A Good Idea Stretched Too Far: Amending the General Aviation Revitalization Act to Mitigate Unintended Inequities

• Publication year: 2008
• Citation: Vol. 31 No. 04

UNIVERSITY OF PUGET SOUND LAW REVIEWVolume 31, No. 4SUMMER 2008

A Good Idea Stretched Too Far: Amending the General Aviation Revitalization Act to Mitigate Unintended Inequities

Kerry V. Kovarik(fn*)

I. Introduction

The General Aviation Revitalization Act of 1994 (GARA), a federal statute of repose,(fn1) has generally been viewed by those in the aircraft manufacturing industry as an unqualified success.(fn2) Less than fifteen years after its passage, U.S. aircraft manufacturers, who were once all but defunct, are now employing large numbers of workers and selling a sizable number of new light aircraft.(fn3)

While it is easy to argue that GARA was both necessary and effective, it nevertheless has created much frustration for the victims of aircraft accidents and their attorneys.(fn4) Ambiguities in GARA's language

have lead to a series of questionable judicial decisions attempting to clarify textual vagaries in the law.(fn5) These decisions have distorted GARA's application in ways never contemplated by Congress.(fn6) Further, the language used in GARA's final draft gave it a substantially different scope than was contemplated during congressional hearings on the legislation.(fn7)

For passengers injured in aircraft accidents, owners of property damaged by an aircraft, and buyers and sellers of refurbished aircraft, GARA may shift liability in ways never discussed or even anticipated during the congressional hearings. An injured individual's otherwise valid claim should not be statutorily denied in the absence of a deliberative legislative process. Instead, claim limitations under GARA are often an unintended consequence. GARA, then, is a statute in great need of a congressional tuneup.

This Comment will examine the congressional intent that shaped GARA, evaluate the equitable implications of the statute's drafting language, discuss its significant judicial interpretations, and explore the author's recommendations aimed at minimizing GARA's inequities without negating its positive aspects. Part II begins with an analysis of GARA's legislative history, identifies stakeholders and their arguments, and examines issues given insufficient consideration by Congress. Part III assesses how GARA actually affected the aviation market when compared to the stakeholders' predictions. Part IV will survey a selection of important judicial decisions interpreting GARA. Finally, Part V evaluates the inequities created by the statute and offers recommendations that will remedy those inequities.

II. History of GARA

This Part examines the arguments that led to GARA, how the aims of the interested parties were shaped during the congressional hearings, how the statute's drafting became the source of one of its major inequities, and how critical issues surrounding GARA's application were not scrutinized. First, GARA's background, including aviation manufacturers' alleged need for immunization against liability, will be examined. Next, the stakeholders behind the enactment of GARA and their particular interests will be identified. Third, the Part explains how changes in GARA's draft language expanded its coverage far beyond the scope contemplated in congressional debates. Finally, the Part evaluates GARA's alleged necessity.

A. Legislative History and Intent

In the early 1980s, general aviation(fn8) manufacturers began to lobby congressional representatives from Kansas for statutory relief from the yoke of unlimited product liability. In 1994, over a decade of such lobbying paid off, and President Clinton signed GARA into law.(fn9)

The driving force behind GARA was the failure of the U.S. piston-powered aircraft market.(fn10) U.S. general aviation aircraft production had declined from 18,000 units in 1978 to only 928 units in 1994.(fn11) The Cessna Aircraft Company, which has sold more civilian piston-powered single-engine aircraft than any other company in history,(fn12) completely shut down its single-engine production lines in 1986.(fn13) Industry analysts estimated that this decline resulted in the loss of approximately 100,000 jobs.(fn14) These numbers stood in stark contrast to those of other segments of the aerospace industry, where the U.S. market share remained strong. In particular, the United States remained a world leader in the production and sale of business jets.(fn15)

