FLORIDA AVIATION AND SPACE LAW REPORT

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1 2012 EDITION I. AIRPORTS AND LAND USE 2 II. CORPORATE AND GENERAL AVIATION 4 III. LABOR AND EMPLOYMENT 10 IV. LITIGATION 12 V. REGULATORY LAW 17 VI. SPACE LAW 21 TIMOTHY M. RAVICH, ESQ. WEISS SEROTA HELFMAN PASTORIZA COLE & BONISKE, P.L PONCE DE LEON BOULEVARD CORAL GABLES, FLORIDA TELEPHONE: travich@wsh-law.com

2 I. Airports and Land Use Criminal Law Theft of Jet Fuel Cliff Berry, Inc. v. State --- So. 3d ----, 2012 WL (Fla. 3d DCA 2012) A provider of environmental services and its project manager were convicted of two counts of first degree grand theft and two counts of organized scheme to defraud for their stealing jet fuel and money from the Miami-Dade Aviation Department ("MDAD"). The scheme, which spanned over a three-year period, involved: (1) the theft of hundreds of thousands of gallons of jet fuel, which was sold for profit; and (2) the submission of fraudulent invoices to the MDAD, resulting in the fraudulent receipt of hundreds of thousands of dollars. Though convicted after a jury trial, Florida's Third District Court of Appeal reversed, reasoning that the trial court abused its discretion in: (1) refusing to give the defendants' requested special jury instruction that the defendants had a "good faith" belief that they were entitled to take the property they were accused of stealing; and (2) failing to conduct a timely hearing under the authority of Richardson v. State, 246 So. 2d 771 (Fla. 1971), requiring an inquiry by the court, once a discovery violation is revealed, to determine what sanctions should be imposed. Florida's Marketable Record Titles to Real Property Act Matissek v. Waller 51 So. 3d 625 (Fla. 2d DCA 2011) The Hidden Lakes Estate in Pasco County, Florida, was designed to be an airpark community that would include its own airport and permit its residents to construct aircraft hangers on their property. During the summer of 2007, a resident began constructing an airplane hangar on his property and submitted his plans to the County to get a permit issued to build a pre-engineered hangar containing a steel frame and steel paneling. Another resident brought suit for injunctive relief, claiming that the metal exterior of the hangar violated a specific deed restriction requiring all buildings to "be constructed of masonry or similar materials." The trial court initially ordered that the hanger be brought into compliance with the deed restriction, but the appellate court reversed, finding that Florida's Marketable Record Titles to Real Property Act, Fla. Stat. Ch. 712 (2008), had extinguished the community deed restriction, providing free and clear, marketable record title to the property and permitting construction of the metal hangar TIMOTHY M. RAVICH Spring 2012 Edition 2

3 Intangible Personal Property Tax Boca Airport, Inc. v. Florida Dept. of Revenue 56 So. 3d 140 (Fla. 4th DCA 2011) Fixed Base Operators ("FBOs") that leased government-owned airport properties challenged a decision made by the Florida Department of Revenue in 2008 to assess intangible personal property taxes on each leasehold interest. The FBOs argued that they were exempt from intangible personal property tax under Fla. Stat (6), (2)(a), which exempt nongovernmental leases on government-owned real property that serve "a government, municipal, or public purpose or function." The argument was rejected as it was also determined that the FBOs were subject to the intangible personal property tax under Florida law, which subjects to taxation the leasehold interests of non-governmental leases on government-owned real property "predominantly used for... commercial purposes" where rental payments are due. Florida Sunshine and Public Disclosure Law Florida Senate Bill 994 (2011) The Florida Legislature considered enacting a new statutory section to Chapter 331 of the Florida Statutes ("Airports and Other Air Navigation Facilities"), to make proprietary confidential business information submitted to or held by a public airport confidential and exempt from public records requirements, until it is no longer considered to be proprietary confidential business information by the proprietor. The proposed statute, Fla. Stat , would also have applied to trade secrets held by a public airport and for any proposal or counterproposal exchanged between a public airport and a nongovernmental entity relating to the sale, use, development, or lease of airport facilities. The measure was rejected, however TIMOTHY M. RAVICH Spring 2012 Edition 3

