Air Crash Disaster, In re

Decision Date06 June 1996
Docket NumberNos. 91-2328,92-1776,s. 91-2328
Citation86 F.3d 498
PartiesIn re AIR CRASH DISASTER. Chester H. POLEC, et al.; Kris Grigg, Mary Kahle, James Wennen, Earl Pearson, Carolyn Johnson, Suzanne Redd Ross, Victor Elfering, Marilyn Blakley, Bonnie Royden, David Charles Morris, Patricia Roundy, and Janet D. Cook, Plaintiffs, v. NORTHWEST AIRLINES, INC., Defendant-Appellant, McDonnell Douglas Corporation, Defendant-Appellee. through 92-1787.
CourtU.S. Court of Appeals — Sixth Circuit

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Felix J. Gora (briefed), Ralph F. Mitchell, Rendigs, Fry, Kiely & Dennis, Cincinnati, OH, Leonard E. Nagi, Paskin, Nagi, & Baxter, Detroit, MI, Carroll E. Dubuc, Michael H. Selter (argued and briefed), Aidan D. Jones, Graham & James, Washington, DC, for Northwest Airlines, Inc. in No. 91-2328

Felix J. Gora (briefed), Ralph F. Mitchell, Rendigs, Fry, Kiely & Dennis, Cincinnati, OH, Leonard E. Nagi, Paskin, Nagi, & Baxter, Detroit, MI, Carroll E. Dubuc, Michael H. Selter (argued and briefed), William D. Evans, Jr., Graham & James, Washington, DC, for Northwest Airlines, Inc. in Nos. 92-1776 through 92-1787.

Donald E. Shely, Dykema, Gossett, Spencer, Goodnow & Trigg, Bloomfield Hills, MI, Jeffrey W. Morof, Bryan & Cave, Los Angeles, CA, Douglas E. Winter (argued and briefed), Bryan, Cave, McPheeters & McRoberts, Washington, DC, for McDonnell Douglas Corp. in Nos. 92-1776 through 92-1787, 92-2328.

Before: MERRITT, Chief Judge; and ENGEL and BOGGS, Circuit Judges.

BOGGS, Circuit Judge.

This case concerns who is responsible for the crash of Northwest Flight 255 on August 16, 1987, the second-worst aviation disaster in American history. The crash killed one hundred fifty-four passengers and crew, and two bystanders. A jury found that Northwest Airlines was liable for one hundred percent of the injuries and deaths caused by the crash. Northwest appeals. Northwest also appeals the district court's holding that McDonnell Douglas, the manufacturer of the crashed airplane, can recover from Northwest, under a theory of equitable subrogation, money that it paid to settle certain claims. We affirm both judgments.

I

Northwest Airlines Flight 255 crashed during takeoff from the Detroit Metropolitan Airport on August 16, 1987. The aircraft was an MD-80 model manufactured by McDonnell Douglas. The plane failed to gain sufficient altitude after takeoff, and struck a lamppost in the lot of a nearby National Car Rental office. The impact sheared off part of the wing, and the plane subsequently crashed into a highway overpass on Middlebelt Road. Evidence at trial indicated that the aircraft's crew had not properly set the plane's wing flaps and slats, which are necessary for lift. Fifteen seconds after takeoff, the plane was forty-two feet above the ground--according to the standard flight plan, it should have been at an altitude of 752 feet.

Following the accident, some 160 plaintiffs sued Northwest and McDonnell Douglas. In addition, Northwest and McDonnell Douglas filed claims against each other. The Judicial Panel on Multidistrict Litigation consolidated all federal cases in the United States District Court for the Eastern District of Michigan, before Chief Judge Julian Abele Cook, Jr., pursuant to 28 U.S.C. § 1407. In re Air Crash Disaster at Detroit Metro. Airport, 674 F.Supp. 27, 28 (J.P.M.L.1987). Judge Cook appointed a Plaintiffs' Steering Committee, consisting of six experienced mass disaster attorneys. In re Air Crash Disaster at Detroit Metro. Airport, 737 F.Supp. 396 (E.D.Mich.1989). The PSC, Northwest, and McDonnell Douglas agreed to a discovery and pretrial schedule. Practice and Procedure Order No. 2, 1 and Amendment, March

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23, 1989. 2

On November 30, 1988, Northwest filed third-party complaints for contribution and indemnity against Texas Instruments (TI), National Car Rental System, Inc. (National), and the United States. 3 TI manufactured a circuit breaker used in the aircraft's warning system. Northwest alleged that the circuit breaker failed, causing the warning system to fail also. Northwest contended that National's placement of its lamppost violated Federal Aviation Administration (FAA) regulations, and that the accident would not have occurred had the post been properly placed. The plaintiffs moved to sever TI, National, and the United States on January 12, 1989, arguing that Northwest's proceedings against TI and National were "instituted at this late date solely for the purpose of promoting delay." The court denied the motion, noting that the Practice and Procedure Order No. 2 "allowed any defendant to file a third-party complaint with the court on or before November 30, 1988," and stating that it still expected "factual liability discovery" to close by February 15, 1989. Order, January 12, 1989, at 2. After a hearing, however, the court reconsidered its position and granted the motion, severing the claims against TI and National. Order, February 23, 1989. The court requested Northwest to provide a list of depositions noticed, but not commenced or completed, by the close of discovery on February 15. The court would consider which of these depositions, if any, could continue. Id. at 2.

