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IN RE AIR CRASH DISASTER AT SIOUX CITY ON JULY 19

March 14, 1990

In re AIR CRASH DISASTER AT SIOUX CITY, IOWA, ON July 19, 1989

Suzanne B. Conlon, United States District Judge.


The opinion of the court was delivered by: CONLON

SUZANNE B. CONLON, UNITED STATES DISTRICT JUDGE

 In this consolidated multidistrict litigation arising from an air crash at Sioux City, Iowa, defendants United Airlines, Inc., McDonnell Douglas Corporation and General Electric Company (collectively "defendants") move the court to dismiss all punitive damages claims under Fed.R.Civ.P. 12(b)(6). *fn1" In the alternative, defendants request an order determining the state law governing punitive damages in each of the eighteen cases before this court.

 I. Background

 On July 19, 1989, United Airlines Flight 232 from Denver to Chicago crashed during an attempted emergency landing at Sioux City, Iowa, after the aircraft lost hydraulic power. Of the 296 people on board, 112 were killed in the tragic crash. The aircraft, owned and operated by United Airlines, was a DC-10 manufactured by McDonnell Douglas. General Electric manufactured the CF6-6 engines utilized on the aircraft.

 Flight 232 passengers were from thirty states and two foreign countries. Ninety-three passengers were from Colorado. Eighteen cases were transferred to the Northern District of Illinois for pretrial purposes by order of the Judicial Panel on Multidistrict Litigation. The cases were transferred from district courts located in ten states.

 Defendants argue that plaintiffs may not bring claims for punitive damages in this action. They maintain that punitive damage claims should be dismissed because they violate the due process clause of the Fourteenth Amendment. In addition, defendants argue that the Federal Aviation Act preempts punitive damage claims in air crash incidents. In the alternative, defendants request the court to determine the state law governing punitive damages as to each claim.

 II. Due Process Limitations on Punitive Damages

 Defendants argue that the due process clause of the Fourteenth Amendment categorically bars state law actions for punitive damages in this case. Defendants assert that in some states, a jury is afforded unbridled discretion in visiting this form of punishment upon defendants. In addition, defendants contend that multiple punitive damage awards for the same course of conduct are inherently unfair.

 The due process clause does not bar punitive damages per se. Twice in the last two years, the Supreme Court has declined opportunities to hold that punitive damage awards violate due process. Browning-Ferris Indus. of Vermont v. Kelco Disposal, Inc., 492 U.S. 257, 106 L. Ed. 2d 219, 109 S. Ct. 2909 (1989); Bankers Life & Casualty v. Crenshaw, 486 U.S. 71, 100 L. Ed. 2d 62, 108 S. Ct. 1645 (1988). Concurring opinions in these decisions suggest that five individual members of the Court would hold that due process constrains imposition of punitive damages in some circumstances. *fn2" Defendants imply that a Supreme Court decision barring punitive damages on due process grounds is imminent. However, in November 1989, the Court denied certiorari in two appeals raising due process objections to punitive damage awards. Thomas Ainsworth Combined Insurance Company of America v. Ainsworth, 104 Nev. 587, 763 P.2d 673 (Nev. 1988), cert. denied 493 U.S. 958, 107 L. Ed. 2d 361, 110 S. Ct. 376 (1989); Clardy v. Sanders, 551 So. 2d 1057 (Ala. 1989), cert. denied 493 U.S. 959, 107 L. Ed. 2d 362, 110 S. Ct. 376 (1989). On February 20, 1990, the Court denied certiorari in another case raising the due process issue. HealthAmerica v. Menton, 551 So. 2d 235 (Ala. 1989), cert. denied, 493 U.S. 1093, 110 S. Ct. 1166, 107 L. Ed. 2d 1069 (1990). A categorical bar of claims for punitive damages is simply not supported by the case law. Eichenseer v. Reserve Life Insur. Co., 881 F.2d 1355, 1365 (5th Cir. 1989).

