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IN RE AIR DISASTER IN LOCKERBIE

United States District Court, Eastern District of New York


January 3, 1990

IN RE AIR DISASTER IN LOCKERBIE, SCOTLAND, ON DECEMBER 21, 1988.

The opinion of the court was delivered by: Platt, Chief Judge.

MEMORANDUM AND ORDER

Defendants, Pan American World Airways, Inc. ("Pan Am"), Alert Management Systems, Inc. ("Alert"), Pan Am World Services ("PAWS"), and Pan Am Corporation ("Pan Am Corp.") move for partial summary judgment dismissing all punitive damage claims on the ground that punitive damages are barred by the Warsaw Convention.*fn1 In response, plaintiffs argue that the Warsaw Convention does not bar punitive damage claims and, if this Court were to hold that the Warsaw Convention bars punitive damages, then plaintiffs should be allowed additional discovery in order to demonstrate that plaintiffs' claims against defendants Alert and PAWS are not governed by the Warsaw Convention.

RELEVANT FACTS

On December 21, 1988, Pan Am Flight 103 crashed near Lockerbie, Scotland. Flight 103 originated at Frankfurt Main Airport in Frankfurt, West Germany, and flew non-stop to Heathrow Airport in London, England. After stopping at Heathrow Airport, the flight departed for New York's John F. Kennedy International Airport. At approximately 7:19 p.m. Greenwich mean time, the aircraft exploded in midair and crashed near Lockerbie, Scotland. On the plane were 45 passengers who boarded in Frankfurt, 198 passengers who boarded in London and 16 crew members. All 259 persons died on board.

Survivors of the victims filed suit against Pan Am, PAWS, Alert, and Pan Am Corp. in several Federal District Courts. On April 4, 1989, the Judicial Panel on Multi-district Litigation, pursuant to 28 U.S.C. § 1407, transferred all suits brought by the decedents' representatives to the undersigned in the Eastern District of New York for consolidated pretrial proceedings, 709 F. Supp. 231.

In these suits, plaintiffs assert claims against defendant Pan Am seeking compensatory damages for defendant's wilful misconduct and breach of contract and punitive damages for defendant's wilful misconduct. The complaints assert that federal subject matter jurisdiction over these claims exists on the basis of 28 U.S.C. § 1331 and the Warsaw Convention.

Plaintiffs also assert claims against defendants PAWS and Alert seeking compensatory and punitive damages for defendants' negligence and wilful misconduct. Subject matter jurisdiction over these claims is based on the federal court's pendent or ancillary jurisdiction.

DISCUSSION

Because plaintiffs maintain that additional discovery is needed in order to determine whether defendants Alert and PAWS are governed by the Warsaw Convention, this Court will only address the issue of whether the Warsaw Convention bars punitive damage claims.*fn2

Defendants argue that the Warsaw Convention in Article 17 limits the right of recovery to compensatory damages only and any exclusion from limitation provided in Article 25 is an exception to the monetary limit on the recovery of compensatory damages. According to defendants, Article 25 does not authorize the recovery of any damages other than compensatory.*fn3

In response, plaintiffs present a two fold argument. First, they contend that the Warsaw Convention provides that a number of issues including punitive damage claims are to be determined according to the law of the forum State; thus, punitive damage claims are only barred under the Warsaw Convention when barred by local law. Second, plaintiffs argue that even if the Warsaw Convention generally bars punitive damage claims, Article 25 provides that when wilful misconduct exists, the liability limits of the Warsaw Convention are inapplicable and thus if wilful misconduct exists plaintiffs' punitive damage claims should be determined by referring to local law.

While the Warsaw Convention does not expressly refer to punitive damage claims, it appears that the Warsaw Convention bars such claims whether or not wilful misconduct exists. The Supreme Court has recently explained that, in interpreting the Warsaw Convention, courts are obligated "to give the specific words of the treaty a meaning consistent with the shared expectations of the contracting parties." Air France v. Saks, 470 U.S. 392, 399, 105 S.Ct. 1338, 1342, 84 L.Ed.2d 289 (1985) (emphasis added).

The primary shared expectation of the contracting parties was to set some uniform limit on an airline carrier's liability in order to promote the civil aviation industry which at the time of the Warsaw Convention was in its infancy. See Trans World Airlines, Inc. v. Franklin Mint Corp., 466 U.S. 243, 256, 104 S.Ct. 1776, 1784-85, 80 L.Ed.2d 273 (1984); Reed v. Wiser, 555 F.2d 1079, 1089 (2d Cir. 1977); Floyd v. Eastern Airlines, Inc., 872 F.2d 1462, 1467 (11th Cir. 1989); Andreas Lowenfeld and Allan I. Mendelsohn, The United States and The Warsaw Convention, 80 Harv.L.Rev. 497, 499 (1967). This primary goal is clearly evidenced by Secretary of State Cordell Hull's transmittal of the Warsaw Convention to the United States Senate. Secretary of State Hull wrote:*fn4

    It is believed that the principle of limitation
  of liability will not only be beneficial to
  passengers and shippers as affording a more
  definite basis of recovery and as tending to
  lessen litigation, but that it will prove to be
  an aid in the development of international air
  transportation, as such limitation will afford
  the carrier a more definite and equitable basis
  on which to obtain insurance rates, with the
  probable result that there would eventually be a
  reduction of operating expenses for the carrier
  and advantages to travelers and shippers in the
  way of reduced transportation charges.

