florida aviation and space law report (2014)

FLORIDA AVIATION AND SPACE LAW REPORT

2014 EDITION _______________________________________________

I. AIRPORTS AND LAND USE 2 II. CORPORATE AND GENERAL AVIATION 4 III. LABOR AND EMPLOYMENT 9 IV. LITIGATION 13 V. REGULATORY LAW 20 VI. SPACE LAW 23

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TIMOTHY M. RAVICH, ESQ. FLORIDA BAR BOARD CERTIFIED AVIATION LAWYER RAVICH LAW FIRM, P.A. TELEPHONE: 1+ 305-213-1223 [email protected] www.ravichlawfirm.com

______________________________________________________________________________FLORIDA AVIATION AND SPACE LAW REPORT

_______________________________________________________ © TIMOTHY M. RAVICH 2014 Edition 2

I. Airports and Land Use Notice of Dangerous Conditions—Burden of Proof Kenz v. Miami-Dade County 116 So. 3d 461 (Fla. 3d DCA 2013) After slipping on liquid and falling at Miami International Airport, a pedestrian filed suit against Miami-Dade County, alleging permanent injuries. At the time suit was filed, Fla. Stat. § 768.0710 (2002) was in effect, providing that in a negligence action involving a transitory foreign substance in a business establishment, “[a]ctual or constructive notice of the transitory foreign object or substance is not a required element of proof to this claim.” After suit was filed, but before trial commenced, Fla. Stat. § 768.0755 (2010) took effect and superseded Fla. Stat. § 768.0710, effectively returning Florida law to an earlier status, and providing that a person who slips and falls on a transitory foreign substance in a business establishment “must prove that the business establishment had actual or constructive knowledge of the dangerous condition and should have taken action to remedy it.” Miami-Dade County subsequently filed a motion for a determination that Fla. Stat. § 768.0755 should apply retroactively to the lawsuit against it because the statute was procedural and not substantive in nature. Miami-Dade Circuit Court Judge Spencer Eig entered summary judgment in favor of the county given the absence of any proof it had actual or constructive notice of any dangerous condition. Florida’s Third District Court of Appeal affirmed given the procedural nature of issues relating to a party’s burden of proof. Racketeering Influenced and Corrupt Organizations (“RICO”) Sinapsis Trading USA, LLC v. Secure Wrap of Miami, Inc. 2013 WL 1455824 (S.D. Fla. 2013) Sinapsis Trading USA, LLC (“Sinapsis”) sued Secure Wrap of Miami, Inc. (“Secure Wrap”) in federal district court in Miami, claiming that Secure Wrap was engaged in a world-wide criminal racketeering scheme in retaliation for Sinapsis’s success in winning an exclusive contract to sell protective plastic cling wrap and luggage wrapping services to travelers at Miami International Airport (“MIA”). Secure Wrap countered that its alleged conduct did not implicate federal or state racketeering laws as Sinapsis was merely upset over Secure Wrap’s plans to provide competitive services off-site of MIA (thereby undermining the value of the exclusive airport contract).



Noting that claims under the Racketeering Influenced and Corrupt Organizations (“RICO”) Act were subject to heightened pleading standards under Fed. R. Civ. P. 9(b), United States District Judge Kathleen M. Williams found Sinapsis’s allegations facially deficient. To state a claim under RICO, a plaintiff must prove conduct through a pattern of racketeering activity, where a pattern consists of two or more related predicate acts of a continuing nature. The operative complaint did not put Secure Wrap on notice of any fraudulent scheme. Indeed, “no single allegation suffice[d] to provide the who, what, where, when, and why of any aspect of the fraud” and “at no point [was] the hallmark of a fraud claim—a false representation that was relied on—even articulated.” Judge Williams’s “greatest reservations” concerned the predicate acts that Sinapsis proffered to establish its RICO claim because it was not clear that Secure Wrap went beyond the bounds of legitimate business competition and expression. For example, Secure Wrap’s alleged breaking of a monopoly by opening off-site locations and offering consumers a lower price was “hardly reproachable.” Additionally, even if Secure Wrap had undertaken tortious or illegal conduct under foreign law—for instance, committing perjury, engaging in malicious prosecution, or defaming Sinapsis in Argentina—such conduct was not within the reach of the RICO statute. Notwithstanding these observations, the Court granted Sinapsis leave to amend its pleading, reserving ruling on whether to exercise supplemental jurisdiction over remaining state law claims. Eminent Domain, FLL Runway Expansion City of Dania Beach, Florida et al. v. U.S. Army Corps of Engineers etc., 2013 WL 3807823 (S.D. Fla. 2013) Broward County proposed extending the south runway (9R/27L) of Ft. Lauderdale-Hollywood International Airport via federal funding under the Airport and Airway Improvement Act, 49 U.S.C. §§ 47101 et seq. Dania Beach and several individuals unsuccessfully challenged the county’s plan in City of Dania Beach v. Fed. Aviation Admin., 628 F.3d 581 (D.D.C. 2010), and later failed to establish violations under the National Environmental Policy Act, 28 U.S.C. § 4321 et seq., and Clean Water Act, 33 U.S.C. § 1251 et seq., as a matter of law. In November, 2013, the Broward County Commission was set to bring years of litigation to an end by voting on a proposed settlement of a related eminent domain lawsuit, Broward County v. Ft. Lauderdale Owner, LLC, Case No. 12-33993, respecting compensation for 857 homeowners complaining about increased jet noise. See http://www.ci.dania-beach.fl.us/index.aspx?NID=1519.