Northwest petitioned this court for a writ of mandamus to reverse the court's February 23, 1989 order. We denied the petition in In re Air Crash Disaster at Detroit Metro. Airport, No. 89-1457, 1989 WL 62513 (6th Cir. June 13, 1989).

Initially, the trial court had identified an exemplar case to try on issues of liability. However, "rather than preside over the claims of an individual plaintiff, as was previously scheduled," on August 18, 1989, the trial court transferred all pending federal cases to itself for trial, pursuant to 28 U.S.C. § 1404 and Rule 14(b) of the Rules of Procedure of the Judicial Panel on Multidistrict Litigation. In re Air Crash Disaster at Detroit Metro. Airport, 737 F.Supp. 391, 393 (E.D.Mich.1989).

"After considering various proposals with respect to the procedure for addressing all of the issues in the case," the court broke the trial into three parts: (1) a joint liability trial involving all the plaintiffs' claims against Northwest and McDonnell Douglas, and of all claims for contribution and indemnity between Northwest and McDonnell Douglas; (2) damage trials to determine the amount of the compensation that would be payable to the plaintiffs; and (3) a second liability trial to resolve Northwest's claims against TI and National. In re Air Crash at Detroit Metro. Airport, 791 F.Supp. 1204, 1209 (E.D.Mich.1992). The present appeal is only concerned with the joint liability trial.

Before trial, Northwest entered into "damages only" settlements with sixty passengers. Northwest agreed not to contest liability for compensatory damages, and the sixty plaintiffs agreed not to seek punitive damages. As part of the settlement, McDonnell Douglas waived the exculpatory clause of the Aircraft Purchase Agreement, which would otherwise immunize McDonnell Douglas from liability to Northwest, except in instances of fraud. Stipulation between Northwest Airlines and McDonnell Douglas, December 12, 1988 (sealed); see also In re Air Crash Disaster at Detroit Metro. Airport, 757 F.Supp. 804, 806 n. 4 (E.D.Mich.1989)(containing language of Purchase Agreement's exculpatory clause); id. at 807 n. 5 (stating that McDonnell Douglas waives the exculpatory clause in

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cases where Northwest stipulates to liability). In return, Northwest secured plaintiffs' release of McDonnell Douglas, dismissed its fraud claims against McDonnell Douglas, and agreed to seek contribution at trial for the money it paid to the sixty plaintiffs under traditional products liability theories only.

Northwest partially settled claims by another group of plaintiffs, against whom it claimed "special defenses." Some of the "special defense" cases involved international tickets. Northwest asserted that the $75,000 liability limit under the Warsaw Convention applied to these claims absent a finding of "willful misconduct." Order, Nov. 6, 1990 (sealed). Other "special defense" claims involved off-duty Northwest employees traveling on passes. The terms of these passes exculpated Northwest from liability absent a finding of "willful or wanton misconduct." 4 Still other "special defense" claims involved on-duty flight attendants, against whom workers' compensation served as a partial defense for Northwest.

McDonnell Douglas settled separately with the special defense plaintiffs, preserving, in its words, a "right" to "recover over" from Northwest. At trial, McDonnell Douglas sought reimbursement from Northwest pursuant to the doctrine of equitable subrogation.

These various settlements left a group of eighty plaintiffs still seeking recovery from Northwest and McDonnell Douglas on the eve of trial. Northwest settled with these plaintiffs after jury selection, but before opening statements. In the settlement, Northwest paid compensatory damages, but did not obtain a release of McDonnell Douglas.

At trial, the eighty plaintiffs and Northwest each proceeded separately against McDonnell Douglas, while McDonnell Douglas proceeded against Northwest for reimbursement of the money it paid to settle the special defense cases. The trial began with the eighty plaintiffs' case-in-chief. Through a series of witnesses beginning on October 12, 1989, the plaintiffs presented evidence explaining the general facts of the crash. The plaintiffs called expert witnesses who testified that the plane was impossible to control at stall in violation of FAA regulations, that a warning system intended to alert the crew if the slats and flaps were not set correctly ("Central Aural Warning System," or "CAWS") malfunctioned, and that a circuit breaker that supplied power to the CAWS (the "P-40" circuit breaker) was unreliable.

After the plaintiffs had presented their affirmative evidence, McDonnell Douglas moved for...

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