An FBO is not supposed to rent an aircraft to a pilot who the FBO knows isn't competent to complete the planned flight safely. If it does, and a passenger is hurt or killed by the pilot's mistake, the victim or his family can hold the FBO responsible. That's the law of "negligent 
entrustment."
A pilot who doesn't hold the proper license or rating to operate the aircraft he is seeking to rent is probably not competent to complete the planned flight safely. But what if the pilot is properly licensed and meets all the FAA's other requirements? If the FBO rents the aircraft to the pilot, can the FBO still be held responsible for what turns out to be the pilot's mistakes?
Sometimes, the answer is yes.
The landmark case is White v. Inbound Aviation. A young pilot had just recently received his private pilot's license. He was comfortable flying the FBO's Piper Archer in which he had been "checked out" by one of the FBO's instructors. The FBO felt the renter was a good pilot. It felt, however, that the pilot should obtain some additional instruction in "mountain flying" before flying to an airport in the mountains nearby. The FBO felt that without the instruction, the pilot might not be able to handle the special challenges presented by "high density altitude" airports.
One day the pilot showed up to rent the Archer. He told the FBO that he wanted to fly two friends to Lake Tahoe airport, an airport in the mountains. The pilot hadn't obtained the mountain-flying instruction, but the FBO rented the aircraft to him anyway.
The pilot landed at Lake Tahoe airport without incident. But he wasn't prepared for the effects of the altitude, heat, and weight of the aircraft on takeoff. When he attempted to depart, he crashed, killing himself as well as his two passengers.
The family of one of the passengers sued the FBO, arguing it should never have rented the plane to the pilot for this particular trip. The jury agreed and held the FBO liable.
The FBO appealed. It argued that the pilot held a license that legally entitled him to fly anywhere he wanted, including mountain airports like Lake Tahoe. That, the FBO argued, should have been the end of the matter. If the pilot was competent in the eyes of the FAA, he should have been deemed competent in the eyes of the court.
The court of appeal disagreed, and affirmed the jury's verdict against the FBO. Though the young pilot may have been a competent pilot generally, that wasn't the issue. The FBO knew that, notwithstanding his license, the pilot wasn't competent for the particular flight he had planned. As the court of appeal noted:
[The issue as plaintiffs framed it] was not whether [the pilot] was competent in general to pilot an aircraft but whether [he] was competent to 'operate the aircraft that he operated on the day he operated it and in the manner in which he operated it under the conditions he experienced ... on July 3rd with three people on board going to Lake Tahoe.'
The FBO knew that, even though he was properly licensed, the pilot was not competent to conduct the particular flight he had planned under the conditions that existed on the day of the accident. The court of appeal ruled that, therefore, the jury properly held the FBO liable for the accident under the law of negligent entrustment.
e fuel for the short flight. But fuel was a few pennies per gallon cheaper in Truckee than in San Jose. The Trolans decided to fill the tanks of their single-engine Cessna 206 to the tops.
atically compromise the aircraft's ability to climb. After takeoff, the aircraft will ride briefly on the cushion of air that exists between the plane's wings and the runway, and then crash. And that's exactly what happened.
