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In case where multiple plaintiffs sued multiple international air carriers alleging that they contracted deep vein thrombosis during flights, House of Lords holds that limiting term “accident” as used in Warsaw Convention precludes airline liability for such events
In the English courts, 24 passengers sued 18 international air carriers for damages alleging that the plaintiffs had suffered from Deep Vein Thrombosis (DVT) by reason of the cramped seating in their aircraft. The defendants denied that the plaintiffs had endured DVT caused by traveling with them.
The principal question of law in this case, however, arises from the defendants’ alternative legal contention that, even if international trips on defendants’ aircraft did cause the plaintiffs to suffer the specified condition, this did not give rise to an “accident” as required by Article 17 of the Convention for the Unification of Certain Rules relating to International Transportation by Air [49 Stat. 3000; T.S.876; 2 Bevans 983; 137 L.N.T.S. 11; concluded at Warsaw, October 12, 1929, as amended] [the Convention], which Parliament incorporated into English law by the Carriage by Air Act of 1961.
DVT is a condition in which a small blood clot or thrombus forms mainly in the deep veins of the legs. Complications from DVT may take place when a thrombus breaks away from the wall of the vein to which it is attached and is carried along with the flow of the blood as an embolus. The most serious of these may occur in the lungs (a pulmonary embolism); it often gives rise to chest pain and breathing difficulties and, in the worst cases, death from respiratory failure.
According to plaintiffs, defendants required every plaintiff to sit in a cramped seat which discouraged and/or prevented a plaintiff from moving out of his or her seat during most of the flight. Defendants also knew, or ought to have known, that these conditions would increase the risk that the seating might cause a DVT to the plaintiffs.
In an appeal pertaining solely to the legal meaning of the term “accident” in Article 17 of the Convention, the English Court of Appeal (Civil Division) ruled against the plaintiffs. Plaintiffs next secured review in the House of Lords. The Judicial Committee of the House unanimously agrees to dismiss the appeal. It rules that contracting DVT (if it did occur) during plaintiffs’ international air flights with defendants did not constitute an “accident” which the Convention demands as a condition of airline liability.
Article 17 of the Convention provides as follows with respect to international air travel on board aircraft of Member States: “The carrier is liable for damage sustained in the event of the death or wounding of a passenger or any other bodily injury suffered by a passenger, if the accident which caused the damage so sustained took place on board the aircraft or in the course of any of the operations of embarking or disembarking.”
In their concurring opinions, the Lords of Appeal analyze the special meaning of the term “accident” in Article 17. “It is to be noticed that the conditions for the imposition of liability on the carrier do not include any element of fault or blameworthiness or failure to observe a proper standard of care on the part of the carrier. … The omission from these conditions of any requirement of negligence on the part of the carrier is double-edged so far as an injured passenger is concerned. It is to the passenger’s advantage that negligence on the part of the carrier needs to be neither alleged nor proved.”
“It is to the passenger’s disadvantage, however, that even clear causative negligence on the part of the carrier will not entitle the passenger to a remedy if the Art. 17 conditions cannot be satisfied. It has been authoritatively established that if a remedy for the injury is not available under the Convention, it is not available at all.” See Sidhu v. British Airways plc [1997] A.C. 431 and El Al Israel Airlines Ltd. v. Tsui Yuan Tseng, 525 U.S. 155 (1999). [See also 1999 International Law Update 3].”
“Nonetheless, negligence, or the absence of it, on the part of the carrier may play a part under Art. 20. It provides that: ‘The carrier is not liable if he proves that he and his servants or agents have taken all necessary measures to avoid the damage or that it was impossible for him or them to take such measures.’ Plainly, a carrier who had been negligent could not qualify for an Art. 20 defence.” [¶ 4]
“Contributory fault of the injured person, too, may afford a defence to the carrier. Article 21 provided that: ‘If the carrier proves that the damage was caused by, or contributed to, by the negligence of the injured person, the court may, in accordance with the provisions of its own law, exonerate the carrier wholly or partly from his liability.’”
“[Moreover]… [A]rt 22 … imposes monetary limits on the extent of the liability of the carrier for Art. 17 damage. It has often been observed that the provisions were designed to strike a balance between the interests of passengers and the interests of the airlines. (See e.g. Morris v KLM Royal Dutch Airlines [2002] A.C. 628).”
The House then contrasts the use in Art. 17 of the term ‘accident’ with the choice of a different term in Art. 18 dealing with baggage or cargo. Article 18 declares that: ‘The carrier is liable for damage sustained in the event of the destruction or loss of, or of damage to, any registered baggage or any cargo, if the occurrence which caused the damage so sustained took place during the carriage by air.’ (emphasis added).”
“The use of the term ‘accident’ in Article 17 but the term ‘occurrence’ in Article 18 must be significant. Both terms impart the idea that something or other has happened. But ‘occurrence’ is entirely general in its natural meaning. It permits no distinction to be drawn between different types of happening. ‘Accident’ on the other hand must have been intended to denote an occurrence of a particular quality, an occurrence having particular characteristics.”
“Since [1976], DVT as an alleged consequence of economy class long distance flights has had increasing attention from the media, from members of the medical professions and from airlines themselves. The hand baggage of most passengers on long distance flights will these days include a pair of tight stockings which, if worn, are believed to provide some protection against the onset of DVT. Many air travellers, however, have suffered the serious consequences of DVT to which I have referred and they, or persons on their behalf, believe the onset of the DVT to have been attributable to the nature of the seating provided for them on the aircraft.” [¶¶ 5-7]
“During the plaintiffs’ international flights to which the Warsaw Convention applied, the following [factual] conditions are the [agreed upon] ‘specimen matrix’ of a claimant on which the House is to base its interpretation of Article 17 in DVT cases: ‘(1) the layout of the passenger cabin, the seating space available to each passenger and the type of passenger seat installed on the aircraft performing the flight were all in accordance with the Defendants’ usual standard for an aircraft of that type flying on the route in question; (2) the flight was operated in accordance with all of the Defendant’s usual procedures and practices; (3) nothing happened in the course of the flight which adversely affected the performance or flight characteristics of the aircraft; (4) throughout the flight, all of the aircraft’s seating and all of its systems affecting the passenger cabin environment were in their normal working order; (5) the aircraft complied with, and the flight was carried out in accordance with, all applicable aviation regulations; and, (6) whether or not the above operation of the aircraft minimized and/or eliminated the risk of passengers suffering from DVT, the defendant took no further or other steps to minimize and/or eliminate such risk.” [¶ 9]
Additional elements of the Specimen include that the plaintiffs suffered DVT from their flights; that defendants are assumed to have known of the special risks posed by DVT on long air flights; and that defendants failed to warn plaintiffs of this risk.
The House also sets down what the parties generally agree are the principles of interpretation which it should apply to Art. 17. “(1) The starting point is to consider the natural meaning of the language of Art. 17, with the French text prevailing in case of any inconsistency with the English text (fortunately there is no relevant inconsistency); (2) the Convention should be considered as a whole and given a purposive interpretation; (3) the language of the Convention should not be interpreted by reference to domestic law principles or domestic rules of interpretation; and (4) assistance can, and should be, sought from relevant decisions of the courts of other Convention countries, but the weight to be given to them will depend upon the standing of the court concerned and the quality of the analysis.”[¶ 11].
Opinions from abroad also warn against changing the balance that the 1929 Convention tried to strike between the neophyte airlines and their passengers. For instance, Justice Antonin Scalia in his dissenting opinion in Hasten v. Olympic Airways, 124 S. Ct. 1221, 1234 (2004) (an opinion with which Justice Sandra Day O’Connor concurred) well states the issue: “‘A legal construction is not fallacious merely because it has harsh results. …. It is a mistake to assume that the Convention must provide relief whenever traditional tort law would do so. To the contrary, a principal object of the Convention was to promote the growth of the fledgling airline industry by limiting the circumstances under which passengers could sue. … Unless there has been an accident there is no liability, whether the claim is trivial . … or cries out for redress.’”
The Lords of Appeal then develop their analyses further. “First, for Convention purposes, the ‘loss or hurt’ cannot itself be the ‘accident’. Article 17 distinguishes between the bodily injury on the one hand and the ‘accident’ which was the cause of the bodily injury on the other. It is the cause of the injury that must constitute the ‘accident’. Second, it is important to bear in mind that the ‘unintended and unexpected’ quality of the happening in question must mean ‘unintended and unexpected’ from the viewpoint of the victim of the accident.”