Manufacturers unanimously cited the cost of settling, defending against, and insuring against litigation as the ultimate cause of the failure in this segment of the aerospace market, which had, until recently, been dominated by the United States.(fn16) Beech Aircraft Company, for example, defended itself against 203 accident suits filed between 1983 and 1986 and reported that its average cost per case was $530,000.(fn17) Yet according to the National Transportation Safety Board, not one of these accidents was attributable to manufacturing and design defects.(fn18)

GARA is a statute of repose that, with certain exceptions, bars a lawsuit against any manufacturer of a general aviation aircraft for design and manufacturing defects, if the accident leading to the cause of action occurred more than eighteen years after the aircraft was first delivered from the factory.(fn19) In the case of parts manufacturers, GARA sets the start of the repose period as the date that a part was first installed on an aircraft.(fn20)

A statute of repose is very different from a statute of limitations, which limits claims based on the time elapsed after the occurrence of the incident in question.(fn21) With a statute of repose, the clock typically starts ticking on the delivery date of the product that is later alleged to be defective.(fn22) The policy behind such statutes is that, without proper maintenance, manufactured items will deteriorate over time; thus, after a certain point, owners should inherit responsibility from manufacturers when maintaining these older products.(fn23)

For a manufacturer to qualify for GARA protection, the aircraft involved in the accident must satisfy three requirements. First, it must be a general aviation aircraft, meaning that it must have been issued a type certificate or airworthiness certificate before the accident occurred.(fn24) Second, the aircraft must have been originally certificated for no more than twenty seats. Finally, the aircraft must not be engaged in scheduled passenger carriage at the time of the accident.(fn25)

Four exceptions apply to GARA's provisions. GARA will not protect manufacturers if (1) it is proven that the manufacturer knowingly misrepresented, or concealed or withheld, required information relating to a dangerous condition regarding an aircraft or part, and that condition was causally related to the accident; (2) the deceased or injured claimant was on board the aircraft because of a medical or other emergency; (3) the claimant was not onboard the aircraft; or (4) the deceased or injured party's claim sounds in contract pursuant to a written warranty.(fn26)

B. The Stakeholders

The most important groups advocating for the enactment of GARA were (1) Kansas politicians, led by Senator Nancy Kassebaum;(fn27) (2) the General Aviation Manufacturers Association (GAMA)(fn28), most notably represented by Russ Meyer, Chairman and CEO of Cessna; (3) the International Association of Machinists and Aerospace Workers Union (IAM); and (4) the Aircraft Owners and Pilots Association (AOPA). The Association of Trial Lawyers of America (ATLA)(fn29) was the primary organizer of opposition to GARA's enactment.(fn30)

Senator Kassebaum and Representative Dan Glickman were the congressional sponsors of GARA, championing its passage for roughly ten years.(fn31) Aviation manufacturing interests represent a major constituency for Kansas politicians because the aerospace industry is one of the largest and most important employment sectors in Kansas.(fn32) Supporters focused on the importance of general aviation to the U.S. economy and trade balance-the bill was advanced as a means to recreate lost jobs at "no cost"(fn33)-as well as the support revitalized general aviation would provide to commercial aviation, through the provision of a training ground for future pilots.(fn34) Supporters noted that the lack of a federal statute of repose for the U.S. aviation industry put it at a competitive disadvantage globally because most European countries already had statutes of repose in effect, commonly with limitation periods of only ten years.(fn35) By eliminating this domestically imposed restriction on trade, manufacturers could reenter the market competitively and recapture their lost market share from their European competitors.(fn36)

GAMA was a powerful industry advocate of GARA enactment. This organization of aircraft manufacturers represented the largest single group of businesses that would directly benefit from the passage of a statute of repose. GAMA members argued that the money spent insuring and defending against lawsuits was money that could be spent on research and development for the benefit of the industry.(fn37) A belief that tort liability was hindering technological advances and delaying or preventing safety improvements in general aviation was prevalent among pilots.(fn38) The oppressiveness of this liability made it difficult for manufacturers to obtain insurance for design or product defects-one Lloyd's of London underwriter dryly commented at the...