As reported in a previous issue of this newsletter, in July 2011, the Florida Supreme Court held in Vreeland v. Ferrer, 71 So.3d 70 (Fla. 2011), that certain claims against aircraft owners and lessors under Florida’s dangerous instrumentality doctrine are not preempted by 49 U.S.C. § 44112 (1994). In Vreeland, Danny Ferrer entered into a lease agreement to lease an airplane from Aerolease of America, Inc. (“Aerolease”). In January of 2005, the plane crashed, killing the pilot and a passenger. The passenger’s estate filed a wrongful death action against Aerolease contending that Aerolease, as owner of the aircraft, was liable for, among other things, the negligence of the pilot. Aerolease argued that 49 U.S.C. § 44112, which provides in relevant part that an owner or lessor of an aircraft is liable for damages on land or water only when the aircraft is in the actual possession or control of the owner or lessor, preempts Florida’s dangerous instrumentality doctrine. The Florida Supreme Court rejected Aerolease’s argument after concluding that 49 U.S.C. § 44112 preempts liability for damages that only occur underneath the plane on the earth’s surface, but not harm that occurs  within the aircraft. Thus, the Florida Supreme Court held that Aerolease, as owner of the aircraft, could be vicariously liable for negligence in the operation of the aircraft even though it lacked actual possession or control of the aircraft.

The Florida ruling flies in the face of decisions by the First, Second, Third, Fifth, Sixth, Ninth and Tenth Circuit Courts of Appeals, all of which have expressly held that Congress has preempted all or a part of the field of air transportation and safety.

Aerolease appealed the Florida Supreme Court ruling to the U.S. Supreme Court. The National Aircraft Finance Association (“NAFA”) and the Aviation Working Group (“AWG”) filed an amicus brief with the Court. NAFA and AWG agreed with Aerolease that the Florida Supreme Court construed 49 U.S.C. § 44112 too narrowly in holding that its protection to owners and lessors applied only to damages sustained on the ground rather than those in the air as well. They pointed to, among other things, the legislative history surrounding the enactment of 49 U.S.C. § 44112 as an indication of Congress’ intent to shield owners and lessors without operational control of an aircraft from liability resulting from the negligent acts of a pilot.

In February of 2012, in a blow to aircraft owners and lessors, the U.S. Supreme Court, without comment, let the Florida Supreme Court’s decision stand by refusing to hear Aerolease’s appeal. 132 S.Ct. 1557 (Feb. 21, 2012) (cert. denied).

Notwithstanding the U.S. Supreme Court’s decision not to hear the Vreeland case, Vreeland and other similar state court decisions would still appear to be the minority view. However, it serves as a reminder of the importance of including strong indemnity and insurance provisions in any operating lease agreement.