Airplane engine manufacturer loses $4 million judgment

Guy goes out in his twin-engine Beechcraft Baron. He returns home in bad weather, with clouds reported by witnesses as low as 500′ above ground level (AGL). He loses control of the airplane in a typical stall/spin accident, crashes into the ground, and kills himself. The NTSB did not mention any mechanical problems with the airplane or the engines and did not list engine failure as a possibility. The NTSB said only that the probable cause was “the pilot’s failure to maintain control of the airplane while maneuvering resulting in an inadvertent stall/spin.”

Teledyne Continental (TCM) was the manufacturer of the Baron’s engines way back in the 1970s or whenever this plane was produced (the NTSB doesn’t say). An engineer might say “it is impressive that those engines spun flawlessly for thirty years, not quitting until this pilot flew them right into the ground.” A jury saw this accident differently, ordering TCM to pay $4 million to the survivors of the pilot. The total market for these kinds of engines in new airplanes is about 2500 per year, of which Teledyne makes roughly half. So this judgment represents a cost of about $4,000 per engine sold every year to airplane manufacturers. The Federal Reserve Bank can cut interest rates to 0% and you’d still have to ask yourself how it could possibly be rational to invest in a U.S.-based company making aircraft or aircraft components. Subprime mortgages look great when you factor in this kind of litigation risk.

Full story on Aero-News.net; also check the NTSB report.

Related story: Airplane carburetor company sued out of business.

3 Comments

  1. Mark

    April 21, 2008 @ 10:18 am

    1

    The NTSB report was evidence, but the plaintiffs probably introduced other evidence at trial that we don’t know about. The burden of proof in a tort case is only preponderance of the evidence (i.e., 51 percent probable). Since the jist of the NTSB report was basically just “We couldn’t find anything materially wrong,” there’s a lot of room for a plaintiff’s attorney to maneuver. For instance, the defendant actually did the testing, not the NTSB, who only observed. It’s natural for the jury to discount such evidence.

  2. philg

    April 21, 2008 @ 5:54 pm

    2

    Actually, Mark, I think I read somewhere in there that NTSB reports cannot be used as evidence in civil trials. It is supposed to make people involved in the accident investigation more cooperative.

    So the jury only needed to be convinced that these engines performed flawlessly for 30 years and through a couple of overhauls. Then they performed flawlessly just about all the way from the departure airport to the destination. Then they happened to quit just as the pilot was descending into bad weather and slowing down above his destination airport.

  3. ifrpilot

    April 22, 2008 @ 4:44 pm

    3

    Phil, you are correct. 49 U.S.C. § 1154(b) provides that “No part of a report of the Board, related to an accident or an investigation of an accident, may be admitted into evidence or used in a civil action for damages resulting from a matter mentioned in the report.”

    So, manufacturer defendants find no solace in the NTSB’s report if it concludes that the accident was pilot error, and the plaintiffs’ lawyers find no barrier to bringing suit from that conclusion. The converse holds true as well. Some courts have gnawed at the edges of the statute and allowed portions of the NTSB investigation into evidence, but others have adopted a more literal interpretation of the statute and prohibited any portion of the Board’s report or investigative file to be entered into evidence.

    The practical reality is that if there’s something useful in the report or the investigator’s field notes, more often than not, the party who would be helped by that evidence will seek out the witness who provided the information and obtain testimony directly. Costly, yes, indeed. But at least the information can be obtained.

    GARA was supposed to make suits like this a thing of the past. It would be interesting to learn how plaintiff was able to survive what I’m sure was a motion to dismiss or for summary judgment under GARA’s 17-year statute of repose.

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