4 II. Corporate and General Aviation Aircraft Management Agreements Mutual Mistake BP Group, Inc. v. Kloeber 664 F. 3d 1235 (8th Cir. 2012) BP Group, a Florida corporation, leased a Gulfstream G200 from Wachovia National bank pursuant to an equipment lease (a headlease). In 2008, BP Group executed an Aircraft Management Agreement ("AMA") with Capital Wings Airlines, Inc. ("CWA"), an "on demand air carrier" licensed by the Federal Aviation Administration ("FAA") to conduct operations under Part 135 of the Federal Aviation Regulations. CWA acquired the right to use the aircraft in its commercial charter operations, and under the terms of the AMA, BP Group was required "to provide the aircraft to CWA 'on a non-exclusive, non-continuous basis and appoint[ ] CWA as the sole and exclusive charter operator of the Aircraft' for a term of approximately four years." In exchange, CWA agreed to pay BP Group for each hour of use, with a minimum payment of $80,000 per month. Although BP Group retained the right under the headlease to sublease the aircraft to an entity under BP Group's direct control, the headlease prohibited the assignment, sublease, or other transfer of BP Group's rights and obligations in the aircraft absent Wachovia's consent. BP Group never asked for Wachovia's consent to enter into the AMA. At the time of contract, CWA and one of the guarantors claimed not to have been represented by counsel, relying on the assurances of BP Group's aviation counsel that the AMA would comply with FAA requirements and not violate the headlease. However, when a dispute arose in connection with an unpaid bill for a painting and refurbishment job for the aircraft, BP Group sued CWA and the guarantors for breach of the Aircraft Management Agreement. The enforceability of the AMA was at issue. Applying Florida law, the Eighth Circuit Court of Appeals affirmed summary judgment in favor of BP Group, holding that (1) the parties' mistaken belief that the AMA transferred control of the aircraft to CWA without violating the headlease did not give CWA the right to rescind the AMA, and (2) nothing in the plain language of the AMA made the transfer of operational control to CWA a condition precedent to the AMA's validity rather than a covenant. The federal appellate court also affirmed the liability of the guarantor for the refurbishment costs that fueled the lawsuit in the first place TIMOTHY M. RAVICH Spring 2012 Edition 4

5 Finally, in 2009, BP Group entered into an aircraft management agreement with Priester Aviation, LLC, for rights to use the aircraft in charter operations. The federal district court, concluding that the Priester agreement was "substantially similar" to the AMA with CWA, as required under Fla. Stat , allowing BP Group a greater recovery, awarded BP Group $860, in damages for "monthly payments due under the AMA less charter revenue earned from alternate sources and BP Group's use of the [a]ircraft." The Court of Appeals reversed that decision, however, finding genuine disputes remained as to whether the AMA and Priester agreement were so similar and whether BP Group otherwise took reasonable steps to avoid unnecessary damages. Warranty of Workmanship In Flight Leasing Group, LLC v. Bizjet Int'l Sales & Support, Inc WL (S.D. Fla. 2012) PNCEF, LLC ("PNC") contracted for testing, maintenance, and recertification services on two engines installed on its Gulfstream IV aircraft. Included in the agreement was an express warranty that "workmanship conforms to the intent of the requirement of the manufacturer of the engine or components, and that the quality of such workmanship is in accordance with the applicable provisions of the Federal Aviation Regulations." The warranty provision also provided that it "may not be assigned without... prior written confirmation." Two days after entering into the contract, PNC sold the aircraft, including the engines, to DFASS Management, Inc. ("DFASS") via an aircraft purchase agreement. The purchase agreement contained an assignment to the purchaser of "any and all of Seller's rights with respect to any manufacturer's warranties or repair or maintenance agreements relating to the Aircraft." The maintenance company removed the engines from the aircraft to perform service and repairs, but after reinstallation of the engines, discovered that the lefthand thrust reverser was not mounted correctly. The maintenance company agreed that it was responsible for the repairs, but then refused to perform or pay for the repairs. After paying for the repairs itself, PNC sued for breach of express warranty of workmanship and negligence. United States District Judge Patricia A. Seitz dismissed (with leave to amend) the negligence claim as barred by the economic loss rule, but sustained a demand for lost profits arising from negligence and permitted the warranty claim on the basis the maintenance company knew about and consented to the warranty transfer TIMOTHY M. RAVICH Spring 2012 Edition 5

