (FAAAA).

Court reaffirmed rule that a state law tort action against a carrier, where the subject matter of the action is related to the carrier's prices, routes, or services, is a state enforcement action having a connection with or reference to a price, route, or service of any carrier, for purposes of preemption under the FAAA.

FAAA preemption was found as the claims that delivery service failed to properly deliver medication, failed to properly and accurately locate patient, failed to maintain proper policies and procedures for delivering parcels, and failed to properly hire, train, supervise and oversee personnel went to heart of delivery service offers, and potential damages award on patient's claims could result in requiring new and enhanced delivery procedures.

Schmmidt v. Tavenner's Towing & Recovery LLC., 448 P. 3d 605 (N. Mexico 2019)

Aircraft owners brought an action against towing company for negligence, breach of implied contract, and breach of the implied covenant of good faith and fair dealing, after their airplane caught fire and was destroyed while being towed by company.  Court held that negligence claim was not preempted by FAAA.

Court reaffirmed that the purpose of the FAAA preemption provision was to prohibit states from effectively re-regulating the motor carrier industry and to promote maximum reliance on competitive market forces. Court determined that Aircraft owners' negligence claim against towing company, which was directed specifically at the manner in which company carried out the service of loading and transporting owners' property, was not preempted by the FAAA even though claim related to the transportation of property, as the claim did not otherwise target or affect the regulation of motor carriers in general.

PRODUCT LIABILITY
State Cavner v. Continental Motors, Inc., 8 Wash. App. 2d 1001 (2019)

Personal injury and wrongful death action arising out single-engine airplane crash on takeoff from an Anchorage, Alaska airport. State based product liability claims including design and manufacturing defect claims and a failure to warn asserted against engine manufacture with the manufacturer asserting pilot error as cause of the crash.

Trial court had dismissed defect claim. Jury subsequently found in favor of manufacturer finding pilot 100% at fault for the accident on remaining claims.

On appeal, state Appellate Court held that law as to preemption had changed following trial court's dismissal of design defect claim based on FAA preemption. After trial, the Washington Supreme Court reversed prior holding finding that the FAA and its regulations did not preempt design defect claims under state product liability law.

Court rejected manufacture's position on appeal that remand was not warranted because the jury determined that the pilot's negligence was the sole cause of the crash, and as such, the claimants could not, as a matter of law, establish any design defect proximately caused the crash. Court found that the jury's proximate cause finding only precluded remand if the jury's finding would have been the same had the design defect claim been presented to it. According to the Court, claimant alleged the engine's cylinders and valve lifters were defective in design and that although some of this evidence may have been presented at trial in the context of the experts' discussion of the failure to warn claim and causation, the jury rendered no finding as to the existence of a design defect.

Court conducted choice of law analysis for purposes of re-trial as to whether Washington or Alaska law applied. Although accident and injury occurred in Alaska, Court found that the "most significant relationship" test applied. Court concluded that Washington's Interest in providing full compensation to tort victims and its interest in protecting persons from Injuries from defective products outweighed any interest Alaska might have in protecting an out-of-state manufacturer whose product arrived In that state through the stream of commerce.

Kedrowski  v. Lycoming Engines, 933 N.W. 2d 45 (Minn. 2019)

Pilot, who was injured in single-engine airplane crash, brought products liability action against manufacturer of fuel pump, alleging that fuel pump was defective and caused the airplane to lose power and crash. After jury returned a $27.7 million verdict for pilot, the Trial Court ruled that opinion of pilot's sole expert on causation lacked foundational reliability and that expert's opinion should have been excluded, and following this posttrial evidentiary ruling, Trial Court granted judgment as matter of law to manufacturer, and appeal was taken. Intermediate appellate court affirmed and matter was further appealed to Minnesota Supreme Court.

Court held that trial court did not abuse its discretion by finding that engineer's expert opinion about flow-bench testing was foundationally unreliable in products liability action brought against fuel pump manufacturer by pilot, who was injured in single-engine airplane crash and alleged that fuel pump was defective and caused airplane to lose power and crash; engineer could not consistently explain why he ran flow-bench test as he did, his explanations did not correspond to the parameters that he employed in the testing process, and nothing in the record showed that third-party parameters were representative of fuel needs of the engine in pilot's aircraft.

Court also held that trial court abused its discretion by excluding entire causation opinion of engineer, whose expert opinion about flow-bench testing was foundationally unreliable, as engineer based his causation opinion on more than flow-bench testing, engineer testified that his opinion was also grounded on his differential analysis-the complete disassembly of engine, down to its nuts and bolts-which found no explanation for loss of power that pilot described, except defective pump, engineer also grounded his opinion on pilot's personal experiences with boost pump, and deficiencies in engineer's flow-bench testing did not taint his investigation as a whole.

Although there was perceived gap in engineer's expert testimony, namely his perceived failure to account for fact that pilot's plane flew 312 hours before crash, engineer's expert testimony was properly the subject of a detailed cross-examination and argument to jury, rather than foundational-reliability determination under rule, governing admission of expert testimony. Engineer expert's alleged failure to account for fact that pilot flew 312 hours before crash was a question of weight, not of foundational reliability. 

