April 2011

From the editors of CCH's Transportation products, here are summaries of the important recent developments in the area for the past month.  Complete coverage of these issues, and many more, appear in our print and electronic products, including: Aviation Law Reporter, Commercial Aircraft Transactions, Issues in Aviation Law and Policy, Federal Carriers Reporter, Federal Motor Carrier Safety Administration Decisions, and Motor Carrier Liability.

If you have comments or suggestions concerning the information provided or the format used, please feel free to contact Pamela Maloney, Managing Editor, at pamela.maloney@wolterskluwer.com.

Hot Topics

Spate of Sleepy Controllers Spurs Outrage, FAA Action

Changes to air traffic controller scheduling practices that allow more time for controllers to rest between shifts were implemented by the Federal Aviation Administration last weekend, following the suspension of yet another controller who allegedly fell asleep while on duty at the Miami Air Route Traffic Control Center. Four days earlier, FAA added an extra air traffic controller on the midnight shift at 27 control towers around the U.S. that previously had been staffed by only one controller during that time period.

Recent incidents of controllers falling asleep on duty prompted immediate statements from both Transportation Secretary Ray LaHood and FAA Administrator Randy Babbitt. Calling the incidents “absolutely unacceptable,” Secretary LaHood said he was “totally outraged.” “This type of unprofessional behavior does not meet our high safety standards,” Babbitt added, pledging his commitment to maintain the highest level of public confidence on FAA’s ability to ensure flight safety. Babbitt also accepted the resignation of Hank Krakowski, who had headed the agency’s Air Traffic Organization, appointing FAA Chief Counsel David Grizzle as acting ATO Chief Operating Officer while a nationwide search is conducted to permanently fill the COO position.

In addition, Babbitt and Paul Rinaldi, President of the National Air Traffic Controllers Association, launched a nationwide Call to Action on air traffic control safety and professionalism. The initiative, which began on Monday, April 18, includes an independent review of FAA’s ATC training curriculum/qualifications and an expansion of NATCA’s Professional Standards committees. According to FAA, other recent incidents/actions involving unresponsive air traffic controllers are as follows:

• A controller was suspended for sleeping on the job after having failed to respond for approximately 16 minutes while a medical flight carrying an ill patient was attempting to land at the Reno-Tahoe International Airport on April 13;

• A controller at Boeing Field/King County International Airport (BFI) in Seattle, Washington, was suspended for having fallen asleep during his morning shift on April 11, 2011—that controller already had been facing disciplinary action for having fallen asleep on two separate occasions during the early evening shift on January 6, 2011;

• Two controllers at Preston Smith International Airport (LBB) in Lubbock, Texas, were suspended for an incident that occurred during the early morning hours of March 29, 2011, in which hand-off of a departing aircraft to the Fort Worth Air Route Traffic Control Center was mishandled and it took several attempts by a Fort Worth controller to reach the Lubbock controllers in order to hand off an inbound aircraft; and

• A controller at Ronald Reagan Washington National Airport (DCA) was suspended for allegedly having fallen asleep in the overnight hours of March 23 and 24, resulting in two passenger-carrying commercial airliners having had to land at the airport without input from ATC.

Under the new scheduling rules, which already are in place and will be fully effective by week’s end, controllers now have a minimum of nine hours off between shifts; previously they had as few as eight. In addition, controllers no longer are able to swap shifts unless they have a minimum of nine hours off between the last shift worked and the one they want to begin, nor can they switch to an unscheduled midnight shift following a day off. Finally, FAA managers will schedule their own shifts in a manner such that greater coverage is ensured in the early-morning and late-night hours. CCH Aviation Law Reports, Letter No. 1450, April 21, 2011.

STB Modifies Interim Rules Implementing Clean Railroads Act

The Surface Transportation Board (STB) is seeking comments on an interim final rule revising the existing interim rules implementing the mandates of the Clean Railroads Act of 2008 (Pub. L. No. 110-432). Enacted in October 2008, the Act added new provisions to Title 49 of the U.S. Code limiting the STB's authority related to solid waste rail transfer facilities to the issuance of land-use-exemption permits, thus transferring primary regulatory responsibility to the states.

In furtherance of the Act's purpose, STB issued an interim final rule establishing temporary procedures for requesting land-use-exemption permits. In addition, the interim rule addressed such topics as what existing and proposed solid waste rail transfer facilities must do to comply with the Clean Railroads Act; the STB's role under the Clean Railroads Act; and the effects of the Act and STB-issued land-use-exemption permits.