6 Florida Uniform Fraudulent Transfer Act Turner v. Ramo, LLC 2011 WL (S.D. Fla. 2011) A Florida based company facilitated a $4.25 million loan to a corporate buyer for the purchase of five Israel Industries Westwind jets for use in a new charter-flight service based in the U.S. Virgin Islands. In consideration for the loan, the lender was to receive two-thirds of the buyer's net profits and reduced rates for chartered flights aboard the aircraft, which themselves were collateral for the loan pursuant to security interests. In December, 2008, a twin-engine Rockwell International 490B chartered by the buyer crashed while on approach to San Juan, Puerto Rico, killing the buyer's president (who piloted the airplane) and both passengers. After the crash, all of the buyer's business operations ceased. Soon thereafter, the lender called in its loans as immediately due. The buyer then transferred ownership of all five of its aircraft to the lender in exchange for a discharge of the outstanding debt. The personal representative of the deceased passengers commenced both a wrongful death lawsuit and a separate lawsuit to void the transfer from the buyer to the lender as fraudulent so that the assets would be available to satisfy a claim in the wrongful-death matters. The latter lawsuit asserted two claims under the Florida Uniform Fraudulent Transfer Act ("FUFTA"): (1) that the aircraft transfer was fraudulent against present creditors under Fla. Stat (1); and (2) the aircraft transfer was fraudulent against present and future creditors under Fla. Stat (1)(a). The buyer moved for summary judgment, but United States District Judge Kenneth A. Marra denied the motion. The court inferred that the parties never intended for the buyer to pay for the aircraft (i.e., repay the loans). Record evidence established that the lender had complete control and exclusive use of the aircraft, and that the buyer was unable to afford the aircraft or maintenance. Accordingly, a genuine issue of fact existed as to the value the buyer received for the aircraft transfer under the "reasonably equivalent value" prong of Fla. Stat (1). Additionally, a factual issue also existed as to whether the asset transfer was a "valid conveyance" that "discharg[ed] a pre-existing debt." The court also found, under Fla. Stat (1)(a), genuine issues of fact respecting: (1) whether the transfer was to an insider; (2) whether the debtor was insolvent or became insolvent shortly after the transfer; and (3) whether the transfer was of substantially all of the debtor's assets TIMOTHY M. RAVICH Spring 2012 Edition 6

7 Pre-Judgment Writ of Replevin PNCEF, LLC v. South Aviation, Inc. 60 So. 3d 1120 (Fla. 4th DCA 2011) A lender moved for a pre-judgment writ of replevin to recover four aircraft valued at between $9 and $11 million from an Illinois-based borrower. The borrower had leased the aircraft to a lessee based in Broward County, Florida, and refused to return the aircraft on the basis of liens the lessee had filed against the aircraft. After obtaining an Illinois court order requiring the borrower and lessee to pay for the use of the aircraft, the lender brought suit in Florida for replevin, conversion, and injunctive relief against the borrower and lessee. The trial court denied the lender's motion for a pre-judgment replevin writ without making any findings of fact or conclusions of law. The appellate court reversed that decision, finding that (1) the lender's verified complaint recited and showed all of the information required to obtain an order authorizing issuance of a prejudgment writ of replevin under Fla. Stat ; (2) at a show cause hearing, the lender proved, with reasonable probability, that it was entitled to possession of the aircraft pending final adjudication of the parties' claims and that the lessee was engaging in conduct that may have placed the aircraft in danger of removal from the state and the court's jurisdiction; and (3) the lender satisfied the additional requirements of Fla. Stat , by alleging specific facts that clearly showed the nature of the lender's claims, the amount thereof, and the ground relied upon for the issuance of the writ. The appellate court also cited the underlying mortgage obligating the borrower to "return the Aircraft by delivering the same forthwith to Lender" upon the occurrence of a default and a provision of the lease between the borrower and lessee pursuant to which the lessee expressed its understanding that its quiet enjoyment of the aircraft was subordinate to the lender's rights in the aircraft TIMOTHY M. RAVICH Spring 2012 Edition 7

8 Florida's Long-Arm Jurisdiction Statute Corporacion Aero Angeles, S.A. v. Fernandez 69 So. 3d 295 (Fla. 4th DCA 2011) A Florida-based broker arranged for the sale of a Falcon 900B jet owned by a Mexican corporation to a Canadian buyer. Alleging that the seller breached an oral agreement to pay him a commission in Florida, the broker brought suit in Broward County under Florida's long-arm statute, Fla. Stat (g): "Breaching a contract in this state by failing to perform acts required by the contract to be performed in this state." The trial court found sufficient jurisdiction in Florida on the basis that the Florida broker sold the airplane, but the Court of Appeal reversed, on the basis of specific jurisdiction. The seller's contacts with Florida in relation to the sale of the airplane to Canadian buyers was non-existent. Neither the plane, nor even its general director and pilot of the aircraft came to Florida in connection with the sale. No contract was delivered to the seller in Florida. No deposit was escrowed in Florida. The closing took place in Canada. Accordingly, the broker failed to satisfy the minimum contacts requirements for personal jurisdiction to attach to the Mexican-based seller. Insurance Standing Global Aerospace, Inc. v. Platinum Management, LLC 2011 WL (S.D. Fla. 2011) The agent and manager for a pool of insurance companies defended and settled multi-million dollar claims arising from a crash, in 2005, of a corporate charter jet in New Jersey. Subsequently, the insurance agent learned that a federal grand jury indicted the principals of the charter company for criminal acts that caused the crash. The insurance agent then sued for declaratory relief, breach of contract, fraud, civil conspiracy, RICO violations, and alter ego liability. The charter company moved to dismiss for lack of subject matter jurisdiction. United States District Judge James Cohn denied the motion, finding that (1) an agent who contracts in his own name may sue on that contract without joining his principal, and (2) an insurer has standing to sue based on its own injuries in fact (i.e., $25 million in defending, settling, and investigating claims) and further has standing to bring an action as an agent of underlying insurers based on the insurers' injury TIMOTHY M. RAVICH Spring 2012 Edition 8

