VII. SOME OBJECTIONS TO THE PROPOSED ACT

1. The proposed act will not result in uniformity.

From the point of view of the passenger or the man upon the ground, uniformity in aviation liability law is not a matter of great importance. Thus, although the railroads have been operating in interstate commerce for many years, the lack of uniformity regarding liability to passengers and other persons killed or injured by trains has apparently caused no great hardship to anyone. Uniformity in this matter is much less vital than, for example, in the law of sales where differing laws may cause unending perplexities regarding transactions which have incidents in more than one State. From the point of view of the air carrier and the insurance company, however, uniformity would be highly desirable. Moreover, as to shipments of goods, uniformity is very important.

The question is whether the proposed act will result in uniformity.

In considering this matter we must take into account what the prospects are regarding the time necessary for all or substantially all of the States to pass the proposed act. The Uniform Sales Act, which was prepared after experience and judicial precedents extending over centuries, was submitted to the States in 1907. After a lapse of 31 years it has been adopted by 32 States.

The Uniform State Law for Aeronautics was adopted by the National Conference of Commissioners on Uniform State Laws in 1922 and after 16 years has been adopted by 21 States. The proposed Uniform Aviation Liability Act, which repeals a substantial part of the Uniform State Law for Aeronautics, and in addition thereto incorporates the highly controversial provisions regarding passenger liability and compulsory insurance, can scarcely be expected to make better progress than the Uniform State Law for Aeronautics, and especially so in view of the fact that the enactment of the statute will in all probability be actively opposed and resisted by every branch of aviation.

Experience with reference to liability without fault and compulsory insurance as applied to automobiles indicates the difficulty which will be encountered in bringing about the general adoption of the Uniform Aviation Liability Act. Automobiles have been in use for approximately 35 years. There are nearly 30,000,000 Automobiles in use in the United States. They can be purchased in second-hand markets for prices as low as the amount of a State license fee, and innumerable cars are owned and operated by persons who are financially irresponsible and carry no insurance. They can be and are operated by anyone, including children, cripples, and drunkards, and the number of deaths and injuries caused by their operation is appalling and is increasing from year to year. Nevertheless, no State has adopted legislation imposing liability without fault as to automobiles and only Massachusetts has provided for compulsory insurance as to private automobiles.

The provisions of the Uniform Aviation Liability Act relate to matters which are highly controversial and upon which there exists a wide difference of opinion. States have radically different policies as to whether damages recoverable for death by wrongful act should or should not be limited, and States having such limits vary considerably in their views as to the proper amount of the limit. See supra, section III, subsection 4 of this paper. Certainly great difficulty can be anticipated in convincing the legislatures of Maine and Colorado that an air line causing death by an accident due to the malicious act of a third person, or a mistake of a Government employee in a traffic control tower, should be held liable for $10,000, when a person causing death by driving an automobile on the wrong side of the road while intoxicated is liable for only $5,000.

We, therefore, feel warranted in predicting that the progress of the proposed statute in the State legislatures will be slow. There seems to be practically no hope that the statute will be passed by all the States in less than 15 or 20 years. Probably the period will be much longer, and it is likely many States will never pass the proposed act. Thus for the better part of a generation-at a time critical in the development of the aviation industry-there is bound to be a highly disuniform and complicated situation. Visualize the time when this statute shall have been adopted by 10 States scattered over the country-the liability of an airplane on a reasonably long flight will be radically changing from hour to hour. The general principles of aviation liability law are now about the same in substantially all the States. Although there are minor variations, the insurance companies have had little trouble in working out the risks, the air lines have not been seriously handicapped by the differences in the law;

and certainly the traveling public has not suffered from them. The proposed statute, on the other hand, will have the effect of superimposing upon the present law an entirely new set of principles.

For the next 20 years-the period in which we are most interested-the proposed statute would insure a situation far less uniform than that existing today. Imagine the complications regarding insurance against liability to passengers. To estimate the risk, the insurer would have to know just what proportion of each flight was over statute States and what was over nonstatute States. Every route would have a different risk, and the situation with regard to the aircraft not operating over fixed routes would seem impossible of solution. Moreover, every time another State passed the act the calculations would all have to be changed. To complicate matters further, there is the question of the extraterritorial effect of the act. How far passengers will be able to avoid the limitations of liability imposed by the act by suing in other States depends upon delicate questions under the full faith and credit clause and the conflict of laws. This adds another factor of uncertainty to the determination of risks. Instead of the air carriers knowing exactly what their risks are as was stated at the Cleveland meeting of the Commissioners, the proposed plan means that starting now, and for the period of most of our lives, the air carriers will be more uncertain about their risks than they are today. That there may be a utopia in the distant future, toward which we will be heading, does not alleviate the more immediate troubles.

