Alaskan Oil v. Central Flying Service

Alaskan Oil, Inc. (Alaskan) (plaintiff) bought an airplane from Central Flying Service, Inc. (Central Flying) (defendant) for $65,000. Central Flying sold the airplane on behalf of its actual owner, G. W. Davis Construction Company (Davis) (defendant), and kept $53,000 of the sale price in collection of the debt that Davis owed to Central Flying for having repaired and stored the airplane prior to the sale. However, shortly after the sale, Alaskan had multiple issues with the airplane and made several major repairs, ultimately uncovering significant amounts of corrosion. Alaskan was forced to salvage the airplane due to the extensive corrosion approximately one year after purchase. Alaskan sued Davis and Central Flying in federal district court in Arkansas, bringing breach-of-warranty, fraud, and products-liability claims under Arkansas law. A jury found no wrongdoing that would support liability on the breach-of-warranty and fraud claims. However, under a strict-liability theory that did not require any proof of wrongdoing, the jury found that Davis and Central Flying had sold Alaskan an unreasonably dangerous plane and awarded Alaskan $54,500 on its products-liability claim. Central Flying appealed the judgment, arguing that (1) strict liability was not the correct standard for a products-liability claim if the only damage was to the product, (2) the airplane was not unreasonably dangerous when it was sold, and (3) Central Flying was merely Davis’s selling agent and not a supplier that could be held responsible for a products-liability claim.