9 Aircraft Purchase Agreement Mutual Mistake and Legal Malpractice KT Holdings USA, Inc. v. Akerman, Senterfitt & Eidson 34 So. 3d 61 (Fla. 3d DCA 2010) A corporation executed a letter of intent to sell all of its assets for $44 million. Before the closing of the asset purchase transaction, the selling corporation purchased a new Premier One corporate jet from Raytheon for $4,780,000. The seller retained a law firm to assist with the asset purchase sale, but not with the jet purchase, including review of the written conveyance executed by Raytheon for filing with the Federal Aviation Administration. The seller corporation directed its attorneys not to disclose the jet purchase to the buyer, and when the asset purchase transaction closed, the jet was not listed on a schedule of excluded assets. (The lawyers advised the seller not to take title to the aircraft, but instead to title the aircraft in a different or new single-asset company). Approximately eleven months later, post-closing disputes arose and the buyer sued the seller in circuit court in Tampa, Florida. The buyer then learned that the jet was titled in the seller on the date of the asset purchase closing and amended its post-closing complaint to include a claim for "recovery," averring that the aircraft should have been included in the asset sale. The buyer was awarded the aircraft and other money damages. Following a post-judgment settlement involving the seller's "repurchase" of the aircraft, the seller then sued its lawyers for legal malpractice. The trial court granted summary judgment in favor of the lawyers, reasoning that the true cause of any losses by the seller regarding the aircraft was its failure to assert "mutual mistake" as an affirmative defense. Florida's Third District Court of Appeal, affirmed, noting that the buying corporation had no rights with respect to the aircraft, having never known about, bargained for, or paid for the jet. The appellate court also affirmed as to the legal malpractice claim, concluding that the facts of the case "underscore the hazards of self-representation in a multi-million dollar aviation transaction. The [seller's] attempt to turn his own mistake into a claim for millions of dollars of damages (against the law firm that correctly warned [the seller] not to title the aircraft in the name of the [seller] was correctly rejected." 2012 TIMOTHY M. RAVICH Spring 2012 Edition 9

10 III. Labor and Employment Liability for Injuries to Independent Contractor Strickland v. Timco Aviation Svcs., Inc. 66 So. 3d 1002 (Fla. 1st DCA 2011) An employee of a painting company who contracted to pressure wash the roof of an airport hangar and perform repair and maintenance on roof skylights sued the hangar operator for negligence after he fell five stories to the ground. The employee claimed that the hangar operator failed to furnish him with adequate safety equipment. In addition, the employee claimed the skylights upon which he stepped were indistinguishable from the color of the roof, that the roof could not withstand 200 pounds of perpendicular pressure, and that the roof lacked protective guardrails in violation of Occupational Safety and Health Administration and industry standards. The employee's claims were dismissed via summary judgment on the basis that a property owner who employs an independent contractor to perform work on his property will not be held liable for injuries sustained by the employee during the performance of that work. Strickland's claims also did not fall within either of two exceptions to this general rule, namely where (1) the property owner actively participates in and exercises direct control over the work, or (2) the property owner negligently creates or negligently approved a dangerous condition. Age Discrimination Avera v. Airline Pilots Ass'n Int'l 436 Fed. Appx. 969 (11th Cir. 2011) A pro se commercial airline pilot sued the Airline Pilots Association and the United Airlines Master Executive Council in the United States District Court for the Northern District of Florida for violations of the Age Discrimination in Employment Act of 1967 ("ADEA"), 29 U.S.C. 621, the Employment Retirement Income Security Act ("ERISA"), 29 U.S.C. 1101, and for breach of the duty of fair representation under the Railway Labor Act ("RLA"), 45 U.S.C. 151 et seq. The pilot also petitioned for a declaratory judgment that the Fair Treatment of Experienced Pilots Act ("FTEPA"), 49 U.S.C , and the Federal Aviation Administration ("FAA") "Age 60 Rule," 14 C.F.R , were unconstitutional both facially and to a class of pilots born between 1942 and 1947 and as applied to him TIMOTHY M. RAVICH Spring 2012 Edition 10

