Source: http://www.ecases.us/case/ca2/c783948/commercial-union-insurance-company-aso-ilapak-inc
Timestamp: 2020-08-06 01:48:20
Document Index: 206725146

Matched Legal Cases: ['§ 2', 'art. 1', 'art. 24', 'art. 12', 'art. 13', '§ 5001', 'art. 17']

commercial-union-insurance-company-aso-ilapak-inc, Second Circuit, US Court of Appeals Cases, Federal Courts, COURT CASE
COPYRIGHT MATERIAL OMITTED COPYRIGHT MATERIAL OMITTED COPYRIGHT MATERIAL OMITTED COPYRIGHT MATERIAL OMITTED Nicholas E. Pantelopoulos, New York, New York (Lawrence Mentz, Biedermann, Hoenig, Massamillo & Ruff, P.C., New York, New York, of counsel), for Defendant Alitalia Airlines, S.p.A.
Because we have before us an appeal from the grant of summary judgment, we conduct de novo review to determine whether the record reveals the existence of any material issue of fact that would bar such relief. See Podell v. Citicorp Diners Club, Inc., 112 F.3d 98, 100 (2d Cir.1997); see also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48, 106 S. Ct. 2505, 91 L. Ed. 2d 202 (1986). In so doing, we stand in the place of the district court and are guided by the same principles. See Podell, 112 F.3d at 100.
Liability for personal injury and damage to goods during international flight is governed by the provisions of the Warsaw Convention. As a treaty adhered to by the United States, it is the supreme law of the land and trumps local law when it applies. See U.S. Const. art. II, § 2 and art. VI. The Convention governs "all international transportation of persons, baggage, or goods performed by aircraft for hire." Warsaw Convention, art. 1(1). Where applicable, its terms provide the exclusive basis for recovery. See id. art. 24 ("In cases [involving damage to cargo], any action for damages, however founded, can only be brought subject to the conditions and limits set out in this convention."); cf. El Al Israel Airlines, Ltd. v. Tseng, 525 U.S. 155, 160-61, 119 S. Ct. 662, 142 L. Ed. 2d 576 (1999) (holding that if recovery for personal injury aboard aircraft or during embarking or disembarking not allowed under Convention, it is not available at all).
Certain general principles guide interpretation of the Warsaw Convention. Where the language of such an international treaty is plain, a court must refrain from amending it because to do so would be to make, not construe, a treaty. Chan v. Korean Air Lines, Ltd., 490 U.S. 122, 134-35, 109 S. Ct. 1676, 104 L. Ed. 2d 113 (1989) (quoting The Amiable Isabella, 19 U.S. (6 Wheat.) 1, 71, 5 L. Ed. 191 (1821) (Story, J.)). This principle recognizes that the Warsaw Convention is aimed at providing unifying norms in a world of diverse legal systems. See Eastern Airlines, Inc. v. Floyd, 499 U.S. 530, 552, 111 S. Ct. 1489, 113 L. Ed. 2d 569 (1991) (describing Warsaw Convention's purpose of "achieving uniformity of rules governing claims arising from international air transportation"). To import meaning into a treaty from an outside source risks disrupting the very uniformity the Convention aims to provide.
Yet, when a treaty is reasonably susceptible to more than one interpretation, secondary sources must be employed to ascertain appropriate meaning. See Chan, 490 U.S. at 134, 109 S. Ct. 1676. In so doing, we strive to conform our reading to the treaty's original intent and purpose. See Air France v. Saks, 470 U.S. 392, 399, 105 S. Ct. 1338, 84 L. Ed. 2d 289 (1985). Some useful secondary sources are found in the drafting documents (travaux préparatoires), see Zicherman v. Korean Air Lines Co., 516 U.S. 217, 226, 116 S. Ct. 629, 133 L. Ed. 2d 596 (1996), the opinions of sister signatories at international conferences, see Saks, 470 U.S. at 404, 105 S. Ct. 1338, interpretations by our own executive, see Tseng, 525 U.S. at 168-69, 119 S. Ct. 662 (citing Sumitomo Shoji America, Inc. v. Avagliano, 457 U.S. 176, 184-85, 102 S. Ct. 2374, 72 L. Ed. 2d 765 (1982)), and post-ratification practices of the signatory nations, see Trans World Airlines, Inc. v. Franklin Mint Corp., 466 U.S. 243, 255, 104 S. Ct. 1776, 80 L. Ed. 2d 273 (1984). With this overview of the Convention in mind, we analyze the issues raised on appeal.
Alitalia's challenge emphasizes that actions for damage to goods brought under the Warsaw Convention are subject to the limits expressly set forth in the text. See Tseng, 525 U.S. at 167, 119 S. Ct. 662. It directs us to Article 24, which states
Outside the context of successive carriage, the Convention does not discuss which parties have standing for cases of damage to cargo. Courts determining which parties have a right to sue have found guidance in Articles 12 and 13, which govern the rights of the consignor and consignee named on the air waybills. Article 12 gives the consignor the right to dispose of the goods by withdrawing them at the airports of departure and destination, stopping them in the course of the journey, requiring their return, or calling for them to be delivered at the place of destination. See Warsaw Convention, art. 12(1). Article 13 confers on the consignee the right to require the carrier to deliver the air waybill and the goods, and if the goods do not arrive or the carrier admits liability for their loss, the consignee may enforce the rights flowing from the contract of carriage. See id. art. 13. Courts have assumed that the consignor and consignee, as the parties with rights over the goods, were the parties in interest entitled to sue under the Convention. See, e.g., Brink's Ltd. v. South African Airways, 93 F.3d 1022, 1025 n. 2 (2d Cir.1996) (inferring standing for consignee based on Article 13); Lufthansa German Airlines v. American Airlines, Inc., 797 F. Supp. 446, 452-53 (D.Vi.1992) (stating, based on Articles 12, 13 and 14 governing rights over goods in transit, that consignors and consignees have right of action); Parke, Davis & Co. v. British Overseas Airways Corp., 11 Misc. 2d 811, 812-13, 170 N.Y.S.2d 385 (City Ct. of N.Y.1958) (same); see also Miller, supra, at 249-56.