II. Corporate and General Aviation Breach of Aircraft Engine Sale Agreement American Aeronautical Corp., Inc. v. Aviation Engine Service, Inc. 2013 WL 1499353 (S.D. Fla. 2013) Pursuant to an Aircraft Engine Sale Agreement, a seller agreed to sell two aircraft engines for a total purchase price of $690,000. The buyer agreed to make an initial payment of $140,000 at signing and monthly installment payments thereafter. The buyer made only the initial payment and the seller brought suit in federal district court in Miami, alleging breach of contract and Florida’s fraudulent conveyance statutes. United States District Judge Patricia A. Seitz granted summary judgment in the seller’s favor as to its contract claim. The seller entered into evidence the executed agreement along with testimony of the buyer’s principal admitting no installment payments had been made. Meanwhile, the buyer neither responded to the seller’s summary judgment motion nor produced a statement controverting the seller’s facts, which were deemed admitted because they were supported by record evidence. Hence, the seller was entitled to recover $550,000 and attorney’s fees under a prevailing party clause in the agreement. Aircraft Sales—Jurisdiction and Transfer APR, LLC v. American Aircraft Sales, Inc. 2013 WL 607970 (M.D. Ala. 2013) APR, LLC (“APR”), an Alabama company, believed it was being shepherded through the process of purchasing a Cessna airplane by a responsible broker, but instead was being duped into paying a higher price so that a Florida company (“American Aircraft”) could profit. Specifically, American Aircraft allegedly used APR’s financial resources to purchase the Cessna for a lower price and then sell it to APR for a profit. In addition to the bad deal, the Cessna was defective when delivered, with malfunctioning systems and avionics and a non-current factory-recommended maintenance program. APR thus filed suit in Alabama state court, alleging several state law claims, including breach of fiduciary duties, promissory and equitable estoppel, negligence, fraudulent misrepresentation, fraudulent suppression, unjust enrichment, conspiracy, wantonness, conversion, and breach of contract.



American Aircraft removed the case to federal court on diversity of citizenship grounds and moved to transfer the action to the United States District Court for the Middle District of Florida. APR sought remand, but Judge Myron H. Thompson of the United States District Court for the Middle District of Alabama ruled that the action could originally have been brought in the Middle District of Florida and that the locus and concentration of operative facts counseled in favor of venue in Florida. Indeed, although APR was an Alabama company, American Aircraft was a Florida corporation; the Cessna at issue had been flown by APR to Florida on 19 different occasions since purchased; and the aircraft was located, inspected, and delivered in Florida. American Aircraft had no “minimum contacts” with Alabama either, never having traveled to Alabama to discuss the transaction. Finally, the applicable-state-law factor in a transfer analysis was given less weight as there was substantial uncertainty as to whether Florida or Alabama state law would apply. Misrepresentation and Breach of Engine Warranty Continent Aircraft Trust, 1087 v. Diamond Aircraft Indus., Inc. 2013 WL 2285539 (S.D. Fla. 2013) Thieler Aircraft Engines GmbH (“TAE”) warranted two turbo diesel engines on a Diamond DA42 Twin Star aircraft. After the airplane was purchased, TAE instituted the equivalent of a U.S. bankruptcy proceeding in Germany, a process voiding the engine warranty. A trust company then sued the airplane manufacturer in federal district court in Miami for negligent and fraudulent misrepresentation and concealment arising from representations, made through a distributor, about the engine warranty. The manufacturer, which had excluded the TAE engines from its own warranty, attacked the complaint as defective in alleging agency and fraud. United States District Judge Federico A. Moreno denied the motion. Allegations of actual agency were “thin,” but the complaint sufficiently expressed that the manufacturer mandated strict inventory requirements and sales procedures, trained its distributor’s staff on the operations of its airplanes, and issued periodic updates on promotions and technical problems for its distributors. Though failing to aver “superior knowledge” of TAE’s financial condition, the complaint also sufficiently pled that a distributor’s sales manager knew or should have known that TAE could not honor its engine warranty. While dismissal was denied for these substantive reasons, Judge Moreno granted dismissal on a limited procedural basis under Fed. R. Civ. P. 17. Specifically, leave was given for the trust to name itself as the proper party and vested owner of the aircraft with authority to prosecute an action to protect trust property under Fla. Stat. § 736.0816(23).



Reconsideration of Final Judgment Regions Bank v. Hyman 2013 WL 5487035 (M.D. Fla. 2013) The lender for a Gulfstream G-1159A executive jet (initially appraised at $6,619,698.00) filed suit in federal district court in Tampa, seeking a final judgment against its borrower and guarantors. The company also commenced an assignment for the benefit of creditors in Hillsborough County Circuit Court. United States District Judge Elizabeth A. Kovachevich found that the disposition of the airplane was commercially reasonable and entered a final judgment of deficiency in the amount of $5,604,598.72. Following trial, the borrower and obligors moved for amended or additional findings pursuant to Fed. R. Civ. P. 52 and 59 respecting the court’s allowance of parol evidence as to the parties’ intent as to individual guaranties and maintenance obligations. The lender argued that the parol evidence was uncontroverted and did not contradict or rewrite applicable loan documents. The court denied relief, finding that reconsideration of a previous order was “an extraordinary remedy” and a new trial was warranted only “where the error has caused substantial prejudice to the affected party.” Recovery of Attorney’s Fees Global Xtreme, Inc. v. Advanced Aircraft Center, Inc. 122 So. 3d 487 (Fla. 3d DCA 2013) Global Xtreme, Inc. (“Global”) entered into an oral agreement with Advanced Aircraft Center, Inc. (“Advanced”), which operated an aircraft storage and repair center. Global disputed the amount it owed for repairs of its aircraft and Advanced filed a mechanic’s lien pursuant to Fla. Stat. §§ 329.51 and 713.58. Global then sued, seeking a writ of replevin and damages for contract breach. Advanced, in turn, served a 21-day demand letter that Global withdraw its lawsuit under penalty of Fla. Stat. § 57.105(4). Receiving no response, Advanced filed a motion for attorney’s fees under Fla. Stat. § 57.105 and a counterclaim to foreclose its mechanic’s lien and collect $30,141 in attorney’s fees under Fla. Stat. § 713.29. Advanced prevailed at trial and obtained a judgment, but Global claimed that Advanced was not entitled to attorney’s fees because the demand letter it sent did not reference and was not accompanied by its 57.105 motion. The trial court, relying only on the unsworn statements of the attorneys of record, ruled that both a demand letter and 57.105 motion were sent together and that Advanced was entitled to its attorney’s fees. Global appealed.