The original interim final rule took effect on January 27, 2009. The STB has now issued a new interim rulemaking modifying the review process for land-use-exemption permits under the Clean Railroad Act and amending other aspects of the 2009 interim rules based on feedback from interested parties and further evaluation by the agency. The revised rules took effect on March 24, 2011. The regulation preamble appears at ¶22,436. The updated rules can be found at ¶16,951—16,980.  CCH Federal Carriers Reports, Letter No. 1603, April 15, 2011.

Aviation News

SWA Jet Loses Part of Its Fuselage in Mid-Air But Lands Safely

A Boeing 737 operated by Southwest Airlines had to divert to the closest airport for an emergency landing on April 1, after having experienced loss of pressurization in the aircraft’s cabin as the result of a hole in the top of the fuselage at about mid-cabin. The plane landed safely and none of the 118 passengers and five crewmembers board were seriously injured in the incident. Southwest is working with the National Transportation Safety Board, which dispatched a team to investigate the event. In addition, the carrier grounded a subset of its 737-300 fleet in order to begin an aggressive inspection effort in cooperation with Boeing engineers. Those aircraft will be inspected over the course of the next several days at five locations, with the carrier forced to cancel approximately 300 flights in order to accommodate the inspections.

Under the supervision of NTSB investigators, mechanics from Southwest removed a section of the ruptured fuselage skin from the affected aircraft for transport to NTSB headquarters in Washington, D.C., for in-depth analysis. Meanwhile, NTSB investigators conducted additional inspections of other portions of the lap joint along the fuselage of the affected airplane and found evidence of additional cracks. Additional crack indications in fuselage lap joints were identified on three more airplanes inspected by Southwest/Boeing so far, NTSB said, adding that it has been working with Southwest, Boeing, and the Federal Aviation Administration to determine what actions might be necessary in order to discern potential problems with similar airplanes.

As a result of the efforts to date, Boeing indicated that it will be drafting a Service Bulletin to describe the recommended inspection techniques to be accomplished on similar airplanes. Lastly, on April 5, FAA issued an emergency Airworthiness Directive requiring operators of specific early Boeing 737 models to conduct initial and repetitive electromagnetic inspections for fatigue damage that cannot be spotted with visual detection. The AD requires initial inspections using so-called eddy-current technology in specific areas of the aircraft fuselage on certain Boeing 737 aircraft in the -300, -400 and -500 series that have accumulated more than 30,000 flight cycles, followed by repetitive inspections at regular intervals. According to the agency, the action initially applies to approximately 175 aircraft worldwide, 80 of which are U.S.-registered aircraft. Most of those aircraft in the U.S. are operated by Southwest Airlines, FAA said. CCH Aviation Law Reports, Letter No. 1449, April 7, 2011.

FAA Budget Extender Inked; Long-Term Bill to Conference

President Obama on March 31 signed The Airport and Airway Extension Act of 2011 (Pub. L. 112-7, 125 Stat. 31), which provides yet another short term reauthorization of the Federal Aviation Administration’s budget authority through May 31, 2011. One day later, the U.S. House of Representatives approved by a vote of 223 to 196 the FAA Reauthorization and Reform Act of 2011 (H.R. 658), which would extend current FAA funding and aviation excise taxes through September 30, 2014.

Unlike the U.S. Senate’s version of long-term FAA funding approved earlier in the year (S. 223), H.R. 658 does not raise aviation fuel taxes or passenger facility charges above current levels. The House and Senate now must meet in conference to negotiate the measures approved by each chamber. Responding to the passage of H.R. 658, Senate Commerce, Science, and Transportation Committee Chairman John D. Rockefeller IV (D-W.Va.) expressed confidence that the differences between the two versions could be ironed out in the conference process.  CCH Aviation Law Reports, Letter No. 1449, April 7, 2011.

“High Seas” Definition Not Necessary for DOHSA Preemption

Claims against a helicopter manufacturer under state and general maritime law on behalf of three U.S. Navy crewmen who had perished in the crash of a helicopter approximately 9.5 nautical miles off the coast of California were preempted by the Death on the High Seas Act, a federal appeals court determined. The Act, which provides a federal statutory remedy for wrongful death occurring at sea, specifies that, “[w]hen the death of an individual is caused by wrongful act, neglect, or default occurring on the high seas beyond three nautical miles from the shore of the United States, the personal representative of the decedent may bring a civil action in admiralty against the person or vessel responsible.” As the statute does not define “high seas” and the U.S. territorial waters end at 12 nautical miles from the shore of any state, the parties disagreed as to whether DOHSA applied to the intermediate area where the accident had occurred, i.e., between three and 12 nautical miles from the California shoreline.

