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United States District Court, S.D. New York

December 14, 2004.


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


Plaintiff Sinisa Djordjevic, appearing pro se, moves this Court for an order removing the captioned case from the suspense docket and restoring the case to the Court's active calendar. Defendant Swissair Transport Co., Ltd. ("Swissair") opposes the motion. For the reasons that follow, plaintiff's motion is denied.

Plaintiff commenced this action in the Civil Court of the City of New York in January 2001. Swissair removed the case to this Court pursuant to 28 U.S.C. § 1331, the source of this Court's original jurisdiction being that treaty commonly referred to as the Warsaw Convention, 49 Stat. 3000, as amended. Plaintiff had purchased a round trip ticket to be transported by Swissair in August 2000 from JFK, New York, to Belgrade, Yugoslavia with a stopover in Zurich, Switzerland, and return. On August 22, 2000, while plaintiff was undergoing a security check at the Zurich airport, plaintiff stated several times to security personnel that he had a bomb in his luggage. Plaintiff's luggage was searched and no bomb was found. However, Swissair decided to refuse onward carriage to plaintiff and to ban him indefinitely from Swissair flights, on the ground that "plaintiff posed a threat to the safe operations of Swissair flights." Affidavit of Werner Schaub, verified June 20, 2001, at ¶ 5. Plaintiff thereafter commenced this action. His complaint asserts a claim for breach of contract and may also be interpreted, giving the pro se pleading the requisite liberal reading, to assert a claim sounding in tort.

  Swissair moved for judgment on the pleadings, which plaintiff opposed. While that motion was pending decision, Swissair filed a notice of injunction issued by the United States Bankruptcy Court for this district. Swissair had become the subject of a liquidation proceeding in a Swiss court under Swiss law. The Swiss court-appointed Trustee applied to the Bankruptcy Court pursuant to the United States Bankruptcy Code, 11 U.S.C. § 304, which provides that "[a] case ancillary to a foreign proceeding is commenced by the filing with the bankruptcy court of a petition under this section by a foreign representative." § 304(a). The statute authorizes bankruptcy courts, inter alia, to "enjoin the commencement or continuation of any action against a debtor with respect to property involved in such foreign proceeding . . ." § 304(b)(1)(A)(I). Swissair's § 304 petition was signed by Karl Wuthrich, as Temporary Trustee of Swissair.

  On October 18, 2001, the United States Bankruptcy Court issued a Preliminary Injunction Order, signed by Chief United States Bankruptcy Judge Stuart M. Bernstein, which enjoined Swissair creditors from, inter alia, "commencing or continuing any action or legal proceeding in the United States . . ." First decretal paragraph at pp. 3-4.

  Plaintiff applied to the Bankruptcy Court for relief from that court's injunction in respect of his claim against Swissair. Chief Bankruptcy Judge Bernstein denied that application in an Order dated October 28, 2003. His Order also provided, in the second and last decretal paragraph, "that Swissair shall allow Applicant's claim in the amount of $943.42, and shall pay such claim pari passu with all other general unsecured claims."*fn1 Counsel for Trustee Wuthrich, opposing plaintiff's present application, say that "Swissair has complied with the [Bankruptcy Court's] Order, and Plaintiff's claim is registered in the Swiss proceeding." Memorandum in Opposition at ¶ 6. Accordingly plaintiff will eventually recover on his contract claim against Swissair in accordance with whatever percentage the Swiss court awards to unsecured creditors such as plaintiff.

  Plaintiff is understandably dissatisfied with this state of affairs. He prefers to litigate his claims in this Court, closer to home, rather than be relegated to a Swiss court and Swiss law. He argues, among other points, that denying an American citizen access to an American court is contrary to the Constitution. It is impossible not to sympathize with plaintiff. This Court must recognize, however, that in the Bankruptcy Code, 11 U.S.C. § 304, the Congress explicitly authorized and directed the Bankruptcy Courts, upon the application of foreign debtors such as Swissair, to issue injunctions of the sort that bars plaintiff, even though a United States citizen, from proceeding on his claim in this Court and requires him to file his claim in a foreign court. The injunction covers all claims, sounding in both contract and tort, and so it is of no moment that Chief Judge Bernstein's October 23, 2003 Order does not refer to plaintiff's tort claims. The Second Circuit Court of Appeals (whose decisions are binding upon this Court) has explained the policy considerations underlying the statute:

Section 304(a) authorizes a foreign representative in a foreign bankruptcy proceeding to commence a case ancillary to that proceeding in a United States bankruptcy court to protect the administration of the foreign proceeding. The purpose of a § 304 petition is to prevent the piecemeal distribution of assets in the United States by means of legal proceedings initiated in domestic courts by local creditors.
In Re Koreag, Controle et Revision S.A., 961 F.2d 341, 348 (2d Cir. 1992) (internal quotation marks, brackets and citations omitted). The Court's research indicates that it has never been suggested, let alone held by a court, that § 304 of the Bankruptcy Code exceeds the constitutional powers of the Congress.

  I have considered plaintiff's other contentions and criticisms about the manner in which the Bankruptcy Court administered his claim. This Court would have jurisdiction to adjudicate such issues only on an appeal to the District Court from the orders of the Bankruptcy Court, which plaintiff has not filed. But there would be no purpose in his doing so, since plaintiff's contentions, taken singly or in the aggregate, do not change the basic reality of the case, namely, that the Bankruptcy Court enjoined plaintiff from continuing his claim against Swissair in this Court and relegated him to the Swiss court in accordance with a valid act of Congress.

  Accordingly plaintiff's present application to reinstate the captioned case on this Court's active calendar will be denied. The case will remain on the Court's suspense docket.

  Plaintiff also applies for leave to amend his complaint to assert a negligence claim against Karl Wuthrich, the Swissair Trustee. Plaintiff charges the Trustee with "negligent administering of the claim matter, in particular the notice of the PIO, a plaintiff's letter, an application for relief from the PIO and the original proof of claim." Plaintiff's motion at ¶ 12. While leave to amend a pleading "shall be freely given when justice so requires," Rule 15(a), Fed.R.Civ.P., leave will be denied when the proposed amendment is futile in law. That is the fact in the case at bar, since Wuthrich, a Swiss resident, is not subject to the personal jurisdiction of this Court. His special appearance as Swissair's Trustee for the purpose of filing a petition in the Bankruptcy Court does not subject Wuthrich to the personal jurisdiction of the District Court.

  Nor could the New York long-arm statute confer such jurisdiction, since it is apparent from the motion papers that whatever failures or imperfections of communication may have arisen during the Bankruptcy Court proceeding, plaintiff's claim has been agreed to by Swissair and safely lodged in the Swiss liquidation proceeding. See Swissair's memorandum in opposition at ¶ 10:

In sum, Plaintiff's claim is registered, and he need take no affirmative steps, despite the return of the proof of claim filed in the U.S. ancillary proceeding. Moreover, the registering of the claim as an allowed claim effectively grants the relief sought by Plaintiff. While Swissair makes no representation as to the timing or amount of any distribution, Plaintiff's claim will be treated like all other general unsecured claims.
The significance of these undisputable circumstances in the present context is that plaintiff could not prove that Wuthrich's conduct in New York caused him any damage; and it follows that the long-arm statute would not operate to establish personal jurisdiction in this Court over Wuthrich. To recapitulate: (1) plaintiff's application to restore the captioned case to the Court's active calendar is denied; and (2) plaintiff's application to amend his complaint in order to assert a negligence claim against Karl Wuthrich is denied.


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