Florida’s Third District Court of Appeal found that the trial court abused its discretion by awarding fees without conducting an evidentiary hearing and on the sole basis of unsworn representations by counsel that were entitled to no weight. Under Fla. Stat. § 57.105(4), “[a] motion by a party seeking sanctions ... must be served but may not be filed with or presented to the court unless, within 21 days after service of the motion, the challenged claim ... is not withdrawn or appropriately corrected.” No evidence showed that Advanced complied with this statutory notice requirement. Instead, Advanced evidently intended its demand letter rather than its 57.105 motion to serve as “twenty-one (21) day notice.” “Even more persuasive,” Judge Barbara Lagoa wrote for the court, was the fact that the motion for attorney’s fees that Advanced filed with the court had a certificate of service showing service on Global only four days earlier, in contravention of the mandatory twenty-one-day notice provision. Finally, the court ruled that Fla. Stat. § 713.29 was limited to construction liens and did not extend to possessory liens on personal property such as that claimed by Advanced. Criminal Fraud Involving Aircraft Parts United States v. Romero 2013 WL 5779802 (11th Cir. 2013) Aircraft Transparencies Repair Inc. (“ATR”) repaired aircraft windows into “overhauled” condition and then sold them to commercial airlines. As a certified repair station, ATR was required to prepare certain paperwork documenting all maintenance functions performed on aircraft windows, including work orders and maintenance release forms (“FAA Form 8130”), for delivery to its final customer. ATR’s repair station certificate was revoked by the Federal Aviation Administration (“FAA”) in July 2009 however, after a customer complained that it had falsely certified the airworthiness of an airplane window. ATR hired an attorney to appeal the revocation to the National Transportation Safety Board (“NTSB”) and, following a hearing, an administrative law judge upheld the revocation of ATR’s license. Afterwards, ATR’s founder devised a scheme to backdate work orders and maintenance release forms so that ATR could continue to perform repair work despite the revocation of its license. Approximately seven months after ATR had resumed its repair operations, FAA safety inspectors launched an investigation through a Special Agent of the United States Department of Transportation (“DOT”) to discover if ATR was continuing to overhaul airplane windows despite losing its certification.



Dennis Romero, an ATR employee, was arrested for his involvement in ATR’s continued operations. He and fifteen codefendants were charged in a 21–count indictment with one count of conspiring to commit mail fraud, two substantive counts of fraud involving aircraft parts, and two counts of wire fraud relating to his collection of unemployment compensation. According to the DOT Special Agent’s testimony at trial, Romero admitted that he was aware that ATR’s certification had been revoked, but nevertheless continued to approve repairs on work orders that had been backdated by other employees. While Romero apparently had been told by ATR’s founder that ATR had consulted with counsel and could continue its operations, Romero admitted that the repair work had been moved to the second floor of ATR’s building in order to conceal its operations from the FAA, and that he fraudulently certified that he had been permanently laid off by ATR in order to collect unemployment benefits and further ATR’s deception. Romero was sentenced to 45 months imprisonment following a jury trial. He appealed his conviction on three grounds: (1) the district court erred in refusing to give a requested jury instruction on good-faith reliance on the advice of counsel; (2) his conviction for conspiracy to commit mail fraud was inconsistent with the jury’s verdict of acquittal on two counts of fraud involving aircraft parts, in violation of 18 U.S.C. § 38; and (3) the evidence presented at trial was insufficient to sustain his conviction for conspiracy. His conviction was sustained.



III. Labor and Employment Air Traffic Control—Title VII Wrongful Race-Based Discrimination McNeal-Hair v. LaHood 2013 WL 1788507 (S.D. Fla. 2013) A former Developmental Air Traffic Control Specialist (“DATCS”) employed by the United States Department of Transportation (“DOT”) sought compensatory damages and injunctive relief for wrongful racial and national origin discrimination after the DOT suspended his DATCS training and terminated him. The employee argued that the DOT was liable for disparate treatment discrimination because: (1) no other trainee at Miami Air Route Traffic Control Center had ever been terminated without being granted a review board, additional training opportunities or other opportunities to continue employment; (2) the DOT’s argument that failure to pass D–Side Simulation Training set the employee apart from all other asserted comparators created a “false premise that the level of training creates a distinction amongst the developmental trainees;” and (3) despite the employee’s En Route ATCS training failures and suspension, his subsequent assignment to, and training in, the Transportation Management Unit (“TMU”) was tantamount to official recognition that he was qualified as a certified professional controller. The employee also contended that the DOT’s seemingly non-discriminatory employment decisions were pretext and violated the applicable Collective Bargaining Agreement (“CBA”). United States Magistrate Judge John J. O’Sullivan granted summary judgment in the DOT’s favor, applying the framework set out in McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973). While satisfying two prongs under McDonnell Douglas (i.e., membership in a protected class and subjection to an adverse employment action), the employee failed to show a prima facie claim of discrimination by identifying any employees who were treated differently based on nearly identical conduct. The claimant’s failure to pass D-Side Simulation Training, in fact, set him apart from comparators. Moreover, the DOT’s actions were not pretextual or discriminatory, but consistent with policy regulations and the CBA, which specifically authorized the Federal Aviation Administration to take the employment action it took after its employee failed a performance verification and training exam test twice.



Enforcement of Arbitration Award under Railway Labor Act Int’l Brotherhood of Teamsters v. Amerijet Int’l, Inc. 932 F. Supp. 2d 1336 (S.D. Fla. 2013) The labor union for pilots and flight engineers of a cargo and common air carrier subject to the Railway Labor Act, 45 U.S.C. § 151 et seq. sought to enforce post-strike arbitration awards resolving a dispute over minimum pay guarantees for 60 hours of pay per roster duty period. The award also required the carrier to advise flight engineers in advance of a rotation for planned “Zero–G” flights and to post component legs of flights in the carrier’s schedules. The carrier sought dismissal for lack of subject matter jurisdiction and failure to state a claim. United States District Judge Federico A. Moreno granted the carrier’s motion as to the issue of minimum pay guarantees, but not as to the remaining claims. Judge Moreno noted the carrier bore the burden of disproving a pilot’s asserted availability, however that burden was not triggered until an employee presented “evidence” of work availability. In this context, the labor union failed to allege any violation, having produced only an e-mail containing a list of names and contact information of employees allegedly eligible for the minimum pay guarantee. The labor union successfully demonstrated distinct violations of the arbitrator’s Zero-G flights, however (i.e., failure to give notice to flight engineers of opportunities to bid of the flights); the carrier failed to show that the arbitrator’s decision was fundamentally unenforceable by virtue of having awarded a remedy without making a corresponding finding that the carrier violated the operative collective bargaining agreement (“CBA”). Finally, Judge Moreno observed that section 8(D)(1) of the parties’ CBA stated that “the rostered or scheduled time of duty periods will include the scheduled time of their component legs, deadheading, aircraft repositioning, reserve, training, ground school, simulator training, stations, block times, trip numbers, rest periods, days off, or other assigned duties.” While this language was consistent with the carrier’s interpretation that it would only post component legs that were already scheduled, and thus known with certainty, at the time the roster was published, the labor union submitted an equally reasonable alternative interpretation requiring the posting of all component legs subject to changes in schedule based on the air carrier’s needs. Because the parties presented conflicting yet plausible interpretations of the arbitration award, the carrier’s motion to dismiss was denied, leaving for a later stage of litigation the parties’ varying interpretations.



