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James T. Crouse
James T. Crouse
Attorney • (919) 861-0500

N.C. Tort Reform On Product Liability Attacks Right Of Individuals

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The legislature in North Carolina is attacking the rights of individuals at the behest of big money. The product liability bill got here courtesy of a group called ALEC, whose funders include tobacco companies, airlines, drug companies, etc. The product liability portion of the current legislation would exempt any product “regulated” by any state or federal government agency.

This immunity is unique in the entire country, and is far-reaching. Chris Nichols provides us with a list of all the products – think "everything." Almost every facet of aviation has some federal oversight. Every aircraft design is approved, to various degrees, by the federal authorities. The Federal Aviation Act of 1958 and cases interpreting the act have constantly maintained that the federal regulations constitute “minimum standards” and do not establish a level or guarantee of safety. The vast majority of cases hold that FAA approvals, and the Federal Aviation Regulations (FAR’s) themselves, are not determinative of the legal safety of a design. In the federal system, negligence, product liability and legal responsibility have been wisely left to the states to protect their citizens.

In many instances, however, the FAA doesn’t actually review what achieves
“FAA approval.” In something called “Delegated Option Authority (DOA),” a manufacturer simply sends a letter to the FAA saying it has complied with the FAR’s in its design. That’s all it takes for “FAA approval.” The FAA does not see one drawing, one blueprint, one operational test.

Nothing.

In a similar program called the “Designated Engineering Representative (DER),” a manufacturer can self-approve modifications to its products. In world’s largest civilian helicopter crash, a manufacturer rushed through a modification that was the cause of the crash that killed 30 people. The FAA never saw the mod. The manufacturer designed and implemented the mod, and approved it when the manufacturer’s employee put on his “FAA hat” and signed one piece of paper saying the mod conformed to the FAR’s.

So just imagine when a design flaw that causes an airliner crash at RDU and 100+ people die. The aircraft’s design would necessarily have been approved by the FAA. The airline would be exonerated since the crash was not its fault. But under the proposed law the manufacturer would have immunity, especially with NC’s outdated “lex loci” choice of law rule, applying the law of NC to an accident that occurrs in N.C.

If all of these so-called “tort reform” measures pass, it will be difficult to avoid them if the injury occurs in NC—even if the product was designed, made and sold elsewhere, and just happened to wind up in North Carolina because it happened to be shipped here. Complete happenstance when it comes to products. With significant relationship standard, North Carolina residents could apply the law of the place of design, manufacture or sale, etc.