Finally, the act as now drafted contains so many highly controversial details that it is inevitable that many States will omit and alter certain sections of it, thus destroying any faint hope of eventual uniformity and increasing immeasurably the complexities of the situation.

2. The limitation on liability in the proposed act will be nonexistent in many instances.

It has been said with regard to the general theory of the proposed act that absolute liability, limited if insured or secured, is a fair bargain for all concerned. And the matter is frequently thought of in terms of a trade. The air carrier in return for having absolute liability and compulsory insurance thrust upon it is given the quid pro quo of limited liability. An examination of the act indicates that this benefit may be largely illusory. Article II, covering ground injuries and damage gives the plaintiff an option to sue on a negligence theory with no limits on liability. As a practical matter, therefore, limited liability will exist only when proof of negligence would be difficult. As regards passenger injuries, it will probably be frequently possible for a plaintiff to obtain jurisdiction over the air carrier in a State which will not have to give extraterritorial effect to the limitation of liability in the proposed act.

For example, the proposed act provides that the liability it imposes for injuries or death to passengers shall apply wherever the contract of carriage was made in the State even though the injury took place elsewhere. Suppose a contract of carriage is made in New York which has adopted the act. Injury occurs in Kansas which has not adopted it. Plaintiff resides in Kansas and is able to bring suit there against the air line. Does the Kansas court have to give effect to the New York statute even though it is contrary to its own statute for common carriers to limit their liability? The ordinary rule of the conflict of laws is that tort liability shall be determined by the law of the place of injury. (See Beale, The Conflict of Laws, vol. II, sec. 378.2.) While it may be true that the liability imposed by the proposed act, like that of workmen's compensation acts, will be held to be not a tort liability (see Bradford Electric Light and Power Co. v. Clapper (286 U. S. 145, 157-158); and Alaska Packers Ass'n. v. Industrial Accident Commission (294 U. S. 532, 541)), where there is a conflict in the policy of the two States would Kansas be required by the full faith and credit clause to apply the New York statute? Mr. Justice Stone in the Alaska Packers case indicates that in an analogous situation in the workmen's compensation field the matter is to be determined by which State has the superior governmental interest and that this depends upon the circumstances of each case. He says:

"It follows that not every statute of another State will override a conflicting statute of the forum by virtue of the full faith and credit clause; that the statute of a State may sometimes override the conflicting statute of another, both at home and abroad; and again that the two conflicting statutes may each prevail over the other at home, although given no extraterritorial effect in the State of the other" (p. 548).

Thus under this rule each State is given a wide discretion in determining whether it will apply the statutes of other States. For a discussion of the difficulties and complexities of this situation, see David C. Dunlap, the Conflict of Laws and Workmen's Compensation (23 Cal. L. Rev. 381). In the suppositious case, it seems very doubtful if New York has a governmental interest in the accident equal to that of Kansas where the injury occurred, the plaintiff resided, and suit was brought. Variations upon this situation which will raise the same type of problem will constantly be arising. The very nature of air transport is such that almost any flight involves acts done in several States. Moreover, the air lines commonly do business in a number of States so that plaintiffs will have a wide choice, subject only to the doctrine of forum non conveniens, regarding where to bring suit.

Consequently, the quid pro quo which it is asserted the airplane operators will receive in exchange for absolute liability and compulsory insurance will be to a considerable extent nonexistent.

3. The proposed act will result in wide-spread litigation.

One of the chief objects of the proposed statute is to make possible the handling of claims with a minimum of litigation. Unquestionably the first effect of the statute will be a flood of litigation. The proposed statute presents several serious constitutional questions. The absolute liability feature creates an issue of doubtful result under every State constitution as well as the Federal Constitution. Whether the compulsory insurance and absolute liability_provisions are an unconstitutional burden on interstate commerce is a difficult and uncertain question. As was indicated above, under the workmen's compensation acts complicated questions regarding the extraterritorial effects to be given to such acts have arisen under the conflict of laws and the full faith and credit clause when the injury, the making of the contract of employment and the bringing of the suit did not all take place within the bounds of the same State. Since with regard to aviation liability it will be the exception when the contract of carriage, the injury, and the bringing of suit do take place in the same State, much litigation along the lines of the Alaska Packers case, supra, must be anticipated until the act is adopted by all the States in the same form. It was difficulties of a kindred nature in the field of railroad liability which created such confusion that the Carmack amendment had to be passed. (See Beale, The Conflict of Laws, vol. II, sec. 337.1.)

