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IN RE AIR DISASTER IN LOCKERBIE

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 ...

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