Those rules and the print on Paist's ticket folder set forth a
$1,250 limitation per passenger. The print on the ticket folder
explicitly states that there is a $1,250 limitation per
passenger on domestic flights and the ticket provides for
incorporation of the terms of the tariff and conditions of
carriage pursuant to 14 C.F.R. §§ 253, 254.
There is no evidence that defendants did not provide notice
of the $1,250 limitation in accordance with federal
regulations. Indeed specific notice was contained in large
print on the ticket folder. There also is no evidence that
defendants have not complied with the governing common law
rules embodied in the Released Valuation Doctrine. That
doctrine provides that an air carrier may validly limit its
liability to an agreed value of the goods when: (1) the carrier
gives the passengers a fair opportunity to choose between
higher and lower liability by paying a greater or lesser fee;
(2) the passenger is on notice of the opportunity to pay a
higher price for greater coverage and the passenger does not
choose to pay for higher coverage; (3) the carrier does not
appropriate the property of the passenger for its own use.
See Deiro v. American Airlines, 816 F.2d 1360 (9th Cir. 1987);
Shapiro v. United Airlines, 22 Avi. 17395 (S.D.N.Y. 1989).
The record shows that the first and second elements of the
doctrine were satisfied. There was reasonable notice in the
ticket of the incorporation of the tariff and conditions of
carriage which set forth that liability is limited to $1,250
per passenger "unless a higher value is declared in advance and
additional charges are paid." Section 230(C) of the tariff sets
forth that the passenger can pay a fee to raise the liability
limit "when checking in for a flight and presenting property
for transportation." Moreover, under a bold-faced capitalized
caption "NOTICE OF BAGGAGE LIABILITY LIMITATIONS," there was a
statement on the ticket itself: "Liability for loss, delay, or
damage to baggage is limited unless a higher value is declared
in advance and additional charges are paid." It is reasonable
to presume that a corporation like plaintiff regularly engaged
in interstate transport of jewelry would have notice of the
provisions for raising liability limitations on lost baggage.
Indeed, the written security instructions of the plaintiff to
its salespersons shows that it had knowledge of this standard
option. Thus, it is not material that Paist may have failed to
read the ticket's notice of the means for raising the liability
limitation and of the incorporation of the terms of the tariff
and conditions of carriage. See Deiro, 816 F.2d at 1366. The
third element is satisfied because plaintiff has come forward
with no evidence to suggest that the carrier has appropriated
the jewelry. All the evidence indicates that the sample case
was stolen by a third party in the short period while it was
"at curbside" and that it was never loaded by the airline or
Even though the defendants' implementation of the $1,250
limitation was in accordance with federal regulatory and common
law standards, plaintiff argues that defendants' reliance is
misplaced because after the baggage was lost a representative
of defendants notified plaintiff that Continental's position
was that there was no liability, rather than a limitation on
liability. Plaintiff relies on Klicker, supra, as the basis for
its argument that the representative's statement means
defendants cannot rely on the $1,250 limitation in this case.
Klicker does not stand for the proposition for which
plaintiff cites it. The airline in Klicker refused to permit
the plaintiff to pay a fee to raise the liability limitation
because the airline concluded prior to the loss of the baggage
that the airline could have no liability rather than just
limited liability. Such a refusal to permit a passenger to pay
to raise the liability limitation led the Klicker court to find
a violation of the Released Valuation Doctrine. Here the
circumstances are quite different. Plaintiff presents no
evidence that plaintiff would have been prevented from raising
the $1,250 liability limitation if plaintiff had attempted to
do so before checking its baggage. Plaintiff's contention is
also without merit because it would not be fair to limit the
defenses available to defendants in this
suit based solely on the "no liability" statement of a customer
relations representative, who was not a lawyer, after the claim
had been presented albeit prior to the start of this
Accordingly, Continental's liability is limited to $1,250.
The liability of co-defendant ITS is also limited, because ITS
acted as Continental's agent and the ticket gave notice to
ticket holders that the limitation of liability applied to
Continental's agents. See Baker v. Lansdell Protective Agency,
Inc., 590 F. Supp. 165 (S.D.N.Y. 1984).
Defendants' motion is granted insofar as it seeks a
declaration that defendants' joint liability is limited to
$1,250, but in all other respects defendants' motion is denied.
Plaintiff's cross-motion is granted insofar as it opposes
defendants' contention that there is no liability, but in all
other respects plaintiff's cross-motion is denied.
IT IS SO ORDERED.
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