In a very significant, closely watched aviation product liability preemption case in the U.S. Court of Appeals for the Third Circuit, Sikkelee v. Precision Airmotive Corp., et al., No. 17-3006, 2018 WL 5289702 (3d Cir. Oct. 25, 2018), the court recently held that state law claims against type certificate holders can go forward unless the defendant can show that the FAA would not have approved a plaintiff’s proposed change to the FAA type certificate. The court held that the plaintiff’s design defect claims against Lycoming, the type certificate holder for the engine on the accident aircraft, were not conflict preempted because Lycoming was in a position to make changes to its type certificate and was unable to show that the FAA would not have approved the alternative engine design the plaintiff proposed. The court emphasized that allowing state law claims to proceed against type certificate holders complemented the federal scheme and furthers its purpose of ensuring the safety of aircraft. Accordingly, under this ruling, it appears that the only time a type certificate holder can potentially succeed with a conflict preemption defense under these circumstances is if there is clear evidence establishing that the FAA would not have approved an alternative design proposed by the plaintiff.

The dissent held that the claims were preempted and pointed out significant issues with the majority’s decision. The majority relied primarily on a U.S. Supreme Court case which held that state law claims against brand name pharmaceutical manufacturers are not preempted because the manufacturer was able to implement changes prior to receiving FDA approval. The dissent pointed out the critical distinction between that case and Lycoming – unlike a brand name pharmaceutical manufacturer, an FAA type certificate holder cannot implement design changes without prior FAA approval. Thus, the dissent held that the majority’s analysis was flawed because it would be impossible for Lycoming to independently implement the changes that the plaintiff alleged state law required.

Procedural history

The last time this case was before the Third Circuit, the court held that the plaintiff’s state law claims for defective design against Lycoming, the type certificate holder for the engine on the accident aircraft, were not barred based on the doctrine of field preemption, but remanded on the issue of whether they were barred under conflict preemption. On remand, the district court found that the claims were barred under the doctrine of conflict preemption because the FAA’s regulations made it impossible for Lycoming to unilaterally implement the design changes Pennsylvania law allegedly would have required. The district court further held that even if the claims were not preempted, Lycoming was entitled to summary judgment on the plaintiff’s strict liability and negligence claims under Pennsylvania law. The district court also granted summary judgment on the plaintiff’s claim that Lycoming failed to notify the FAA.

The Third Circuit reversed the district court, holding that the plaintiff’s claims were not conflict preempted because Lycoming did not produce clear evidence that the FAA would not have allowed it to change the engine’s design to the alternative design proposed by the plaintiff. The Third Circuit also reversed the district court’s grant of summary judgment on the state law claims, holding that there are genuine issues of material fact.[1] However, the Third Circuit did uphold the district court’s grant of summary judgment on the plaintiff’s failure to notify the FAA claim.[2]

Factual background

The decedent, David Sikkelee, died when the Cessna 172N he was piloting crashed shortly after taking off from Transylvania County Airport in North Carolina. The plaintiff alleged that the crash was caused by a defect in the design of the engine’s carburetor.

Lycoming’s engine type certificate included approval of a specific carburetor manufactured by Marvel-Schebler. The carburetor consists of two halves (the float bowl and throttle body), which are connected by hex-head bolts and lock-tab washers. The FAA initially required that safety wire be used to prevent the bolts on the carburetors from loosening. However, Lycoming asked the FAA to remove the safety wire requirement and the FAA permitted it to do so.

The Lycoming engine in Sikkelee’s plane was overhauled in 2004. As part of the overhaul, Kelly Aerospace, Inc. and Kelly Aerospace Power Systems, Inc. (“Kelly”) overhauled the carburetor and shipped it back for installation in Sikkelee’s plane. Kelly had an FAA repair station certificate, which permitted it to overhaul the carburetor and held a parts manufacturer approval from the FAA to manufacture certain carburetor parts in accordance with the requirements from the type certificate holder. Kelly performed the work in accordance with the service manual and bulletins issued by Lycoming and Precision Airmotive, LLC (the company that acquired the carburetor line from Marvel-Schebler). The overhauled carburetor that was on the aircraft at the time of the accident had the same design as the original carburetor although it was comprised of parts that Lycoming never sold with its original engine and never manufactured.

The plaintiff argued that the design of the carburetor was defective because Lycoming should have used safety wire to secure the two bolts that attach the float bowl and the throttle body of the carburetor.

Conflict preemption analysis

Lycoming argued that the plaintiff’s claims were barred under impossibility conflict preemption because its FAA-approved type certificate precluded it from unilaterally changing the design and therefore it could not simultaneously comply with federal and state law where state law would require it to adopt a different design. In support of that position, Lycoming relied primarily on two Supreme Court cases, PLIVA, Inc. v. Mensing, 564 U.S. 604 (2011) and Mutual Pharmaceutical Co. v. Bartlett, 570 U.S. 472 (2013), involving generic drug manufacturers in which the Court found that federal law prohibited the generic manufacturer from altering the design or warnings for generic drugs due to federal law requirements that generic drug manufacturers use the same FDA-approved design and warning labels as the brand name manufacturer.

