United States District Court, Eastern District of New York
September 16, 1991
IN RE AIR DISASTER NEAR COVE NECK, NEW YORK, ON JANUARY 25, 1990. MARGARITA DE LONDONO, INDIVIDUALLY AND AS REPRESENTATIVE OF THE ESTATE OF OMAR LONDONO, DECEASED, PLAINTIFF,
AEROVIAS NACIONALES DE COLOMBIA, S.A. A/K/A AVIANCA AND THE BOEING COMPANY, DEFENDANTS.
The opinion of the court was delivered by: Platt, Chief Judge.
MEMORANDUM AND ORDER
Plaintiff was injured and her husband was killed when the
plane on which they were travelling crashed en route from
Colombia to New York in early 1990. She brought this action
against Aerovias Nacionales de Colombia, S.A. ("Avianca,
S.A."), the operator of the aircraft, and The Boeing Company,
the manufacturer of the aircraft to recover for the injuries
they sustained as a result of that crash. Avianca, S.A. now
moves this Court for an Order dismissing plaintiff's action
pursuant to Rule 12(b)(1) for lack of subject matter
jurisdiction. For the following reasons, Avianca, S.A.'s motion
is hereby granted.
I. Article 28 of The Warsaw Convention
The parties agree that the Warsaw Convention*fn1 governs the
rights of the parties to this action. The issue presently
before the Court concerns whether this Court possesses treaty
jurisdiction pursuant to the terms of that Convention.
Article 28(1)*fn2 of the Convention provides that a suit for
damages subject to its provisions must be brought in one of
four locations: 1) the domicile of the carrier; 2) the
principal place of business of the carrier; 3) the carrier's
place of business through which the contract has been made; or
4) the place of destination. 49 Stat. 3020. This Article is
jurisdictional in nature and the points of jurisdiction it
are national in scope. Smith v. Canadian Pacific Airways, Ltd.,
452 F.2d 798, 801 (2d Cir. 1971). If, in any given action, the
United States is not one of the fora specified by Article 28,
the federal courts lack treaty jurisdiction under the
Convention and therefore federal subject matter jurisdiction
over the controversy. Gayda v. LOT Polish Airlines,
702 F.2d 424, 425 (2d Cir. 1983); Smith, 452 F.2d at 802. Plaintiff here
focuses solely upon the first locus of jurisdiction specified
by Article 28, the domicile of the carrier.*fn3
In this Circuit, an air carrier is generally considered to be
domiciled in the country of its incorporation. Smith, 452 F.2d
at 802; Eck v. United Arab Airlines, Inc., 360 F.2d 804, 809
(2d Cir. 1966). Avianca, S.A. is a South American company,
incorporated and headquartered in Colombia. While this fact
would seem to end the jurisdictional analysis, plaintiff
contends that Avianca, S.A. has acquired a second domicile in
the United States. Borrowing an analysis from the law of
federal diversity jurisdiction, she notes that Avianca, S.A.
maintains a wholly-owned subsidiary, incorporated under the
laws of New York, Avianca, Inc., over which it exercises
significant control. So great is this control, plaintiff
argues, that the two corporations may be considered alter egos
of one another and the American domicile of the subsidiary
imputed to the South American parent,*fn4 thus conferring
jurisdiction on this Court under the terms of Article 28(1).
As far as this Court's research can determine, no prior Court
has considered whether a jurisdictional alter ego analysis may
properly be conducted under the terms of the Warsaw
Convention.*fn5 Having considered the submissions and
arguments of the parties, this Court now concludes that the
Warsaw Convention does not allow the use of such an analysis.
II. Alter Ego Analysis in Diversity Jurisdiction
Although American law generally presumes that corporations
are entities separate from their subsidiaries, Fletcher Cyc.
