The opinion of the court was delivered by: WYATT
This is a motion by plaintiff for an order under Fed.R.Civ.P. 12(f) striking from the answer the "Second Defense" to the "First Cause of Action" or, in the alternative, for partial summary judgment under Fed.R.Civ.P. 56 striking said "Second Defense".
On motions to strike under Fed.R.Civ.P. 12(f) material outside the pleadings may not properly be considered. Since there are some facts outside the pleadings which are stipulated or otherwise beyond dispute and which ought to be considered on this motion, it is treated as one for partial summary judgment. For reasons which will appear, a denial of this motion by plaintiff for partial summary judgment will result in a partial summary judgment for defendant dismissing the first cause of action.
Jurisdiction is based solely on diversity of citizenship. 28 U.S.C. § 1332.
The first cause of action is based on a provision of the law of Brazil (Air Code, Article 83) which, among other things, gives to an aircraft passenger the right to recover damages from the carrier for "bodily injury" caused by "a defect in the aircraft" or by "the fault of the crew". It is averred that plaintiff was injured in an accident in Brazil while a passenger on an aircraft of defendant ("Cruzeiro") and that the accident "was caused by a defect of the aircraft and/or by the fault of the crew". It is also averred that "any limitation on the amount of damages recoverable which may be contained in the Brazilian Air Code is inapplicable or unenforceable".
The second defense to this first cause of action pleads a limitation of liability contained in the Brazilian Air Code (Article 91) limiting the liability of the carrier under Article 83 (on which this cause of action is based) to 100,000 cruzeiros. The "cruzeiro" is the basic unit of money of Brazil. (The word may come from the Portuguese "cruzado", literally "marked with a cross", which was also the name of a very old gold coin of Portugal bearing a cross to commemorate crusades against the Moors. It is of course without any significance that the corporate name of defendant includes the word "Cruzeiro"). At the time of the accident, 100,000 cruzeiros had a value in American dollars of about $140 and at the present time have a value in American dollars of about half that amount, or less.
It is stipulated that defendant has paid in excess of 100,000 cruzeiros for the account of plaintiff and thus if the Brazilian limitation of liability is applicable there should be partial summary judgment for defendant dismissing the first cause of action.
Two points should be noted preliminarily. The first is that under a section of the Brazilian Air Code the limitation of liability to 100,000 cruzeiros does not apply if there has been on the part of the carrier what the civil law calls "dolus" (Webster's Third New International Dictionary, page 670, gives among other meanings "willful and wanton misconduct in the law of delicts"). The second cause of action is on a theory of "dolus", but not the first. Thus, the "dolus" exception is in no way involved on this motion. The second point is that there was no "international transportation" in the case at bar and therefore the Warsaw Convention (49 Stat. 3000), under Article 1 thereof, does not apply.
The motion raises the single question whether as a matter of New York law (which clearly must here be followed by this Court) the Brazilian limitation of liability is valid in an action in New York. Put in a different way: would the Court of Appeals of New York apply in the case at bar the principle laid down for the first cause of action in Kilberg v. Northeast Airlines, Inc., 9 N.Y.2d 34, 211 N.Y.S.2d 133, 172 N.E.2d 526 (1961)?
The relevant and undisputed facts in the case at bar should first be stated.
Plaintiff is 38 years old. He is a citizen of the United States and since October 1962 has been resident and domiciled in New York. He has been employed as a Sales Engineer by Honeywell, Inc., a large, publicly owned Delaware corporation which makes and sells control, regulator, and other equipment. The principal place of business of Honeywell is in Minneapolis, Minnesota but it does business over most, if not all, of the United States. It has subsidiaries which do business in foreign countries, including Honeywell Controles Ltda. in Brazil.
Defendant Cruzeiro is a Brazilian corporation, wholly owned by residents and nationals of Brazil. It is a commercial air carrier, flying scheduled flights on routes principally in Brazil; it has some flights to four neighboring South American countries. It has no flights to or from any of the States of this country. It does not itself sell any tickets in this country. It does not advertise here and it has no ticket office here. Cruzeiro is, however, a member of a large group of air carriers which by agreement issue tickets good over the lines of other members. Some members of this group, such as Pan-American World Airways, Inc., have ticket offices in New York and thus it would be possible for a person, through some other air carrier such as Pan American, to buy a ticket in New York good over the lines of Cruzeiro.
Jurisdiction over the person of Cruzeiro was obtained in this action because Cruzeiro has a small purchasing office in New York with two employees. Nearly all the planes operated by Cruzeiro are manufactured in the United States and the purchasing office is needed to buy spare parts and other equipment for its planes and operations. After a careful review of the facts, Judge Edelstein found that Cruzeiro was subject to the jurisdiction of this Court on the basis of the activities of its purchasing office here (D.C., 232 F. Supp. 433).
In January 1963, plaintiff made a business trip to Brazil. He bought in New York a ticket to Rio de Janeiro from Pan-American and arrived in Rio on a Pan-American plane on January 15, 1963. He evidently had no plans up to that time to go to Sao Paulo, Brazil. When he arrived in Rio, however, he was told by an employee of Honeywell (or Honeywell Controles Ltda.) working in Brazil that he (plaintiff) and the other employee were required at once to go on a business trip to Sao Paulo. There are regular flights by Cruzeiro between Rio and Sao Paulo. On the day of plaintiff's arrival in Rio - January 15, 1963 - he and the other employee bought tickets ...