DISCRIMINATION
Cloutier v. GoJet Airlines, LLC., 2019 WL 5260756 (N.D. Ill. 2019)

Claimant, an airline pilot, sued private jet company for violations of the FMLA, Americans with Disabilities Act (ADA), and Age Discrimination in Employment Act (ADEA). Claimant pilot asserted 13 claims, all related to his leave and eventual termination from his job after he was diagnosed with, and began taking medication for, diabetes. By time of trial, remaining claims were for interference and retaliation under FMLA and for failure to accommodate a disability and termination due to disability (diabetes) under the ADA. Pilot prevailed on both FMLA claims and defendant's favor on ADA claims. Damages were awarded in the amount of $426,493.46

Coomes v. Republic Airlines, Inc., 2019 WL 4572800 (S.D. Indiana 2019)

Pilot brought discrimination action against airline alleging that supervisor harassed him based on age, sexual orientation and gender. Allegations included being passed over for various positions given to younger and less experienced employees and assertions that supervisor ridiculed him in staff meetings. It was further alleged that the company investigated the supervisor for sexual harassment, discrimination and creating a hostile work environment with the company taking no action. A subsequent investigation took place a few months later as to same supervisor wherein it was alleged the company published a memo all but naming the supervisor as a serial abusive manager, but took no action to remove him from his position of authority."

The Complaint asserted three claims against airline: (1) discrimination based on age in violation of the Age Discrimination in Employment Act ("ADEA"); (2) discrimination based on gender and sexual orientation in violation of Title VII of the Civil Rights Act of 1964 ("Title VII"); and (3) negligent retention in violation of Indiana law. Claimant asked for "in excess of $1,000,000 in damages."

In addressing airline's motion to dismiss, the Court noted that, as a general rule, a Title VII plaintiff cannot bring claims in a lawsuit that were not included in her EEOC charge. However, a plaintiff need not allege in an EEOC charge each and every fact that combines to form the basis of each claim in the complaint. The Court will recognize the claims that are "like or reasonably related to the allegations of the charge and growing out of such allegations." Court found that the allegations set out in his EEOC claimant's charge were "[a] barebones version of the facts laid out in his Complaint" as to discrimination but not as to the negligent retention claim.  The allegations in the Complaint as to the negligent retention claim were not reasonably related to the allegations or facts set forth in the EEOC charge requiring dismissal.

As to the ADA discrimination claim, the Court agreed with airline that pilot was prohibited from relying on any discrimination that occurred more than 180 days before the filing of the EEOC charge. Court rejected reliance on the continuing violation doctrine as it is inapplicable where discrete acts of employment discrimination are alleged and thus dismissed any claim of discrimination made before 180 days of the EEOC filing.

Court rejected airline's claim that remaining age discrimination allegations failed to state a claim holding that the claimant only needed to allege facts that create an inference that he suffered an adverse employment action because of his membership in a protected class. This was deemed a "low bar" and the ADEA claim was allowed to proceed given the allegations created a reasonable inference that claimant was passed over for younger employees.

As to sex, gender and orientation discrimination claims, while the Court agreed with complainant that it is immaterial whether a Title VII complaint for discrimination based on sexual orientation (or an EEOC charge) explicitly reveals the claimant's sexual orientation, the complaint, nevertheless, was found not to give rise to an inference that his gender or sexual orientation were factors in his not receiving certain jobs at airline.

FEDERAL FALSE CLAIMS ACT
Shi v. Moog Inc., 2019 WL 3129 (W.D. N. Y. 2019)

Former employee of company which bought parts for U.S. military planes from a Chinese supplier brought a Federal False Claims action after being terminated by employer after complaining or voicing concern that supplier was cutting corners and hiding the fraud with false documentation.

Court found complaint was sufficient to as to a claim of retaliation. It noted that the required elements for such a claim under the Federal False Claims Act include: (1) claimant engaged in activity protected under the statute, (2) the employer was aware of such activity, and (3) the employer took adverse action against him because he engaged in the protected activity.  The Court further noted that "an employee need not complete an investigation into potential fraud or uncover an actual FCA violation to undertake protected activity. The FCA's anti-retaliation provision protects employees while they are collecting information about a possible fraud, before they have put all the pieces of the fraud together."

Court noted that the complaint included facts that plausibly showed reasonable efforts to uncover fraud or other conduct that would violate the FCA. This included allegations that complainant became aware that supplier "did not properly bake parts both before and after the cadmium plating process, and forged production process cards, and the improperly baked parts consisted of four different part numbers"  and that claimant noticed further that supplier tried to cover up its substandard manufacturing with fraudulent documentation that its spoiler blocks met all necessary specifications. According to the Court, claimant adequately pled that he took steps to prevent fraud that could eventually lead to FCA litigation; that defendants were aware of plaintiff's efforts no later than the start of the internal investigation; and that defendants fired plaintiff because he took his concerns all the way up to the parent company's CEO.

AIRCRAFT PURCHASE AND SALE: UNJUST ENRICHMENT
Mansfiled Heliflight Inc. v. Freestream Aircraft USA Ltd., 2019 WL 5081061 (D. Vermont 2019)

State law based diversity action alleging various claims including fraudulent inducement, tortious interference with contract, tortious interference with prospective business relations, civil conspiracy and unjust enrichment arising out of the purchase and sale of Gulfstream IV jet.

Following jury trial, jury claimant $420,000 in restitution damages for the unjust enrichment claim, $800,000 in compensatory damages, and $2,440,000 in punitive damages, for a total award of $3,660,000.

Trial Court, post-trial, held that unjust enrichment portion of verdict was required to be vacated. Held that unjust enrichment is an equitable claim and that equitable remedies are available when there is not an adequate remedy at law on the very subject in question."  "To be adequate the legal remedy must be able to provide complete relief for the case before the court and must be equally convenient, beneficial, and effective." Court noted that if a plaintiff has an adequate remedy at law "and the main cause of action is of a legal nature, equity has no jurisdiction"  and the principle that a claimant "generally cannot recover both compensatory and restitution damages for the same harm." Court found the compensatory award on the legal claims provided adequate remedy. According to the Court, "[w]ere claimant to recover for damages and restitution, it would receive the benefits of both parties' bargains, a clear windfall that would be inequitable on the facts before the court."

 

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