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IN RE HIJACKING OF PAN AMERICAN AIRWAYS

United States District Court, Southern District of New York


January 18, 1990

IN RE HIJACKING OF PAN AMERICAN WORLD AIRWAYS, INC. AIRCRAFT AT KARACHI INTERNATIONAL AIRPORT, PAKISTAN ON SEPTEMBER 5, 1986.

The opinion of the court was delivered by: Sprizzo, District Judge:

MEMORANDUM OPINION AND ORDER

Defendant, Pan American World Airways, Inc. ("Pan Am"), has moved pursuant to Federal Rule of Civil Procedure 56 for partial summary judgment dismissing all claims seeking the imposition of punitive damages.*fn1 Pan Am claims that because Article 17 of the Warsaw Convention as supplemented by the Montreal Agreement*fn2 (collectively referred to as the "Convention") creates a cause of action for compensatory damages limited to $75,000,*fn3 any recovery of punitive damages is preempted by the Convention.*fn4 For the reasons set forth herein, the motion is denied.

DISCUSSION

Notwithstanding some early precedent to the contrary,*fn5 it is now well-settled in this Circuit that the Convention creates a right of recovery for wrongful death and personal injury independent of the various actions created by the internal law of the signatory nations. See Benjamins v. British European Airways, 572 F.2d 913, 919 (2d Cir. 1978), cert. denied, 439 U.S. 1114, 99 S.Ct. 1016, 59 L.Ed.2d 72 (1979). However, that remedy, whether it be contractual or tortious in nature, does not supersede other state common law remedies not preempted by the Convention. See Tokio Marine & Fire Ins. Co. v. McDonnell Douglas Corp., 617 F.2d 936, 942 (2d Cir. 1980).*fn6

Punitive damages are a part of common law tort remedies, see Racich v. Celotex Corp., 887 F.2d 393, 396 (2d Cir. 1989), and no language in the Convention expressly preempts or precludes such claims, although consistent with Article 22, all damages, including punitive damages, cannot exceed $75,000. Nor may such preemption be implied in the absence of some clear indication in the text itself or its legislative history that supports that conclusion. See Chan v. Korean Airlines, Ltd., ___ U.S. ___, 109 S.Ct. 1676, 1683-84, 104 L.Ed.2d 113 (1989).

Here, not only is there no such clear indication, but the language of the Convention leads to the opposite conclusion. Article 24(1) provides that "any action for damages, however founded, can only be brought subject to the conditions and limits set out in this convention." This language strongly suggests that the Convention contemplates state causes of action, including those for punitive damages, not founded in or created by the Convention. See Tokio Marine, supra, 617 F.2d at 942; Reed v. Wiser, 555 F.2d 1079, 1084-85 (2d Cir.), cert. denied, 434 U.S. 922, 98 S.Ct. 399, 54 L.Ed.2d 279 (1977). Indeed, Article 24(2) expressly states that the Convention applies "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).

This is especially true since the Convention leaves many issues to be governed by the internal law of the parties to the Convention. One such issue is the question of what items of damages are recoverable. See Harris v. Polskie Linie Lotnicze, 820 F.2d 1000, 1002 (9th Cir. 1987); Cohen v. Varig Airlines, 62 A.D.2d 324, 334, 405 N.Y.S.2d 44, 49 (1st Dep't 1978). Furthermore, both the rules governing comparative negligence, see Article 21, and "[q]uestions of procedure" are controlled by local law. See Article 28(2).

Also lending support to this position is Racich v. Celotex Corporation, supra, 887 F.2d at 396, where the Second Circuit rejected an argument that a claim for punitive damages was not available unless specifically referred to in a state statute reviving asbestos related tort claims which would otherwise have been time-barred. The court stated that "[s]ince a common law tort action for personal injury by definition includes the element of damages, including punitive damages when factually appropriate, the omission in the revival statute and the legislative silence with respect to punitive damages do not preclude such a recovery." Id. (citations omitted).

Even assuming that Article 17 did preclude the recovery of punitive damages, the Court finds that in any event the Convention would bar Pan Am's reliance on Article 17 in cases of wilful misconduct. Article 25(1) provides that:

  [t]he 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 or
  by such default on his part as, in accordance
  with the law of the Court to which the case is
  submitted, is considered to be equivalent to
  wilful misconduct.

Therefore, to the extent that Article 17 is construed to preempt a claim for punitive damages, it would be a limitation or exclusion of liability within the meaning of Article 25, and such claims would not be barred in cases involving wilful misconduct.*fn7

Pan Am, however, argues that the only provision excluding or limiting liability within the meaning of Article 25 is Article 22's monetary limit, and, therefore, the relevant portions of Article 17 remain intact. However, Pan Am's interpretation, if accepted, would require the Court to construe Article 25 as if it read "the provision, to wit Article 22, . . . which limits the amount of his liability" which would constitute a judicial alteration of the plain language of the Convention foreclosed by Chan, supra. For this reason the Court cannot accept as persuasive the reasoning set forth by the Eleventh Circuit in Floyd v. Eastern Airlines, Inc., 872 F.2d 1462, 1483-89 (11th Cir. 1989), which was followed in In re Air Disaster in Lockerbie, Scotland, M.D.L. 799, 1990 WL 1672, 1990 WL 1673 (E.D.N.Y. January 3, 1990). Both of these cases rely heavily upon a judicially perceived need to construe the Convention in accordance with the intention of the Contracting Parties. However, this Court does not believe that Chan permits the Court to amend the plain language of the Convention to effectuate what it believes the Contracting Parties intended.

In this regard, it is significant to note that an amendment to Article 25 which has never been ratified by the Senate provides that: "[t]he limits of liability specified in Article 22 shall not apply if it is proved that the damage resulted from an act or omission of the carrier . . . done with intent to cause damage or recklessly and with knowledge that damage would probably result." Hague Protocol Art. XIII, reprinted in Lowenfeld, Aviation Law Documents Supp. at 429. The fact that the Contracting Parties saw the need to amend Article 25 to achieve precisely the same result that Pan Am would have this Court achieve by judicial interpretation affords additional support for the conclusion that the policy considerations underlying Chan preclude a judicial amendment of Article 25. This is especially true since the United States has refused to adopt that amendment. Cf. Trans World Airlines, Inc. v. Franklin Mint Corp., 466 U.S. 243, 260-61, 104 S.Ct. 1776, 1786-87, 80 L.Ed.2d 273 (1983) (courts should not imply repeal of Convention provisions).

Accordingly, Pan Am's motion for partial summary judgment is denied.

It is SO ORDERED.


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