Fair Labor Standards Act—Air Carrier Exemption Roca v. Alphatech Aviation Svcs., Inc. 2013 WL 4116017 (S.D. Fla. 2013) 2013 WL 4436558 (S.D. Fla. 2013) Alphatech Aviation Services, Inc. (“Alphatech”), a company specializing in heavy-duty cleaning of airplanes operated by commercial and freight airlines, was sued in federal court in Miami for failing to pay an employee overtime pay in violation of the Fair Labor Standards Act (“FLSA”). Each party separately moved for summary judgment on the same grounds, FLSA’s air carrier exemption, which removes from coverage “any employee of a carrier by air subject to the provisions of Title II of the Railway Labor Act.” 29 U.S.C. § 213(b)(3). Under the National Mediation Board’s two-pronged conjunctive test in cases where the employer does not itself fly aircraft, an employee is covered by the air-carrier exemption if: (1) the nature of the work is that traditionally performed by employees of air carriers (“function” test); and (2) the employer is directly or indirectly owned or controlled by or under common control with an air carrier (“control” test). As to the “function” test, Alphatech’s own witnesses testified that air carriers hired outside contractors to perform heavy-duty aircraft cleaning work. Such testimony foreclosed summary judgment in Alphatech’s favor while related testimony and evidence offered by the plaintiff-employee created a genuine issue of material fact. Indeed, evidence showed a new trend in air carrier outsourcing, suggesting that heavy-duty airplane cleaning functions were actually “traditionally” performed by air carrier employees. Airworthiness regulations such as 14 C.F.R. § 121.363(a) also implied that maintenance work was a traditional air carrier function. As to the “control” test, Alphatech failed to show that its clients indirectly controlled its operations, effectively converting its independent contractors into “carriers” under the RLA. Testimony established that Alphatech’s air carrier clients had absolutely no control over what Alphatech paid its employees, when and how they were promoted or given pay raises, which shifts they worked, how many hours they worked per shift, or how many employees were scheduled to work on an aircraft at once. Accordingly, Judge Ursula Ungaro of the United States District Court for the Southern District Court of Florida entered partial summary judgment in favor of the FLSA plaintiff-employee on the question of whether 29 U.S.C. § 213(b)(3) applied.



Review of Adjustment Board Award Tate v. Spirit Airlines, Inc. 2013 WL 3711246 (S.D. Fla. 2013) An airline captain asserted that his employer’s board of adjustment exceeded its jurisdiction and denied him due process when it upheld the termination of his employment based on an untimely served Notice of Investigation by the airline. Judge Robin S. Rosenbaum of the United States District Court for the Southern District of Florida ruled otherwise, granting summary judgment in favor of the airline. Evidence supported the airline adjustment board’s conclusion that the airline had “just cause to effect the termination of Captain William Tate” because of his lengthy and repeated record of anger-management and judgment problems and the “serious concern” that they represented “to an employer charged with safely operating aircraft.” The airline board of adjustment explained that the airline had “painted a picture of a pilot that has lost his social filter and governor ... with instances showing Mr. Tate’s lack of self-control and unwillingness to conform his conduct to reasonable norms of behavior.” For example, the pilot lost his temper with subordinate co-workers. He was suspended for using loud, abusive, and vulgar language. He sent profane and abusive messages to one of the airline’s vendors. And, during a flight from Port-au-Prince, Haiti, to Ft. Lauderdale, Florida, the pilot disconnected the autopilot and autothrust and instructed his first officer to adjust speed to 340 knots on the flight control unit—non-standard flying procedures that concerned the first officer, who was met with the captain’s anger when he attempted to discuss the importance of complying with the airline’s flight standards. The pilot attempted to impose a separate “statute of limitations” as to each of these incidents over a several year period, however the Notice of Investigation at issue referred to a totality of actions and a pattern of conduct over an extended period that warranted disciplinary action, Judge Rosenbaum concluded. The pilot also failed to show an irregularity when the adjustment board declined to credit some of the information included in the Notice of Investigation. Finally, the pilot had an “extensive opportunity ... to present his side of the story” and the airline adjustment board did not go beyond its jurisdiction when it heard and considered evidence of off-duty misconduct and “uncharged offenses,” all of which were “fair game [as] relevant to [the pilot’s] physical or mental capacity to fly an airplane.”



IV. Litigation Accident Litigation—Breach of Fee-Sharing Agreement Greenspoon Marder, P.A. v. Andry Law Firm, LLC 2013 WL 6004054 (E.D. La. 2013) An airline passenger sustained catastrophic injuries when she tripped and hit her head on the jetway while attempting to board a commercial flight from New Orleans to Los Angeles. Her daughter, acting as power of attorney, subsequently hired a Florida lawyer. Because he was not licensed to practice law in Louisiana, the Florida lawyer entered into a co-counsel arrangement with a New Orleans lawyer, which included an oral agreement to split a contingency fee 50/50. The Louisiana lawyer filed a complaint in 2010 in the Civil District Court for the Parish of Orleans, against the City of New Orleans d/b/a Louis Armstrong New Orleans International Airport and Southwest Airlines Company. He failed to keep his Florida co-counsel informed about the progress of the case as promised, settled the case, and withheld the Florida lawyer’s share of the attorney’s fee. Upon discovering this, the Florida lawyer sued for breach of the operative attorney/client contract and oral fee-sharing agreement. Louisiana counsel moved to dismiss the action for failure to state a claim under Fed. R. Civ. P. 12(b)(6). Judge Martin L.C. Feldman of the United States District Court for the Eastern District of Louisiana denied the motion. First, the court rejected the argument that the attorney/client contract did not contain any provision regarding fee-splitting or that such an arrangement would be impermissible under Rule 1.5 of the Louisiana Rules of Professional Conduct; in fact, the complaint alleged that the parties agreed to joint representation and to split a 40% contingency fee equally. The court also rejected the argument that there was no joint venture or basis for quantum meruit recovery because the Florida lawyer did not allege that he was actively involved in the case or remained responsible to the client. In fact, the Florida lawyer alleged active involvement in the case and never indicated that he relinquished responsibility prior to settlement. The Florida lawyer also had sufficiently pled a claim for open account and claims in tort by alleging that its Louisiana co-counsel breached a fiduciary duty and the duty of good faith and fair dealing by engaging in a negligent pattern of acts resulting in the failure to pay any portion of the contingency fee earned from the settlement. Finally, all of the Florida lawyer’s claims were timely and not barred by relevant prescriptive periods established by the Louisiana Civil Code.