Corp. § 43 (1989), federal courts sitting in diversity will
ignore such corporate distinctions where the parent exercises
sufficient control over the subsidiary. Panalpina Welttransport
GMBH v. Geosource, Inc., 764 F.2d 352, 354 (5th Cir. 1985);
Freeman v. Northwest Acceptance Corp., 754 F.2d 553, 556-58
(5th Cir. 1985). Where such control is exercised, the two
corporations will be deemed alter egos of one another and
treated as a single consolidated entity. In matters relating to
diversity jurisdiction, the effect of such treatment is to
impute the domicile or the business activities of each company
to the other. See Topp v. CompAir, Inc., 814 F.2d 830, 835-37
(1st Cir. 1987); Panalpina, supra, 764 F.2d at 354; Freeman,
supra, 754 F.2d at 556-58. Under no circumstances, however,
does alter ego analysis permit a corporation to ignore the
domicile of either of the two consolidated corporations;
rather, in the
cases in which the subsidiary's domicile is imputed to the
parent, the parent acquires an additional domicile for
jurisdictional purposes. J.A. Olson Co. v. City of Winona,
818 F.2d 401, 413-14 (5th Cir. 1987); Panalpina, supra, 764 F.2d at
354; Fritz v. American Home Shield Corp., 751 F.2d 1152,
1153-54 (11th Cir. 1985). Thus, using an alter ego analysis, a
single corporation may be found to possess several separate
domiciles for jurisdictional purposes simultaneously.
III. Corporate Domicile Under the Warsaw Convention
In contrast to domestic American principles of jurisdiction,
the terms of the Warsaw Convention indicate that the drafters
of the treaty did not see the concept of corporate domicile, or
domicile as it is rendered in the original French, as so
expansive. Rather, they saw a corporation's domicile as unitary
and did not contemplate that a corporation might be
simultaneously domiciled in two separate countries.
A. Article 28
As is true With any treaty, Courts are bound to construe the
language of the Warsaw Convention to effect the shared
intentions of the contracting parties. Air France v. Saks,
470 U.S. 392, 399, 105 S.Ct. 1338, 1342, 84 L.Ed.2d 289 (1985). Of
course, those intentions are most fully embodied in the text of
the treaty itself. Courts must therefore follow that text
unless it is ambiguous or produces results which are
"necessarily absurd." Chan v. Korean Air Lines, Ltd.,
490 U.S. 122, 109 S.Ct. 1676, 1683-84, 104 L.Ed.2d 113 (1989).
Furthermore, because the text was drafted in French by
continental jurists, the French text and the French legal
meaning of the terms it contains provide the clearest insight
into the drafters's intentions. Air France, supra, 470 U.S. at
399, 105 S.Ct. at 1342.
The official text of Article 28(1), ratified by the Senate in
L'action en responsibilite devra etre portee, au
choix du demander, dans le territoire d'une des
Haute Parties Contractantes soit devant le
tribunal du domicile du transporteur, du siege
principal de son exploitation ou du lieu ou il
possede un etablissement par le soin duquel le
contrat a ete conclu, soit devant le tribunal du
lieu de destination.
Warsaw Convention, 49 Stat. at 3007.
The unofficial American translation of this Article, which
was read to the Senate but not itself ratified, provides:
An action for damages must be brought, at the
option of the plaintiff, in the territory of one
of the High Contracting Parties, either before the
court of the domicile of the carrier or of his
principal place of business, or where he has a
place of business through which the contract has
been made, or before the court at the place of
49 Stat. at 3020.
B. Du Domicile Du Transporteur
In the original French, Article 28(1) speaks of jurisdiction
"du domicile du transporteur." Warsaw Convention, art. 28(1),
49 Stat. 3007. The American version of this provision
translates this phrase as "the domicile of the carrier."
Id., 49 Stat. 3020. It is a matter of hornbook American law
that a corporation is deemed "domiciled" in the state in which
it is incorporated. Restatement 2d, Conflict of Laws § 11(2)
comment 1 (1971). Without analysis, courts in this Circuit have
transferred this understanding of corporate domicile from the
domestic to the Warsaw Convention context, finding corporations
to be domiciled at their place of incorporation under the terms
of the Warsaw Convention. Smith, supra, 452 F.2d at 802; Eck,
360 F.2d at 809.
The French term domicile, however, as it relates to
corporations, does not refer to the place of incorporation.
Wyler v. Korean Air Lines Co., 928 F.2d 1167, 1175 (D.C. Cir.