In opposition, the plaintiff relied on the impossibility preemption standard from Wyeth v. Levine, 555 U.S. 555 (2009), a case that preceded PLIVA and Bartlett. In Wyeth, the Supreme Court held that the plaintiff’s state law failure-to-warn claim against a brand name drug manufacturer was not preempted because federal regulations permitted the brand name manufacturer to change a label to strengthen a warning upon filing a supplemental “changes being effected” application with the FDA. The brand name manufacturer did not need to obtain agency approval prior to implementing the change. Thus, the Supreme Court held that, absent clear evidence that the FDA would not have approved a change to the drug’s label, it could not conclude that it was impossible for Wyeth to comply with both federal and state requirements.

Relying on the reasoning from Wyeth, the Third Circuit held that Lycoming was more akin to the brand name drug manufacturer, rather than the generic manufacturer, because Lycoming, as the type certificate holder, was in a position to make changes to the type certificate for the engine albeit only with FAA prior approval. Although the court recognized that the FAA process was different from that of a brand name pharmaceutical manufacturer seeking to change its design or warning, it nonetheless held that “[a]lthough the FAA does not explicitly have a [changes being effected (“CBE”)]-type process that allows the certificate holder to make a change before obtaining approval, the FAA allows the certificate holder to request permission to make a minor or major change.”[3]

Applying that standard, the court held that the plaintiff’s claims were not conflict preempted because there was no evidence in the record showing that the FAA would not have approved a change to the carburetor’s screws or attachment system. The court noted that Lycoming had previously made changes to the type certificate for this engine, “which the FAA approved in short order.” The court also found that the FAA would likely have approved the plaintiff’s proposed change to the carburetor because Lycoming was previously granted permission by the FAA to remove the requirement that safety wire be used to connect the float bowl and throttle body of the carburetor – the precise alternative design that the plaintiff proposed. In further support of its finding that the FAA likely would have approved the change, the court cited multiple letters sent to Lycoming from the FAA documenting the ongoing issue with leakage between the two parts of the carburetor due to loose screws, the Lycoming service bulletin, which acknowledged the issue with leakage, and letters from Precision Airmotive, LLC detailing the ongoing issues with the screws and recommending that Lycoming evaluate whether a new attachment system should be designed.

The court also observed that “allowing state-law claims to proceed in this context complements, rather than conflicts with the federal scheme.” It noted that obtaining a type certificate is simply a minimum-standard baseline requirement and state law claims should be used as a way to supplement the federal scheme and further its purpose of ensuring the safety of aircraft. The court also noted that “[a] manufacturer would have little incentive to correct problems with its plane or parts if it could rely on a type certificate to avoid liability. This would undermine both the goal of the federal regulatory regime and the interests of states in ensuring the safety of their residents.”

Dissent

The dissent held that Lycoming’s claims were conflict preempted because Lycoming could not independently implement the changes the plaintiff alleged state law required without prior FAA approval. The dissent focused on the majority’s failure to address the critical distinction between the manufacturer in Wyeth and an FAA type certificate holder like Lycoming: unlike the CBE process for brand name pharmaceutical manufacturers, which permits changes to be made without prior FDA approval, FAA type certificate holders cannot implement design changes without prior FAA approval. It noted that Wyeth, PILVA, and Bartlett have established a clear standard for conflict preemption: “when federal regulations prevent a manufacturer from altering its product without prior agency approval, design defect claims are preempted; when federal regulations allow a manufacturer to independently alter its product without such prior approval, design defect claims ordinarily are not preempted.” Accordingly, like the generic pharmaceutical manufacturers in PILVA and Bartlett, because Lycoming was not permitted to make changes to the type certificate without prior FAA approval, it would be impossible for Lycoming to independently implement the changes that plaintiff alleged state law required.

Conclusion

Under the majority’s ruling, it appears that type certificate holders rarely will be able to invoke the affirmative defense of conflict preemption for design or failure-to-warn claims. It remains to be seen whether and how a type certificate holder can use the defense by demonstrating that the FAA would not approve an alternative design or warning proposed by a plaintiff. As noted by the dissent, the ill-defined standard whereby a Court has to determine whether the FAA would approve of an alternative design is inconsistent with recent U.S. Supreme Court precedent, which provides that claims are conflict preempted where it is not possible for a party to independently do under federal law what state law allegedly requires of it. It will be important to follow how this new standard is applied, how other federal circuits approach this issue, and whether this decision will be appealed to the U.S. Supreme Court.

[1] The court held that (1) reasonable minds could differ on the issues of defective design and causation, (2) the plaintiff and Lycoming presented conflicting expert theories as to the cause of the accident, and (3) there are circumstances where a manufacturer can be held liable for a component part that caused a plaintiff’s injury, even when the part was made by a different entity, and particularly when that entity was required to follow the manufacturer’s design.

[2] The court noted that Congress has not created a federal standard of care for persons injured by defective airplanes and therefore the plaintiff could not use that federal duty and standard of care for its state law negligence claim.

[3] The court held that it did not need to decide whether the proposed change was major or minor as defined in the Code of Federal Regulations “because, either way, there is no impossibility preemption here.”