11 In a per curiam opinion, the Eleventh Circuit Court of Appeals affirmed dismissal of the pilot's ADEA, ERISA, and constitutional claims for failure to state a cause of action. Applying a rational-basis review (as opposed to strict scrutiny because age is not a suspect classification), the court found that the FTEPA's nonretroactivity provision and protection-for-compliance provisions satisfied the Equal Protection Clause. The Court of Appeals also found no merit to the pilot's claims that the FTEPA effected an unconstitutional taking without compensation or violated the Due Process Clause of the Fifth Amendment or the prohibition against bills of attainder (a law that legislatively determines guilt and inflicts punishment upon an identifiable individual without the protections of a judicial trial). Finally, the Court of Appeals affirmed dismissal of the pilot's RLA claim as barred by the applicable six-month statute of limitations, measured from the time the pilot discovered the acts that formed the basis of his claim. Finally, the Court of Appeals recognized that, under 49 U.S.C (a), courts of appeals have exclusive jurisdiction to review final orders of the FAA, including the Age 60 Rule. Accordingly, the pilot was prohibited from bypassing such exclusive jurisdiction by pursuing in the district court a collateral attack of the FAA's order, as the trial court lacked subject matter jurisdiction over that claim. Nat'l Aeronautics and Space Admin. v. Nelson 131 S. Ct. 746 (2011) See Part VI, infra TIMOTHY M. RAVICH Spring 2012 Edition 11

12 IV. Litigation Negligent Misrepresentation, Failure to Warn, and Federal Preemption North v. Precision Airmotive Corp WL (M.D. Fla. 2011) Following the death of her husband in an airplane crash in December, 2006, in Mt. Snow, Vermont, a widow and estate administratrix sued an engine component manufacturer under theories of strict product liability, negligence, and misrepresentation. The lawsuit averred that the manufacturer (and its predecessor) intentionally and/or negligently distributed communications that were intended to induce and mislead persons to believe that the engines and fuel control systems installed on the aircraft involved in the accident were safe. The claimant also alleged that the manufacturer had, but failed to abide by, federal reporting obligations, including the duty to report failures and design defects to the Federal Aviation Administration ("FAA"). Applying Florida negligent misrepresentation law, a federal district court entered summary judgment in favor of the manufacturer on the basis that the claimant had not pointed to any particular FAA report that the manufacturer should have, but failed, to make, and the claimant could not demonstrate reliance, justifiable or otherwise, in any event. The claimant further alleged, as part of her strict liability and negligence counts, that the manufacturer failed to provide adequate warnings and instructions. The engine component manufacturer defended on grounds that federal law preempts state law in the field of aviation safety, and therefore federal law is the exclusive source of any duty to warn. Most federal courts have decided that federal law preempts state law in the arena of aviation safety under the authority of Abdullah v. American Airlines, Inc., 181 F.3d 363 (3d Cir. 1999), and Witty v. Delta Air Lines, Inc., 366 F.3d 380 (5th Cir. 2004). However, among the minority of courts to have reached the opposite conclusion is the United States Court of Appeals for the Eleventh Circuit, under the authority of Public Health Trust of Dade County, Fla. v. Lake Aircraft, Inc., 992 F.2d 291 (11th Cir. 1993). Thus, the engine manufacturer was not entitled to summary judgment in a federal district court situated in Florida on the basis of Lake Aircraft, Inc., which may compel a finding that Congress did not intend to preempt state laws regarding warnings, even if the claimant did lack evidence of any violation of any federal warning standard TIMOTHY M. RAVICH Spring 2012 Edition 12

13 Removal Fraudulent Joinder Dorsch v. Pilatus Aircraft, Ltd WL (M.D. Fla. 2011) On July 5, 2009, an airplane from Teterboro, New Jersey, to Tampa, Florida, crashed, killing all on board. Plaintiff, whose mother and father were passengers on board the airplane, sued the aircraft and component manufacturers for negligence and strict liability, alleging the aircraft's Instrument System, comprised of two Primary Flight Displays and two Multi Function Displays, failed during the flight by shutting off, and therefore did not provide accurate data to safely operate the aircraft. The lawsuit was brought in Hillsborough County Circuit Court and removed to federal court on the basis of diversity jurisdiction. The defendants, in their removal notice, argued that defendant Leading Edge Aviation Services, a Florida corporation, was improperly joined and that there was no reasonable basis for Leading Edge's liability under controlling state law, as the only contact Leading Edge had with the aircraft was the replacement of its battery more than a year before the crash. Noting that the procedure to resolve a claim for fraudulent joinder is akin to the burden-shifting scheme under Fed. R. Civ. P. 56(c) for summary judgment, U.S. District Judge Elizabeth Kovachevich denied the motion to remand and dismissed Leading Edge from the lawsuit. Defendants had proved by clear and convincing evidence that there was no reasonable basis in fact to include Leading Edge in the lawsuit as it did not manufacture or design the battery in question and performed no services to the aircraft other than battery installation. Affidavit testimony by plaintiff's aviation accident reconstruction and aircraft maintenance expert that a battery failure could have contributed to the accident did not controvert this fact. Forum Non Conveniens Tazoe v. Airbus, S.A.S. 631 F.3d 1321 (11th Cir. 2011) July 17, 2007, marked the worst accident in Brazilian aviation history. TAM Linhas Aéreas Flight 3054, an A airplane manufactured by French corporation Airbus, S.A.S, overran a rain-soaked runway as it landed in São Paulo, Brazil. The airplane crashed into a warehouse and fueling station, killing 187 people, including all pilots, attendants, and passengers, together with 12 people on the ground. One citizen of the United States, a resident of Florida, died in the accident. The remainder of those killed were citizens or residents of Brazil TIMOTHY M. RAVICH Spring 2012 Edition 13