Admissibility of Expert Testimony WM Aviation, LLC v. Cessna Aircraft Co. 2013 WL 5705529 (M.D. Fla. 2013) A Cessna Citation X skidded off a runway at JFK International Airport in New York in 2008 when its hydraulic and primary and emergency brake systems malfunctioned and failed. In subsequent federal litigation against it in Orlando for various claims including breach of an aircraft purchase and service agreement, Cessna Aircraft Company (“Cessna”) conceded that the airplane experienced a hydraulic leak, but argued that the pilots “failed to follow the low hydraulic volume landing checklist, attempted to land the aircraft with pedal brakes and thrust reversers, as normal, ... [and] panicked and attempted to increase the thrust reverser” only on the right side which caused the aircraft to veer to the right and off the runway. Cessna retained an expert witness who examined sounds obtained from the Cockpit Voice Recorder (“CVR”) to establish deployment of the airplane’s right thrust reverser. The plaintiff moved to exclude the expert and his testimony under Fed. R. Evid. 702 and Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993), arguing that the expert’s analysis of CVR recordings was subjective and allowing him to testify would be “tantamount to instructing the jury that because he heard something, the jury should hear it too.” In a Report and Recommendation, United States Magistrate Gregory J. Kelly recommended granting the Daubert motion. Cessna had not developed any of the non-exclusive Daubert factors including whether its expert’s methods or techniques were generally accepted in the scientific community and could be or had been tested and subjected to peer review, and whether the known or potential error rate was acceptable. In any event, Cessna’s expert did not opine that the right reverse thruster had a uniquely identifiable sound that could be measured, as compared to the left reverse thruster or both thrusters. Moreover, Cessna did not assert that the aircraft’s reverse thrusters were related, in any way, to the claims relating to airplane’s emergency brake system failure. Finally, Cessna’s expert opinion would not be helpful because it concerned a matter that was within the perception and understanding of a lay person. For that matter, though Cessna asserted that a typical lay juror would have no experience identifying the sound of a thrust reverser, its expert admitted that his knowledge of the sound of a Cessna Citation reverse thruster was gleaned from viewing and listening to online videos.



Cessna objected to Magistrate Judge’s Kelly’s Report and Recommendation, claiming that he improperly weighed the credibility of its expert, relied on inadmissible expert testimony regarding the concept of “gain” (i.e., an amplification of signals that created the volume heard), applied Daubert in a rigid manner, and did not consider reliable data upon which its expert’s opinions were founded. District Judge Charlene Edwards Honeywell adopted and confirmed Magistrate Judge Kelly’s findings (except as to whether the expert’s testimony would be relevant) and excluded the expert’s testimony and opinions from trial. FBO Breach of Contract—Statute of Limitations and Trial Administration Bombardier Aerospace Corp. v. Signature Flight Support Corp. 123 So. 3d 128 Fla. 5th DCA 2013) Under a Fixed Base Operator (“FBO”) services agreement with a choice-of-law provision for the application of Texas law, an FBO agreed to nationwide service of a fleet of 83 aircraft managed by Bombardier Aerospace Corp. (“Bombardier”). The FBO damaged six aircraft in the fleet between 2004 and 2006, yet refused to pay Bombardier for direct and consequential damages (totaling $1,267,782.78) relating to the damaged aircraft. Bombardier sued for breach of contract in Florida state court and a jury found that the FBO employees had damaged all six aircraft, but that Bombardier was not entitled to recover any damages because it made an unreasonable pre-suit demand. Bombardier appealed, and the FBO contended that the Texas statute of limitations barred the claims as to certain aircraft. Recognizing that when a cause of action accrues was a question of law, not fact, Florida’s Fifth District Court of Appeal agreed that Bombardier’s claims as to certain aircraft were stale under Texas’s four year statute of limitations because Bombardier brought suit in 2009 for causes of action that accrued in 2004. As to its remaining viable claims, however, the appellate court reversed the final judgment in the FBO’s favor. Bombardier was not required to prove, and thus, the jury should not have been asked to resolve whether it had made a “reasonable” pre-trial demand as Texas does not recognize a claimant’s unreasonable demand as an affirmative defense to a breach of contract action, but only to an award of attorney’s fees. Accordingly, the Fifth District Court of Appeal remanded the case with instructions that the existence of, or amount of insurance coverage, would not be relevant to the issue of damages or a proper matter for the jury’s consideration and the FBO would not be allowed to assert as an affirmative defense the duty to cooperate, which was an implied condition in the performance of a contract, relating solely to the issue of liability, not damages.



Jurisdiction—Forum Selection Clause Kostelac v. Allianz Global Corporate & Specialty AG 517 Fed. Appx. 670 (11th Cir. 2013) In January 2009, a Remos GX sport aircraft crashed in Florida and seriously injured Michael Kostelac, a citizen of Virginia. Kostelac brought suit in the United States District Court for the Southern District of Florida against the aircraft’s manufacturer, Remos Aircraft GmbH (“Remos Germany”), and its U.S. distributor, Remos Aircraft, Inc. (“Remos USA”), both of which were co-insureds under an Aviation Product Liability insurance policy issued by Allianz Global Corporate and Specialty AG (“Allianz Global”). Allianz Global denied coverage and Kostelac and the Remos Defendants executed a consent judgment admitting Kostelac’s damages of $2,950,000 and assigning the Remos Defendants’ insurance policy rights to Kostelacs. As assignee, Kostelac filed suit in Florida state court against Allianz Global for breach of contract arising from its denial of coverage. Allianz Global removed the lawsuit against it to the United States District Court for the Southern District of Florida on diversity of citizenship grounds and moved to dismiss for improper venue and forum non conveniens based on a forum-selection clause in the insurance policy. The district court did not address the forum-selection clause, but instead determined that Germany was a more appropriate forum after weighing relevant public and private interests. The Eleventh Circuit Court of Appeals affirmed the district court’s decision but on different grounds, holding that the district court abused its discretion when it decided that Kostelac’s choice of forum was owed less deference simply because he sued in Florida and not his home forum and state of residence, Virginia. Nevertheless, dismissal was affirmed under the insurance policy’s forum-selection clause: “If the policy holder has his usual place of residency or temporary place of residence in Germany, and if, during the period of the insurance contract, an insurable claim happens abroad[,] complaints in this matter can only be heard before a German court.” Under the test for international forum-selection clauses established in M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1 (1972), a forum-selection clause is prima facie valid and enforceable unless unreasonable under the circumstance. Kostelac failed to make the required “strong showing” that the forum-selection clause was against public policy, induced by fraud or overreaching, or inconvenient or unfair.



