Helicopter Transp. Servs., LLC v. Sikorsky Aircraft Corp.

• Decision Date: 23 March 2020
• Docket Number: Case No. 3:16-cv-2078-SI
• Citation: 448 F.Supp.3d 1127
• Parties: HELICOPTER TRANSPORT SERVICES, LLC, and U.S. Leaseco, Inc., Plaintiffs, v. SIKORSKY AIRCRAFT CORPORATION, Defendant.
• Court: U.S. District Court — District of Oregon

448 F.Supp.3d 1127

HELICOPTER TRANSPORT SERVICES, LLC, and U.S. Leaseco, Inc., Plaintiffs,

v.SIKORSKY AIRCRAFT CORPORATION, Defendant.

Case No. 3:16-cv-2078-SI

United States District Court, D. Oregon.

Signed March 23, 2020

Scott G. Seidman, Ryan M. Bledsoe, and Sarah M. Einowski, Tonkon Torp llp, 888 SW Fifth Avenue, Suite 1600, Portland, OR 97204. Of Attorneys for Plaintiffs.

Jonathan M. Hoffman and Michael A. Yoshida, MB Law Group llp, 117 SW Taylor Street, Suite 200, Portland, OR 97204. Of Attorneys for Defendant.

OPINION AND ORDER

Michael H. Simon, District Judge.

Plaintiffs Helicopter Transport Services, LLC ("HTS") and U.S. Leaseco, Inc. ("Leaseco") (collectively, "Plaintiffs") bring this lawsuit against Defendant Sikorsky Aircraft Corporation ("Sikorsky"). This dispute arises out of Plaintiffs' ownership and operation of a Sikorsky-manufactured helicopter, which Plaintiffs have been unable to operate since 2012. In their First Amended Complaint, Plaintiffs allege breach of implied-in-law contract (Count 1), breach of implied-in-fact contract (Count 2), and breach of the implied warranty of merchantability and fitness for a particular purpose (Count 3). Sikorsky moves for summary judgment. For the reasons that follow, Sikorsky's motion is granted.

STANDARDS

A party is entitled to summary judgment if the "movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). The moving party has the burden of establishing the absence of a genuine dispute of material fact. Celotex Corp. v. Catrett , 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). The court must view the evidence in the light most favorable to the non-movant and draw all reasonable inferences in the non-movant's favor. Clicks Billiards Inc. v. Sixshooters Inc. , 251 F.3d 1252, 1257 (9th Cir. 2001). Although "[c]redibility determinations, the weighing of the evidence, and the drawing of legitimate inferences from the facts are jury functions, not those of a judge ... ruling on a motion for summary judgment," the "mere existence of a scintilla of evidence in support of the plaintiff's position [is] insufficient...." Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 252, 255, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). "Where the record taken as a whole could not lead a rational trier of fact to find for the non-moving party, there is no genuine issue for trial." Matsushita Elec. Indus. Co. v. Zenith Radio Corp. , 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986) (citation and quotation marks omitted).

Summary judgment is not the time to amend pleadings. See, e.g., Navajo Nation v. U.S. Forest Serv. , 535 F.3d 1058, 1080 (9th Cir. 2008) (holding that when allegations are not in the complaint, "raising such claim in a summary judgment motion is insufficient to present the claim to the district court"); Wasco Prods., Inc. v. Southwall Techs., Inc. , 435 F.3d 989, 992 (9th Cir. 2006) (" ‘Simply put, summary judgment is not a procedural second chance to flesh out inadequate pleadings.’ ") (quoting Fleming v. Lind–Waldock & Co. , 922 F.2d 20, 24 (1st Cir. 1990) ); see also Pickern v. Pier 1 Imports (U.S.), Inc. , 457 F.3d 963, 968-69 (9th Cir. 2006) (new issues raised in response to summary judgment were not appropriate for consideration).

BACKGROUND

Sikorsky designs, manufactures, and sells helicopters. In 1963, Sikorsky made and sold to a third-party a model S-61R helicopter, identified as Helicopter 61501 ("the Helicopter"). That Helicopter later was resold several times and eventually purchased by Plaintiff Leaseco in 2000. In 2012, the Federal Aviation Administration ("FAA") refused to approve the Helicopter for flight, effectively grounding it. Plaintiffs have been unable to use the Helicopter since then.

A. The Civilian Helicopter Industry

The Helicopter at issue is a "heavy-lift" helicopter, capable of holding significant weight. Heavy-lift helicopters frequently are used in the logging industry and in fighting forest fires. The FAA regulates both commercial and civilian aircraft. To legally operate a civilian helicopter, that helicopter must be approved and deemed "airworthy" by the FAA.

The FAA requires that all aircraft have a Type Certificate ("TC"), which indicates the airworthiness of an aircraft design or model. An aircraft's manufacturer usually holds the Type Certificate for that aircraft. Type Certificate holders create maintenance manuals, which are required by the FAA and guide owners, operators, engineers, and mechanics in maintaining the aircraft and keeping it airworthy by staying in compliance with FAA regulations. The maintenance, repair, and overhaul of aircraft is referred to in the industry as "MRO."

