Isla Nena Air Services v. Cessna Aircraft, No. CIV.04-1883(RLA).

• Citation: 380 F.Supp.2d 74
• Decision Date: 09 August 2005
• Docket Number: No. CIV.04-1883(RLA).
• Parties: ISLA NENA AIR SERVICES, INC., a Puerto Rico corporation, and San Juan Jet Charter, Inc., a Puerto Rico corporation, Plaintiffs, v. CESSNA AIRCRAFT COMPANY, et al., Defendants.
• Court: U.S. District Court — District of Puerto Rico

380 F.Supp.2d 74

ISLA NENA AIR SERVICES, INC., a Puerto Rico corporation, and San Juan Jet Charter, Inc., a Puerto Rico corporation, Plaintiffs, v. CESSNA AIRCRAFT COMPANY, et al., Defendants.

No. CIV.04-1883(RLA).

United States District Court, D. Puerto Rico.

August 9, 2005.

Juan A. López-Conway, Garcia & Fernandez, San Juan, PR, Lawrence D. Goodman, Robert J. Kuntz, Jr., Devine, Goodman, etc., Miami, FL, for Plaintiffs.

James M. Derr, St. Thomas, VI, Bruce J. McGiverin, San Juan, PR, David A. Wagner, J. Thompson Thornton, Thornton, Davis & Fein PA, Miami, FL, for Defendants.

OPINION AND ORDER

ACOSTA, District Judge.

INTRODUCTION

This case arises from an incident on August 30, 2003, when a single engine aircraft suffered engine failure and made an emergency landing in the water close to a beach in Culebra, Puerto Rico. The owner of the aircraft, plaintiff ISLA NENA AIR SERVICES, INC. (ISLA NENA) and its successor in interest, plaintiff SAN JUAN JET CHARTER, INC., sued the manufacturers of the aircraft and engine, defendants CESSNA AIRCRAFT COMPANY (CESSNA) and PRATT & WHITNEY CANADA CORP. (PRATT), respectively.

Invoking this Court's diversity jurisdiction, plaintiffs seek recovery based on theories of negligence and strict products liability arising from Article 1802 of Puerto Rico's Civil Code, 31 L.P.R.A. § 5141, for costs associated with the loss of the aircraft, repair to the aircraft, loss of business income for the time the aircraft has been out of service, and other related damages. See Complaint, Counts I through IV. Plaintiffs also seek indemnification for any amounts they may be adjudged to pay in claims brought by the aircraft's passengers. See Complaint, Counts V and VI.

Before the Court is defendants' motion to dismiss Counts I through IV pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, and plaintiffs' opposition thereto. Defendants argue that regardless of the jurisdictional basis asserted in the complaint, this Court is bound to apply admiralty law to plaintiffs' alleged claims, which law adopts the "economic loss rule", precluding recovery for damage to the aircraft or any of its component parts, except under warranty claims. See East River Steamship Corp. v. Transamerica Delaval, Inc., 476 U.S. 858, 106 S.Ct. 2295, 90 L.Ed.2d 865 (1986). Alternatively, defendants argue that Puerto Rico's substantive law would also follow the "economic loss" rule, and that plaintiffs' claims would be precluded even if admiralty does not apply. Plaintiffs, for their part, maintain that admiralty law does not govern this case and that their claims are cognizable under Puerto Rico's Civil Code. The parties have fully briefed their positions in several filings. See Docket Nos. 21, 22, 26, 32, 36, 48, 49, 52, 53.

For the reasons set out below, the Court GRANTS defendants' motion and consequently dismisses Counts I through IV of the Complaint.

THE INCIDENT

It is axiomatic that for the purposes of deciding a motion to dismiss, the court must accept as true all allegations of the complaint, resolve all doubts and inferences in the plaintiff's favor, and view the pleading in the light most favorable to the non-moving party. Albright v. Oliver, 510 U.S. 266, 267, 114 S.Ct. 807, 127 L.Ed.2d 114 (1994). A claim will be dismissed under Rule 12(b)(6) only if it appears beyond doubt that the pleader can prove no set of facts in support of the claim that would entitle the pleader to relief. Conley v. Gibson, 355 U.S. 41, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957). In this case, the following facts are alleged in the complaint or arise indisputably from the facts so alleged:

Plaintiff ISLA NENA is a short-haul commercial airline based in Puerto Rico. In 2001, ISLA NENA purchased a Model 208B Grand Caravan manufactured by CESSNA. The engine of the aircraft was a Model PT6A-114 engine manufactured by PRATT. On August 30, 2003, the aircraft was carrying nine passengers on a commercial revenue flight from Fajardo to Culebra. Fajardo is a city on the northeast coast of Puerto Rico, and Culebra is an island municipality of Puerto Rico approximately twenty miles east of Fajardo. While flying approximately five miles west of Culebra at an altitude of 2,500 feet, the pilot heard a loud noise and the engine lost power. He established a glide toward Flamenco Beach on Culebra and, according to the complaint, "performed a controlled emergency landing of the Aircraft in the water near the shoreline of Flamenco Beach." The complaint further alleges that, following the emergency landing, the pilot "assisted all the passengers to the shore" and no one was injured (emphasis added). However, the aircraft suffered major damage to all of its components, and the engine was destroyed.

