Lexington Insurance Company, et al v. Cessna Aircraft Company

FILED
U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
DECEMBER 21, 2011
JOHN LEY
CLERK
[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
____________
No. 11-12091
_____________
D.C. Docket No. 6:08-cv-02165-JA-GJK
COMPETITOR LIAISON BUREAU, INC., et al.,
Plaintiffs,
LEXINGTON INSURANCE COMPANY,
WESTCHESTER FIRE INSURANCE COMPANY,
Intervenors - Appellants,
versus
CESSNA AIRCRAFT COMPANY,
Defendant-Appellee.
_____________
No. 11-12092
______________
D.C. Docket No. 6:08-cv-02165-JA-GJK
COMPETITOR LIAISON BUREAU, INC.,
NASCAR, INC.,
f/u/b/o their insurers, Including the United States

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Aircraft Insurance Group,
Plaintiffs - Appellants,
LEXINGTON INSURANCE COMPANY, et al.,
Intervenors - Plaintiffs,
versus
CESSNA AIRCRAFT COMPANY,
Defendant - Appellee.
______________
Appeals from the United States District Court
for the Middle District of Florida
_____________
(December 21, 2011)
Before TJOFLAT and BARKETT, Circuit Judges, and SMOAK, District Judge.*
PER CURIAM:
This case involves an aircraft, a Cessna 310R. It was manufactured by
Cessna Aircraft Co. (“Cessna”), sold to an aircraft leasing company, and
purchased by an entity not engaged in the business of leasing or selling aircraft on
November 22, 1978. Ownership of the aircraft changed several times after that
Honorable Richard Smoak, United States District Judge for the Northern District of*
Florida, sitting by designation.
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date until Competitor Liaison Bureau, Inc. (“CLB”), a wholly owned subsidiary of
NASCAR, Inc. (“NASCAR”), purchased it in 1995. The aircraft was used both
for official NASCAR business and for the transportation of NASCAR officers and
directors.
On July 10, 2007, the Cessna 310R “sustained an in-flight electrical fire and
crashed into a neighborhood in Sanford, Florida causing death, personal injury,
and property damage to persons and property on the ground.” Order at 1,
Competitor Liaison Bureau, Inc. v. Cessna Aircraft Co., No. 6:08-cv-2165-Orl
(M.D. Fla. Apr. 8, 2011) (“April 8 Order”). The claims presented by those who
suffered such losses were settled by CLB and NASCAR, through their insurers,
United States Aviation Underwriters, Inc., Westchester Fire Insurance Co. and1
Lexington Insurance Co. (collectively “Insurers”). As part of this settlement, the2
claimants assigned their claims against Cessna to CLB, NASCAR and Insurers,
and, on December 23, 2008, these assignees, as subrogees, brought this “products
CLB and NASCAR were insured under a policy of liability insurance issued by United1
States Aviation Underwriters, Inc., as managers of the United States Aircraft Insurance Group.
United States Aviation Underwriters provided CLB and NASCAR primary insurance2
coverage; Westchester and Lexington provided them excess insurance coverage. Westchester
and Lexington intervened in the case as subrogee co-plaintiffs after this suit was filed.
The claims of those who suffered losses were settled by Insurers even though there had
been no determination that their insureds were at fault. The two pilots aboard the aircraft were
killed in the crash. The claims arising out of their deaths are not at issue in this case.
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liability” tort action against Cessna, in an effort to recoup the sums paid to the
claimants.3
Their complaint alleged that the aircraft “was unreasonably dangerous when
it was manufactured because Cessna used PVC-insulated wire in the cockpit . . .
and . . . knew or should have known that the wire was not flame resistant and
would create dangerous quantities of toxic fumes and smoke when ignited.” Id. at
2. The crash occurred after the wire ignited and filled the cockpit with toxic fumes
and smoke. In its answer to the complaint, Cessna denied that the PCV-insulated
wire was defective as alleged. As an affirmative defense, it asserted that the
plaintiffs’ claims were barred based on Florida’s statute of repose for products
liability claims, Fla. Stat. § 95.031(2)(b)–(d).
The consolidated appeals before us, which were lodged by Insurers in No.
11-12091 and CLB in No. 11-12092, are from the district court’s April 8 Order
granting Cessna’s motion for summary judgment based on Florida’s statute of
repose. As the district court stated, two statutes of repose were at issue on
summary judgment: the Florida statute of repose (“FSR”) and a federal statute of
repose, the General Aviation Revitalization Act of 1994 (“GARA”), Pub. L. No.