“Article 17 claims based on the airline’s failure to warn passengers of the possibility of, and the need to take precautions against, DVT have been rejected in Australia, Canada, Germany and the United States. Some decisions to the contrary can be found but the bulk of the authority is firmly against the acceptance of Art. 17 DVT claims.”
“The most important DVT authority is the recent decision of the High Court of Australia in Povey v Qantas Airways Ltd [2005] H.C.A. 33. [A majority] gave a judgment rejecting the argument that the onset of DVT brought about by the conditions of passenger travel on the flight could be said to have been caused by an Art. 17 accident. The onset of DVT, i. e., the formation of the blood clots in the veins of the leg, could not be the requisite accident because that onset was the damage, or the first stage of the damage, complained of. And no other event or happening, no occurrence external to the passenger, could be pointed to. … (¶ 13).” [¶ 20].
“Of more importance for present purposes is that nothing in the Hasten case casts doubt upon the two important requirements of Art. 17 … namely, that an event or happening which is no more than the normal operation of the aircraft in normal conditions cannot constitute an Art. 17 accident and, second, that the event or happening that has caused the damage of which complaint is made must be something external to the passenger.”
“These two requirements appear to me to rule out Art. 17 recovery in DVT cases where no more can be said than that the cramped seating arrangements in the aircraft were a causative link in the onset of the DVT. The failure by an airline to warn its passengers of the danger of DVT and of the precautions that might be taken to guard against that danger does not, in my opinion, improve the case, at least where there is no established practice of airlines generally or of a defendant airline in particular to issue such warnings.” [¶¶ 23-25].
Another opinion further elaborates on how to interpret Article 17. “It follows from the scheme of the Convention, and indeed from its very nature as an international trade law convention, that the basic concepts it employs to achieve its purpose are autonomous concepts. For present purposes, the compromise agreed at Warsaw involved the imposition of a form of strict liability on carriers in respect of accidents causing death, wounding or bodily injury to passengers in return for the limitations of liability expressed in the Warsaw Convention.”
“The exclusive remedy under Art. 17 is dependent on the fulfilment of three indispensable requirements. First, that a passenger sustained death, wounding or other bodily injury. Secondly, that an accident took place on board the aircraft or in the course of any of the operations of embarking or disembarking. Thirdly, that the death, wounding or bodily injury was caused by the accident. This is the immediate context in which the meaning of ‘accident’ must be determined. This setting makes clear that accident is used with reference to the cause rather than the injury itself.” [¶ 29].
“In order to achieve a more extensive interpretation of the word ‘accident’ in Art. 17, counsel for the Appellants invoked various policy grounds. He submitted that under Art. 17 there is a need to impose liability upon the party best able to develop defensive mechanisms, who has physical control of the aircraft, who is most capable of assessing the risk and insuring against it, and who is best able to spread remedial cost over all the passengers.”
“This is a variant of a ‘deep pocket’ tort law theory which has no place in a trade law treaty such as the Warsaw Convention. On the contrary, Art. 31 of the Vienna Convention on the Law of Treaties [See Carter & Trimble, International Law, Selected Documents 49, at 58 [U.S. is not a party as of January 1, 2005] provides that a treaty shall be interpreted ‘in accordance with the ordinary meaning to be given to the terms of the treaty in their context and in the light of its object and purpose.’ … This approach does not permit the adoption of the economic analysis advocated on behalf of the Appellants. Once this approach is rejected, the argument for treating DVT by itself as an accident can be seen to be fragile.” [¶ 31].
“There is, however, another perspective to be taken into account. In interpretation of a trade law treaty, like the Warsaw Convention, it is of great important (sic) that the courts of treaty states, and particular their higher courts, should strive for uniform interpretations on debatable issues. Such uniformity is not always attainable but it must be the constant aim.” [The opinion then extensively reviews the relevant judicial views of other member states.] [¶ 35].
“It is now established that the remedy provided by Art. 17 is exclusive, in the sense that no other common or civil law remedy (e.g. for want of reasonably (sic) care or negligence) is available to a passenger who sustains bodily injury or dies in the course of international carriage by air, but has no claim against the carrier under Art. 17 (e.g. because the injury or death was not caused by an accident on board or in the course of embarkation or disembarkation).” [¶ 62].
Citation: Deep Vein Thrombosis v. Air Travel Group Litigation, [2005] U.K.H.L. 72 (Transcript) (House of Lords, December 8).
Filed in: 2006 International Law Update, Issue 2
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Where defendant’s negligence damaged plaintiff’s telecommunications cargo while en route between Melbourne airport and plaintiff’s bonded warehouse, High Court of Australia rules that neither Treaty nor waybill limitations on liability apply and restores trial court’s award of substantial damages
During December of 1996, the Siemens group of companies and the Schenker group of companies renewed their long-standing arrangement dealing with the latter’s carriage of Siemens products by air from Germany to Australia. Later, Schenker Germany agreed to transport a large shipment of telecommunications gear via Singapore Airlines and thence by truck to Schenker’s bonded warehouse about 2.5 miles from the Melbourne airport.
Schenker International Deutschland GmbH (SID) consolidated this consignment with cargo from its other customers and forwarded it on Singapore Airlines to Tullamarine Airport in Melbourne. Two days after it got to Tullamarine, an employee of Schenker International (Australia) Pty. Ltd. (SIA) collected the consignment and placed it on a truck for delivery to its bonded warehouse. As a result of the conceded negligence of SIA’s driver, however, part of the consignment fell off the truck on the way and was damaged.
Siemens Ltd. sued SIA and SID for damages in the New South Wales Supreme Court. The decisive issue was whether a limitation-of-liability clause in the standard form of air waybill applies during the road transport of cargo to a bonded warehouse located outside the perimeter of Melbourne Airport. If so, the defendant’s liability for damages drops from almost A$1.7 million inclusive of interest to US$ 74,680 plus interest.
The primary judge held that the limitation provisions contained in either the Convention for the Unification of Certain Rules relating to International Carriage by Air as Amended [49 Stat. 3000; T.S. 876; 137 L.N.T.S. 11 (Warsaw, 1929)] and/or the waybills did not apply. He then found the Schenker Companies jointly and severally liable to Siemens Australia in the amount of $ 1,688,059.50 including interest.
The Court of Appeal agreed with the primary judge’s holding that the Warsaw Convention did not apply. That Court did rule, however, that the waybill governed the rights and obligations of the parties with respect to the accident and that this included the limitation on liability contained in Clause 4. The Court set aside the orders of the trial judge and, instead entered judgment for Siemens Australia in the limited amount of $US 74,680 plus interest. Siemens Australia then obtained review by the High Court. In a 3 to 2 vote, the High Court allows the appeal and reinstates the judgment of the primary court.
The Court first notes that, under their century-old Richtungsverkehr (literally, “direct traffic”), SID and SIA were to be the exclusive transporters of Siemens equipment to Australia and that SIA’s bonded warehouse was to be the end point of the transportation. The Richtungsverkehr it did not contain a liability-limitation clause. At the trial, it was assumed that the provisions of the air waybill itself operated as a part of, or adjunct to, the overall contract of carriage.
Article 18 of the Warsaw Convention, as Amended offers a scheme of presumptive air carrier liability for damaged goods, inter alia, during its transport by air of goods between the territories of two High Contracting Parties. The Convention is in force for both Germany and Australia. With respect to damaged cargo, Article 22 limits the liability of the air carrier to 250 Francs per kilogramme unless modified by specific agreement.
The “air carriage” to which the Amended Convention applies ends when the air carrier ceases to be in the charge of the cargo or when the cargo is no longer within an aerodrome, whichever happens first. Here, the damage took place outside the Melbourne airport. In the Court’s view, this rebuts the general presumption that the accident occurred during “carriage by air.”
Under Article 2 of the Convention, Supplementary to the Warsaw Convention, for the Unification of Certain Rules Relating to International Carriage by Air Performed by a Person Other than the Contracting Carrier, (Guadalajara, 1961) which partially supplements the Warsaw Convention, SID was the “contracting carrier” whereas Singapore Airlines was the “actual carrier.” Both Germany and Australia are also parties to the Guadalajara Convention.