Since the application of local law to punitive damage claims would be inconsistent with the primary goal of the Warsaw Convention, this Court may not find that the treaty's mere silence authorized punitive damage claims to be governed by local law; in order for a court to find that a provision inconsistent with the entire scheme of the Warsaw Convention exists, the provision would have to be express and explicit.*fn5 See Floyd.

Plaintiffs maintain that the Warsaw Convention in Article 24 does expressly provide for local law to be applied to any punitive damage claim. Article 24 states:

  (1) In cases covered by articles 18 and 19 any
  action for damages, however founded, can only be
  brought subject to the conditions and limits set
  out in this convention.

  (2) In the cases covered by article 17 the
  provisions of the preceding paragraph shall also
  apply, without prejudice to the questions as to
  who are the persons who have the right to bring
  suit and what are their respective rights.*fn6

Plaintiffs ask this Court to read the provision in paragraph (1) stating that "any actions for damages, however founded, can only be brought subject to the conditions and limits set out in this convention" in combination with provision in paragraph (2) stating that actions under Article 17 be brought subject to the convention "without prejudice to the questions as to who are the persons who have the right to bring suit and what are their respective rights." (emphasis added). They argue that by the combination of these two provisions the Warsaw Convention provided that punitive damage claims would be determined by reference to local law.

However, Article 24 actually seems to be persuasive evidence that the Warsaw Convention intended to bar punitive damage claims. The provision in paragraph (1) that actions "however founded" be "subject to the conditions and limits set out by this convention" appears to emphasize the Warsaw Convention's intent that all actions be governed by the Warsaw Convention's uniform limit of liability and thus actually precludes any other actions including those founded in State law. The Eleventh Circuit, in Floyd v. Eastern Airlines, Inc., employed similar reasoning in addressing the issue of whether a State cause of action for punitive damages was preempted by the Warsaw Convention. There, the Court held that despite the Warsaw Convention's silence on the subject, the plaintiffs could not bring punitive damage claims under State law because Article 24 of the Convention required the Court to determine whether such a State cause of action would be within the "conditions and limits set out in this convention" and a State cause of action for punitive damages would directly contravene the liability limits set out in the treaty. Floyd, at 1480-1481.

The provision that "all actions however founded be brought subject to the conditions and limits of the convention" is unaltered by the provision in paragraph (2) that "in cases covered by Article 17 the provisions of the preceding paragraph shall also apply without prejudice as to who are persons who have the right to bring suit and what are their respective rights". (emphasis added). Plaintiffs maintain that if the provision that all actions however founded be subject to the Warsaw Convention is considered together with the natural meaning of paragraph (2), Article 24 actually authorizes punitive damage claims to be governed by local law. However, the natural meaning of paragraph (2) seems to be additional evidence that the Warsaw Convention does not allow for any punitive damage claims. It expressly states that even actions for personal injury and death, governed by Article 17, must comply with the conditions and limits of the Warsaw Convention. Further, it seems quite obvious that the natural meaning of the "without prejudice" clause is that the Warsaw Convention would not interfere with local laws of descent and distribution; the "without prejudice" clause of Article 24 simply provides that the limited amount obtained under the Warsaw Convention would be distributed between heirs and next of kin according to local law.

Plaintiffs next argue that even if Article 24 does not authorize punitive damage claims brought under the Warsaw Convention to be generally governed by reference to local law, Article 25 authorizes punitive damage claims to be governed by local law in cases where wilful misconduct exists. According to plaintiffs, Article 25 provides that the airline loses the benefit of anything in the Warsaw Convention that excludes or limits liability when wilful misconduct exists.

Article 25 explicitly provides that "the carrier shall not be entitled to avail himself of the provisions of this convention which exclude or limit his liability if the damage is caused by his wilful misconduct." Plaintiffs maintain that the drafters intended to deter wilful misconduct and thus both the specific monetary limit provided by the Warsaw Convention and the Warsaw Convention's general scheme that only compensatory damages would be provided are disallowed where wilful misconduct exists. Taken alone, the language in Article 25 may be interpreted to mean that one who engaged in wilful misconduct would not benefit from either the specific monetary limit set by the Warsaw Convention or the general plan to limit liability to compensatory damages.