The appellate panel said that a firm meaning to the term “high seas” was not necessary in order to determine the DOHSA’s applicability to the case, however. A plain reading of the Act’s current text—including the recently enacted amendments excepting from the statute’s coverage all commercial accidents occurring “12 nautical miles or less” from shore—compelled the conclusion that DOHSA’s boundary remains at three nautical miles from U.S. shores, the panel ruled. Although the statute also uses the term “high seas” to describe the scope of the enacted remedial scheme, there was no indication that the term was meant to incorporate into the statute the independent and fluid political concept of U.S. territorial waters. Instead, a more natural reading indicated that the term “high seas” is defined for purposes of the statute by the explicitly stated geographic boundary of “beyond three nautical miles” from shore. Therefore, the helicopter crash at issue was governed by DOHSA’s remedial scheme. Helman v. Alcoa Global Fasteners, Inc. (9thCir) 34 Avi. 15,913.

ADA Preempts Refused Transport Claim Related to Passenger, Dog

The Airline Deregulation Act of 1978 preempted a passenger’s state-law tort claims against an air carrier arising from the carrier’s refusal to allow the passenger or her pet dog to board a flight for which she had purchased a ticket, a New York federal court determined, reasoning that boarding procedures—including an airline’s refusal to allow a passenger to board—are an airline service and are directly related to the airline service of boarding passengers. All of the passenger’s tort claims arose from the carrier’s decision not to allow her or her dog to board; therefore, all of the claims involved the carrier’s boarding practice, the court held. Moreover, the carrier’s actions were reasonably necessary to accomplish its boarding procedures, the court added. As such, all of the passenger’s tort claims were dismissed.

Moreover, the carrier acted within its rights under its contract with the passenger, the court said. The carrier’s international conditions of carriage—which were incorporated by reference in its contract of carriage with the passenger and, as such, were enforceable as part of the contract—provided that the carrier could refuse to transport any passenger who does not possess the requisite travel documents, in order to comply with government law.

In addition, the court held that the carrier was not liable for any information given to passengers regarding necessary travel documents or the status of government regulations, nor was it liable for having refused to transport a passenger based upon a good-faith determination of relevant laws. In the circumstances at issue, the carrier had delayed the passenger because she lacked the requisite documents to transport her pet dog into Ghana, and subsequently had prevented the passenger from boarding her flight because she did not have her passport. Even if the carrier had been mistaken about the required documents for transporting a dog into Ghana, it made a good-faith determination about the documents based upon information provided by the International Air Transport Association, the court remarked, ruling that the carrier’s actions were consistent with its international conditions of carriage and it did not breach its contract with the passenger. Accordingly, the breach-of-contract claim was dismissed, as was the passenger’s claim that the carrier was liable for having breached an implied contract. Reed v. Delta Airlines, Inc. (SDNY) 34 Avi. 15,933.

Controllers Not Liable for Failure to Warn of Air Turbulence

The United States was entitled to summary judgment in a flight attendant’s Federal Tort Claims Act action alleging that the U.S. government was responsible for physical injuries she allegedly had sustained while working on a commercial airline flight that hit turbulence while she was aboard. Although the flight attendant alleged that the Federal Aviation Administration had been negligent in having failed to report warnings of severe turbulence to the flight’s pilots, she could not satisfy the duty, breach, or causation elements required for a negligence action under the law of the state where the events that gave rise to the action had occurred, a federal court in Illinois ruled.

Acknowledging that FAA air traffic controllers have a legal duty to relay certain weather-related information to the flight’s pilots in accordance with the controllers’ handbook, the court found that the controllers in this case had not breached that duty as to either central weather advisories (CWAs) or bad weather reports from pilots (PIREPs). There was no evidence that the controllers knew or should have known of severe turbulence in the affected flight’s path, the court observed, noting that the flight attendant had failed to identify which pilot reports she asserted had put the controllers on notice of the turbulent conditions.

In addition, the controllers did not have a duty to disseminate the weather information contained in those advisories whose purpose is for air traffic control personnel’s internal use (MISs), the court advised. Unlike other weather products issued by a National Weather Service meteorologist, air traffic controllers do not see MISs, nor is the information from an MIS printed onto an information strip that controllers broadcast to pilots. Thus, a controller’s duty to advise pilots of hazardous weather that might impact operations does not include the information contained in an MIS, the court determined. Therefore, even if the controllers in this case had been aware of the forecasts contained in the MISs at issue, those forecasts were not created with the intention that they be disseminated, nor did they contain information specific enough to have been useful to the affected flight’s pilots, the court concluded, denying the flight attendant’s motion for summary judgment. LeGrande v. U.S. (NDIll) 34 Avi. 15,951.