4. Compulsory insurance is unwise.

We do not intend to go into the question of compulsory liability insurance at length. The underwriters themselves are far better fitted to discuss this subject than we. It is our intention to mention only one or two outstanding features.

Firstly, the underwriters say that compulsory insurance inevitably increases rates by destroying selectivity of risks. Aircraft liability insurance is now sold at varying rates depending upon the circumstances of each case and the record of the individual or air line insured. The underwriters say that if there were compulsory insurance they would have to insure poorer risks and the cost to all would go up.

Secondly, compulsory insurance will not help to reduce accidents. The airlines have every incentive both from the humanitarian and the business point of view to reduce accidents. Probably in no industry are such strenuous efforts made to insure safety. Compulsory insurance will not add to this incentive. In fact, it is so strong now that nothing could add to it. Furthermore, compulsory insurance will not have the effect of eliminating from the air a number of dangerous, badly maintained private planes, because such planes are prevented by Government licensing provisions from being flown anyway. Thus one of the chief arguments made in favor of compulsory insurance of automobiles does not apply to aircraft.

Thirdly, the underwriters say that the experience under the Massachusetts compulsory automobile insurance law has been far from satisfactory. Insurance rates have risen about 30 percent since the law went into operation. The immediate effect of the passage of the Massachusetts law was an enormous increase in motor vehicle cases. The Massachusetts Judicial Council stated that for a 5-month period from October to February 1927-28 (approximately 1 year after the law came into effect) there were 4,201 more cases entered than for the corresponding period in 1926-27, and that of this increase 97.4 percent were motor-vehicle cases. (See Massachusetts Judicial Council Report,

1928, pp. 7 and 8.) A subsequent report of the Judicial Council indicates that the increased volume of motor-vehicle cases had become chronic. (See Massachusetts Judicial Council Report, 1929, pp. 7 and 8.) The 1929 report refers specifically to the great number of fake claims, ambulance chasing, and nuisance cases. Statistics show that the passage of the law has not decreased the number of injuries and deaths resulting from motor vehicles.

5. The proposed act will increase insurance rates.

As to ground injuries and damage, it was pointed out in subsection 2, supra, that the act offers the plaintiff an option of suing for negligence with unlimited liability. This means, as a practical matter, that liability is limited only when it is fairly clear that negligence cannot be proved. While it is true some States now have absolute liability in unlimited amount for ground damage, the liability is far less broad than that of the proposed act. For example, under the Uniform Aeronautics Act, contributory negligence is a defense. Also it has been held that there was not absolute liability for damage done at an airport where the airplane was authorized to land. (See supra, sec. IV, subsec. 1 of this paper.) Or, if the injury occurred through the fault of a third person, there would not be liability. In all these instances the proposed act makes the aircraft operator liable. Furthermore, some States apply a negligence standard as to ground damage. (See, supra, sec. IV, subsec. 1 of this paper.) Finally, as in the case of passengers, there will be the operation of compulsory insurance increasing rates through destruction of selectivity of risks. Thus we feel justified in concluding that the proposed act will increase liabilities and insurance rates for ground injuries and damage.

6. The proposed act imposes liability even if the injury occurs through the fault of a third person.

Not only does the proposed statute impose upon aviation a higher standard of liability than that of any other form of transportation, it even fails to provide for an exemption or a right over where an injury was caused through the negligence or willful misconduct of a third person over whom the aircraft operator had no control. Of the 50 workmen's compensation acts which have been passed in States and in United States territories, 47 make some provision whereby the employer can shift the burden of liability to the person at fault.

VIII. ALTERNATIVES TO THE PROPOSED ACT

Because of the difficulties which inevitably arise from attempting to handle a problem which is essentially interstate by State statutes, one is led to ask why, if there is need for legislation, it should not be accomplished by Federal action, at least with respect to passengers and goods and baggage carried upon the airplane. A Federal statute applying to interstate operations would cover substantially all scheduled air-line accidents. Although we have no figures to show how many nonair-line accidents involving passengers or goods shipped occur in interstate commerce, it seems likely that a large large proportion of them do. A Federal statute would unquestionably cover a major part of the field. Thus, in one blow, the back of the problem would be broken.

If the proposed act were passed in several States and a Federal statute based upon different principles and with different insurance requirements were then passed, great confusion would inevitably result. But if a Federal act were passed first the States could then follow it, and real uniformity would be achieved.

As a ground injuries and damage, the time may not yet be ripe to attempt final and permanent codification. The United States has not yet decided to adopt the Rome Convention with regard to international flying.