In addition, air waybills act as prima facie evidence of the contract terms, the receipt of the cargo and the conditions of the air carriage. In the absence of an air waybill, a negligent carrier is not entitled to avail itself of the liability limitation under the Amended Convention.
The Master Air Waybill was the standard form required by the International Air Traffic Association (IATA). The Bill listed the airport of departure as “Frankfurt” and the airport of destination as “Melbourne Tullamarine.” It also noted that the cargo was “bond delivery approved”, suggesting that it allowed SIA to carry the cargo to a bonded warehouse prior to customs clearance. SID also issued a standard form of air waybill used by freight forwarders; it also generally tracks the required language of the IATA form.
The Schenker Companies did not dispute their liability for the accident. They sought to limit its scope, however, by citing the Amended Warsaw Convention as incorporated into Australian law by statute in 1959. In the alternative, they relied on the house air waybill (the waybill) issued by SID in connection with this consignment.
Article 18.1 of the Warsaw Convention provides in relevant part: “The carrier is liable for damages sustained in the event of destruction or loss of, or damage to, any cargo, if the occurrence which caused the damage so sustained took place during the carriage by air.” Article 18.2 of the Convention defines “carriage by air” in part as follows: “The carriage by air within the meaning of [Art 18.1] comprises the period during which the baggage or cargo is in charge of the carrier, whether in an aerodrome or on board an aircraft, …”
Finally, Article 18.3 declares that: “The period of the carriage by air does not extend to any carriage by land, by sea or by river performed outside an aerodrome.” The primary judge held, and the Court of Appeal agreed, that the Convention did not apply ex proprio vigore to the equipment once it had left the physical boundaries of Tullamarine Airport. The High Court unanimously concurs on this point.
The Court then addresses the effect of the waybill. “The primary judge … held that the waybill was ‘confined to air carriage’ and, … did not purport to cover any ‘land element’. Critical to his Honour’s reasoning was the relationship between [Clauses] 4 and 2.1. The latter provides that: ‘Carriage hereunder is subject to the rules relating to liability established by the Warsaw Convention unless such carriage is not ‘international carriage’ as defined by that Convention.”
“Clause 2.1, when read with [Clause] 4, was said to evidence an assumption that the carriage ‘as a whole’ will, or will not, fall within the Warsaw Convention’s definition of ‘international carriage’. In other words, the waybill, including [Clause] 4, would only operate in circumstances where the entire carriage performed pursuant to that waybill did not fall within the Convention. Given that the Convention applied prior to the point in time at which the consignment was removed from the boundaries of Tullamarine, [Clause] 4 could not be relied upon by the Schenker Companies.” [¶ 89]
“The limitation of liability contained in [Clause] 4 as noted earlier, is only available in respect of ‘carriage’. ‘Carriage’ is not defined in the waybill. However,‘carrier’ is defined to mean any air carrier which undertakes to carry goods pursuant to the waybill ‘or perform any other services incidental to such air carriage’. Siemens Australia relies on the emphasised phrase as supporting its contention that ‘carriage’ within the meaning of [Clause] 4 is limited to carriage by air. However, several factors suggest a different construction.” [¶ 91]
“First, … [Clause] 4 itself operates only in respect of carriage to which the Warsaw Convention does not apply. In so providing, the waybill contemplates a disjunction between carriage to which the Convention applies (international carriage by air) and carriage which is governed solely by the terms of the waybill itself. It must follow that ‘carriage’ in [Clause] 4 has a meaning different from that contained in Article 18 of the Warsaw Convention.” [¶ 92]
“Secondly, the definition of ‘carrier’ relied upon by Siemens Australia speaks of the carriage of goods ‘hereunder’, i.e., pursuant to the terms of the waybill. Importantly, the terms of the waybill provide for the transportation of goods other than through carriage by air.” [¶ 93]
“In the present case, the terms of the Richtungsverkehr appear to have included the transportation of the consignment to Schenker Australia’s bonded warehouse. So much is suggested by the [parties' correspondence] …. Evidence from … the shipping officer at Siemens Australia, was to similar effect. It follows that delivery to the Schenker Australia bonded warehouse was contemplated by Siemens Germany, the Schenker Companies and, most importantly, Siemens Australia in its capacity as consignee.” [¶ 94]
“Thirdly, the statutory regime in effect at the time of the consignment’s arrival at Tullamarine permitted no other possibility. Evidence before the primary judge indicated that Schenker Australia was permitted by an officer of the Australian Customs Service (Customs), from at least April 1991, to transport consolidated cargo from Tullamarine to its warehouse for deconsolidation without being required to submit that cargo to customs inspections prior to its removal from the airport.” [¶ 95]
After finding support in two not dissimilar Ninth Circuit cases, the majority concludes that: “[t]he result is that, on the proper construction of the waybill, the damage sustained to the consignment in the course of complying with requirements necessary in order to effect delivery of that consignment fell within the terms of [Clause] 4 of the waybill.” [¶ 99]
Citation: Siemens Ltd. v. Schenker International(Australia) Pty. Ltd., 205 A.L.R. 232, 78 A.L.J.R. 508, [2004] H.C.A. 11.
Filed in: 2004 International Law Update, Issue9
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Ninth Circuit affirms dismissal of action by Portuguese survivors of China Airlines crash in Hong Kong because district court lacked jurisdiction under Warsaw Convention
Numerous Portuguese plaintiffs brought an action in California state court against China Airlines, McDonnell Douglas Corporation, the Boeing Company, and others, after a crash by a China Airlines plane in Hong Kong had killed three and injured several others. The flight was on a round trip from Portugal to the far east and return. It had scheduled stops in London, Hong Kong, and Bangkok. Defendants removed the case to federal court on the basis of alienage. Plaintiffs, however, moved to remand to state court for lack of complete diversity — both plaintiffs and China Airlines being foreign.
The district court concluded that plaintiffs had fraudulently joined China Airlines only because they could not have filed their damage claims against China Airlines in the U.S. under the Convention for the Unification of certain Rules Relating to International Transportation by Air, October 12, 1929, 49 Stat. 3000, 3020-21, T.S. No. 876, 137 L.N.T.S. 11 (The Warsaw Convention).
The district court, therefore, denied the motion to remand, and dismissed China Airlines with prejudice. Plaintiffs later dismissed the “other” defendants whom they had not been able to serve pursuant to Fed.R.Civ.P. 41(a)(1)(i). They also stipulated to the dismissals of defendants McDonnell Douglas and Boeing, leaving no defendants in the action. Plaintiffs appealed, claiming error (1) in the district court’s denial of their motion to remand to state court, and (2) in the dismissal of China Airlines for lack of jurisdiction. The U.S. Court of Appeals for the Ninth Circuit affirms.
The Court points out that the Convention is the exclusive basis for filing a personal injury action against air carriers in international transportation between citizens of parties to the Convention. Article 28(1) sets forth where plaintiffs may file such a suit: “An action for damages must be brought, at the option of the plaintiff, in the territory of one of the High Contracting Parties, either before the court of the domicile of the carrier or his principal place of business, or where he has a place of business through which the contract has been made, or before the court at the place of destination.”
Here, the U.S. is neither the domicile of China Airlines, nor the place of its principal place of business, nor the place where the parties made the contract of transportation, nor the destination of the flight in question. Therefore, plaintiffs could not have filed the action against China Airlines in the U.S.
The Ninth Circuit remands the matter to the district court only to have the record reflect that it should have dismissed China Airlines without prejudice. This is the accepted practice in dismissals for lack of subject matter jurisdiction.
Citation: Bartolomeu v. China Airlines, Nos. 01-15497 & 01-15518, 2002 WL 31829110 (9th Cir. December 17, 2002) (unpublished).
Filed in: 2003 International Law Update, Issue 1
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In proceeding by EC Commission against United Kingdom, European Court of Justice rules that U.K.’s “open skies” agreement with United States unlawfully discriminates against Member State air carriers established in U.K. but not owned or controlled by U.K. nationals, thus failing to comply with “national treatment” demanded by EC Treaty with respect to airlines of other Member States
The United Kingdom entered into bilateral agreements on air transport (“open skies” agreements) with the United States beginning in the mid 1940s. The U.K. and the U.S. concluded the first Bermuda agreement (Bermuda I) in 1946. Article 6 of this Agreement provided that: ” [e]ach Contracting Party reserves the right to withhold or revoke the exercise of the rights specified in the Annex to this Agreement by a carrier designated by the other Contracting Party in the event that it is not satisfied that substantial ownership and effective control of such carrier are vested in nationals of either Contracting Party …”
In July 1977, over four years after the U.K. had entered the EC, the same parties updated the Bermuda I Agreement. Article 5 of Bermuda II declares in pertinent part: “(1) Each Contracting Party shall have the right to revoke, suspend, limit or impose conditions on the operating authorisations or technical permissions of an airline designated by the other Contracting Party where: (a) substantial ownership and effective control of that airline are not vested in the Contracting Party designating the airline or in nationals of such Contracting Party; .. (2) … such rights shall be exercised only after consultation with the other Contracting Party.”
