Many Americans would likely be shocked to learn how lax government oversight of the manufacture and design of aircraft, such as airplanes and helicopters, has become. After all, any list of those areas of the economy that would seem to cry out for strict regulation would have to include aircraft production and maintenance, considering that when aircraft are defective or contain defective parts, the consequences are almost inevitably catastrophic and tragic.
Yet, in a 2004 audit, Congress' nonpartisan Government Accountability Office (GAO) found that severe budget constraints had compelled the Federal Aviation Administration (FAA) – the agency charged with overseeing aircraft safety – to outsource to private parties nearly 90 percent of the work it is supposed to do to ensure that aircraft meet applicable safety requirements. In some cases, the private parties taking on these tasks are the manufacturers themselves, raising at least the appearance, if not the reality, of a conflict of interest.
Fortunately, even when regulatory programs such as the FAA's are at risk of falling short, consumers have long been able to count on another crucial legal institution to look out for their well-being: the courts. Though tort "reformers" refuse to acknowledge it, the civil justice system plays a critical role in promoting safety by reinforcing and complementing regulatory programs that are meant to avert disasters before they occur. The civil justice system, when permitted to function effectively, buttresses regulation by, among other things, providing an additional deterrent factor (i.e., companies don't want to get sued, so they act accordingly) and also by supplying the government with the latest information about how product safety could be improved. Of course, since not all accidents can be prevented, the civil justice system also provides – and in fact, alone provides – victims with a pathway for seeking compensation for their injuries or those of their dead loved ones.
For their part, some aircraft manufacturers are less enthused about the vital accountability functions that the civil justice system performs. These companies would rather pad their profits by cutting corners on safety and then avoid paying out compensation to their victims when they get caught. Accordingly, they have sought to short-circuit the civil justice system by finding different ways to deny citizens meaningful access to the courts to bring their claims.
In a new report out today, The Truth About Torts: Regulatory Preemption at the Federal Aviation Administration, CPR Member Scholars and staff examine one tactic aircraft manufacturers are pursuing to deny citizens access to the courts: using pending lawsuits to argue that the FAA's regulations "preempt," or block, victims and their families from bringing claims in the first place.
Specifically, the report reviews a 2016 decision by the Third Circuit Court of Appeals, Sikkelee v. Precision Airmotive Corporation, in which the court correctly held that the FAA's regulations governing the manufacture and design of aircraft and aircraft components do not automatically preempt a type of lawsuit known as a products liability claim, which permits consumers to hold manufacturers directly accountable for the harms caused by their defective products.
The doctrine of preemption arises from our country's constitutional design, which divides governing authority among the federal and state governments, respectively, but establishes federal laws as taking precedence over state ones when they cover the same area. Preemption of state law would include state "tort" law, which governs most civil lawsuits including those involving products liability claims. In lawyer-speak, federal laws are said to preempt state laws to the extent that they are inconsistent.
Congress can include legislative language that specifically declares that the given law preempts state laws; such language is referred to as "express preemption." Otherwise, courts can under limited circumstances infer that Congress meant to preempt state law; this results in what is known as "implied preemption." In the Sikkelee case, for example, the aircraft manufacturer attempted to argue that federal laws and regulations governing the manufacture and design of aircraft and aircraft component safety were so comprehensive as to result in a type of implied preemption known as "field" preemption. The idea is that Congress recognized that the program it was creating would leave no room – no part of "the field" – for state law to cover the same issue, and thus must have intended for the federal law to have preemptive effect even if it did not explicitly say so.
The Third Circuit correctly rejected the argument that the FAA's regulations resulted in field preemption of aircraft products liability law, and in doing so joined every other federal circuit court that has considered this issue so far. Make no mistake, the decision is a huge victory for consumers, providing the families of people hurt or killed in small plane crashes with some degree of assurance that they will be able to hold manufacturers accountable for the harm caused by their defective products.
While the decision provided much-needed clarity on the particular issue of implied field preemption, it unfortunately went on and muddied the waters on another question relating to still a different kind of implied preemption known as "implied conflict preemption." Implied conflict preemption is a more discrete form of implied preemption that occurs when simultaneous compliance with both a federal and state law would be impossible. As such, the determination of whether implied conflict preemption exists involves a much narrower and more fact-based inquiry. The Third Circuit remanded the Sikkelee case to the trial court to make this determination.
As the report explains, the application of implied conflict preemption to regulatory programs such as the FAA's that are built around a pre-approval certification process raises significant policy concerns. In most cases, the legal conflict at issue, while real, is temporary in nature and can typically be resolved through a straightforward and predictable process. In other words, the FAA can resolve the conflict by going through its process of approving any changes to an aircraft's design or manufacture that would be needed to satisfy the relevant state tort law standard; once the approval process has run this relatively straightforward and predictable course, the conflict would be eliminated. Nevertheless, the automatic application of implied conflict preemption creates a "safe harbor" for manufacturers that insulates them against accountability for products liability claims.
In turn, the safe harbor has the perverse result of preventing the effective functioning of the FAA's regulations, thereby perpetuating the existing legal conflict rather than encouraging its swift and efficacious resolution. Thanks to the safe harbor, the manufacturer no longer has any incentive to pursue needed changes to its product to increase safety. And because a lawsuit would be blocked, the FAA would be denied a critical source of information about the existing safety defects in the product's design or manufacture – information that the FAA is unlikely to obtain on its own due to budget constraints. Without this information, the FAA would be in no position to strengthen its existing regulations to address the defects or to demand that the manufacturer make any changes to its previously approved design or manufacturing process. With both key actors – the FAA and the manufacturer – either unwilling or unable to move forward to bring the relevant federal requirement up to par with applicable state tort law standards, the existing legal conflict would continue, stuck in a perpetual policy rut.
Given the harmful results that could flow from overly expansive application of implied conflict preemption to aircraft manufacturing safety policy, the report calls on policymakers to explore various avenues for minimizing or avoiding instances in which such conflicts might arise. As it happens, the election of Donald Trump as the next president means the most promising of those recommendations – those directed at the FAA itself – are unlikely to come to fruition any time soon. Under the circumstances, then, the best hope for victims of defective aircraft is for the attorneys bringing these cases to tailor the claims as best they can to avoid any potential findings of implied conflict preemption.
Joining me in co-authoring the report are CPR Member Scholars Thomas McGarity, Nina Mendelson, and Sidney Shapiro, along with CPR Policy Analyst Mollie Rosenzweig. The report is part of an ongoing series of research CPR has conducted over the last several years on the issue of federal regulatory preemption and how it can potentially harm the public interest by denying citizens meaningful access to the courts. To read the report, see here. To read CPR's other work on the importance of a vibrant civil justice system, see here.