In a decision likely to have far-reaching effects in the aviation industry, the Third Circuit in Sikkelee v. Precision Airmotive Corp., — F.3d –, 2018 WL 5289702 (3d. Cir. Oct. 25, 2018), recently held that state-law claims brought against an aircraft engine manufacturer were not conflict preempted by federal law. This decision places equipment manufacturers and other defendants at greater risk of being held liable for state law-based accident claims and other related cases — at least in courts within the Third Circuit.
The complex history of this case dates back to 2005 when David Sikkelee was killed in a rented Cessna 172 airplane, which crashed shortly after takeoff. In 2007, the pilot’s widow Jill Sikkelee filed suit in the U.S. District Court for the Middle District of Pennsylvania asserting state-law claims against multiple defendants who manufactured and serviced the engine and its components.
After several defendants settled, the district court granted the remaining defendant, Lycoming (the engine manufacturer) partial summary judgment on Ms. Sikkelee’s negligence and products liability claims on the grounds that Lycoming’s securing and complying with an FAA-type certificate meant that the federal standards of care were met. The claims alleging violations of mandatory reporting regulations survived partial summary judgment and the court certified its order for immediate appeal to address whether the scope of Abdullah v. American Airlines, Inc., 181 F.3d 363 (3d Cir. 1999) preempted Ms. Sikkelee’s claims.
In its decision on this original appeal, the Third Circuit reversed and remanded, holding that (1) the state law product liability claims were not field preempted, (2) the field preemption of aviation safety articulated in Abdullah only applied to “in air” operations, (3) genuine issues of fact precluded summary judgment on the products liability and negligence claims, and (4) the court on remand should analyze the claims consistent with the doctrine of conflict preemption.
On remand, based on the Third Circuit’s narrowed scope of federal preemption, Lycoming again moved for summary, this time on the basis of conflict preemption. The district court granted Lycoming’s motion for summary judgment on all claims finding that that (1) because Lycoming could not unilaterally make the design changes necessary to comply with state law and FAA regulations, the negligence and strict liability claims were conflict preempted, and (2) there was no issue of material fact on either state law claim. Sikkelee IV found that Lycoming did not violate the 14 C.F.R. § 21.3 duty to warn. Ms. Sikkelee appealed.
On October 25, 2018, a split decision from the Third Circuit reversed summary judgment on the strict liability and negligence claims and remanded yet again. Both the majority and the dissenting opinions analyzed the issue of conflict preemption by applying a triad of U.S. Supreme Court cases concerning the regulation of labeling for pharmaceuticals.
In Wyeth v. Levine, a divided court found that state law-based failure to warn claims leveled against the Wyeth drug company were not conflict preempted by Food and Drug Administration (FDA) labeling regulations because of a “changes being effected” (CBE) exception to the otherwise absolute requirements for drug labeling. 555 U.S. 555 (2009). Under FDA rules, if a brand name drug manufacturer has cause to make a change that adds to the warnings or instruction required to safely administer the drug, then under the CBE rule, the manufacturer can make this change concurrent with a filing with the FDA but need not wait for approval. The Wyeth court found that the CBE flexibility would have made it possible for a brand name manufacturer to comply both with the FDA rules and with state tort law.
By contrast, two other cases dealing with generic drug manufacturers found that state law claims alleging defective warning were conflict preempted because generic drug manufacturers have no flexibility whatsoever as to how they label drugs. PLIVA, Inc. v. Mensing, 564 U.S. 604 (2011); Mutual Pharm. Co., Inc. v. Bartlett, 570 U.S. 472 (2013). The generic drug manufacturing defendants in PLIVA and Bartlett, like all generic drug manufacturers, were required to provide labels and warnings absolutely identical to those of the brand name equivalent. Because these defendants were not afforded the flexibility of the CBE exception and were not even in a position to request a change, state law failure to warn claims were preempted by FDA regulations.
The Sikkelee majority analogized Lycoming’s position to Wyeth, saying that Lycoming was in a position to request a design change that would have made the engine’s carburetor sufficiently safe under the state law standard of care. The majority also surmised that the record supports an inference that the FAA would have approved this change.
The dissent contended that the majority opinion missed the distinction between Wyeth and PLIVA/Bartlett and relied on a counterfactual analysis rather than the facts presented. According to the dissent, the fact that both Lycoming and Wyeth could request a change is unimportant because only Wyeth had the ability to unilaterally act prior to regulatory approval. Put otherwise, even though Lycoming could request a change (something the generic drug manufacturers could not do), Lycoming could not adopt a change without prior FAA approval whereas Wyeth could do this under the CBE exception. Because no CBE exception exists in the aviation context, the comparison between brand-name drug makers and aviation manufacturers is not apples to apples.
Much of the majority’s analysis focuses on the fact that Lycoming had not suggested design changes to remedy reported carburetor defects at the time of the accident. Therefore, based on this latest Sikkelee decision, aviation products manufacturers will need to be more aggressive in evaluating and requesting design changes as soon as a pattern of issues with a component part or design arises. However, because this case is now on remand, the final disposition could be some time coming. It is also foreseeable that the issues of preemption are sufficiently developed at this point to merit review by the U.S. Supreme Court. Certiorari has been denied in this case once already, but the legal issues have come into much sharper focus and so this case might be ripe for review.