Moreover, Article 3(6) of Bermuda II provided that a condition of a Contracting Party’s duty to authorize the operations of an airline is that the designating Party or its nationals have substantial ownership and effective control of the requesting airline. Between 1992 and 1994, the U.S. intensified its efforts to enter into similar bilateral “open skies” agreements with the largest possible number of European States.
In a November 1994 letter to all EC Member States, the EC Commission declared, inter alia, that only the Community could lawfully and effectively negotiate air transport agreements with third nations such as the U.S. The following July, the Commission formally notified the U.K. that, by its Agreement with the U.S., it had failed to fulfill its duties under [old] Article 52 of the EC Treaty.
It noted that, under Bermuda II, among the air carriers which had gotten licenses from the U.K. pursuant to Council Regulation (EEC) No. 2407/92 and had exercised their rights of establishment in the U.K., only those owned and controlled by U.K. nationals could acquire traffic rights in the U.S. — thus barring those licensed and established carriers that nationals of other Member States owned and controlled. Undeterred, the U.K. went ahead and finalized Bermuda II on June 5, 1995.
Unsatisfied by the U.K.’s response to its later Reasoned Opinion, the EC Commission, on December 1998, filed a proceeding against the United Kingdom in the European Court of Justice under old Article 169 of the EC Treaty (now Article 226 EC). It asked for a declaration that the U.K. has failed to carry out its duties under Article 52 of the EC Treaty (now, after amendment, Article 43 EC). In an eleven-member panel, the European Court of Justice rules for the Commission.
The U.K. first contended that Bermuda II did not amend or substantially change the provisions of Bermuda I entered into prior to the U.K.’s accession to the EC, i.e., before January 1, 1973. Under old Article 234 (now Article 307), the Treaty is not to affect those rights and duties generated by pre-accession agreements entered into with third nations.
The Court, however, points out that the same Article also demands that Member States take all proper steps to get rid of any incompatibilities between their previous agreements and the Treaty. In the Court’s view, therefore, Article 234 cannot rescue the U.K. What creates the difficulty here is Bermuda II, entered into four years after the U.K. joined the EC, not Bermuda I.
“As the final recital in its preamble states, the Bermuda II Agreement was concluded ‘for the purpose of replacing’ the Bermuda I Agreement, in particular in order to take into account the development of traffic rights between the Contracting Parties. It thus gave rise to new rights and obligations between those parties.”
“In those circumstances, it is not possible to attach to the Bermuda I Agreement the rights and obligations which, for the United Kingdom and the United States of America, have flowed from the clause in the Bermuda II Agreement concerning the ownership and control of air carriers since the entry into force of that latter agreement.” [Para. 29]
The central issue in this case centers on [old] Article 52 of the Treaty (now Article 43). Its second paragraph provides in relevant part that: “Freedom of establishment shall include the right … to set up and manage undertakings, in particular, companies or firms within the meaning of the second paragraph of Article 48 under the conditions laid down for its own nationals by the law of the country where such establishment is effected…” [emphasis added].
As the Court points out, no provision of the Treaty bars old Article 52 from applying to air transport. Nor does it matter whether or not the Community has already legislated on air transport outside the Community.
“Articles 52 and 58 of the Treaty thus guarantee nationals of Member States of the Community who have exercised their freedom of establishment and companies or firms which are assimilated to them the same treatment in the host Member State as that accorded to nationals of that Member State [Cite] both as regards access to an occupational activity on first establishment and as regards the exercise of that activity by the person established in the host Member State.” [Para. 45]
The 1977 agreement, however, denies Member State airlines the “national treatment” guaranteed by the Treaty. “In this case, Article 5 of the Bermuda II Agreement permits the United States of America, inter alia, to revoke, suspend or limit the operating authorisations or technical permissions of an airline designated by the United Kingdom but of which a substantial part of the ownership and effective control is not vested in that Member State or its nationals.” [Para. 47]
“It follows that Community airlines may always be excluded from the benefit of the Bermuda II Agreement, while that benefit is assured to United Kingdom airlines. Consequently, Community airlines suffer discrimination which prevents them from benefiting from the treatment which the host Member State, namely the United Kingdom, accords to its own nationals.”
“Contrary to what the United Kingdom maintains, the direct source of that discrimination is not the possible conduct of the United States of America but Article 5 of the Bermuda II Agreement, which specifically acknowledges the right of the United States of America to act in that way. Consequently, by concluding and applying that agreement, the United Kingdom has failed to fulfil its obligations under [old] Article 52 of the Treaty.” [Paras. 50-52]
Finally, the U.K. falls back on Article 56 (1) (now Article 46). It provides in part that: “the provisions of this Chapter and measures taken in pursuance thereof shall not prejudice the applicability of provisions laid down by law, regulation or administrative action providing for special treatment for foreign nationals on ground of public policy, public security or public health …”
The Court, however, is not persuaded that this provision applies here. “It should be recalled that, according to settled case law, recourse to justification on grounds of public policy under [old] Article 56 of the Treaty presupposes the need to maintain a discriminatory measure in order to deal with a genuine and sufficiently serious threat affecting one of the fundamental interests of society [Cites]. It follows that there must be a direct link between that threat, which must, moreover, be current, and the discriminatory measure adopted to deal with it [Cites].”
“In this case, Article 5 of the Bermuda II Agreement does not limit the power to refuse operating authorisations or the necessary technical permissions to an airline designated by the other party solely to circumstances where that airline represents a threat to the public policy of the party granting those authorisations and permissions.”
“There is no direct link between such [a] (purely hypothetical) threat to the public policy of the United Kingdom as might be represented by the designation of an airline by the United States of America and generalised discrimination against Community airlines. The justification put forward by the United Kingdom on the basis of Article 56 of the Treaty must therefore be rejected.” [Paras. 57-60]
The European Court of Justice rules similarly as to “open skies” agreements entered into with United States by seven other EU Member States. The other “open skies” rulings also handed down by the ECJ on November 5, 2002 consisted of: Commission v. Republic of Austria, EU: Case C-475/98; Celex No. 698J0475; Commission v. Kingdom of Belgium, EU: Case C 471/98; Celex No. 698J0471. Commission v. Kingdom of Denmark, EU: Case C 467/98; Celex No. 698J0467. Commission v. Republic of Finland, EU: Case C 469/98; Celex No. 698J0469. Commission v. Federal Republic of Germany, EU: Case C 476/98; Celex No. 698J0476. Commission v. Grand Duchy of Luxembourg, EU: Case C 472/98; Celex No. 698J0472. Commission v. Kingdom of Sweden, EU: Case C 468/98; Celex No. 698J0468.
In each case, the ECJ concludes that, in entering into an “open skies” agreement with the United States, the above Member States had failed to fulfil their Community obligations under the EC Treaty and secondary law. Specifically involved were Articles 5 (now Article 10 EC) and 52 (now, after amendment, Article 43 EC) of the Treaty.
The applicable secondary law in the majority of cases consisted of Council Regulation (EEC) No 2407/92 of 23 July 1992 on the licensing of air carriers (OJ 1992 L 240, p. 1), Council Regulation (EEC) No 2408/92 of 23 July 1992 on access for Community air carriers to intra Community air routes (OJ 1992 L 240, p. 8), Council Regulation (EEC) No 2409/92 of 23 July 1992 on fares and rates for air services (OJ 1992 L 240, p. 15), Council Regulation (EEC) No 2299/89 of 24 July 1989 on a code of conduct for computerized reservation systems (OJ 1989 L 220, p. 1), as amended by Council Regulation (EEC) No 3089/93 of 29 October 1993 (OJ 1993 L 278, p. 1), and Council Regulation (EEC) No 95/93 of 18 January 1993 on common rules for the allocation of slots at Community airports (OJ 1993 L 14, p. 1).