Suit Sheds Light on Scope of Federal Preemption

State-law negligence claims against an air carrier and its regional code-share partner by an elderly, disabled passenger who allegedly sustained personal injury when she fell while disembarking from a plane without the assistance she previously had requested were preempted by the Air Carrier Access Act of 1986 and/or the Federal Aviation Act of 1958 to the extent that the claims were based upon the carriers’ failure to have provided deplaning assistance or training on such assistance, a federal court in California ruled.

According to the court, the ACAA regulates with specificity an airline’s obligations with respect to boarding and deplaning assistance, particularly in instances where the plane does not pull up directly to the gate. As such, to the extent that the passenger’s negligence claims rested upon the carrier’s failure to provide assistance in deplaning, the ACAA appears to occupy the field and preempt any state-law duty to provide greater or different assistance, the court held.

Conversely, where a disabled passenger brings a claim that does not depend upon duties pervasively regulated by the ACAA, a finding of preemption is precluded, however, the court elucidated. Therefore, to the extent that the passenger’s claims in the case at bar were based upon the carriers’ failure to warn about a dangerous condition on the premises, they were not preempted. And, to the extent that the claims were based upon the carriers’ failure to cure and warn of a dangerous condition, the state-law-based standard of care claims were not preempted. Furthermore, as the effect of ACAA preemption is to bar any claims based upon a state-law standard of care, the passenger was granted leave to amend her surviving claims under the federal standard of care.

Finally, the court found that the passenger could not sustain a separate cause of action for negligent infliction of emotional distress on the facts already pled with respect to her ordinary negligence claim against the carriers. The passenger’s allegations of emotional distress were connected to the physical injury that was the basis for her ordinary negligence claim, and any damages related to that distress only could be recovered as “parasitic damages” in the negligence claim, the court advised. As currently pled, the negligent infliction of emotional distress claim was no more than a restatement of one of her causes of action for negligence. However, as it was possible that the passenger could have some other basis for her negligent infliction of emotional distress claim that was unrelated to the negligence that allegedly caused her physical injuries, the claim was dismissed with leave to amend. Summers v. Delta Airlines, Inc. (NDCal) 34 Avi. 15,967.

Surface Transportation News

STB's Denial of Jurisdiction and Preemption Affirmed

Decisions by the Surface Transportation Board (STB's) finding that a truck and rail transloading facility built and operated by an entity that was not a railroad did not qualify for federal preemption under the Interstate Commerce Commission Termination Act were not arbitrary or capricious, according to a federal court of appeals. Petitioners, New York & Atlantic Railway Company (NYAR) and Coastal Distribution, LLC (Coastal), appealed from three orders issued by the STB on February 1, 2008, September 26, 2008, and October 16, 2009. The challenged orders all found that the transload facility operated by Coastal in NYAR's Farmingdale Yard did not qualify for federal preemption and, therefore, was fully subject to state and local regulations. Petitioners disputed this finding, arguing that the transload facility was an integral part of the railroad's operations and, thus, was subject to STB jurisdiction and federal preemption.

Upon review, the appellate court recognized that because Congress vested the STB with exclusive jurisdiction over transportation by rail carriers, the Board is uniquely qualified to decide whether activities satisfy the "transportation by rail carrier" criteria necessary for STB jurisdiction and federal preemption. Consequently, it was determined that the STB's conclusions regarding the transloading facilities operations were neither arbitrary nor capricious, but were within its statutory authority and fully supported by the law. Thus, the petition for review was denied. NY & Atl. Ry. Co. v. STB (2dCir) CCH Federal Carriers Cases ¶84,686.

No Private Cause of Action Under Federal Drug Testing Rules

A former employee’s lawsuit against a motor carrier alleging that the carrier had failed to comply with federal drug testing requirements was dismissed by a federal district court in Texas for failing to state a claim. The employee had been required to participate in a random drug test. The initial specimen submitted by the employee had been rejected due to foreign objects floating in the sample. Subsequent attempts to collect a valid specimen failed and the employee left the testing facility without having submitted a valid sample for testing. The employer conducted an investigation into the events surrounding the aborted test and determined that the employee had failed to cooperate in the collection process. Therefore, pursuant to the carrier’s employment policy, the employee was terminated. As a result of his termination, the employee sued the carrier, alleging that it had violated the federal drug testing program. The carrier challenged the employee’s claim, arguing that it was entitled to summary judgment because the Department of Transportation’s drug testing program did not provide employees with a private right of action. The appellate panel agreed with the carrier, holding that Congress had not given individuals a private right of action under the DOT drug testing regulations. Therefore, the employee had failed to state a claim upon which relief could be granted. Brooks v. AAA Cooper Transp. (SDTex) CCH Federal Carriers Cases ¶84,687.

