Normally, the FAA cannot be sued for doing a bad job certifying an aircraft as safe. But in the case of the 737 Max, things might be different.
As a general rule, the FAA cannot be sued as long as, in certifying the aircraft as safe, it was exercising its “discretion.” The United States Supreme Court discussed the “discretionary function defense” in a case called United States v. Varig Airlines. In that case, 124 people died on board a Boeing 707 due to an inflight fire. The fire was the result of a lavatory that did not satisfy applicable safety regulations. The families sued the FAA for wrongful death, alleging that the FAA was negligent in certifying the aircraft as safe when, in fact, it wasn’t safe at all. Specifically, the FAA didn’t even review the defective lavatory design, instead simply “spot checking” the design work of Boeing. The Supreme Court ruled that in only spot-checking Boeing’s design work, the FAA was exercising its discretion and thus could not be sued.
[T]he acts of FAA employees in executing the “spot-check” program in accordance with agency directives are protected by the discretionary function exception . . . The FAA employees who conducted compliance reviews of the aircraft involved in this case were specifically empowered to make policy judgments regarding the degree of confidence that might reasonably be placed in a given manufacturer, the need to maximize compliance with FAA regulations, and the efficient allocation of agency resources. In administering the “spot-check” program, these FAA engineers and inspectors necessarily took certain calculated risks, but those risks were encountered for the advancement of a governmental purpose and pursuant to the specific grant of authority in the regulations and operating manuals. Under such circumstances, the FAA’s alleged negligence in failing to check certain specific items in the course of certificating a particular aircraft falls squarely within the discretionary function exception . . .
The case of the Boeing 737 Max, however, is different. The FAA didn’t even spot-check Boeing’s work. Rather, it farmed out its job to Boeing itself. Some courts hold that the government can’t assert the “discretionary function” defense when it completely abdicates its responsibility. In short, the FAA can’t argue it had the “discretion” not to do its job, and to instead hope that someone else does it. As the court explained in Whisnant v. United States,
While the government has discretion to decide how to carry out its responsibility to maintain safe and healthy premises, it does not have discretion to abdicate its responsibility in this regard. When it does so, the discretionary function exception cannot shield the government from . . . . liability for its negligent conduct.
Of course, the FAA’s practice of allowing Boeing to self-certify its design seems to be an complete abdication of its responsibilities and, in fact, is now under scrutiny by the Department of Justice, among others. So the question for the families of Ethiopian Airlines Flight 302 is whether this situation is more like Varig or Whisnant?