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A call for aviation liability reform in South Dakota

The new Republican governor of South Dakota, Gov. Dennis Daugaard, included a call for liability reform in his State of the State address, arguing that a 10-year statute of repose could encourage civil aircraft manufacturers to expand in the vicinity of Andrews Air Force Base. From The Rapid City Journal, "Aeronautics industry officials see merit in Daugaard idea":

In the aviation industry, "everybody's trying to pare back right now," said Allan Tamm, president of the aviation consulting firm Avicor Aviation. "When they're paring back on stuff, they're looking for tax breaks, cheaper locations and cheaper labor in order to keep their taxes down. ... States like yours are in a good position to bring companies in."...

Daugaard's proposal to give aircraft manufacturers immunity from liability for product failures after 10 years is another key to attracting aeronautics companies, who have that immunity in states such as Kansas.

"It's very attractive," Tamm said. "Litigation and liability issues are always very high in the priority and importance list for any manufacturer, especially in the aviation group."

But low taxes and friendly liability laws might not be enough to attract manufacturers to the Black Hills.

See also Bob Mercer's report at The Mitchell Daily Republic, "Daugaard sees potential in aviation manufacturing as one new step in economic development plan."

It's difficult to see how a state law could provide enough protection to an industry involved so heavily in interstate commerce and transportation. It took the 1994 General Aviation Revitalization Act, which created a federal 18-year statute of repose for manufacturers, to encourage the rebirth of the civil aircraft industry in the Unite States.

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Rafael Mangual
Project Manager,
Legal Policy

Katherine Lazarski
Manhattan Institute


Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.