Generally, Type Certificate holders provide MRO support for even discontinued models of aircraft. A manufacturer's reputation with respect to its support for its aircraft, including older models, is often important to its ability to sell new models. Sikorsky provides MRO support and sells parts to owners and operators of its helicopters. Sikorsky has a program for its type-certificated helicopter models that provides MRO support and parts to owners and operators of those models. In the past, when Sikorsky has sold Type Certificates to other companies, it has required that those companies or entities be a source for re-supply of parts, components, and accessories for those aircraft.

The Helicopter Association International ("HAI") is the leading trade association for owners and operators of helicopters. In 2004, the HAI issued a white paper noting that all of the "primary OEMs [original equipment manufacturers] maintain a significant number of dedicated staff within their ‘product support engineering’ organizations to provide expert technical assistance to the ‘civil helicopter fleet.’ " According to this report, OEM support for civilian helicopters "is a given, understood part of how the helicopter business is accomplished." This direct link between OEMs and helicopter operators, the report explained, "is a major element in insuring the ‘continued airworthiness’ of the fleet."

B. History of the Specific Helicopter at Issue

Sikorsky manufactured the Helicopter at issue and first applied for FAA registration for the Helicopter in June 1963. The Helicopter is a model S-61R helicopter, which is part of Sikorsky's line of S-61 helicopters. The specific S-61R Helicopter at issue is listed on the 1H15 Type Certificate, which Sikorsky holds.

In December 1970, Sikorsky sold the Helicopter to Carson Helicopters, Inc. ("Carson"), under a written Conditional Sales Contract ("Carson Sales Contract"). Sikorsky sold the Helicopter used and in an "as is" condition. Under the Carson Sales Contract, Sikorsky and Carson acknowledged that Sikorsky would not provide or obtain an Airworthiness Certificate or a special flight authorization for Carson to remove the helicopter from Sikorsky's premises. The Carson Sales Contract also expressly noted that the aircraft, when delivered, would "not be in conformity with the FAA type certification basis applicable to the S-61R and FAA Type Certificate Number 1H15." Sikorsky expressly disclaimed all warranties, except for a warranty of good title and a warranty against patent infringement claims. The Carson Sales Contract also provided that "all loss, liability and damage to persons or property arising out of the possession, regulations, requirements, and rules with respect to the use, operation, management, control and maintenance of the Helicopter" would fall on the buyer, Carson. Sikorsky's sale to Carson also included several components for the Helicopter, including a model S3167-23000-8 Main Gear Box ("-08 MGB"). In January 1971, the Carson Sales Contract was recorded in the FAA Registry.

After purchasing the Helicopter, Carson performed work on the aircraft, and the FAA thereafter issued a Standard Airworthiness Certificate on May 14, 1971. The Helicopter's logbooks indicate that Carson installed a -12 MGB in May, 1971, and then modified that to be a -13 MGB in November 1971.

The Helicopter changed hands two more times before entering Plaintiff Leaseco's possession. In January 1972, Carson sold the Helicopter to Grumman Aerospace Corporation ("Grumman"). In December 1995, Grumman resold the Helicopter to Blue Bird Helicopters ("Blue Bird"). On February 9, 2000, Plaintiff Leaseco purchased the Helicopter from Blue Bird as part of a larger purchase of several aircraft and other items of inventory and equipment. As was the case with Carson's purchase from Sikorsky in 1970 under the Carson Sales Contract, Leaseco purchased the used Helicopter from Blue Bird in 2000 on an "as is, where is" basis.

C. Plaintiffs' Operation and FAA's Grounding of the Helicopter

As the Type Certificate holder, Sikorsky owns the drawings for most of the parts, components, and accessories for the S-61 line of aircraft. Over the years, Sikorsky in various ways assisted Plaintiffs in their operation of the Helicopter and other aircraft. For example, Sikorsky Commercial Services, Inc. ("SCS"), a wholly-owned subsidiary of Sikorsky, employs Gary Tate as a Field Service Representative. Tate provides technical assistance with maintenance problems and serves as a liaison between Sikorsky and its customers. Tate assisted Plaintiffs on at least six separate occasions, always at no charge to Plaintiffs. Tate also occasionally shared with Sikorsky information about issues gleaned from operators, which Sikorsky would use to update protocols for the maintenance, repair, or overhaul of aircraft. Plaintiffs also purchased parts from Sikorsky. HTS purchased at least $185,000 worth of parts from Sikorsky or Sikorsky affiliates for use mostly, if not exclusively, on aircraft other than the Helicopter. HTS also purchased an annual subscription to a Sikorsky website that allows aircraft operators to access Sikorsky's technical and maintenance manuals.

When Leaseco...