1991); S. Speiser & C. Krause, Aviation Tort Law, § 11.41 n. 89
(1978). Instead, French law considers a corporation's domicile
to be its siege social. G. Miller, Liability in International
Air Transport, 301 (1977). Literally translated,
siege social means the "seat of the corporation," see Cassell's
French Dictionary (1981), and under French law, it refers to
the corporation's headquarters. See Zimonyl v. Varig Airlines
(Empresa de Aerea Rio Grandese), 1978 U.S.Av.Rpts. 122, 125
(France, Court of First Instance of Paris, 1st Div., Sec. 2,
Apr. 28, 1978); Wyler, supra, 928 F.2d at 1175; G. Miller,
supra, at 301; N. Matte, Treatise on Air-Aeronautical Law
As the term "headquarters" indicates, implicit in this
concept of domicle or siege social, is the idea that an
individual or a corporation may have no more than one. As one
French Court explained, considering whether a South American
Airline's maintenance of a place of business in France created
a domicile there:
Paris cannot be the carrier's legal domicile, as a
person, whether physical or legal can have only
one domicile, which in this case is Rio de
Janeiro, the headquarters of the Varig Company. .
Zimonyl, supra, 1978 U.S.Av.Rpts. at 125 (France, Court of
First Instance of Paris, 1st Div., Sec. 2, Apr. 28, 1978).*fn6
This view has been echoed by one noted commentator. Analyzing
the distinctions between the common law concepts of domicile
and the French notion of domicile, he concluded that they
did not present much of a risk of creating serious
difficulties between judicial applications of
Article 28. The reason is that beyond any
difference in the technical definitions of the
concepts of domicile, these definitions have in
common an essential feature which is that, for a
given purpose, there can be only one domicile.
G. Miller, supra, at 301 (citing Restatement 2d, Conflict of
Laws § 11(2) (1971) and Dicey & Morris on the Conflict of Laws,
Rule 5) (emphasis added).
The structure and language of Article 28(1) confirm that the
drafters of the Convention intended to incorporate this French
limitation into the treaty. First, it bears noting that the
term domicile, as used in the Article, is singular rather than
plural. More importantly, the structure of the provision itself
suggests that the drafters intended the provision to specify
four discrete points of jurisdiction, rather than four
categories of locations which might each contain several
appropriate points. Each of the three bases of jurisdiction
other than domicile specify no more than a single country in
any one instance. For instance, a carrier may only have one
principal place of business under the convention. Smith, supra,
452 F.2d at 802 n. 13; Nudo v. Societe Anonyme Belge
D'exploitation, 207 F. Supp. 191, 192 (E.D.Pa. 1962). Similarly,
there may be only one place of business through which the
contract of carriage is made and there may only be one
destination. See Gayda v. LOT Polish Airlines, 702 F.2d 424,
425 (2d Cir. 1983); Butz v. British Airways, 421 F. Supp. 127,
130-31 (E.D.Pa. 1976) (destination for purposes of Convention
is ultimate destination), aff'd mem., 566 F.2d 1168 (3d Cir.
1977). Use of the unitary French concept of domicile would
therefore have maintained the parallel structure of the
provision. Moreover, when it is recalled that domicile-based
jurisdiction was primarily intended to apply to individuals,
this conclusion is all but irresistible.*fn7 As applied to
individuals, there may only be a single domicile for any given
purpose at any given time. Zimonyl, 1978 U.S.Av.Rpts. at 125;
G. Miller, supra, at 301. Indeed this is even true of common
law notions of individual domicile. See Restatement 2d,
Conflict of Laws § 11(2) & comment m (1971).
Given this general structure, this Court declines to conclude
that the domicile provision, as applied to corporations,
authorizes jurisdiction in two or more places simultaneously.
Having clearly defined each of the other provisions of Article
28 to apply to only a single place in any one instance, and
given the inherent limitation on the domicile provision as it
applies to individuals, the drafters could not have intended
that the same provision simultaneously create many points of
jurisdiction as applied to corporations. That the drafters did
not even explicitly consider the application of the provision
to corporations during the Conference itself only makes the
jurisdictional expansion proposed by plaintiffs all the more
improbable. See Minutes, at 113-28, 169-70, 254.*fn8
By conforming the American understanding of Article 28 with
that of other parties to the Warsaw Convention, see, e.g.,
Zimonyl, supra, 1978 U.S.Av.Rpts. at 125, adoption of a unitary
concept of corporate domicile also comports with the Treaty's
general aim of promoting uniformity in the treatment of
aviation among the world's legal communities. See Lowenfeld &
Mendelsohn, The United States and the Warsaw Convention, 80
Harv.L.Rev. 497, 498-99 (1966).
