The Ninth Circuit Court of Appeals recently held that the statute of repose created under the General Aviation Revitalization Act (“GARA”) provides an aircraft’s individual component parts’ manufacturers the same protections as the aircraft manufacturer itself, even where the part in question is used and becomes incorporated on a later delivered aircraft that is not entitled to protection. Eliminating the potential distinction between new and used component parts incorporated into a newly delivered aircraft, the decision is largely favorable for aircraft component manufacturers and their insurers.
In 2010, United States Aviation Underwriters, Inc. (“USAU”) brought a subrogation action against Nabtesco Corporation and Nabtesco Aerospace, Inc. (“Nabtesco”) to recover damages sustained by a Cessna Citation 560 it insured that was damaged in a 2009 runway accident. The insurer claimed that the accident was caused by a defective component part, a landing gear actuator, manufactured by Nabtesco and originally installed upon a different Cessna aircraft. The delivery date of the original aircraft (which included the new landing gear actuator) was October 30, 1990. A short time later, a third party removed the landing gear actuator, overhauled it, and installed it upon a Cessna 550. That aircraft, with the overhauled landing gear actuator, was delivered to its first purchaser on December 30, 1991. At the time that USAU filed its subrogation action in 2010, 18 years had passed since the date of delivery of the original aircraft, but not the date of delivery of the second aircraft – the one which sustained the damage.
This distinction was recognized by Nabtesco, who moved for and was awarded summary judgment on the premise that the triggering date for GARA’s statute of repose was in fact the date the original aircraft with the new actuator was delivered, and not the delivery date of the second aircraft. The insurer appealed, arguing that GARA’s statute of repose in this case applied only to the delivery date of the second, damaged aircraft, and that GARA was intended to apply only to an indivisible finished aircraft and not its component parts.
The Ninth Circuit found that the insurer’s view conflicted with the legislative intent of GARA to relieve manufacturers of the burdens of liability costs over a long period of time. The Court declared that GARA’s definition of “aircraft” should be viewed broadly, to include both the aircraft as a whole as well as its individual component parts. Therefore, in actions against aircraft component manufacturers, the statute of repose is triggered upon the initial delivery of the component as part of a finished aircraft. This broad view is likely to provide more aircraft component part manufacturers and their insurers additional opportunities to seek immunity from litigation under GARA’s statute of repose where refurbished components are incorporated into subsequent aircraft.The decision of the Appeals Court can be found here