Differences in the various rulings typically arose out of differing wording in the prior or present agreements, some variations in EC law as of the dates on which each state became bound by it and in the defenses raised by each Member State. On certain common issues, the Court’s language is substantially identical with respect to each Member State.
Citation: EC Commission v. United Kingdom, EU Case C-466/98, Celex No. 698J0466, [2002] ECR 0 (November 5, 2002). For additional background on these rulings, see The Wall Street Journal, Global Report, November 6, 2002, page A3 (bylines of Scott Miller, Susan Carey and Neil King, Jr.); Financial Times, November 6, 2002, page 7 (byline of Daniel Dombey)].
Filed in: 2002 International Law Update, Issue 11
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In two consolidated cases, House of Lords rules that mental or psychic injury aboard international airlines flight without physical manifestation does not qualify as “bodily injury” under Article 17 of Warsaw Convention
Fifteen-year-old Ms. Morris (plaintiff) was a paying passenger on a KLM flight from Kuala Lumpur to Amsterdam traveling by herself. Upon waking from a nap, she discovered the hand of the man next to her caressing her left thigh from her hip to her knee. Extremely distressed, she got up and told a flight attendant what had happened to her. The attendant got her another seat. Back in England, a doctor diagnosed plaintiff as suffering from clinical depression based on a single episode of a major depressive illness. In her English damage suit against KLM, she claimed only that the incident had caused her a mental injury. Plaintiff has gotten completely better from the incident.
A trial judge upheld her injury claim as within Article 17 of the Convention for the Unification of Certain Rules relating to International Transportation by Air, with additional Protocol (1929) [the "Warsaw Convention”], 49 Stat. 3000; T.S. 876; 137 L.N.T.S. 11. The English version of Article 17 (the French text being authoritative) is: “The carrier is liable for damage sustained in the event of the death or wounding of a passenger or any other bodily injury [lesion corporelle] suffered by a passenger, if the accident which caused the damage so sustained took place on board the aircraft or in the course of any of the operations of embarking or disembarking.” [emphasis added] The Court of Appeal, however, held that Morris’s claim did not constitute a “bodily injury.” From this ruling, she obtained review in the House of Lords.
In an unrelated appeal from the Scottish courts, the following incidents had taken place. Plaintiff Philip King was riding on board a helicopter which Bristow Helicopters Ltd. owned and operated. As they started to take off from a North Sea floating platform in bad weather, both engines failed, causing the craft to land heavily on the deck, enveloped by smoke. The blinded passengers panicked, afraid that the helicopter was going to fall over into the stormy sea. Nevertheless, everyone was able to get out of the ‘copter onto the platform.
King later developed post-traumatic stress disorder, leading to the onset of peptic ulcer disease. He sued Bristow in the Scottish courts, claiming both physical and mental injuries. (Eds. – while King’s flight was not “international,” a U.K. statute made Convention standards applicable.) Under his reading of article 17, the Lord Ordinary allowed proof only as to the peptic ulcer. The First Division court, however, allowed King’s appeal and ordered that his entire claim should go to trial. Bristow got its case into the House of Lords. The question applicable to both appeals is: to what extent, if at all, is an international carrier liable under article 17 where the injury that the passenger sustained in the accident was a mental and not a physical injury?
Mr. King’s counsel pitched his appeal on the basis that Mr King suffered two distinct kinds of injury as a result of the helicopter mishap. The first was a mental injury which led to three psychiatric conditions: post traumatic stress disorder, chronic depression and fear of flying. The second was a physical disorder consisting of the peptic ulcer disease which the psychiatric conditions had caused.
The five Lords of Appeal unanimously decide (1) to dismiss Ms. Morris’s appeal and (2) to allow Bristow’s appeal, restoring the decision of the Lord Ordinary.
Before 1929, injured international air passengers could sue airlines under a wide variety of applicable national laws in respect of damage caused by death, wounding and bodily injury; loss of or damage to property; and injurious delay. Carriers, of course, were free to protect themselves by insurance, while limiting their liability to passengers by exception and limitation clauses. This legal hodge-podge satisfied neither air travelers nor the still fragile aviation industry.
The Warsaw Convention sought to bring some degree of order to this tangled system of liability. For example, it placed ceilings on damages and partially harmonized the applicable laws. It made the airlines liable without fault for specified types of injuries to persons and cargo. Finally, it nullified any contractual provisions that tended to remove the carrier’s liability or to lower its limits. In view of the many compromises made, therefore, it is not a good idea to approach the meaning of the phrase “bodily injury” in article 17 of the Convention through the spectacles of full corrective justice. The question applicable to both appeals is: to what extent, if at all, is the carrier liable under article 17 where the injury which the passenger sustained in the accident was a mental and not a physical injury?
The lead opinion reviews the traveaux preparatoires of the Convention as well as leading prior judicial interpretations by the U.K., France, Germany, Australia and Israel. It then gives substantial weight to Eastern Airlines Inc v. Floyd, 499 U.S. 530 (1991). Passengers on an aircraft which narrowly avoided ditching in the Gulf of Mexico claimed damages solely for the mental distress arising out of the incident. The Supreme Court held that article 17 of the Convention does not allow recovery for mental or psychic injuries unaccompanied by a physical injury or a physical manifestation of injury.
In addition to parsing the French text, the Floyd Court had found no French cases allowing recovery under the Convention for psychic injury without physical manifestation even though such recovery was seemingly possible under French domestic tort law as early as 1929. On the other hand, the domestic law of many of the other civil and common law signatories did not at that time allow damage recoveries for purely psychic injuries. The American court found this a persuasive showing that the drafters had no specific intent to include such an innovation in the Convention.
The Lords of Appeal quote the Floyd opinion as declaring that “neither the language, negotiating history, nor postenactment interpretations of article 17 clearly evidences such intent … Moreover, we believe our construction of article 17 better accords with the Warsaw Convention’s stated purpose of achieving uniformity of rules governing claims arising from international air transportation … We have no doubt that subjecting international air carriers to strict liability for purely mental distress would be controversial for most signatory countries.” [Id. at 551-52, quoted at para. 111]. The Supreme Court later followed Floyd in El Al Israel Airlines v. Tseng, 525 U.S. 155 (1999), where it ruled against a female passenger who had claimed psychic injury from an intrusive body search by airlines personnel.
Looking at developments in science since 1929, the lead House of Lords opinion concedes that, “if the brain could be shown to have been injured and the other conditions for compensation under article 17 are satisfied, it would not be right to refuse compensation under the article on the ground only that in 1929 an injury of that kind would not have been capable of being demonstrated. Whether or not there is such an injury will always depend on the evidence. But the fact remains that a bodily injury is conceptually distinct from any injury which affects the mind.” [para. 125]
“I would, [agree] … that compensation may be awarded to a passenger under article 17 for the physical manifestations of a mental injury. A peptic ulcer disorder involves the tissues of the body, and it is not difficult to see that it is a kind of bodily injury. The requirement of a causal link to the accident will be satisfied if it can be shown, as Mr. King seeks to do, that the disorder was caused by a mental illness which was itself caused by the accident. Thus, while there is no general right to recover damages under article 17 for mental injury sustained by a passenger, damages for the physical manifestations of a mental injury will be recoverable. I would hold that the Lord Ordinary was right to allow Mr. King a proof of his averments about the peptic ulcer disease.” [para. 129]
“I have considered whether an opportunity should be given in Miss M’s case to re open the question whether her depressive illness was linked to changes in her brain cell structures and could be said on this ground to have amounted to a physical injury. But I have come to the conclusion, in view of the way her case was expressly argued both in the Court of Appeal and in this House and because I do not think that even with the benefit of such evidence it could be shown that she has suffered a ‘bodily injury,’ that this would not be appropriate. I would dismiss her appeal.” [para. 130]
Citation: King v. Bristow Helicopters Ltd., 2002 WL 45487 (HL), [2002] 2 W.L.R. 578 (House of Lords, February 28, 2002).