14 Three categories of family members of those who died in the accident brought suit against the airplane and part manufacturers: (1) the Brazilian family members; (2) the family members of the sole U.S. citizen; and (3) a Brazilian mother whose complaint was dismissed sua sponte before she served a summons and complaint on the manufacturers. (The airline involved in the accident settled with almost all the family members in exchange for a release from liability.) The manufacturers moved to dismiss the lawsuit based on forum non conveniens, arguing that (1) an adequate alternative forum was available; (2) the public and private factors weighed in favor of dismissal; and (3) the plaintiffs could reinstate their suit in the alternative forum without undue inconvenience or prejudice. After the manufacturers agreed to submit themselves to the jurisdiction of Brazil and toll its statute of limitations, U.S. District Judge Marcia G. Cooke dismissed the lawsuit of the Brazilian family members as well as the family members of the only U.S. citizen on grounds of forum non conveniens. The Eleventh Circuit Court of Appeals affirmed that dismissal, but, in a matter of first impression, concluded that the trial court abused its discretion when it sua sponte dismissed the Brazilian mother's claim without first affording her notice or an opportunity to be heard. Jurisdiction Venue Marley v. Jetshares Only, LLC 767 F. Supp. 2d 1337 (S.D. Fla. 2011) A musician chartered a round-trip flight for himself and his band and crew from Miami to Abu Dhabi in the United Arab Emirates for $165,000. Upon receipt of a $145,000 deposit to secure the aircraft, the charterer flew the aircraft from Orlando to Miami in preparation for the trip to Abu Dhabi. The musician became ill and cancelled the chartered flight, however. In turn, the charterer employed the aircraft for a different flight and retained the musician's deposit, an action for which the charterer was sued in federal district court in Miami for unjust enrichment, tortuous interference with a contractual right, and conversion. The charterer moved to dismiss on grounds of improper venue under Fed. R. Civ. P. 12(b)(3), or alternatively to transfer the lawsuit to the United States District Court for the Middle District of Florida. In support, the charterer argued that it was a resident of Orange County located in the Middle District of Florida and that the airplane in question was physically based in Orange County and that the monies paid for the flight were wired to the charterer's bank account in Orange County TIMOTHY M. RAVICH Spring 2012 Edition 14

15 U.S. Magistrate Judge John J. O'Sullivan denied the motion on the basis that venue in diversity cases is controlled by 28 U.S.C. 1391(a), which provides that "[a] civil action wherein jurisdiction is founded only on diversity of citizenship may... be brought only in... (2) a judicial district in which a substantial part of the events or omissions giving rise to the claim occurred..." The Magistrate Judge determined that the fact that the plane was chartered to fly out of Miami and return to Miami and that the cancellation of the chartered flight took place while the plane was in Miami was sufficient to find that a substantial part of the events or omissions giving rise the musician's claims occurred in the Southern District of Florida. The Court also declined the charterer's alternative motion to transfer, concluding that a plaintiff's choice of forum is owed considerable deference and that no showing had been made by the charterer that the Middle District was a more convenient forum than Southern Florida. GARA Fraud Exception Nowicki v. Cessna Aircraft Co. 69 So. 3d 406 (Fla. 4th DCA 2011) Two passengers died in June, 2003, when a twin-engine Cessna Model 414 ran out of fuel during flight and crashed near North Fort Myers, Florida. The personal representative of one of the passengers sued the aircraft manufacturer for negligence and strict liability, claiming that, notwithstanding the fact the airplane crashed because of fuel starvation, the passenger's death was caused by a defective rear passenger seat, which detached from the rails and caused the passenger to violently strike his head inside the airplane on or before impact. The airplane manufacturer obtained summary judgment as the aircraft was manufactured and delivered thirty-three years before the accident and so the claim was barred by the eighteen-year statute of repose provided in the General Aviation Revitalization Act of 1994 ("GARA"), 49 U.S.C Additionally, the plaintiff failed to persuade the court under the section 2(b)(1) "fraud" exception to GARA that Cessna concealed or withheld from the Federal Aviation Administration ("FAA") the fact that the fallen aircraft contained a passenger seat assembly (with seat rail and locking mechanism) that was the subject of an airworthiness directive. Plaintiff made no showing that the manufacturer misrepresented or concealed any "required information" it had an affirmative obligation to report to the FAA, and plaintiff had failed to prove that the harm suffered was causally related to the disclosure of such required information TIMOTHY M. RAVICH Spring 2012 Edition 15