Capacity to Sue—Federal Tort Claims Act, Florida Wrongful Death Act Schippers v. United States 715 F.3d 879 (11th Cir. 2013) After receiving vector instructions from the Federal Aviation Administration Air Traffic Control Center in Houston, Texas, the pilot of a private twin-engine Beechcraft King Air aircraft flying from Uvalde, Texas to Leesburg, Florida flew into a thunderstorm and crashed near Benavides, Texas. The pilot and his passenger (Richard Schippers and his adult son, Shane), both Florida residents, were killed. Their personal representatives brought separate wrongful death actions against the United States in Florida under the Federal Tort Claims Act, 28 U.S.C. §§ 1346 et seq. (“FTCA”), and the Florida Wrongful Death Act, Fla. Stat. §§ 768.16, et seq. (“Florida Act”). Meanwhile, the surviving adult daughter of Richard Schippers and the surviving maternal parent of Shane Schippers—both Florida residents—sued the federal government in Texas for air traffic controller negligence. The matters were consolidated in the United States District Court for the Middle District of Florida and the government moved to dismiss the Texas action because it was brought by plaintiffs who, while entitled to file suit and recover damages on their own behalf in Texas, were not “survivors” entitled to sue under the Florida Act. The district court dismissed their claims, therefore. On appeal, “[t]hree distinct and, in some respects, novel questions” presented: Whether Fed. R. Civ. P. 17 controlled capacity to sue in a FTCA case? If not, what weight should a plaintiff’s domicile be given in choice-of-laws analysis? And, whether the doctrine of depeçage should enter into the analysis? The “most significant relationship test” set out in the Restatement (Second) of Conflicts of Laws and adopted by Texas courts pointed to Texas law as to the issue of liability, i.e., the accident occurred there, the alleged negligence arose in Houston, and the relationship between the parties was centered in Texas. As to damages, however, the government insisted that Florida law applied. While recognizing the concept of depeçage—applying the law of one state to one issue (liability) while applying the law of another state to another issue (damages)—the Eleventh Circuit Court of Appeals opined that, “even though all of the beneficiaries are Florida residents, Florida has little interest in applying its law on this particular issue ... limiting potential beneficiaries limits recovery ... [and] the ‘only purpose’ of limiting the beneficiaries is to protect defendants—the domicile of the plaintiffs is entitled to little weight in the choice-of-law analysis.”



Breach of Workscope Agreement—Motion to Exclude Evidence Democratic Republic of the Congo v. Air Capital Group, LLC 2013 WL 3307499 (S.D. Fla. 2013) Air Capital Group, LLC (“ACG”) executed a workscope agreement with the Democratic Republic of the Congo (“DRC”) for work on a B707-138B. In federal litigation arising from the agreement, the DRC alleged that ACG was not actually in the business of performing aircraft maintenance or repairs and was not authorized to perform any of the covered work. Rather, ACG pocketed monies from the DRC and arranged for unrelated entities such as Commercial Jet, Inc. (“CJI”) to perform the covered work. Before trial, ACG unsuccessfully moved in limine to exclude certain evidence. ACG first sought to exclude all evidence concerning Stage III Hush Kits, contending that expert testimony showed that money paid for the hush kits had been credited against other balances. Judge Robin S. Rosenbaum of the United States District Court for the Southern District of Florida determined that the degree to which such credits were valid or invalid went to the heart of the damages element of the DRC’s fraud claim and could be challenged by ACG at trial. Judge Rosenbaum also rejected ACG’s argument that the introduction of evidence of altered or fabricated invoices beyond those identified in an expert report would result in unfair prejudice under Fed. R. Evid. 403. Although the DRC was not seeking to recover damages on the basis of the additional invoices, the court agreed that the invoices were probative of ACG’s alleged intent and practice of over-billing the DRC until its improprieties were caught. Finally, on grounds of relevance, ACG sought to exclude evidence of a flat rate it paid to CJI because the DRC had agreed to pay a higher flat rate to ACG regardless of whether the flat rate agreement was fraudulently obtained. Judge Rosenbaum opined that ACG had conflated its contract and the fraud claims. The DRC sought both compensatory and punitive damages and the different flat rates were relevant to both inquiries. Montreal Convention—Forum Non Conveniens Galbert v. West Caribbean Airways 715 F.3d 1290 (11th Cir. 2013) In 2005, a West Caribbean MD-82 from Panama to Martinique, France crashed in Venezuela. Representatives and heirs of some of the decedents filed wrongful death actions in federal court in Miami under the Convention for the Unification of Certain Rules for International Carriage by Air (“Montreal Convention”).



