On October 5, 2018, the Federal Aviation Administration Reauthorization Act of 2018 (the “2018 Act”) was signed into law. One of the more notable aspects of the 2018 Act is its change to 49 U.S.C. § 44112, the section of the Federal Aviation Act that concerns the liability of aircraft owners and lessors and persons with a financial interest in aircraft. By making two small changes to the language of 49 U.S.C. § 44112(b), section 514 of the 2018 Act expands the protections afforded to aircraft owners and lessors against liability for personal injury, death, and property damage caused by accidents.
Previously, 49 U.S.C. § 44112(b) provided that “[a] lessor, owner, or secured party is liable for personal injury, death, or property loss or damage on land or water only when a civil aircraft, aircraft engine, or propeller is in the actual possession or control of the lessor, owner, or secured party, and the personal injury, death, or property loss or damage occurs because of (1) the aircraft, engine, or propeller; or (2) the flight of, or an object falling from, the aircraft, engine, or propeller.” Although this provision limits the liability of out-of-possession aircraft owners and lessors,1 some U.S. courts applying this provision relied on the phrases “on land or water” and “control” to conclude that out-of-possession aircraft owners and lessors with no operational control over the aircraft could still potentially be held liable under state tort law for damages caused by the aircraft.
For example, in Vreeland v. Ferrer, 2 the Florida Supreme Court ruled that 49 U.S.C. § 44112 did not preempt Florida’s “dangerous instrumentality” law, pursuant to which an out-of-possession aircraft owner or lessor is liable for the negligence of the pilot operating the aircraft. The defendant in Vreeland was an aircraft owner that had leased the aircraft to another person for a one-year lease period. During the lease period, the aircraft crashed, killing the pilot operating the aircraft with the lessee’s permission and the other individual on board. The estate of the deceased passenger sued the aircraft owner, among others, and argued that the owner was strictly liable under Florida law as the owner of a dangerous instrumentality. The aircraft owner argued, successfully in the lower courts, that federal law governing the liability of aircraft owners preempted Florida’s dangerous instrumentality statute and precluded out-of-possession aircraft owners from being held liable for death caused by the aircraft. However, the Florida Supreme Court reversed the lower courts’ preemption holding.
Relying on the words “on land or water,” the Florida Supreme Court found that the limitation of liability found in 49 U.S.C. § 44112 “only applies to death, injury, or damage that is caused to people or property that are physically on the ground or in the water. Specifically, the limitation on liability would apply only to individuals and property that are underneath the aircraft during its flight, ascent, or descent.”3 Accordingly, the court found that this provision of federal law did not apply to the defendant aircraft owner because the decedent “was not ‘on land or water’ at the time of the crash—he was a passenger inside the aircraft.”4
Section 514 of the 2018 Act eliminates the phrase “on land or water” from section 44112. By removing this language, Congress effectively overturned the Vreeland court’s holding that federal law does not preempt state dangerous instrumentality laws. Accordingly, aircraft owners and lessors now have stronger grounds to argue that federal law precludes them from being held liable for damages caused by aircraft while not in their possession or control.
In addition to removing the geographical component of section 44112, section 514 of the 2018 Act qualifies that “control” means “operational control.” Thus, as amended by section 514, 49 U.S.C. § 44112 provides that “[a] aircraft owner, lessor, or secured party is liable for personal injury, death, or property loss or damage only when a civil aircraft, aircraft engine, or propeller is in [their] actual possession or operational control . . . .” This change also is significant because, unlike the word “control,” which some courts have construed broadly to include any legal rights or obligations with respect to the aircraft,5 the words “operational control” are specifically defined in the Federal Aviation Regulations. Specifically, 14 CFR § 1 defines “operational control” with respect to any flight as “the exercise of authority over initiating, conducting, or terminating a flight.” This modification suggests that to establish that an aircraft owner or lessor is liable for an accident, there must be evidence that the aircraft owner or lessor exercised authority over the flight and evidence of indirect control may not be sufficient.
While it remains to be seen how courts will construe the new language of 49 U.S.C. § 44112, section 514 of the 2018 Act reflects Congress’ efforts to provide greater protection from liability to out-of-possession aircraft owners and lessors.
1 The predecessor of section 44112(b), section 1404, was enacted in 1948 to shield security holders in aircraft from the vicarious liability they might otherwise incur under state law. At that time, several states had enacted the Uniform Aeronautics Act (“UAA”), which altered the common law rule that a bailor could not be held liable for the negligence of a bailee and provided that aircraft owners and lessors were absolutely liable for injuries to people and property on the ground caused by their aircraft while in flight. In addition to states that adopted the UAA, some states had laws governing “dangerous instrumentalities,” which made non-operating owners vicariously liable for operator negligence.
2 71 So.3d 70 (Fla. 2011). The Vreeland case has been the subject of previous newsletters, including one that can be found on our website at: https://condonlaw.com/2011/09/lessor-liability-florida-supreme-court-limits-pre-emptive-effect-federal-ownerlessor-liability-statute-vreeland-v-ferrer-special-edition-fall-2011/.
3 Id. at 80.
5 See, e.g., Scollard v. Duncan Aviation, Case No. CI 02-2621, Order (Neb. Dist. Ct. Lancaster Cty. Oct. 10, 2003).