However, as the Eleventh Circuit noted in Floyd v. Eastern Airlines, Inc., "minutes of the negotiations on the Hague Protocol, an amendment to the Convention, indicate that the delegates understood article 25 as referring only to article 22 which establishes monetary limits for recoveries under the Convention." Floyd, at 1483 (the Floyd Court held that Article 25 did not provide an independent cause of action for punitive damage claims); see also H. Drion, Limitation of Liabilities in International Air Law 70, 260-61 (1954). Moreover, since allowing the application of various punitive damage laws would defeat the Warsaw Convention's primary goal of uniform and limited liability, Article 25 may not be interpreted as authorizing an independent cause of action for punitive damage claims and be consistent with the shared expectations of the parties. It seems more likely that if the parties intended that carriers which engaged in wilful misconduct would be subject to punitive damage claims, Article 25 would have provided that the entire Warsaw Convention, rather than just certain provisions, was inapplicable in such cases. Since Article 25 does not provide an independent cause of action for punitive damage claims, plaintiffs who brought their suit under the Warsaw Convention must resort to Article 17 which provides the cause of action for death or bodily injury under the Warsaw Convention.*fn7 See Benjamins v. British European Airways, 572 F.2d 913, 916 (2d Cir. 1978) (the Court reversed previous Second Circuit caselaw and held that Article 17 created a cause of action).

Since Article 17 provides plaintiffs' cause of action, plaintiffs may not obtain punitive damages even if wilful misconduct exists. The official American translation of Article 17, which was before the Senate when it ratified the Convention in 1934, reads:

    "The carrier shall be 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
  operations of embarking or disembarking." 49
  Stat. 3018.

Plaintiffs argue that "damage sustained" is an incorrect translation of the original French phrase "du dommage survenu."*fn8 According to plaintiffs, the proper translation of the French "dommage survenu" is damage which "happened" or "arose" and such a translation would allow for punitive damage claims.*fn9

The Eleventh Circuit, in Floyd, held that "dommage survenu" is accurately translated as "damage sustained"*fn10 and that punitive damages are not damages sustained but rather an award, over and above what is necessary to compensate a plaintiff for damage sustained, designed to punish a defendant for his conduct and to deter others from engaging in similar conduct in the future. Floyd, at 1486-1487. (citing In re Air Crash Disaster at Gander, Newfoundland, 684 F. Supp. 927, 931 (W.D.Ky. 1987) (citing International Brotherhood of Electrical Workers v. Foust, 442 U.S. 42, 48, 99 S.Ct. 2121, 2125-26, 60 L.Ed.2d 698 (1979); Gertz v. Robert Welch, Inc., 418 U.S. 323, 94 S.Ct. 2997, 41 L.Ed.2d 789 (1981); Prosser and Keeton on Torts § 2 at 9-15 (5th ed. 1984))).

Plaintiffs nonetheless argue that the Floyd Court erred in not recognizing that the original French phrase "du dommage survenu" is more properly translated as damage which "happened" or "arose". In this Court's own survey of French-English dictionaries, "survenir" was found to be most frequently translated as "to happen", "to arise", or "to arrive unexpectedly".*fn11 However, even if "du dommage survenu" is translated as damage happened or arisen, Article 17 does not allow for punitive damage claims. Under a literal translation, Article 17 would provide that the transporter or carrier is responsible for damage, not damages, happened or arisen in the case of death, wounding, or any other bodily injury if the accident which caused the damage, not damages, took place on board. "Damage" in the context of Article 17 is damage or injury sustained, happened or arisen to the body or mind of the passenger, not monetary damages, and hence, regardless of whether "survenu" is translated as sustained or happened or arisen, Article 17 does not allow for punitive damage claims. See accord Air France v. Saks, 470 U.S. 392, 105 S.Ct. 1338, 84 L.Ed.2d 289 (1985) (while the issue before the Court in Air France was the translation of the term "accident" in Article 17, the Court clearly indicated that the term "damage" in Article 17 was the equivalent of injury). This interpretation is confirmed by the language in Article 18 which clearly states that the damage referred to is damage to baggage.*fn12 Moreover, if Article 17 was referring to monetary damages, at the very least dommage would be in its plural rather singular form and it is more likely that the phrase "in actions for damages" would have been used as was done in Article 24. Thus, when Article 25 is read together with Article 17 which provides plaintiffs' cause of action, it is clear that Article 25 does not authorize punitive damage claims even if wilful misconduct exists.

CONCLUSION

While need to encourage the airline industry's growth may now be obsolete,*fn13 it is only the political branches which have the power to repudiate or amend the Warsaw Convention. See Floyd; Trans World Airlines, Inc. v. Franklin Mint Corp., 466 U.S. 243, 261, 104 S.Ct. 1776, 1787, 80 L.Ed.2d 273 (1984). In its most recent ruling on the Warsaw Convention, the Supreme Court once again admonished the courts that to "alter, amend, or add to any treaty would be . . . an usurpation of power, and not an exercise of judicial functions".*fn14 Chan v. Korean Air Lines, Ltd., ___ U.S. ___, 109 S.Ct. 1676, 104 L.Ed.2d 113 (1989) (quoting The Amiable Isabella, 6 Wheat 1, 71, 5 L.Ed. 191 (1821)) (the issue before the court in Chan was whether carriers lost the benefit of the limitation on damages if they failed to provide notice of the limitation in 10-point type size). Therefore, in interpreting the Warsaw Convention in the only manner consistent with the shared expectations of the contracting parties at the time, this Court is compelled to hold that the Warsaw Convention bars plaintiffs' punitive damage claims whether or not wilful misconduct exists.

SO ORDERED.


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