The opinion of the court was delivered by: Platt, Chief Judge.
Defendants move for partial summary judgment dismissing all
non-Warsaw Convention claims on the ground that any claim
brought against defendants in this action must lie, if at all,
under the Warsaw Convention*fn1. For the reasons set forth
below, defendants' motion is granted.
On December 21, 1988, Pan Am Flight 103 crashed near
Lockerbie, Scotland; all 243 passengers and 16 crew members
died. Family members of the victims of the crash filed
complaints in various federal district courts against Pan Am
Airways, Inc. ("Pan Am"), Pan Am World Services, Inc. ("PAWS"),
Alert Management Systems, Inc. ("Alert") and Pan Am Corp. ("Pan
Am Corp.") (collectively "defendants").*fn2 On April 4, 1989,
the Judicial Panel on Multi-district Litigation transferred the
suits against the defendants to this Court for consolidated
pretrial proceedings. See 709 F. Supp. 231 (Jud.Pan.Mult.Lit.
In a previous motion for partial summary judgment, defendants
moved to dismiss all punitive damage claims against defendants.
This Court granted defendants' motion, holding that punitive
damages claims are barred by the Warsaw Convention. See In re
Air Disaster at Lockerbie, Scotland on December 21, 1988,
733 F. Supp. 547 (E.D.N.Y. 1990), aff'd, 928 F.2d 1267 (2nd Cir.
1991), cert. denied sub nom., Rein v. Pan American World
Airways, ___ U.S. ___, 112 S.Ct. 331, 116 L.Ed.2d 272 (1991).
In our punitive damages decision, we declined to reach the
issue whether defendants Alert and PAWS are governed by the
Warsaw Convention in order to allow discovery
by plaintiffs on this issue. Discovery has now been completed
and the issue has been fully briefed by the parties. We now
hold that all defendants in this case, including Alert and
PAWS, are governed by the Warsaw Convention.
In pertinent part, Article 17 of the Warsaw Convention states
that "[t]he carrier shall be liable for damage sustained in the
event of the death . . . of a passenger . . . if the accident
which caused the damage so sustained took place on board the
aircraft." Article 24(2) provides that "in the cases covered by
Article 17, the provisions of the preceding paragraph shall
also apply." The preceding paragraph referred to is Article
24(1), which states that "any action for damages, however
founded, can only be brought subject to the conditions and
limits set out in this Convention." The key limitation at issue
here is the limitation on maximum liability in Article 22,
which states "[i]n the transportation of passengers the
liability of the carrier for each passenger shall be limited to
the sum of 125,000 francs." Under the Montreal Agreement,*fn3
this limit was raised to $75,000.
In practical terms, the issue for the parties is whether
Alert and PAWS are entitled to this maximum limit on liability
as provided by Articles 24 and 22 of the Warsaw Convention, as
modified by the Montreal Agreement. The legal issue before the
Court is whether Alert and PAWS fall within the meaning of the
term "carrier," as that term was envisioned by the signatory
parties to the Warsaw Convention and as that term has been
interpreted by the courts in the United States.
Our discussion must begin with Second Circuit's opinion in
Reed v. Wiser, 555 F.2d 1079 (2d Cir. 1977). In Reed, the
Second Circuit was faced with the question of "whether airline
employees are entitled to assert as a defense the liability
limitations of the Warsaw Convention." Id. at 1081. The Court
held that employees of a "carrier" are governed by the Warsaw
Convention and thus protected by the liability limitations of
Article 22. The Court reasoned, in part, that to allow a suit
for unlimited damages against an air carrier's employees would
undermine the purpose of the Warsaw Convention "because in most
instances carriers are bound to provide their employees with
indemnity protection." Id. at 1089-90. The Court was concerned
with the risk that "plaintiffs would seek to circumvent the
Convention's limitation by bringing suit against the pilot or
some other employee of the airline involved." Id. at 1092.*fn4
Although Reed employed language suggesting a broader scope —
for example, in framing the issue, the Court asked whether the
term carrier was "limited to the corporate entity [i.e., the
airline], or was intended to embrace the group or community of
persons actually performing the corporate entity's function,"
id. at 1083 (emphasis added) — its holding was limited to
employees. The question now before this Court, whether
non-employee agents of a carrier are likewise protected by the
liability limitations of the Warsaw Convention, was left open.
In Baker v. Lansdell, 590 F.S0upp. 165 (S.D.N.Y. 1984),
plaintiff sued the airline's security agent alleging that the
agent was responsible for the loss of jewelry that plaintiff
claimed was stolen from her handbag. The issue before the Court
was whether the agent "may be permitted to take advantage of
the Convention's limitations on liability, which by their terms
apply only to air carriers." Id. at 170. Citing Reed and Julius
Young, the Court held that the Warsaw Convention applied to
claims against the airline's security agent.
In addition, the Court noted that 49 U.S.C. § 1356
requires that security checks, such as the one
during which the alleged loss purportedly occurred
in the instant case, be performed by employees or
agents of the air carrier. Therefore, unless
British Airways and Lansdell are violating the law,
Lansdell [the agent] is entitled to invoke the
liability limitations of the Convention.
The uncontroverted fact that Lansdell had an
agreement with British Airways to perform a
service, falling within the scope of the
Convention, that British Airways would otherwise
be required by ...