The United States District Court for the Northern District of Illinois recently held that a provision of the Federal Aviation Act, 49 U.S.C. § 44112, preempted state law negligence and strict liability claims brought against a former owner of an aircraft by the heirs of people who died in a plane crash.  See J.A.G.P. v. Aerolineas Damojh, S.A. de C.V., No. 1:19-CV-02552, 2022 U.S. Dist. LEXIS 24858 (N.D. Ill. Feb. 11, 2022). In the suit, the plaintiffs named a trust company, who owned the aircraft for about three years and sold it ten years before the crash.  The plaintiffs alleged that at the time the trust company owned the plane, the plane was defective and unreasonably dangerous.  The plaintiffs alleged that the trust company failed to include any warnings about the effect of aging on the plane.  It further failed to fix or repair the dangerous and defective conditions.  And it sold the plane in an unsafe condition, placing the allegedly dangerous and defective plane into the stream of commerce.

The trust company moved to dismiss.  One of its two arguments was that the claims were preempted by the Federal Aviation Act, 49 U.S.C. § 44112.  Subsection (b) of this statute provides:

(b) Liability. A lessor, owner, 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 the actual possession or operational 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.

The trust company argued that it was an owner in name only and never possessed or controlled the plane. As a result, § 44112(b) preempted any claim against it.

The court agreed and granted the motion to dismiss.  While the court reasoned that the statute did not expressly preempt the claim, “the law’s text, context, and structure clearly imply that the section has preemptive force.” The statute allowed for an owner to be liable “only when” the aircraft was in “actual possession or operational control” of the owner. The statute thus preempted state law that could allow for liability in situations in which the aircraft was not in the actual possession or operational control of the owner.

Trying to get around this reading of the statute, the plaintiffs argued that the statute protected only owners or lessors and did not protect sellers of the airplane.  The court rejected this argument, finding that the distinction made no difference and the statute still preempted the claim.  The trust company was an “owner” of the plane at the time it engaged in the alleged misconduct and thus, by the terms of the statute, could not be liable unless it was in actual possession or operational control of the aircraft.

The court also highlighted that the construction of the statute was consistent with its purpose, which was to facilitate the financing of aircraft by providing that those who held security interests in the plane would not be liable for injuries caused by falling planes or parts absent actual possession or control of the plane.  If the statute did not protect those who later sold their interests, lenders would be hesitant to finance the purchase of aircraft.

The bottom line of the decision in Aerolineas Damojh is its recognition of the protection that the law gives to those who hold interests in aircraft without exercising actual possession or operational control. Under the Federal Aviation Act, those persons may not be sued under state tort law.