We think that the time has not yet come to legislate upon aircraft collisions. They are few and far between at present. Almost any rules worked out now would prove unsatisfactory when air traffic becomes heavy. Furthermore, there has as yet been no international convention covering collisions. The Fourth International Conference, which met at Brussels in September, referred a proposed collision convention back to C. I. T. E. J. A. for further drafting, and the American delegation was strongly opposed to it. Surely, we would not make a mistake in not acting upon this matter at once.

With regard to what a Federal statute covering passengers and baggage should contain, the possible variations in detail are, of course, almost infinite. It will be possible for us to discuss the matter only in the most general terms. Broadly

speaking, three types of liability seem feasible: (1) The absolute liability of the proposed act; (2) a form of statutory res ipsa loquitur; and (3) one of the two above types, with exemptions for errors in piloting, handling, or navigation,

Absolute liability imposes upon aviation a higher standard than that imposed on any other form of transportation in the United States or on aircraft in other countries so far as we know. Inasmuch as air transport is a young and growing industry actively in competition with railroads, steamships, automobiles, and aircraft of other countries, it seems unfair to impose such a standard upon it. While the limitation of liability mitigates somewhat the harshness of this rule, it should be noted that shipowners and aircraft in many countries also have limitations upon liability although they do not have absolute liability. Railroads can frequently limit liability for freight loss or damage, and in the United States all forms of transportation have limited liability for death claims in a number of States.

It is often said that plaintiffs in aircraft accidents are unable to prove negligence. It should be noted that these difficulties are constantly being mitigated by technological developments such as the ground direction finder, which enables the course of an aircraft to be plotted from the ground, the sealed barograph, which gives a record of the altitude of an aircraft throughout a flight, and the radio facsimile. There is every reason to believe further advances will be made along these lines in the future. Nevertheless, there are sometimes difficulties in proving negligence, and for this reason a statutory res ipsa loquitur plan has been widely advocated and widely adopted. In fact, it is embodied in the rules of the Warsaw Convention.

At common law the rule of res ipsa loquitur is a rule of evidence. It has several different interpretations: (1) The mere fact of the accident, if the defendant introduces no evidence showing nonnegligence, creates a permissible inference that the defendant was negligent. Under this view the plaintiff still has the burden of proving negligence by a preponderance of the evidence. The question for the jury is whether the mere fact of the accident is in itself sufficient proof to constitute a preponderance. (See Hughes v. Atlantic City, etc., R. Co. (85 N. J. L. 212, 214, 89 Atl. 769).) (2) If the fact of injury is explained and the defendant fails to introduce evidence showing nonnegligence, the court must direct a verdict for the plaintiff, i. e., a compelled inference. This principle is incorporated in the Warsaw Convention (art. 17). (3) The burden of proof shifts from the plaintiff to the defendant and the latter must show nonnegligence by a preponderance of the evidence. Edgerton v. New York and H. R. Co. (39 N. Y. 227.) This principle is also incorporated in the Warsaw Convention (art. 20).

Even if it is determined that plaintiffs are not now adequately protected, a statute which embodies the principles of the second and third interpretations would meet the problem. Under such a statute plaintiffs could always recover unless the defendant affirmatively proved he was free from negligence.

While protecting passengers in insuring that air carriers will endeavor to maintain a high standard of care, this rule does not saddle the air carrier with liability for accidents, which no amount of care could avoid, as does the proposed uniform act. Just what proportion of the total number of accidents would fall within this class is difficult to ascertain. It appears from the Civil Aeronautics Authority accident reports that it would include at least 38 percent of the scheduled air-line accidents, if not more, and 16 percent of the private flying accidents from 1928 through 1937.11

As regards an exemption for piloting, handling, and navigation errors, the Harter Act, which applies to carriage of goods by sea, contains such an exemption. The theory was that the handling of a ship was such a difficult and hazardous art that mistakes were bound to occur regardless of the care taken by the owner in selecting the captain and crew and that once the ship left port the owner had so little control of it that he should not be held rigidly to the doctrine of respondent superior. An exception modeled upon that of the Harter Act was written into the Warsaw Convention with respect to goods and baggage. The British delegates at the Warsaw Conference were anxious to have this exemption extended to pas

11 The Authority lists the following causes of accidents: (1) Pilot errors, (2) other per sonnel errors, (3) power plant failure, (4) structural, (5) handling qualities, (6) miscellaneous, (7) undetermined. Miscellaneous are defined to include accidents due to weather conditions, darkness, airport or terrain conditions which could not reasonably have been foreseen and avoided. The 38 percent and 16 percent given above are for accidents in this category alone. These figures are probably too low as some of the accidents in the power plant and structural failure groups would not be the result of negligence on the part of the carrier.