103-298, 108 Stat. 1552 (codified as amended at 49 U.S.C. § 40101 note).
These plaintiffs invoked the district court’s diversity jurisdiction, 28 U.S.C. § 1332.3
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The FSR states, in pertinent part, that:
Under no circumstances may a claimant commence an action for
products liability, including a wrongful death action or any other
claim arising from personal injury or property damage caused by a
product, to recover for harm allegedly caused by a product with an
expected useful life of 10 years or less, if the harm was caused by
exposure to or use of the product more than 12 years after delivery of
the product to its first purchaser or lessee who was not engaged in the
business of selling or leasing the product or of using the product as a
component in the manufacture of another product. All products,
except those included within subparagraph 1. or subparagraph 2., are
conclusively presumed to have an expected useful life of 10 years or
less.
Fla. Stat. § 95.031(2)(b). The subparagraph 1. exception pertains to “[a]ircraft
used in commercial or contract carrying of passengers or freight.” Id.
§ 95.031(2)(b)(1). For such aircraft, “no action for products liability may be
brought more than 20 years after delivery of the product to its first purchaser or
lessor who was not engaged in the business of selling or leasing the product or of
using the product as a component in the manufacture of another product.” Id.
§ 95.031(2)(b)(3). The subparagraph 2. exception deals with manufacturer
warranties. If “the manufacturer specifically warranted, through express
representation or labeling, [that the product] has an expected useful life exceeding
10 years, [the product] has an expected useful life commensurate with the time
period indicated by the warranty or label.” Id. § 95.031(2)(b)(2). In addition to
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these exceptions, the FSR provides that regardless of whether the twenty-year or
the twelve-year statute of repose applies, “[t]he [applicable] repose period . . . is
tolled for any period during which the manufacturer through its officers, directors,
partners, or managing agents had actual knowledge that the product was defective
in the manner alleged by the claimant and took affirmative steps to conceal the
defect.” Id. § 95.031(d).
GARA provides an 18-year year statute of repose. GARA § 3, 108 Stat. at
1552 (codified at 49 U.S.C. § 40101 note). In § 2, “ Time limitations on civil
actions against aircraft manufacturers,” GARA states, in pertinent part:
(a) In general.—Except as provided in subsection (b), no civil action
for damages for death or injury to persons or damage to property
arising out of an accident involving a general aviation aircraft may be
brought against the manufacturer or the aircraft . . . if the accident
occurred—
(1) after the applicable limitation period beginning on—
. . . .
(B) the date of first delivery of the aircraft to a person engaged
in the business of selling or leasing such aircraft, . . . .
(b) Exceptions.—Subsection (a) does not apply—
. . . .
(3) if the person for whose injury or death the claim is being made
was not aboard the aircraft at the time of the accident, . . . .
. . . .
(d) Relationship to other laws.—This section supersedes any State
law to the extent that such law permits a civil action described in
subsection (a) to be brought after the applicable limitation period for
such civil action established by subsection (a).
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Id. § 2.
The district court, in its April 8 Order, concluded that Florida’s 12-year
repose period controlled its decision. April 8 Order at 17. That is, neither of
FRS’s exceptions, §§ 95.031(2)(b)(1) and 95.031(2)(b)(2), its tolling provision,
§ 95.031(d), or GARA applied. Id. at 5–15. Plaintiffs argue on appeal that the
court erred in rejecting their argument that both exceptions apply. We are not
persuaded and therefore affirm the court’s ruling for the reasons the court stated in
its order. Plaintiffs argue, as a fall-back position, that GARA creates a “ground
damage” exception, such that a claim for the death or injury of a person not aboard
the aircraft is not barred by GARA’s 18-year period of repose or Florida’s 12-year
period of repose. Instead, the on-the-ground-claimants (and thus their subrogees)
are entitled to proceed with their products liability claims if these claimants can
show that their claims fell within the Florida statute of limitations governing
product liability claims. As Cessna points out in its answer brief, plaintiffs’
GARA theory is “an argument that a statute intended (as its name implies) to
‘revitalize’ the domestic aircraft industry by cutting off liability after 18 years has
the effect of reviving claims that would be dead under state law and imposing
perpetual liability on domestic aircraft manufacturers for ground damages claims.”
Appellee’s Br. 9. We think the simple answer to this argument is that GARA has
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no application here. Subsection (b) states that subsection (a) “does not apply”
where “the person for whose injury or death the claim is being made was not
aboard the aircraft at the time of the accident.” GARA § 2, 108 Stat. at 1552.
Plaintiffs’ assignors were not aboard the aircraft; they were on the ground.
AFFIRMED.
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