16 Statute of Repose Rolling Provision Inmon v. Air Tractor, Inc. 74 So. 3d 534 (Fla. 4th DCA 2011) A crop-duster was injured when the right wing of his airplane failed. He sued the airplane manufacturer for negligence, alleging that the crash and destruction of his airplane (built in 1982) was caused by the installation of a new five-bolt spar splice at a first fatigue critical location. The manufacturer moved for summary judgment based on the 18-year federal statue of repose and the 12-year Florida statute of repose. The primary legal issue was whether the plane manufacturer's design and sale of the new part for the wing assembly in 1993 restarted the respective periods of repose. The manufacturer argued that the pilot had sued over an alleged defect in the airplane's wing that was over 20 years old, and thus, beyond the statute of repose. In addition, the manufacturer contended that any modification to an original part does not restart the statute of repose. Applying the "rolling provision" of the General Aviation Revitalization Act, 49 U.S.C notes, Section 2(a)(2), the trial and appellate courts agreed with the manufacturer. Although the pilot had established that a new part was installed, it did not replace an item, but rather modified the original design. Moreover, the pilot failed to demonstrate that the new part actually caused the accident TIMOTHY M. RAVICH Spring 2012 Edition 16

17 V. Regulatory Law Claims Against FAA Arising From "Final Orders" Baltimore Air Transport, Inc. v. Jackson 419 Fed. Appx. 932 (11th Cir. 2011) Air freight and charter companies filed a complaint in federal district court against various officials of the Federal Aviation Administration ("FAA"), arguing that regulators (1) required them to move their headquarters from one state to another without following the proper procedures for doing so and without permitting an appeal of the decision; (2) required them to rewrite their maintenance and operation manuals; (3) refused to grant "check rides" to their pilots and refused to allow other FAA officials to do so; (4) arbitrarily, capriciously, and unlawfully directed them to stop using a trade name that they had operated under for years, thereby depriving them of goodwill and reputation and putting them at a competitive disadvantage; and (5) refused to return certain records and sanctioned them for not having those records. These claims were dismissed for lack of subject matter jurisdiction. In affirming dismissal, the Eleventh Circuit Court of Appeals recognized that the alleged actions of the FAA were "final FAA orders" in that they either imposed an obligation, denied a right, or fixed some legal relationship as a consummation of the administrative process. See, e.g., Green v. Brantley, 981 F.2d 514, 516 (11th Cir. 1993). As such, "because [the claims were] inescapably intertwined with a review of the procedures and merits surrounding the FAA's orders," such claims constituted an "impermissible collateral challenge" under 49 U.S.C. 1486(a) because the courts of appeals are vested with exclusive jurisdiction over cases challenging "final orders" of the FAA. Dangerous Instrumentality Doctrine Federal Limitation of Liability Vreeland v. Ferrer 71 So. 3d 70 (Fla. 2011) In 2005, a leased airplane crashed after takeoff from an airport in Lakeland, Florida, killing the pilot and his passenger. The passenger's estate brought a wrongful death lawsuit, alleging that the airplane owner was vicariously liable for the pilot's negligence in the operation and inspection of the aircraft TIMOTHY M. RAVICH Spring 2012 Edition 17