FRA Issues Advisory Addressing Fouling of Adjacent Track

The Federal Railroad Administration (FRA) issued a safety advisory reminding railroads and railroad employees of the importance of compliance with federal regulations and railroad operating rules dealing with rolling equipment being left in a location that is clear of any adjacent tracks. The advisory recommends that railroads: (1) review with employees two recent fatal incidents involving rolling equipment fouling adjacent tracks: (2) retrain supervisors and employees on the operating and safety rules applicable to leaving rolling equipment in a location that is clear of adjacent tracks; (3) increase operational testing on operating and safety rules; and (4) review current job briefing procedures among coworkers and determine if the procedures are sufficient to encourage more effective communication regarding switching activities. FRA will be stepping up its inspection activities to focus on compliance with railroad operating rules and railroad operational testing activities. Full text of the safety advisory appears at ¶25,066. CCH Federal Carriers Reports, Letter No. 1604, April 29, 2011.

Insurer Entitled to Damages Under Carmack Amendment

A cargo insurer acting as the subrogee of a purchaser of electronic equipment was entitled to seek damages under the Carmack Amendment from a motor carrier for goods lost during interstate transportation, a federal appellate court ruled in a decision overturning a district court opinion which found that the insurer lacked standing. The seller of the goods contracted with the carrier to ship the equipment under a bill of lading issued by the carrier. When the goods were delivered, some of the equipment was missing. The shipper filed a claim with the carrier, which was settled pursuant to the terms of the carrier's limitation-of-liability clause. At the same time, the buyer filed a claim with its cargo insurer. The insurer paid the claim, and then filed an action against the carrier as the subrogee of the purchaser.

The carrier challenged the suit, arguing that the insurer had no standing to bring the action because the purchaser had not been listed on the bill of lading as the owner of the equipment; nor had it contracted with the carrier to ship the goods. The insurer contended that it had standing because its insured, as the owner of the lost goods, was entitled to seek recovery against the carrier under Carmack, even if the insured was not identified on the bill of lading. The district court agreed with the carrier, holding that allowing someone not a party to the bill of lading to sue the carrier after it had reached an accord and satisfaction with the shipper would discourage carriers from settling claims and would be contrary to the goals of the Carmack Amendment. Upon review, the appellate court reversed, finding that the purchaser was a shipper according to the definition contained in the Conditions of Contract Carriage, because the purchaser was a party with an interest in the shipment. As such, because the insurer was acting as the purchaser’s subrogee, it also had standing to bring the action against the carrier under the Carmack Amendment.

In addition, the insurer opposed the carrier's limitation-of-liability claim, arguing that the Carmack Amendment required all shipments to proceed at full value unless the shipper declared a lower value. The district court rejected this argument, asserting that the Carmack Amendment provides that the liability of the carrier can be limited by agreement, not that it can be lowered by agreement. Based on the evidence presented, the district court ruled that the carrier had effectively limited its liability by: (1) having a valid tariff available to the shipper upon request; (2) providing the shipper with an option to declare a higher value for the shipment for a higher freight charge; (3) obtaining the shipper's agreement as to the liability limitation through the shipper's failure to declare a higher value; and (4) issuing a bill of lading prior to shipment. On appeal, the insurer failed to challenge any of these determinations. Accordingly, the appellate court affirmed the lower court’s conclusion that the carrier had effectively limited its liability. Thus, the insurer was entitled to recover damages in an amount consistent with the carrier’s limitation-of-liability provision. OneBeacon Ins. Co. v. Haas Industries, Inc. (9thCir) CCH Federal Carriers Cases ¶84,684.

Safety Standards for Use of Concrete Crossties Adopted

In an effort to promote the safety of railroad operations over track constructed with concrete crossties, the Federal Railroad Administration (FRA) has adopted amendments to the Federal Track Safety Standards. Under the final rule, FRA is mandating specific requirements for effective concrete crossties, for rail fastening systems connected to concrete crossties, and for automated inspections of track constructed with concrete crossties. This rulemaking satisfies a requirement of the Rail Safety Improvement Act of 2008 (Pub. L. No. 110-432, Division A), enacted on October 16, 2008, which mandated that the Secretary of Transportation promulgate regulations for concrete crossties within 18 months of the enactment of the Act. In addition, FRA removed an outdated provision addressing the preemptive effect of the regulations. The final rule takes effect on July 1, 2011. The regulation preamble can be found at ¶22,437. CCH Federal Carriers Reports, Letter No. 1603, April 15, 2011.