Thornton v. M7 Aerospace LP

• Decision Date: 06 August 2015
• Docket Number: Nos. 14–1707,14–2481.,s. 14–1707
• Citation: 796 F.3d 757
• Parties: Trad THORNTON, administrator of the Estate of Sally Urquhart, deceased, et al., Plaintiffs–Appellants, v. M7 AEROSPACE LP, Defendant–Appellee. Trad Thornton, administrator of the Estate of Sally Urquhart, deceased, et al., Plaintiffs–Appellants, v. Jeppesen Sanderson Inc. and Honeywell International Inc., Defendants–Appellees.
• Court: U.S. Court of Appeals — Seventh Circuit

796 F.3d 757

Trad THORNTON, administrator of the Estate of Sally Urquhart, deceased, et al., Plaintiffs–Appellants
v.
M7 AEROSPACE LP, Defendant–Appellee.

Trad Thornton, administrator of the Estate of Sally Urquhart, deceased, et al., Plaintiffs–Appellants
v.
Jeppesen Sanderson Inc. and Honeywell International Inc., Defendants–Appellees.

Nos. 14–1707
14–2481.

United States Court of Appeals, Seventh Circuit.

Argued Oct. 27, 2014.
Argued May 26, 2015.
Decided Aug. 6, 2015.

796 F.3d 760

Floyd Allen Wisner, Attorney, Wisner Law Firm, PC, Geneva, IL, for Plaintiff–Appellant.

Michael A. Pope, Attorney, McDermott, Will & Emery, Chicago, IL, for Defendant–Appellee.

Before WOOD, Chief Judge, and EASTERBROOK and WILLIAMS, Circuit Judges.

Opinion

WILLIAMS, Circuit Judge.

These appeals arise out of a commuter airplane crash in May 2005 near Queensland, Australia. One of the worst aviation accidents in Australian history, all fifteen people on board died when the descending plane crashed into terrain. The administrators of the estates of the deceased sued several companies and one individual, alleging that they contributed to the crash. In this opinion, we have consolidated two appeals: the first is the plaintiffs' case against the successor to the plane's manufacturer and the second is against the manufacturer of the plane's warning system and the maker of navigational charts. In both appeals, the district court granted the defendants' motions for summary judgment. Because we find that the successor had no duty to warn the plane's operator of the need to install a more enhanced warning system, and the operator did not rely on any alleged voluntary undertaking of a duty to warn, we affirm the district court's grant of summary judgment for the successor in the first appeal. Also, because we find that the plaintiffs did not properly present any evidence from which a reasonable jury could infer that the defendants' products probably contributed to the crash, and because the warning system's manufacturer had no duty to alert the customer that an improved system should be installed, we affirm the decision of the district court in the second appeal.

I. BACKGROUND

On May 7, 2005, a commuter aircraft, operated by Transair, crashed into terrain on its way to the Lockhart River airfield in Queensland, Australia. Sadly, the crew and passengers did not survive. Plaintiffs, as administrators of the estates of all but one of the deceased, sued several defendants for their roles in the crash. The aircraft that crashed was a Fairchild SA227–DC Metro 23, Registration Number VH–TFU (hereinafter “Aircraft”).

796 F.3d 761

A. M7 Aerospace

The first appeal addresses the case against M7 Aerospace LP (“M7”), the successor to the Aircraft's manufacturer Fairchild Aircraft Inc. (“Fairchild”). Now defunct, Fairchild was an aircraft and aerospace manufacturing company that was a wholly-owned subsidiary of Fairchild Dornier, a German corporation. In 1990, the Federal Aviation Administration (FAA) issued Fairchild a Type Certificate to manufacture SA227–DC Metro aircrafts (“Metros”).¹ In 1992, Fairchild manufactured the Aircraft, a Metro, and sold it in January 1993 to Aerovias de Mexico, a non-party Mexican airline. It was later transferred to other owners, and at some point between 1993 and 2005, Transair acquired the Aircraft.

In 2000, Fairchild ceased manufacturing and sold its last Metro. In 2002, it filed for bankruptcy in the Western District of Texas. At an auction during the bankruptcy proceedings, 4M Investments LLC bid and won the purchase of Fairchild's assets. It executed an Asset Purchase Agreement with Fairchild which the bankruptcy court approved, stating that the assets would be free and clear of any liens, claims, and encumbrances. In 2003, 4M assigned the Asset Purchase Agreement to Defendant M7.