An investigation conducted by the National Transportation Safety Board concluded that the engine had suffered some type of damage that resulted in its failure. Plaintiffs allege that the damage was the result of defects in the rivets installed in the air intake by CESSNA, or by some other defects in the aircraft or one of its component parts for which defendants are liable. Plaintiffs seek various economic damages, including cost to repair the aircraft, loss of value of the aircraft, and lost profits from the operation of the aircraft.¹

DISCUSSION

A. Admiralty Jurisdiction

Since it is undisputed that this action involves the crash of a land-based aircraft into ocean waters during a flight between the mainland of Puerto Rico and an offshore island, the analysis must begin with Executive Jet Aviation, Inc. v. City of Cleveland, Ohio, 409 U.S. 249, 93 S.Ct. 493, 34 L.Ed.2d 454 (1972). In that case the Supreme Court adopted a two-prong test for determining whether admiralty law applied to the crash of a land-based aircraft in the waters of Lake Erie: first, the situs of the crash had to be within navigable waters; and second, there had to be some nexus between the type of activity involved and traditional maritime activity. Id.

A trio of subsequent cases expanded upon these requirements: Foremost Ins. Co. v. Richardson, 457 U.S. 668, 102 S.Ct. 2654, 73 L.Ed.2d 300 (1982), Sisson v. Ruby, 497 U.S. 358, 110 S.Ct. 2892, 111 L.Ed.2d 292 (1990), and Grubart v. Great Lakes Dredge & Dock Co., 513 U.S. 527, 115 S.Ct. 1043, 130 L.Ed.2d 1024 (1995). These cases initially concurred that a court must first determine whether the alleged tort occurred on navigable waters. They went on, however, to raise two issues under Executive Jet's second prong: (1) whether the incident has a "potentially disruptive impact on maritime commerce" (viewing the "general features of the type of incident involved"); and (2) whether the "general character" of the "activity giving rise to the incident" bears a "substantial relationship to traditional maritime activity." See, Sisson, 497 U.S. at 363-65, 110 S.Ct. 2892.

1. The Navigable Waters Requirement

Applying these standards to the case at hand, there can be little doubt that the first prong of Executive Jet is met. The complaint contains repeated references to the fact that the aircraft came to rest "in the water near the shoreline of Flamenco Beach," and that the pilot subsequently helped the passengers "to the shore." The waters of the ocean surrounding Culebra are "navigable waters" insofar as Congress has specifically designated all the waters surrounding Puerto Rico and its islands as "navigable waters" for purposes of admiralty jurisdiction:

"The harbor areas and navigable streams and bodies of water and submerged lands underlying the same in and around the island of Porto Rico [Puerto Rico] and the adjacent islands and waters, now owned by the United States and not reserved by the United States for public purposes, be, and the same are hereby, placed under the control of the government of Porto Rico [Puerto Rico], to be administered in the same manner and subject to the same limitations as the property enumerated in the preceding section [48 USCS §§ 747, 748]: Provided, That all laws of the United States for the protection and improvement of the navigable waters of the United States and the preservation of the interests of navigation and commerce, except so far as the same may be locally inapplicable, shall apply to said island and waters and to its adjacent islands and waters ..."

48 U.S.C. § 749.

The text of the statute continues:

"Notwithstanding any other provision of law, as used in this section ... `navigable bodies of water and submerged lands underlying the same in and around the island of Puerto Rico and the adjacent islands and waters' extend from the coastline of the island of Puerto Rico and the adjacent islands as heretofore or hereafter modified by accretion, erosion, or reliction, seaward to a distance of three marine leagues."

The result would be the same under a common law analysis. It has long been the rule in the United States that all waters within the ebb and flow of the tide are considered navigable waters. In In re Complaint of Paradise Holdings, Inc., 795 F.2d 756 (9th Cir.1986), the Ninth Circuit noted that "[t]hroughout the nation's history, tidal waters have been held to be within the definition of `navigable waters.' Indeed, until 1851 admiralty jurisdiction was limited to waters `within the ebb and flow of the tide.' The Steamboat Thomas Jefferson, 23 U.S. (10 Wheat.) 428, 6 L.Ed. 358 (1825)." See also, Hassinger v. Tideland Electric Membership Corp., 781 F.2d 1022 (4th Cir.1986) ("Admiralty jurisdiction in America ... extends to all areas within the ebb and flow of the tide, regardless of whether those areas are actually covered by water at the time of the alleged event" (quotes omitted)); Cove Tankers Corp. v. United Ship Repair, Inc., 528 F.Supp. 101(S.D.N.Y.1981) (term "navigable waters of the United States" includes both the territorial waters within 3 nautical miles of a State as well as the high seas); McCormick v. United States, 680 F.2d 345 (5th Cir.1982) (admiralty...