Filed in: 2002 International Law Update, Issue 4
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Ninth Circuit finds that state-owned Italian airplane manufacturer could not be held liable for deaths of two airplane passengers under General Aviation Revitalization Act of 1994 because 23 years had elapsed since delivery of airplane, but rules that jurisdiction does exist under FSIA
On November 26, 1993, an airplane designed by Marchetti (a company owned by the Italian Government) crashed in California. Marchetti had sold the aircraft in 1970 to SA Sabena N.V. in Belgium, which later sold it to U.S. owners. The representatives of two victims of an aircraft crash sued the manufacturer, alleging that the defendant had failed to warn that a problematic mechanical component had to be replaced. The district court dismissed the action for failure to state a claim on grounds that a statute enacted after the crash barred the action. The U.S. Court of Appeals for the Ninth Circuit affirms.
First, the Court agrees that the General Aviation Revitalization Act of 1994 (hereinafter GARA) [Pub.L. 103-298, 108 Stat. 1552 (1994)] precludes the suit. Defendants first delivered the aircraft in question about 23 years before the accident. GARA’s 18-year period of limitation began on the date of the first transfer from the manufacturer. Although Congress enacted GARA after the accident in question, it became effective prior to plaintiffs’ filing this action. GARA constitutionally applied retroactively to bar this action because Congress had made a conscious decision that GARA should limit the liability of aircraft manufacturers.
“It is apparent that Congress was deeply concerned about the enormous product liability costs that our tort system had imposed upon manufacturers of general aviation aircraft. It believed that manufacturers were being driven to the wall because, among other things, of the long tail of liability attached to those aircraft, which could be used decades after they were first manufactured and sold. (Cit.) Congress therefore enacted GARA…” [The limitation period of 18 years begins to run on] “A) [the] date of delivery of the aircraft to its first purchaser or lessee, if delivered directly from the manufacturer; or B) the date of first delivery of the aircraft to a person engaged in the business of selling or leasing such aircraft.” [Slip op. 11-12].
The plaintiffs argued that it would be unconstitutional for the Court to apply the statute retroactively. The Court holds, however, that the Supreme Court has recognized certain instances where legislation may operate this way. After closely reading the text and investigating the legislative intent, the Court concludes that Congress clearly did intend the law to apply to all actions, even those that arose prior to the effective date.
Plaintiffs also maintained that such an application of the statute violated their vested property rights in the cause of action. The Court dismisses this argument, holding that a cause of action is a species of property, and that a party’s property right in any cause of action does not vest until the party obtains a final unreviewable judgment.
Furthermore, “Congress decided that the economic health of the general aviation aircraft manufacturing industry depended on lifting the requirement that manufacturers abide the possibility of litigation for the indefinite future when they sell an airplane. It, therefore generally limited their exposure to accidents which occur within 18 years of the first delivery of the airplane… Marchetti first delivered the F-260 in question here about 23 years before the crash in California. We hold that, in GARA, Congress constitutionally barred an action based upon that accident, even though GARA itself was not passed until after that accident occurred.” [Slip op. 27]
Second, the Court agrees that, given that the defendant was an instrumentality of the Republic of Italy, it must determine jurisdiction under the Foreign Sovereign Immunities Act of 1976 [FSIA] (28 U.S.C.S. Section 1604]. Under the third type of “commercial activity exception” in Section 1605, a federal court has jurisdiction over a foreign sovereign defendant if the suit involves defendant’s activity “in connection with a commercial activityoutside the territory of the United States…causing a direct effect in the United States.” [Slip op. 5].
The defendants argued that a delay of 23 years from the date of initial sale negates the causation part of the test. The Court recognizes that considerable time has passed, but also holds that “time, itself is linear, and while questions about its ravages, or speculation about the ravages of others along the way, may affect proof, they do not affect jurisdiction.” [Slip op. 10-11].
Citation: Lyon v. Agusta, S.P.A., 252 F.3d 1078 (9th Cir. 2001).
Filed in: 2001 International Law Update, Issue7
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Eleventh Circuit rules that, despite absence of Jamaica’s formal ratification of Warsaw Convention since its independence in 1962, that nation’s active participation in other international aviation agreements supports presumption that it remains party to Convention as it had been during colonial period
Willis Blake, a U.S. national who lives in Jamaica, started a round-trip flight on American Airlines from Jamaica to Connecticut on December 27, 1995. In Miami, Blake changed aircrafts and went on board America Airlines Flight 1480 headed to Hartford. When he found out that there would be a ground delay, Blake went to the lavatory and smoked a cigarette. When questioned about it, Blake admitted that he had done so. The captain and the pilot demanded that Blake get off the plane right away.
After three refusals, the pilot physically removed Blake from his seat, causing Blake to injure his head on the overhead storage compartment. After an overnight hospital stay, Blake took his trip and got back home to Jamaica toward the end of January 1996.
On August 19, 1999, about three and a half years after the incident, Blake sued American Air Lines for damages in a Florida state court. Defendant removed the case to federal court. The latter then gave summary judgment to defendant on the grounds that plaintiff had filed his suit after the running of the two-year limitation period in the Warsaw Convention for the Unification of Certain Rules Relating to International Transportation by Air, 49 Stat. 3000, T.S. 876, 137 L.N.T.S. 11 (1929) reprinted in note following 49 U.S.C. Section 40105. Plaintiff thereupon took an appeal. The U.S. Court of Appeals for the Eleventh Circuit, however, affirms.
Article 29(1) of the Convention extinguishes the right to damages if plaintiff does not sue within two years from the passenger’s arrival at his or her destination. The Convention applies to “international transportation” which covers plaintiff’s trip from Jamaica to the U.S. and back. The question, however, remains whether Jamaica was a High Contracting Party to the Convention at the time of the incident. The U.K. had adopted the Convention on its own behalf and on behalf of its colonies in 1934. The Carriage by Air (Parties to Convention) Order, 1999 lists the colony of Jamaica as a High Contracting Party to the Convention as of March 3, 1935. The crucial issue then is whether Jamaica lost that status when it secured its independence from the U.K. in 1962.
Since the conduct of foreign affairs is more of a political (rather than a judicial) function, the intentions and conduct of the nation in question are critical. This is especially so where, as here, Jamaica has never formally ratified the Warsaw Convention. Nor has the U.S. State Department taken a position on whether Jamaica today is a party to the Convention.
“Jamaica’s conduct in respect to the Warsaw Convention, however, indicates its clear intent to adopt the Convention’s privileges and obligations. First, upon gaining its independence from the U.K., Jamaica agreed that ‘the newly independent State would assume all Treaty obligations and rights relating to it entered into on its behalf prior to independence by the British Government….’ Report of the Jamaica Independence Conference 12 13 (1962).”
“By taking this position, Jamaica created a presumption that it intended to be bound by the Warsaw Convention, which the UK had entered into on Jamaica’s behalf when it had signed the Convention in 1934. (Cit.) Beginning with the presumption that Jamaica intended to remain a High Contracting Party after gaining its independence from Great Britain, we next note that Jamaica has never taken formal steps to denounce the Convention, although the Convention provides that ‘[a]ny one of the High Contracting Parties may denounce this convention by a notification addressed to the Government of the Republic of Poland.’ Warsaw Convention art. 39(1).” [Slip op. 2]
Of course, the Court admits, there is a negative implication raised by Jamaica’s failure to expressly ratify the Convention. After all, it did so with respect to 88% of the multilateral treaties deposited with the United Nations which the U.K. had negotiated on colonial Jamaica’s behalf. The Court sees the positive inferences, however, as more compelling.
“Specifically, Jamaica has taken an active role in negotiations to amend the Warsaw Convention, as evidenced by its participation in the Guatemala Protocol (now known as the Montreal Protocols) to amend the Convention, and its certification of the Guadalajara Convention, the terms of which expressly supplement the Warsaw Convention. (Cit.) Moreover, Air Jamaica, at a time when it was wholly owned by Jamaica, asserted the Warsaw Convention as a defense to a lawsuit in a United States court. (Cit.) These actions are consistent with an intent to adopt the obligations and privileges of the Convention and we hold, therefore, that Jamaica is a High Contracting Party to the Warsaw Convention.” [Slip op. 3]
Citation: Blake v. American Airlines, Inc., 2001 W.L. 264978 (11th Cir. Mar. 12, 2001).
