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ROYAL & SUN ALLIANCE INSURANCE v. AMERICAN AIRLINES

July 23, 2003

ROYAL & SUN ALLIANCE INSURANCE, PLAINTIFF,
v.
AMERICAN AIRLINES, INC. AND ALL FREIGHT CO-ORDINATORS N.V., DEFENDANTS.



The opinion of the court was delivered by: Robert Sweet, Senior District Judge

OPINION

Plaintiff Royal & Sun Alliance Insurance ("Royal & Sun") moves for partial summary judgment declaring that the unamended Warsaw Convention governs the air cargo shipment at issue in this litigation. The defendant American Airlines, Inc. ("American") has opposed the motion on the grounds that the 1955 Hague Protocol governs. For the reasons set forth below, the motion for partial summary judgment is denied.

Prior Proceedings

On August, 16, 2002, Royal & Sun commenced this subrogation action against defendants American and All-Freight Coordinators N.V. ("All-Freight") to recover for the non-delivery of four crates of aircraft parts which were scheduled to be shipped from Brussels, Belgium to Tulsa, Oklahoma in March 2001. On February 21, 2003, Royal & Sun filed a letter motion for partial summary judgment to determine that the Original Warsaw Convention*fn1 governs the cargo shipment, and hence that American's eighth partial affirmative defense that its liability is limited by the terms of the air waybill and the Hague Protocol must be dismissed. American filed a brief opposing the motion on March 31, 2003. Oral argument was heard on May 21, 2003, and the motion was considered fully submitted at that time.

Facts

As befits a motion for summary judgment, the following facts are derived from the parties' Local Rule 56.1 statements and are not disputed.

Five crates of new aircraft parts weighing 374 kilograms were shipped from the manufacturer Asco Industries in Belgium to The Boeing Company's facilities in Tulsa in March 2001. The cargo was originally scheduled to be transported on March 10, 2001 from Brussels to Chicago on American Airlines Flight 89, and then from Chicago to Tulsa on Flight 1701. The waybill which was received showed that the shipment was to be made from Brussels to Tulsa via Chicago. American Airlines' sales agent in Brussels, Aviation Consulting, was initially notified that the cargo weighed approximately 75 kilograms. Because the actual cargo was heavier than Aviation Consulting was expecting, the cargo shipment was rescheduled for one day later and was rerouted through Dallas, Texas instead of Chicago because there was insufficient space to ship the cargo on the initially scheduled flights.

At an unknown time and place during the transit of the cargo from Brussels to Tulsa, four of the five crates were lost or stolen. The total value of the lost crates was $122,730.32.

The Issue

Article 22 of the Original Warsaw Convention "limited the liability of air cargo carriers to $20 dollars per kilogram of goods." Chubb v. Asiana Airlines, 214 F.3d 301, 306 (2d Cir. 2000) (citing Original Warsaw Convention, art. 22, 49 Stat. at 3018). Royal & Sun argues that American cannot avail itself of the limit on liability because it failed to comply with Article 8(c) of the Original Warsaw Convention:

Article 9 of the Original Warsaw Convention precludes an air carrier from availing itself of the liability limitation in Article 22(2) if "the air waybill does not contain all the particulars set out in article 8(a) to (i), inclusive and (q)." Original Warsaw Convention, supra, art. 9, 49 Stat. at 3017. Article 8(c) requires that the air waybill contain "[t]he agreed stopping places" for the shipment. Original Warsaw Convention, supra, art 8(c), 49 Stat. at 3016.
Id. at 304. The air waybill contained Brussels, Chicago and Tulsa, but the shipment was re-routed through Dallas.*fn2

American argues that the Original Warsaw Convention does not apply because the United States adheres to the Hague Protocol*fn3 rather than the Original Warsaw Convention. Neither party disputes that Belgium ratified the Hague Protocol, and that the Protocol entered into force for Belgium on November 25, 1963. The Hague Protocol "removed most of the exceptions to limited liability for shippers of goods," including the "agreed stopping places" requirement. Id. at 306-07. Since the entire shipment weighed approximately 374 kilograms, American argues that its liability would be limited to $7480.

Standard of Review

Rule 56(e) of the Federal Rules of Civil Procedure provides that a court shall grant a motion for summary judgment "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with affidavits . . . show that there is no genuine issue as to material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(e); Celotex Corp. v. Catrett, 477 U.S. 317 (1986); Silver v. City Univ., 947 F.2d 1021, 1022 (2d Cir. 1991). "The party seeking summary judgment bears the burden of establishing that no genuine issue of material fact exists and that the undisputed facts establish her right to judgment as a matter of law." Rodriquez v. City of New York, 72 F.3d 1051, 1060-61 (2d Cir. 1995). In determining whether a genuine issue of material fact exists, a court must ...


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