A unitary concept of corporate domicile also assures that
each potential forum have a substantial connection with either
the contract of carriage or with the carrier itself.
See Minutes, supra, at 113; Lowenfeld & Mendelsohn, supra, 80
Harv.L.Rev. at 499. Under plaintiff's theory, on the other
hand, a corporation may be subject to jurisdiction in a country
with which it maintains no significant connection. For
instance, under Article 28, jurisdiction does not exist where
the carrier merely maintains
a place of business. See Wyler, supra, 928 F.2d at 1175.
Jurisdiction arises only where the contract of carriage is
concluded at that place of business or the place of business is
the principal place of business of the carrier. In this case,
the United States is not the carrier's principal place of
business and plaintiff's contract of carriage was not concluded
through any place of business of Avianca, S.A. in this country.
Rather, as the facts presented by the plaintiff establish, the
United States is merely a country in which Avianca, S.A.
maintains a subsidiary sales agent. That agent, the evidence
showed, operates in much the same way as unincorporated
divisions of Avianca, S.A. in other countries. It is, in
essence, an incorporated place of business of Avianca, S.A.
Plaintiff offers no explanation of why local incorporation
should transform an ordinary place of business into a locus of
jurisdiction under the terms of the Warsaw Convention.
Certainly, the text or the legislative history of the
convention give no indication that the fact of incorporation
ought to effect the suitability of jurisdiction. In fact,
neither the text nor the Minutes of the Conference mention
incorporation at all. Given this lack of textual authority,
this Court must decline to expand the jurisdictional provision
of the treaty based upon the fact that Avianca, S.A. maintains
a subsidiary sales agent in the United States, whether or not
that agent qualifies as an alter ego of its parent.
The country in which a carrier maintains an incorporated
subsidiary also bears no necessary relationship to the contract
of carriage or the expectations of the parties. For example,
the contract here was not concluded outside this country and
the United States was not the destination of the ticket.
While she acknowledges that the drafters of the convention
intended to limit jurisdiction, plaintiff argues that her
approach does no violence to this objective. In her view,
Article 28(1) was designed to prevent a carrier from being
subject to suit in remote countries with underdeveloped legal
systems.*fn9 The alter ego analysis, she contends, can create
jurisdiction only in those places where the parent has
incorporated subsidiaries. By incorporating in a given country,
a carrier essentially certifies that that country's legal
system offers adequate protections and benefits and thus
prevents it from being subject to suit in some primitive area
of the world.
This argument fails because it presumes that the desire to
avoid suit in countries with less-advanced legal systems was
the sole organizing principle behind Article 28(1). This,
however, was clearly not the case. While concerned about this
possibility, the drafters still allowed suit to be brought in
such countries provided that they were the destination of the
flight at issue or the place where the ticket was sold. Indeed,
these provisions indicate that the drafters were more concerned
with conforming the bases of jurisdiction to the contract of
carriage itself and the expectations of the parties created by
it. They did not permit jurisdiction in any country with an
advanced legal system. Rather, they required that the contract
have been made in the forum, that the destination be located
there, and so on. See Minutes, supra, at 113. Focusing upon the
legal sophistication of a given forum, therefore, unjustifiably
ignores the other objective underlying the restrictive approach
to jurisdiction embodied in Article 28.
The nature of the alter ego analysis used in determining the
existence of federal diversity jurisdiction renders it
inappropriate for use in the context of the Warsaw Convention.
Where it applies, the analysis determines that a single
corporation is domiciled
in two separate places. The text and policies of the Warsaw
Convention, however, indicate an air carrier may have no more
than one domicile for purposes of the treaty. Thus, this Court
concludes that the domestic alter ego analysis may not be
applied under that Convention and that the carrier Avianca,
S.A., is domiciled in Colombia where it is incorporated and
headquartered, rather than in America where it maintains a
subsidiary sales agent.
For the foregoing reasons, defendant's motion must be, and
hereby is, granted.