After a year of litigation, United States District Judge Ursula Ungaro dismissed the action for forum non conveniens, citing Article 33(4) of the Montreal Convention: “Questions of procedure shall be governed by the law of the court seised of the case.” The Eleventh Circuit Court of Appeals affirmed, holding that the Montreal Convention did not preclude application of the forum non conveniens doctrine. While (unsuccessfully) appealing this decision to the Supreme Court of the United States, the plaintiffs filed suit in the Regional Court of Fort-de-France in Martinique and challenged jurisdiction there under Article 33(1) of the Montreal Convention, effectively arguing that French courts were barred from exercising jurisdiction over claims that the plaintiffs had originally elected to file in the Southern District of Florida. The Regional Court and Fort-de-France Court of Appeals rejected this argument, but the Court of Cassation, the French Supreme Court, held otherwise, stating that French courts were precluded from ruling on the matter because Articles 33 and 46 of the Montreal Convention “require[ ] the plaintiff to have the sole option of deciding on the forum in which the action will be brought, without the possibility of a national rule of procedure thwarting the plaintiff’s imperative choice of jurisdiction.” Armed with this ruling, the plaintiff’s then moved to vacate the United States District Court’s forum non conveniens order under Fed. R. Civ. P. 60(b)(6) on grounds that the Court of Cassation’s ruling rendered Martinique unavailable. The Eleventh Circuit Court of Appeals found no abuse of discretion by Judge Ungaro and held that the Court of Cassation’s ruling did not abrogate different court decisions in the United States under the Montreal Convention. The plaintiff did not initially challenge the district court’s determination that Martinique was an adequate alternative forum or that they could reinstate their suit there without undue prejudice or inconvenience. As such, their subsequent success in convincing the Court of Cassation that their choice of forum under the Montreal Convention precluded other available forums from exercising jurisdiction over the same claims did not constitute “sufficiently extraordinary” circumstances to warrant Rule 60(b)(6) relief. Rather, the plaintiffs failed to argue (or explain their failure to argue) the unavailability of an alternative forum at the only relevant time—in opposition to the forum non conveniens motion when it was pending in an American federal district court.



V. Regulatory Law Air Traffic Controllers School, Issuance of Medical Certification Deering v. Fed. Aviation Admin. 2013 WL 3864349 (M.D. Fla. 2013) A student in Air Traffic Controllers School (“ATCS”) claimed that the Federal Aviation (“FAA”) adversely affected his reasonable expectation of obtaining gainful employment as an air traffic controller. He averred that he was induced into enrolling in ATCS school and relied on the FAA’s representation that he met the color vision standards for any class of airman medical certification under 14 C.F.R. §§ 67.103(c), 67.303(c). After graduating ATCS, however, he took a second vision exam and an FAA regional flight surgeon told him that he did not meet the medical standard for the position of Air Traffic Control Specialist due to a Color Vision Deficiency. Claiming that the second exam applied new standards that were not part of applicable FAA’s regulations, the student sued the FAA under a promissory estoppel theory, demanding compensatory damages of $300,000, attorney’s fees, and costs. Alternatively, he demanded that the FAA allow him to apply as an Air Traffic Controller and employed using the standards of the FAA regulations. The FAA moved to dismiss for lack of subject matter jurisdiction and failure to state a claim. Judge Elizabeth A. Kovachevich of the United States District Court for the Middle District of Florida granted the FAA’s motions and declined to permit the plaintiff to file a third amended complaint on grounds of futility. The plaintiff failed to exhaust administrative remedies as to his “sparse Title VII” claim. He did not allege that he consulted with an EEO officer within the FAA to attempt informal resolution as required by 29 C.F.R. § 1614.105. The plaintiff also failed to allege that he filed a formal complaint with the FAA in accordance with applicable regulations, 29 C.F.R. § 1614.106. Moreover, to the extent the plaintiff was proceeding under 42 U.S.C. § 1983, he failed to meet his jurisdictional burden to show that the United States consented to the lawsuit and waived sovereign immunity. Finally, the plaintiff’s misrepresentation-based claim was within an exception to the Federal Tort Claims Act, 28 U.S.C. § 1346(b), and to the extent the plaintiff was attacking a flight surgeon’s notice as a “final order” of the FAA, jurisdiction was limited to the United States Court of Appeals for the District of Columbia or the Eleventh Circuit Court of Appeals (i.e., the circuit in which the a claimant resides) under 49 U.S.C. § 46110(a).



NTSB Appeal of Administrative Law Judge Decision Mason v. Nat’l Transp. Safety Bd. 516 Fed. Appx. 801 (11th Cir. 2013) The Eleventh Circuit Court of Appeals held that the National Transportation Safety Board (“NTSB”) did not act arbitrarily or capriciously when it dismissed a late appeal of an Administrative Law Judge (“ALJ”). Under 49 C.F.R. § 821.489(a), an appellant must perfect an appeal by filing a brief within 50 days after an ALJ’s oral initial decision. This deadline is inherently arbitrary, but not capricious, and neither traveling during the time for filing an appeal nor filing a brief only a few days late constitutes good cause for missing the deadline. Likewise, having to wait for a transcript of the proceedings before the ALJ in order to prepare a brief does not excuse an untimely filing, as the NTSB’s rules allow extra time for an appeal from an oral decision compared to an appeal from a written decision. Insurance—Declaratory Relief U.S. Specialty Ins. Co. v. Jet One Express, Inc. 2013 WL 3451362 (S.D. Fla. 2013) In March 2012, a Convair aircraft crashed into the Torrecilla Lagoon shortly after takeoff from Luis Munoz Marin International Airport in San Juan, Puerto Rico, killing two people aboard. U.S. Specialty, which issued an aircraft insurance policy to Jet One Express, Inc. (“Jet One”) for operation of the aircraft, filed suit in the United States District Court for the Southern District of Florida seeking a declaratory judgment that the insurance policy provided no coverage for any claims arising out of the crash. Jet One moved to dismiss, arguing that the operative amended complaint failed to state a claim because it contained contradictory allegations in support of U.S. Specialty’s interpretation of the insurance policy. In particular, the amended complaint alleged that the decedents were both “pilots” and “passengers” of the aircraft. Jet One alternatively moved for a more definite statement under Fed. R. Civ. P. 12(e) because the allegations made it impossible for Jet One to know how to frame a response to the pleading. Judge Robert N. Scola, Jr. disagreed, noting that the rules of procedure tolerate some inconsistent allegations, and in any event, the allegations were not necessarily inconsistent with the insurance policy, which defined “passenger” as “any person who is in the aircraft or getting in or out of it” without appearing to provide a separate definition for “pilots.”



