Lawsuit Against Cessna Aircraft Dismissed for Failure to Allege Non-economic Damages

Isla Nena Air Services, Inc. v. Cessna Aircraft Co., 380 F. Supp. 2d 74 (D.P.R. 2005).

Aubrey Posey, 3L, Stetson University College of Law

On August 30, 2003, a single-engine Cessna plane operated by Isla Nena Air Services (Isla Nena) suffered engine failure during a flight from the city of Fajardo, Puerto Rico to Culebra, a Puerto Rican island approximately twenty miles from Fajardo. The pilot was forced to make an emergency landing in the waters near Flamenco Beach on Culebra. Although all nine passengers made it to shore safely, the aircraft suffered extensive damage.

Isla Nena sued Cessna Aircraft Company, the aircraft’s manufacturer, and Pratt & Whitney, the aircraft engine’s manufacturer, seeking damages for loss of the aircraft, repair costs to the aircraft, lost income during the time the aircraft was out of service and other damages based on tort and strict liability theories for defective products manufacture. The U.S. District Court for the District of Puerto Rico held that Isla Nena’s claims were barred by the economic loss rule.

Admiralty Jurisdiction
As a preliminary matter, the district court determined that admiralty law, not Puerto Rican law, controlled. To determine admiralty jurisdiction in land-based aircraft crashes over ocean water, courts apply a two-part test developed by the U.S. Supreme Court in Executive Jet Aviation Co. v. City of Cleveland, Ohio. Admiralty law will control if the site of the crash was within navigable waters and there is a nexus between the activity involved and traditional maritime activity.1

The district court found that the first prong of the test was met easily as Congress has specifically stated that the waters around Puerto Rico and its islands are navigable waters.2 Furthermore, even if Congress had not specifically defined Puerto Rico’s waters as navigable,“it has long been the rule that all waters within the ebb and flow of the tide are considered navigable waters.”3

The nexus prong, however, required more analysis. Several Supreme Court cases following Executive Jet have further defined the nexus requirement. To have the appropriate nexus, the incident must have a “potentially disruptive impact on maritime commerce” and “the general character of the incident giving rise to the incident [must] bear a significant relationship to traditional maritime activity.”4 The district court found that the crash of an airplane flying between Fajardo and Culebra could have a potential impact on maritime commerce. In Executive Jet, for instance, the Supreme Court held that a sinking plane created a potential hazard for other vessels in the water and therefore could have an impact on maritime commerce. Similarly, the Isla Nena plane created a hazard for other vessels. The district court gave no weight to Isla Nena’s argument that admiralty law was inapplicable because the air travel had no actual effect on maritime commerce, concluding that potential impact was enough to exercise jurisdiction.

The district court also found that the transportation services provided by Isla Nena between the Puerto Rican mainland and islands was a traditional maritime activity. The court reached this conclusion by focusing on the activity, transportation of people from one part of Puerto Rico to another, rather than any particular conduct of Isla Nena or Cessna. Before aircraft, boats transported people between the mainland and the islands. Although planes now perform this function, the transportation of people along these routes is still a traditional maritime activity. In addition, as it is inevitable that a plane operating between Fajardo and Culebra would crash in navigable waters, the flight bears a significant relationship to maritime activities.

Isla Nena argued that the exercise of admiralty jurisdiction was improper because the component part responsible for the engine failure was not manufactured exclusively for maritime use. Isla Nena claimed, therefore, that transportation on the aircraft could not be a traditional maritime function. The court rejected this argument, reasoning that the component parts of a defective product need not be manufactured specifically for maritime use as an injury at sea from a defective product is enough for admiralty law to apply.

Economic Loss Rule
Cessna and Pratt & Whitney also argued that Isla Nena’s claims were barred by the economic loss rule. The economic loss rule, recognized in admiralty law,5 precludes recovery for a tort claim between two parties in a commercial relationship when the only damage resulting from an incident is damage to the product itself. To avoid application of the economic loss rule and successfully bring a tort or strict liability claim, a plaintiff must allege that a defective product caused damage to property other than itself or that the product caused personal injuries. If a plaintiff fails to allege personal injury or other property damage, the only available theory of recovery is breach of warranty.

The district court determined that the relationship between Isla Nena and Cessna and Pratt & Whitney was a commercial relationship (the sale of an aircraft). Isla Nena alleged only that the aircraft was damaged as a result of the emergency landing, but it made no allegations that the defective engine caused personal injuries or damage to other property. As Isla Nena alleges a defect in the aircraft or a component part caused the damage to the aircraft, its only available remedy is a breach of warranty action.

Conclusion
The district court dismissed Isla Nena’s tort and strict liability claims against Cessna and Pratt & Whitney under the economic loss rule because the emergency landing caused damage only to the plane itself.

Endnotes
1. Executive Jet Aviation Co. v. City of Cleveland, Ohio, 409 U.S. 249 (1972).
2. See 42 U.S.C. § 749.
3. Isla Nena Air Services, Inc. v. Cessna Aircraft Co., 380 F. Supp. 2d 74, 77-78 (D.P.R. 2005).
4. Sisson v. Ruby, 497 U.S. 358 (1990).
5. See East River Steamship v. Transamerica Delaval, Inc., 476 U.S. 858 (1986).