Boeing’s newest aircraft, a 787 Dreamliner, has been long-awaited and the possibility of its lithium-ion battery cutting fuel costs by up to 20% makes it seem ideal. However, due to failures arising from Boeing’s electrical system and the lithium-ion batteries in Dreamliners, the FAA grounded all Dreamliner flights worldwide. See “All Dreamliners are Grounded World-Wide,” Wall Street Journal (Jan. 17 2013). The airlines that invested in Dreamliners stand to lose millions of dollars because of grounding. The primary issue involves whether the battery was faulty or not and who is to blame, so the Dreamliner is a likely subject of litigation. As one Board-Certified International Law Expert notes, “Boeing faces a monumental challenge in explaining…that its Dreamliner is…safe to fly. [I]t looks like international attorneys will be busy for years sorting out who’s to blame. … [T]his is indeed a Dreamliner with all the legal work it promises to generate.” Santo Cueto, “Boeing’s Dreamliner is a Dream for International Litigators,” International Business Law Advisor (Jan. 18 2013).With the impending threat of lawsuits from airlines around the world, Boeing faces a dilemma that will require substantial qualified expert testimony to fight or settle claims and assess potential damages due to delays. One potential problem both sides face is that although it was initially assumed that defects in the Dreamliner were apparent, after nearly 2 months of investigation, government experts admit they still cannot detect what structural defect caused the malfunction. FAA air-accident experts are still baffled as to the root cause of the Dreamliner’s failure. “Boeing Dreamliner: Experts Still Stumped Over Burning Batteries,” Wall Street Journal (Feb. 5 2013). To hold Boeing responsible for the airlines’ lost profits and unexpected delays, electrical experts must prove what the problem is and why Boeing is responsible.As The Wall Street Journal notes, “After painstakingly dissecting a number of batteries, examining associated electronic parts, and analyzing information from flight-data recorders, NTSB [National Transportation Safety Board] experts and their Japanese counterparts haven't been able to pinpoint any specific component, automated subsystem or software application that appears to offer…answers. With no apparent, clear-cut theory, investigators are now delving into additional parts of the plane's electrical grid. They also are seeking help from technical experts outside the aviation industry, including scientists and electronics engineers from the U.S. Navy and Department of Energy.” Id. Expert witnesses are critical to determine not only what went wrong, paying particular attention to the lithium-ion batteries, but who is to blame for the delays and worldwide grounding of the aircrafts. Prospective litigants and Boeing will have to require heavily on aviation experts, electrical engineering expert witnesses, and airline industry expert witnesses.Boeing requested launching its own investigation, and if it can demonstrate “in recreating battery-system malfunctions or helping explain how the plane's cutting-edge electrical network behaves under different environmental and operating conditions…such tests could be used to help demonstrate potential fixes.” Id. The FAA has yet approve Boeing’s request, but if Boeing can demonstrate that it exercised due care in its investigation, utilizing airline and electrical engineering experts, it may alleviate potential damages, relating to alleged profits and losses of airlines who contracted with Boeing to use the Dreamliner.The National Transportation Safety Board has yet to fully determine cause and effect. They began their probe on January 7, 2013 and ordinarily, aviation experts can assess what went wrong with respect to a particular aircraft or line within days; hence this is a highly unusual case. Although the FAA claims it is closely monitoring the situation and making progress, it has not commented regarding the unusually long time its investigation has taken. See Committee on Transportation and Infrastructure, “Transportation and Infrastructure Leaders Statement on Boeing Dreamliner Incidents,” Joint-Press Release (Feb. 15 2013),Boeing approached the FAA with several proposals to fix the lithium-ion batteries, and one of its spokespeople claimed, “hundreds of engineers and technical experts are working ‘around the clock’ to return the [Dreamliner] to service.” Marc Birtel, “Boeing Proposes 787 Battery Fix to FAA: sources,” Reuters (Feb. 23 2013). Id. Boeing is wise to cooperate with the government, while retaining its own engineers and technical experts to mitigate litigation that may arise. There may be a question as