 Defendants argue that the circumstances of this case preclude fair application of punitive damages. Defendants contend that their exposure to multiple claims precludes punitive damages in this case. In one recent mass tort action, a district court expressly disavowed the defendants' argument. Leonen v. Johns-Manville Corp., 717 F. Supp. 272, 286 (D.N.J. 1989) (permitting punitive damages in asbestos litigation in spite of defendant's multiple exposure to liability). See also, Ah You Man, Harry N. Sato v. Raymark Indus., 728 F. Supp. 1461 (D.Hawaii 1989) (Supreme Court has not given any indication that punitive damages are unconstitutional as a matter of law in the mass tort context). Accordingly, defendants' motions to dismiss punitive damages claims on due process grounds are denied.

 III. Preemption Of Punitive Damages By The Federal Aviation Act

 Defendants argue that the Federal Aviation Act, 49 U.S.C. App. §§ 1304-1557, preempts state law actions for punitive damages. However, the Supreme Court decision in Silkwood v. Kerr-McGee Corp., 464 U.S. 238, 248, 78 L. Ed. 2d 443, 104 S. Ct. 615 (1984) and the recent seventh circuit decision in Bieneman v. City of Chicago, 864 F.2d 463 (7th Cir. 1988), cert. denied 490 U.S. 1080, 104 L. Ed. 2d 661, 109 S. Ct. 2099, (1989) conclusively establish that punitive damages are not preempted by the FAA. In Silkwood, the Court held that an award of compensatory or punitive damages under state law was not preempted by comprehensive federal regulation of the nuclear power industry. In Bieneman, the seventh circuit decided the FAA did not preempt common law damages and penalties in the aviation field. *fn3"

 In section 1106 of the FAA, Congress expressly determined not to preempt certain state remedies:

 
Nothing contained in this Act shall in any way abridge or alter the remedies now existing at common law or by statute, but the provisions of this chapter are in addition to such remedies.

 FAA, 49 U.S.C. § 1506. In reliance upon section 1106, the seventh circuit concluded in Bieneman that the FAA did not preempt state tort law claims:

 
" Silkwood. . . highlights the extreme reluctance of the modern Court to find preemption." Ronald D. Rotunda, Sheathing the Sword of Federal Preemption, 5 Constitutional Commentary 311, 317 (1988). If no preemption is the conclusion notwithstanding the absence from nuclear safety legislation of a statute such as § 1106, it must be the appropriate treatment of air travel as well.

 864 F.2d at 472. Defendants concede that compensatory damages are not preempted by the FAA. See, Air Crash Disaster at JFK Int'l Airport, 635 F.2d 67, 74 (2d Cir. 1980). Defendants assert that section 1106 excludes punitive damages because punitive damages are not a traditional remedy existing at common law.

 Bieneman and Silkwood support the proposition that punitive damages are included in section 1106. In Bieneman, the seventh circuit noted that punitive and compensatory damages are methods of regulating safety. 864 F.2d at 472. The court did not distinguish punitive and compensatory damages when interpreting section 1106. In Silkwood, the Supreme Court expressly rejected defendants' proposed distinction regarding nuclear safety regulation:

 
Kerr-McGee [the defendant] focuses on the differences between compensatory and punitive damages awards and asserts that, at most, Congress intended to allow the former. This argument, however is misdirected because our inquiry is not whether Congress expressly allowed punitive damages awards. Punitive damages have long been a part of traditional state tort law. As we noted above, Congress assumed that traditional principles of state tort law would apply with full force unless they were expressly supplanted. Thus, it is Kerr-McGee's burden to show that Congress intended to preclude such awards.

 464 U.S. at 255 (emphasis added). Together, Silkwood and Bieneman establish a presumption against preemption by the FAA. Defendants offer no evidence that Congress sought to segregate punitive damages from other traditional "remedies . . . existing at common law" under section 1106. Accordingly, defendants' ...


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