M7 is a privately held small business whose owners had no prior relationship with Fairchild. It operates from a facility in San Antonio that it purchased from Fairchild. As a result of the acquired assets, M7 owns the rights to use the Fairchild name and to Fairchild's technical publications. Additionally, M7 acquired the Type Certificate and was designated as the Original Equipment Manufacturer (OEM) for the Metro fleet. As holder of the Type Certificate and as the OEM, M7 has the exclusive right to manufacture proprietary parts for the Metro aircrafts. In 2003, M7 began operations with three primary business units focusing on Metros and another line of aircraft: (1) part and product support division, (2) government contracts division, and (3) maintenance, repair, and overhaul operation. In its San Antonio facility, M7 builds and assembles aircraft parts for other aerospace companies, but it has never manufactured any aircraft.

M7's operations include distribution of a catalogue of parts for the Metro aircraft, sale of flight, maintenance, and inspection manuals to known Metro owners and operators, and technical support. It issues service bulletins and maintains and updates a list of Metro owners and operators. However, operators do not need to seek M7's approval or inform it of a sale, so the list is informal and largely based upon orders for parts or the owners' initiation of contact with M7. Transair was listed on a revised service customer list. That is to say, Transair at some point purchased parts from M7, but it is unclear whether Transair was purchasing parts for the Aircraft or another plane.

The plaintiffs' primary dispute with M7 concerns the Aircraft's ground proximity warning system. At the time of the crash, the Aircraft was likely fitted with a Ground Proximity Warning System (GPWS), which alerts the crew of approaching terrain. It was not fitted with an Enhanced Ground Proximity Warning System (EGPWS), which has the capacity to alert the crew more quickly of terrain than the GPWS and provides the pilots with more time to react. The Australian Transportation Safety Bureau (ATSB) concluded that if the plane had been equipped

796 F.3d 762

with an EGPWS, the crash could have been avoided. The plaintiffs maintain that M7 should have warned Transair of various defects in the Aircraft, particularly of the need to install an EGPWS.

The plaintiffs filed a negligence and strict products liability action against numerous defendants including M7. Six counts in the second amended complaint pertained to M7, four for indirect liability and two for direct liability. First, the plaintiffs sought to impose liability vicariously on M7 as successor-in-interest for the actions of its predecessor Fairchild, but the district court granted summary judgment for M7 on these counts, and the plaintiffs do not appeal. The plaintiffs also sought to directly impose liability on M7 for its alleged negligent breach of its own duty to warn and advise under operation of law and, in the alternative, under a theory of voluntarily undertaking a duty to warn. The district court granted summary judgment for M7 on these direct liability theories, and the plaintiffs appeal.

B. Jeppesen and Honeywell

The second appeal addresses the plaintiffs' case against two companies, Jeppesen Sanderson (“Jeppesen”) and Honeywell International (“Honeywell”). Because cloud cover did not allow the flight crew to make a visual approach on the day of the crash, the pilots used what is called an RNAV instrument approach. An RNAV instrument approach is a non-precision approach using cockpit instruments, including a global positioning system, to navigate between waypoints along a flight path. Jeppesen produced and sold charts for pilots to use while performing non-visual approaches into the Lockhart River airfield. It received source data for its approach charts from Airservices Australia (“ASA”), an entity owned by the Australian government. ASA designed the approach procedure into Lockhart River airfield. The pilots of the Aircraft subscribed to Jeppesen's chart service, but we do not know for sure if the pilots actually used Jeppesen's charts while descending on the day of the crash. Jeppesen's charts complied with ASA's requirements, but they did not indicate topography of the terrain below the descent path. That is, they did not show the altitude of the mountain range beneath the flight path. The Aircraft crashed into the South Pap ridge at an altitude of approximately 1,210 feet when it descended at a steeper angle than prescribed in the Jeppesen charts and flew below the 2,060–foot minimum safe altitude for its location.

Honeywell manufactured GPWS units. It purchased the GPWS business from Hamilton Sundstrand in 1993. It manufactured a GPWS unit which was fitted on the Aircraft in 2003 (but no wreckage of a GPWS unit was found after the crash). Honeywell also manufactured and sold EGPWS units, but it did not sell the EGPWS to the Aircraft's operator or tell the operator to purchase an EGPWS.

After the crash, the ATSB investigated the potential causes of the accident and published a detailed report. The ATSB report concluded that the plane crashed as a “result of a controlled flight into terrain; that is, an airworthy aircraft under the control of the flight crew was flown unintentionally...