18 The lawsuit presented a conflict between Florida's "dangerous instrumentality doctrine" and a federal statute that limits the liability of aircraft owners. The Supreme Court of Florida specifically addressed whether Florida's dangerous instrumentality doctrine conflicted with a federal law, 49 U.S.C , limiting the liability of aircraft lessors or owners for personal injury, death, or property loss or damage "on land or water." Justice Fred Lewis, writing for the majority, held that Florida's dangerous instrumentality doctrine imposes vicarious liability upon owners and lessors of aircraft, even where the aircraft is not within their immediate control or possession at the time of the loss. To the extent that the doctrine applies to injuries, damages, or deaths that occur on the surface of the earth, the doctrine conflicts with, and is therefore preempted by the federal statute. However, because the death of the passenger in Vreeland occurred while he was in a plane that crashed not on the ground beneath the plane the wrongful death action was not preempted. In dissent, Justice Ricky Polston wrote that the decision "defies reality" because "[e]ven though [the passenger] was in the aircraft when it hit land, his death occurred 'on land,' not in the aircraft prior to his contact with land. The majority's view is inconsistent with the plain meaning of the statute." Qui Tam Action Fuel Surcharge DHL Express (USA), Inc. v. State 60 So. 3d 426 (Fla. 1st DCA 2011) New York residents brought a qui tam action in Leon County under Florida's False Claims Act, Fla. Stat , contending that DHL improperly billed a fuel surcharge for aviation fuel when packages did not travel by air, including a diesel fuel charge for ground deliveries despite the fact the courier's independent contractors incurred the cost of such fuel. The parties' contract authorized DHL to impose surcharges at fixed rates when the price of fuel rose above an established price. DHL moved to dismiss the complaint on the basis the lawsuit was preempted by the Airline Deregulation Act, 49 U.S.C (b)(1), and the Federal Aviation Administration Authorization Act, 49 U.S.C (c)(1), both of which provide that a state "may not enact or enforce a law, regulation, or other provision having the force and effect of law related to a price, rate, or service of a... carrier." 2012 TIMOTHY M. RAVICH Spring 2012 Edition 18

19 When its motion was denied, DHL petitioned for a writ of prohibition and the trial court was ordered to enter an amended ruling finding that, in fact, the lawsuit was preempted as it clearly "relates to" DHL's rates, routes, or services as it is directed at the aviation and diesel fuel surcharges billed by the courier. Florida Bar Attorney Disciplinary Proceedings Florida Bar v. Herman 8 So. 3d 1100 (Fla. 2009) A Florida licensed attorney represented Aero Controls, which sold and repaired component parts, and Triple J Leasing ("Triple J"), an aircraft leasing business. The attorney simultaneously represented Aero Controls in a contract dispute and litigation over the purchase of a DC-10 aircraft and Triple J in negotiating and drafting the lease of a Boeing 737 aircraft. At the conclusion of both matters, the attorney and several potential investors created an aircraft leasing company, Nation Aviation, whose stated purpose was the "Purchase, Sale and Lease of aircraft engines and spare parts." Soon after the Triple J lease negotiation closed, Aero Control's top salesman called the attorney to express an interest in working for Nation Aviation. The attorney, who still represented Aero Controls, agreed and the parties executed an employment agreement. Months later, after all of the investors of Nation Aviation asked for a return of their investment, the attorney decided to put Nation Aviation under the direction of his client's former top salesman and in direct competition with his client, Aero Controls. In that posture, Nation Aviation generated gross revenue of $880,000 from the sale of parts to twenty-three customers of Aero Controls. At no time did the attorney call the owner of Aero Controls to disclose the conflict or request a waiver because of monetary concerns. The owner of Aero Controls eventually learned about Nation Aviation, feeling shocked and betrayed by his attorney. Following a lawsuit against his attorney for breach of fiduciary duty and other causes of action in Broward County Circuit Court, Aero Control's owner filed a Bar complaint. The Florida Bar suspended the attorney for eighteen months for violating the Rules Regulating the Florida Bar respecting conflicts of interest and conduct involving dishonesty, fraud, deceit, or misrepresentation TIMOTHY M. RAVICH Spring 2012 Edition 19

20 Capital City Aviation Fuel Tax Act Florida Senate Bill 1256 (2011) Died in the Florida Transportation Committee did a proposal to enact the "Capital City Aviation Fuel Tax Act," Fla. Stat (7)(a), which would have provided that a commercial airline that purchased aviation fuel for aircraft in Tallahassee Florida, would be eligible for a refund of an aviation fuel tax, provided (i) the airline had a ticket counter presence in the state capital, and (ii) the aircraft was being refueled in connection with a flight that embarked or disembarked passengers in Tallahassee. Florida Wing, Civil Air Patrol Day Florida Senate Resolution (2011) April 19, 2011 was designated as "Florida Wing, Civil Air Patrol Day." The Civil Air Patrol ("CAP") was established one week before the attack on Pearl Harbor by citizens concerned about the defense of America's coastline. It was federally chartered as a benevolent civilian corporation under the administration of President Harry Truman in 1946, and on May 26, 1948, the United States Congress passed Public Law 557, which permanently established CAP as the volunteer auxiliary of the United States Air Force charged with cadet programs, emergency services, and aerospace education. In 2001, alone, the Florida Wing, Civil Air Patrol had flown more than 7,145 hours in support of its task to serve the citizens of the State of Florida, and executed more than 385 missions in the state, including U.S. Air Force training missions TIMOTHY M. RAVICH Spring 2012 Edition 20