Litigation Extortion

My editorial column in the Jan/Feb issue, “Actively Engaged,” got a lot of you talking. I received e-mails and phone calls from quite a few of you sharing your opinions of the proposed clarification of actively engaged by the FAA as it pertains to Inspection Authorization. It is good to see fellow A&Ps and IAs engaged in a spirited discussion of a subject that could adversely impact our industry.

While I am on a roll, I might as well bring up another controversial subject — aviation lawsuits.

Everyone probably knows a few lawyer jokes such as, “How do you tell if it is really cold outside? A lawyer has his hands in his own pockets.” Or, “The day after a verdict had been entered against his client, the lawyer rushed to the judge’s chambers, demanding that the case be reopened, saying, ‘I have new evidence that makes a huge difference in my client’s defense.’ The judge asked, ‘What new evidence could you have?’ The lawyer replied, ‘My client has an extra $10,000, and I just found out about it!’”

We can joke about lawyers, but the sad truth is that our industry is burdened with an extreme amount of litigation. It is a scene that plays out all too often. An aviation accident happens. People are injured or killed. Lawsuits are filed seeking compensation for these injuries or deaths.

I am not implying that victims or their families don’t have a right to seek compensation in a court of law. The problem is that these lawsuits aren’t just targeted at guilty parties. They are targeted at everyone: the airframe manufacturer, engine manufacturer and accessory manufacturers. And don’t forget any IA who did an annual, the A&Ps who touched the airplane, the repair stations that did maintenance. You might as well throw in the engineers who designed the airframe, engine and accessories. The list goes on and on.

I heard one acquaintance coin it “litigation extortion.” 

Here is a hypothetical example of litigation extortion. ACME Carburetors, Inc. manufactures fuel pumps for the Ace passenger aircraft. An Ace aircraft crashes into a mountain side, killing the pilot and three passengers. After its investigation, the NTSB rules the accident was attributable to pilot error, citing fatigue and controlled flight into terrain (CFIT) as the cause.

Meanwhile, ACME gets a subpoena naming it in a lawsuit filed by the pilot’s family. The law firm representing the family alleges that icing in the carburetor caused the crash and sues ACME for $2 million. ACME’s attorneys, the law firm of Dewey, Cheatum, and Howe (the same law firm that represents NPR’s car talk) offers two options to the company.

Option one is to fight the lawsuit. Even though NTSB rulings can’t be used in civil lawsuits, Dewey, Cheatum and Howe feels that it has a strong case and can prove through expert witnesses and independent forensic investigators that the ACME carburetor did not contribute to the crash – it was purely pilot error. The cost to go to court to fight the lawsuit and win would be around $500,000.00.

Option two is to settle with the plaintiffs. Plaintiffs’ attorney has approached Dewey, Cheatum, and Howe and offered to settle out of court for $200,000.

Neither option is palatable to ACME. The cost to settle out of court is expensive, but it is a lot less expensive than the cost to go to trial and “win.” ACME doesn’t even have the opportunity to recoup its legal fees because the remote chance that its carburetor did cause the accident makes it hard to countersue for a fraudulent lawsuit. In the end, ACME chooses to settle with plaintiff.

Although the names in the above story are fictional, the examples they are based on are all too real. Our society is a litigious society, ready to file a lawsuit at the drop of a hat. Our industry is even more susceptible to this litigious tendency. The law firms representing plaintiffs don’t typically aim the sights of their legal rifles at the guilty parties. Instead, they break out their legal shotguns and pepper everyone in sight.

But heck, the more suits the attorneys file, the more money they can make for their clients. The more money their clients make, the more money they make.

No, strike that. That isn’t necessarily true. Unless the plaintiffs’ attorneys are representing pro bono, win or lose, they make their money.

Meanwhile, reputable manufacturers and maintenance operations are constantly subjected to the money-grabbing exploits of litigation extortionists. At best, these manufacturers and maintenance operations get by and have to pay higher and higher insurance premiums. At worst, they are forced to cease operations and good people lose their jobs.

Thanks for reading, and we appreciate your feedback!   – Joe