to whether the government played a role in the delays, particularly if it refuses to cooperate with Boeing and Boeing can show a good-faith intent to avoid delays while minimizing safety risks. If the government fails to identify the specific problem with the Dreamliner but continues to ground flights, it may become a party or cross-party in litigation. If Boeing uses the appropriate, highly qualified, seemingly objective technical and aviation-related experts, it may be able to recoup potential losses, by claiming the FAA conducted a negligent investigation.On the other hand, if the government or airline industry can determine the cause of the Dreamliner’s battery malfunctions, through electrical expert witnesses and engineers, Boeing may ultimately sustain the losses that both it and the airlines incurred. Three key issues may affect prospective litigation: (1) Negligence (2) Strict Liability, and (3) Causation.(1). Negligence involves investigating the standards Boeing’s engineers, drafters, and electrical experts utilized at the time Dreamliners were produced. This does not entail using the “industry standard”; on the contrary, a showing must be made that Boeing’s technicians, scientists, and aviation experts abided by the standards for “state of the art” products. If Boeing’s experts can prove the Dreamliners were manufactured as safely as possible at the time created, it may have a valid defense. Conversely, if the airlines sustained losses because of delays and malfunctions in Boeing’s Dreamliners, they may prevail, using expert testimony from engineers and aviation specialists, who can prove Boeing’s Dreamliners (or the batteries) were not “state of the art.”(2). Strict liability applies regardless of whether a party exercised due care in manufacturing. However, this doctrine is not limitless. Plaintiffs must prove, through expert testimony, Boeing’s product was defective, the legal cause of an injury, and that Boeing had a duty to warn airlines about potential risks arising from its Dreamliners. The aviation industry is rife with hazards; parties understand generally, both orally and in written contracts, that airline accidents occur, and operating an aircraft has hazards. Boeing may not have had any duty to warn airlines.Generally, monetary damages for profit and loss alone tend to be handled under negligence, while strict liability occurs when a party is physically injured/damage is done to their person. California courts have become more lenient with defendants in strict liability cases. In O’Neil v. Crane Co., the Court held that manufacturers are liable for defects in their products, not for products that might be used with their products. 53 Cal. 4th 335 (2012). If Boeing proves the batteries are not “their” products, they may prevail. Boeing is a sophisticated party that has been involved in contracts for decades. A written contract with the airlines existed, indemnifying it from certain torts, and strict liability may have been one of them.(3). Damages: This inquiry requires expert analysis of profits and losses sustained by airlines that contracted with Boeing and a quantifiable amount that an actuarial or engineering expert can make clear to a court. Financial experts and scientists are useful to explain a particular theory and give a jury actual numbers as a guideline rather than nebulous sums. To obtain damages, plaintiffs must show that it was Boeing’s fault the Dreamliners were grounded and delays persisted as long as they did.Boeing may face an uphill battle, but its consistent and clear intent to cooperate with the FAA to determine where the fault lies and avoid unnecessary losses from delays that were perhaps, unfounded or negligent, can minimize damages it may ultimately pay. If government experts cannot determine fault, airlines may express frustration with the government, rather than Boeing or name the FAA as a co-defendant. Boeing has another strategy it may wish to deploy: persuading the airlines that fault lies with another party, such as the federal government or a sub-contractor. Boeing has a close, lucrative relationship and contracts with airlines. It may argue that it has a tradition of exercising due care, and the Dreamliner was part of its well-established rule of creating “state of the art” products. Testimony from engineers familiar with Boeing’s products and its competitors, who spent substantial time testing these products, may help Boeing. However, tradition isn’t everything. Experts in the electrical and technical fields, who can prove the Dreamliner somehow deviated from Boeing’s duty, may penetrate this defense.By: Kat Hatziavramidis, Attorney-at-Law
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