Enhancing Airline Passenger Protections Spirit Airlines, Inc. v. Dep’t of Transp. 133 S. Ct. 1723 (2013) Pursuant to its authority to regulate “unfair and deceptive” practices in the airline industry, the Department of Transportation issued a final rule entitled “Enhancing Airline Passenger Protections.” 76 Fed. Reg. 23,110 (Apr. 25, 2011). Spirit Airlines and others challenged three of the rule’s provisions—the requirement that the most prominent figure displayed on print advertisements and websites be the total price, inclusive of taxes (as arbitrary and capricious and a violation of the First Amendment); the requirement that airlines allow consumers who purchase their tickets more than a week in advance the option of canceling their reservations without penalty for twenty-four hours following purchase (as arbitrary and capricious); and the prohibition against increasing the price of air transportation and baggage fees after consumers purchase their tickets (as procedurally defective and otherwise arbitrary and capricious). The Untied States Court of Appeals for the District of Columbia Circuit found that the rules were reasonable, did not violate any First Amendment protection for commercial speech, and were consistent with the Airline Deregulation Act of 1978. The Supreme Court of the United States denied a subsequently filed petition for writ of certiorari. Antitrust Procedures and Penalties Act United States v. US Airways Group, Inc. and AMR Corp. Case No. 1:13-cv-01236 (D.D.C. 2013) The United States Department of Justice, together with Arizona, Florida, Tennessee, Michigan, Pennsylvania, Virginia, and the District of Columbia sued U.S. Airways Group, Inc. and AMR Corporation on August 13, 2013 in connection with antitrust concerns arising from a proposed merger of the two airlines. On November 12, 2013, the parties announced a proposed final judgment to resolve the litigation. See http://www.justice.gov/atr/cases/f301600/301624.pdf. A key feature of the proposal was the requirement that the merged airlines sell and divest 104 takeoff and landing slots at Ronald Reagan National Airport in Washington, 34 slots at La Guardia Airport in New York, and various assets at five other airports, including O’Hare Airport in Chicago, Los Angeles International Airport and Boston Logan International Airport.



VI. Space Law Waiver to SpaceX of Acceptable Risk Limit for Launch 78 Fed. Reg. 52998-01 (2013) SpaceX, a private commercial space flight company joined with the U.S. Air Force’s Evolved Expendable Launch Vehicle Program (“EELV”) to become a certified launch service provider for National Security space missions and commercial payload launches. In July 2013, it submitted a petition to the Federal Aviation Administration’s Office of Commercial Space Transportation (“AST”) requesting a waiver for a launch from Vandenberg Air Force Base (“VAFB”) of a new vehicle, the Falcon 9 Version 1.1 (“v1.1”), carrying a Canadian scientific and research satellite called Cassiope. SpaceX specifically requested a waiver of the requirement of 14 C.F.R. § 417.107(b)(1), prohibiting the launch of expendable launch vehicles if the total expected average number of casualties for launch exceeds 0.00003 for risk from far field blast overpressure. A waiver was granted per 51 U.S.C. § 50905(b)(3) and 14 C.F.R. § 404.5(b). The AST waived section 417.107(b)(1) requirements to allow SpaceX to conduct a flight with the Ec resulting from far field blast overpressure exceeding 0.00003 as long as total Ec for the three hazards combined did not exceed 0.0001. Though declining to waive the Ec requirement for impacting inert and impacting explosive debris or for toxic release, the FAA found the launch to be consistent with the principles and goals of the 2010 National Space Policy and waived the far field overpressure risk requirement because the Falcon 9 v1.1 launch would not jeopardize public health and safety or safety of property, a national security or foreign policy interest of the United States, and is in the public interest. Waiver to Scaled Composites, LLC to Provide FAA Hazard Analysis 78 Fed. Reg. 42994-02 (2013) In 2013 the Federal Aviation Administration’s Office of Commercial Space Transportation (“AST”) issued Scaled Experimental Permit No. 12-007 pursuant to 51 U.S.C. § 50905(b)(3) and 14 C.F.R. § 404.5(b). In renewing its permit to reflect changes to its SpaceShipTwo (“SS2”) and providing updates to its original hazard analysis, Scaled did not satisfy 14 C.F.R. § 437.29 and 437.55(a) according to the AST.



Scaled neither identified human or software error as causing hazards nor identified these errors as causing hazards on the ground that mitigations it had in place would prevent. Instead, Scaled emphasized aircraft and spacecraft design redundancy, flight and maintenance procedures, and ground and flight crew training to mitigate against hazards caused by human and software errors. AST determined that Scaled’s training program and permitted activities did not jeopardize public health and safety or safety of property. Scaled required its pilots to have at least 1,500 hours of flight time and specific experience in jet and glider aircraft. Moreover, Scaled used three different devices to train SS2 pilots and crew, including an SS2 simulator, a WhiteKnightTwo aircraft, and an aerobatic aircraft, or other g-tolerance training device. Scaled’s incremental approach to flight testing using a test program of subsonic glide flights, powered flight to maximum altitude, and repeatability demonstrations also encouraged AST waiver. AST determined that because an experimental permit is by design a brief authorization of one year, minimal levels of residual error and thus risk might accumulate, but not at levels that would jeopardize public health and safety. Additionally, Scaled’s operating area was remote enough that, were it to experience a catastrophic failure, it would not jeopardize public health and safety. Finally, AST concluded that waiver would not have an impact on any national security or foreign policy interests of the United States.



Timothy M. Ravich is a Martindale-Hubbell® AV-rated business and commercial litigator who has been recognized as a “Leading Lawyer” by the South Florida Legal Guide and named among the top five percent of attorneys in Florida as a “Super Lawyer.” Mr. Ravich also is one of only thirty-four lawyers recognized as a “Florida Bar Board Certified Aviation Lawyer.” He chaired the Florida Bar Aviation Law Committee and is an adjunct professor teaching aviation and space law at the University of Miami School of Law and Florida International University’s College of Law. He earned his M.B.A. in Aviation Policy and Planning from Embry-Riddle Aeronautical University. In addition to publishing a course book, AVIATION LAW AFTER SEPTEMBER 11TH (Vandeplas 2010), Mr. Ravich has appeared in local, national, and global media programming featuring aviation and aerospace issues, including National Public Radio, NBC Universal, and China Central Television. He is the featured author of the LexisNexis Expert Aviation Series and has contributed to Thomson Reuters/Aspatore Special Reports. He also has written extensively about aviation issues in peer-reviewed journals such as the American Bar Association Section of Litigation—Mass Torts, Southern Methodist University’s Journal of Air Law and Commerce, the North Dakota Law Review, the Florida Bar Journal, the University of Miami Law Review, and the Journal of the Transportation Research Forum. Visit www.droninglawyer.com.

The foregoing report is for informational purposes only and should not be construed as legal advice on any subject.

florida aviation and space law report (2014)

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