Filed in: 2001 International Law Update, Issue4
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Second Circuit holds that, when South Korea adhered to Hague Protocol but not to Original Warsaw Convention while United States joined only Original Convention, there was no subsisting treaty between them under which federal suit over loss of air cargo could arise
In 1995, Asiana Airlines, a South Korean corporation, entered into an agreement with Samsung Electronics Co. Ltd., also of South Korea. The deal was that Asiana would ship seventeen parcels of computer chips from Seoul to its subsidiary, Samsung Semiconductor, in San Francisco on Asiana air waybill No. 988-0497-2951 (Waybill) for Asiana Flight 214 on August 10, 1995, apparently a non-stop flight.
When Asiana actually got the shipment, however, it had run out of room on Flight 214. Asiana “solved” the problem by sending it out, without notice to Samsung, on Flight 202 to Los Angeles and by trucking it to San Francisco. The shipment arrived, however, missing two parcels containing $583,000 worth of chips. Chubb & Sons, Inc., the cargo insurer, paid Samsung Semiconductor the full amount of the loss.
As subrogee of Samsung, Chubb sued Asiana in New York federal court to recover the amounts it had paid out. Both sides moved for partial summary judgment on the issue of whether Asiana could invoke Article 22(2) of the Original Warsaw convention (OWC). Article 22(2) limits an international air carrier’s liability to $20.00 per kilogram of lost cargo, here $706.00. Chubb replied by pointing out that Asiana had not complied with Article 8(c) of the OWC in that the Waybill failed to list Los Angeles as an agreed upon stopping-place.
While the OWC waybill issue was still sub judice, Asiana got leave to file a supplemental motion challenging the court’s subject matter jurisdiction under 28 U.S.C. Section 1331. Asiana contended that the U.S. and South Korea were not in an OWC treaty relation. It noted that the U.S. belonged only to the OWC. Korea on the other hand had adhered only to the Hague Protocol, being a party only to the amended version or “Truncated” Warsaw Convention (TWC).
Spurning the jurisdictional attack, the district court held that the two countries were parties to the articles common to both the OWC and the Hague Protocol, i.e. the TWC, which did not include Article 8(c) on the mandatory contents of waybills. This reading would limit Asiana’s liability to $706.00. Reviewing the jurisdiction question under the Interlocutory Appeals Act, 28 U.S.C. Section 1292(b), the U.S. Court of Appeals for the Second Circuit reverses and remands.
The Court first points out that, after the President had ratified the OWC, it went into force for the U.S. on October 29, 1934. As a boost to the then-fledgling air industry, Article 22 limited international air carriers’ liability to $8,300 per passenger and $20 per kilogram of goods or baggage. Article 8 of the OWC created an exception to the limitations if the air waybill failed to contain certain “particulars” such as the agreed upon stopping points.
As the air industry prospered, the limitations became unpopular. A 1955 conference produced the Hague Protocol which, inter alia, doubled the passenger limitation to $16,600 and removed most of the exceptions to this limitation. Deeming the increase in the per-passenger limitation inadequate, the U.S. did not ratify the Hague Protocol. Though South Korea did adhere to the Protocol, it did not separately join the OWC.
The various Warsaw agreements kick in only if the place of departure and the place of destination lie within the territories of two High Contracting Parties to the same one of these substantive treaties. Under this situation, this case would “arise under” the particular treaty so as to create federal question jurisdiction under Section 1331.
Although the U.S. has never ratified the Vienna Convention on the Law of Treaties [May 23, 1969, 1155 U.N.T.S. 331], the U.S. has stated that it looks upon the Convention as, in large part, an authoritative codification of the customary international law of treaties. Here, the parties agree that the Vienna Convention articles that directly pertain to this litigation reflect customary international law as it was in 1967 when South Korea adhered to the Hague Protocol. They differ, however, as to their meaning.
Unfortunately, the Court notes, Article 40(5) of the Vienna Convention is ambiguous as to whether or not a nation becomes a party to the original treaty merely by adhering to an amending agreement. The Court of Appeals agrees with Asiana’s interpretation.
“Those States that adhered to the Hague Protocol specifically adhered to the Warsaw Convention as amended at the Hague, not the Original Warsaw Convention. See id. at art. XXIII(2), 478 U.N.T.S. at 387 (‘Adherence to this Protocol by any State which is not a Party to the Convention shall have the effect of adherence to the Convention as amended by this Protocol.’). Thus, when South Korea adhered to the Hague Protocol, it indicated its intention not to be bound to the Original Warsaw Convention. Although it could have adhered separately to the Original Warsaw Convention, South Korea never exercised that option. South Korea is not therefore in a treaty relationship with the United States pursuant to the Original Warsaw Convention.” [Slip Op. 7].This Court finds further support for its position in another Vienna Convention provision. “Article 17(1) of the Vienna Convention supports this conclusion that the United States is not in treaty relations with any State that adhered to only a portion of the Original Warsaw Convention. Article 17(1) states that ‘the consent of a state to be bound by part of a treaty is effective only if the treaty so permits or the other contracting States so agree.’ Vienna Convention, supra, art. 17(1), 1155 U.N.T.S. at 336. (Cit.)”
“The Original Warsaw Convention does not provide for partial adherence and the United States has not consented to partial adherence by any State, including South Korea. Under Article 17(1) of the Vienna Convention then, partial adherence by South Korea to the Original Warsaw Convention has no effect vis a vis the United States, and did not create treaty relations between the United States and South Korea.” [Slip op. 9]
In addition, U.S. constitutional considerations undermine the lower court’s reasoning. “The creation of a Truncated Warsaw Convention is also a violation of the doctrine of the Separation of Powers. The treaty making powers are vested in the executive and legislative branches of the United States Government, and not in the judicial branch. See U.S. Const. Art. II, Section 2, cl. 2 (‘[The President] shall have the Power, by and with the Advice and Consent of the Senate, to make Treaties….’). Thus, ‘to alter, amend, or add to any treaty, by inserting any clause, whether small or great, important or trivial, would be, on our part, an usurpation of power, and not an exercise of judicial functions. It would be to make, and not to construe a treaty.’ In re The Amiable Isabella, 19 U.S. (6 Wheat) 1, 71 (1821).” [Slip op. 10] Upon remand, the district court is free to consider any other basis for federal jurisdiction it may be able to unearth.
[Editorial Note: Driven by a U.S. threat to denounce the OWC, private international air carriers entered into the Montreal Intercarrier Agreement of 1966 to, inter alia, increase the potential liability per-passenger to $75,000. This "special contract" did not amend the OWC nor did it deal with cargo liability. It was not until September 1998 that the U.S. ratified Montreal Protocol No. 4 to Amend the Convention for the Unification of Certain Rules Relating to International Carriage by Air Signed at Warsaw on 12 October 1929 as amended by the Protocol done at the Hague on 28 September 1955, Sept. 25, 1975. Under treaty law, however, this would have no retroactive effect on the 1995 contract involved in this litigation.]
Citation: Chubb & Son, Inc. v. Asiana Airlines, No. 99-7617 (2nd Cir. June 8, 2000).
Filed in: 2000 International Law Update, Issue 6
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In matter of first impression, Second Circuit holds that Death on High Seas Act does not apply to TWA crash that took place about eight nautical miles from New York shoreline
On July 17, 1996, TWA Flight 800 left New York’s John F. Kennedy International Airport bound for Paris and Rome. A few minutes later, the aircraft seemed to blow up in midair and drop into the Atlantic Ocean about eight nautical miles off the south shore of Long Island, New York. None of the 230 persons aboard survived.
Relatives and estate representatives of 213 passengers and crew members brought suits in various federal courts against TWA, the Boeing Company and Hydro-Aire, Inc., the latter having manufactured the aircraft’s fuel pumps. The Judicial Panel on Multidistrict Litigation transferred all wrongful death cases arising from the accident to the Southern District of New York for combined pretrial proceedings in February 1997.
In July of that year, defendants filed a motion under Fed.R.Civ.P. 12(b)(6) to dismiss plaintiffs’ claims for nonpecuniary damages for failure to state a claim. Movants contended that the Death on the High Seas Act (DOHSA) applied to the case and restricted recovery to pecuniary damages. In June 1998, the district court, in a written opinion, denied defendants’ motion. See In re Air Crash off Long Island, New York, on July 17, 1996, 96 Civ. 7986 (June 2, 1998).
The court reasoned that Congress intended by the term “high seas” in DOHSA to limit the Act to non-sovereign waters or “international waters not subject to the dominion of any single nation.” Therefore, DOHSA’s damage limitations did not apply to this incident since it took place more than a marine league, but less than twelve nautical miles, from the shoreline. If DOHSA does not apply, plaintiffs may be entitled to nonpecuniary damages, e.g., for pre death pain and suffering and survivor’s grief. Under the Interlocutory Appeals Act, 28 U.S.C. Section 1292(b), defendant secured appellate review. As a matter of first impression, a panel of the U.S. Court of Appeals for the Second Circuit affirms in a divided opinion.
The Court of Appeals first points out that the Supreme Court’s view was that the historical absence of a common law claim for wrongful death on land meant that no such claim existed within general admiralty jurisdiction. For a substantial period, the federal courts engaged in a confusing effort to expand state wrongful death statutes or to make use of foreign law to provide for recovery on the high seas. It was well into the twentieth century before the Supreme Court recognized such an admiralty claim with its unanimous opinion in Moragne v. States Marine Lines, Inc., 398 U.S. 375 (1970).
Unhappy about the pre-Moragne law on wrongful death, the Maritime Law Association (MLA) went to work drafting a statutory remedy that ultimately became DOHSA. In the wake of litigation over the Titanic disaster, Congress debated its early draft that would have set up a wrongful death remedy “on the high seas, the Great Lakes, or any navigable waters of the United States.”
To avoid potential conflict with state remedies, however, the 1916 version eliminated DOHSA’s reach over navigable waters within state jurisdiction. Thus, it limited its applicability to deaths that took place beyond a marine league [three nautical miles] from the shore. When DOHSA became law in 1920, it created an action for wrongful death “occurring on the high seas beyond a marine league from the shore of any state…”
The key question is the scope of the term “high seas” in DOHSA. Since the 1790s, the U.S. had claimed no more than one marine league from shore as federal territorial waters while noting that it could arguably extend its reach to 20 miles. The Court notes that up until 1920, the Supreme Court generally equated the high seas with “international waters” over which no sovereign has control. DOHSA’s legislative history repeatedly invoked the definition of high seas found in these cases, pointing powerfully to the meaning that Congress intended for that phrase.
The Court also refers to the Convention on the High Seas [April 29, 1958, 13 U.S.T. 2312, T.I.A.S. No. 5200] which the U.S. had ratified in 1961. Article 1 declares that: “the term ‘high seas’ means all parts of the sea that are not included in the territorial sea or in the internal waters of a state.”
In addition, plaintiffs’ explanation for the seeming tautology in DOHSA’s statutory language appears to meet with the Court’s approval. It is that the “marine league” language expresses a geographical boundary while the term “high seas” refers to a political boundary.
“While the geographical and political boundaries were coterminous in 1920, there was no reason to think that would always be the case. At the time DOHSA was enacted, the ‘minimum limit of the territorial jurisdiction of a nation,’ (cit.) was a marine league. ‘The void that existed in maritime law up until 1920 was the absence of any remedy for wrongful death on the high seas. Congress, in acting to fill that void, legislated only to the three mile limit because that was the extent of the problem.’ Moragne, 398 U.S. at 398.” [Slip op. 7]
Defendants relied upon a series of lower court cases applying DOHSA to deaths in foreign territorial waters to show that DOHSA’s “high seas” are not coterminous with “international waters.” Such cases have applied DOHSA to accidents in the territorial waters of India and Scotland and even to a Peruvian river and a lake in Venezuela. The Court spurns the argument.
“Obviously, we are not faced here with a wrongful death claim arising out of an accident in the territorial waters of a foreign nation. We take no position on what courts should do when faced with the difficult question of whether to apply DOHSA in foreign territorial waters, where plaintiffs might otherwise be left with only foreign remedies in foreign courts.”
“The decisions applying DOHSA to foreign territorial waters seek to provide a remedy in federal court for survivors of those killed in maritime accidents. (Cits.) These decisions do not require or even suggest the application of DOHSA to the territorial waters of the United States, where plaintiffs already have a state or federal remedy.” [Slip op. 12]
In the context of DOHSA, therefore, there were, for 68 years, no federal territorial waters beyond three marine leagues from shore, so that neither federal nor state prescriptive jurisdiction reached beyond that distance. In 1988, however, Presidential Proclamation No. 5928 [54 Fed. Reg. 777 (1988)] declared that “[t]he territorial sea of the United States henceforth extends to 12 nautical miles from the baselines of the United States determined in accordance with international law.” Both sides concede that, prior to the Proclamation, DOHSA would have applied to an air crash 8 miles from an American shore. The Court agrees with the district court that Proclamation No. 5928 moved the starting point for the application of DOHSA out to 12 nautical miles from shore.
Finally, the Court rejects defendants’ claim that the lower court’s ruling had established a “no-man’s land” between three and 12 miles from the shores of coastal states and had undermined uniformity. “But it would be more inconsistent, and more arbitrary, to impose one remedial scheme over certain federal territorial waters (up to three miles) and a different remedial scheme over other federal territorial waters (from three to 12 miles).”
“The core purpose of DOHSA was to provide a remedy where one did not exist before, not to oust either a Moragne type remedy or state law remedies. The remedies available to plaintiffs for wrongful death in the federal territorial waters in which the crash occurred may prove better suited to this case than DOHSA’s statutory requirements. … [W]e leave for the district court to resolve the conflict of law questions in determining which remedies are available. We hold only that the Death on the High Seas [Act] does not apply to federal territorial waters.” [Slip op. 15]
Citation: In re Air Crash off Long Island, New York, on July 17, 1996, No. 98-9622 (2d Cir. March 29, 1999).
Filed in: 2000 International Law Update, Issue 4
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In dispute over damages recoverable for cargo lost en route by air to Taiwan, Ninth Circuit holds that China’s accession to Warsaw Convention did not bind Taiwan
Gemtronics Corp. shipped a package of computer chips from Taipei, Taiwan, to San Jose, California, by United Parcel Service (UPS). The package never arrived, and the insurer of the package, Mingtai Fire & Marine Insurance Co., sued UPS under the Convention for the Unification of Certain Rules Relating to International Transportation by Air [October 12, 1929, 49 Stat. 3000, T.S. No. 876 (1934), reprinted in note following 49 U.S.C.A. Section 40105] (“Warsaw Convention”).
The lost computer chips were allegedly worth $83,454.80, but the air waybill limited the release value to $100. Since Taiwan is not as such a party to the Warsaw Convention, Mingtai creatively argued that Taiwan is in fact a party to the Convention by virtue of China’s accession. China (PRC) had signed the Convention with a declaration that it “shall of course apply to the entire Chinese territory including Taiwan.” The U.S. recognition of China (and the de-recognition of Taiwan) would arguably require the court to honor China’s declaration.
The district court disagreed and held that Taiwan is not bound by China’s accession to the Convention, and entered judgment in favor of Mingtai for $100. Mingtai appealed.
The U.S. Court of Appeals for the Ninth Circuit concludes that China’s accession does not necessarily bind Taiwan. “The determination of whether China’s adherence to the Convention binds Taiwan conflates two distinct areas of foreign relations: the effects of foreign sovereign recognition, and the status of treaties. It is axiomatic that “�the conduct of foreign relations is committed by the Constitution to the political departments of the Federal Government; [and] that the propriety of the exercise of that power is not open to judicial review. …”
“[T]he Supreme Court has repeatedly held that the Constitution commits to the Executive Branch alone the authority to recognize, and to withdraw recognition from, foreign regimes. … Thus, whether China is the sovereign, de jure or de facto, of a territory is not a judicial, but a political question.” [Slip op. 4-5]
The Court points to several acts of the political branches that show that Taiwan is an entity separate from China. The State Department lists treaties with China and treaties with Taiwan separately. When the U.S. President announced the recognition of China in 1979, he directed that existing international agreements remain in force [President's Memorandum for All Departments and Agencies: Relations With the People of Taiwan, reprinted in 1979 U.S.C.C.A.N. 36, 76]. Congress formalized that relationship with the Taiwan Relations Act [22 U.S.C. Sections 3301-3316].
The Court cautions, however, that it is not making an independent determination of Taiwan’s status. It is merely deferring to the political departments’ position that China’s adherence to the Warsaw Convention does not bind Taiwan.
Citation: Mingtai Fire & Marine Ins. Co., Ltd. v. United Parcel Service, No. 98-15088 (9th Cir. May 25, 1999).
Filed in: 1999 International Law Update, Issue 6
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