This provision plainly suggests that any legal relationships third parties possess vis-à-vis consignees and consignors under local law are not altered by those portions of the Warsaw Convention that define consignees/ors' rights. See Minutes, Second International Conference on Private Aeronautical Law, Oct. 4-12, 1929, Warsaw 176 (Robert C. Horner & Didier Legrez, trans. 1975) (hereafter Minutes) (remark by the Warsaw Convention reporter that although it is not explicitly stated, where the Convention does not govern, "it's the common law which is applicable"); cf. Zicherman, 516 U.S. at 224-25, 116 S. Ct. 629 (local law applied to determine cognizable harm in personal injury cases because Warsaw Convention clearly declines to govern). Hence, a party not named in a contract for carriage who under local law would have a right to sue through a legal relationship with the consignor would likewise have such a right under the Warsaw Convention.
Alitalia asserts that no such relationship exists. In support of that argument it cites case law for the proposition that between the carrier and the original shipper, liability runs to the middle man alone. See, e.g., Rank Precision Indus., Inc. v. Jardine Air Cargo (U.S.) Ltd., No. 84 C 8612, 1986 WL 6096 (N.D.Ill. May 20, 1986). That proposition however, misstates the law applicable to the instant case. It is true that freight forwarders like Gava typically serve as intermediaries, or "middle men," between an actual carrier and an original shipper. In the process, a freight forwarder typically operates, though at different times, as an agent for the original shipper and for the carrier performing the transit. Far from cutting off liability, the intermediary function a freight forwarder assumes frequently makes a carrier liable to the shipper. At common law, for instance, the original shipper was ordinarily entitled to sue either the forwarder or the carrier for loss of cargo, on the theory that the original shipper is an undisclosed principal of the forwarder, which is considered to act as an agent of the original shipper with respect to the actual carrier who performs the carriage. See Chicago, Milwaukee, St. Paul & Pac. R.R. Co. v. Acme Fast Freight, Inc., 336 U.S. 465, 487-88 n. 27, 69 S. Ct. 692, 93 L. Ed. 817 (1949); see also Leon Bernstein, 421 N.Y.S.2d at 589.
In support of this argument, Alitalia cites Railroad Salvage of Conn., Inc. v. Japan Freight Consolidators (U.S.A.) Inc., 556 F. Supp. 124 (E.D.N.Y.1983), aff'd, 779 F.2d 38 (2d Cir.1985), and Magnus Elects., Inc. v. Royal Bank of Canada, 611 F. Supp. 436 (N.D.Ill.1985), for the proposition that the Article 18(3) presumption of liability does not apply to any land transport not undertaken as a contractual obligation of the airline itself. But we think these cases inapposite to the present situation. In Railroad Salvage, a shipment disappeared after the airline had delivered it to the consignor's trucking company. See 556 F.Supp. at 126-27. In Magnus Electronics, a bank, perhaps acting at the direction of the airline, mistakenly allowed delivery of a shipment before a condition precedent — payment for the goods — had occurred. See 611 F.Supp. at 438. In both of those cases, the loss to the goods had unquestionably occurred on land outside an airport, and thus the presumption of Article 18 would not have applied. See also Victoria Sales Corp. v. Emery Air Freight, Inc., 917 F.2d 705, 707 (2d Cir.1990). In the case at hand, the location of damage is unknown.
Id. at 77. The Convention delegates eventually rejected the French proposal in favor of DeVos' idea, reflected in the language of the present Article 18(3). This evinces a primary goal of protecting plaintiffs by easing their evidentiary burden, and disregards the question of whether the air carrier has any control over the ground transport. Thus, we believe the absence of a provision for ground transport on an air carrier's waybill cannot preclude application of Article 18(3). This is consistent with the practice of several courts in the cases we have found addressing the issue. See, e.g., Jaycees Patou, Inc. v. Pier Air Int'l, Ltd., 714 F. Supp. 81, 83-84 (S.D.N.Y. 1989) (applying presumption where contract for air carriage with freight forwarder included door-to-door delivery); Ark-wright Mutual Ins. Co. v. KLM Royal Dutch Airlines, No. 94 Civ. 0174, 1995 WL 491490, at *3 (S.D.N.Y. Aug.17, 1995) (applying presumption where forwarder shipped goods by land per original shipper's instructions; indicating that forwarder issued waybills as carrier's agent but presumption would apply even absent agency); Boehringer Mannheim Diagnostics, Inc. v. Pan American World Airways, Inc., 531 F. Supp. 344, 347-48 (S.D.Tex.1981) (presumption covers original shipper's own transport of goods to air carrier's facility at airport before contract for carriage began), rev'd on other grounds, 737 F.2d 456 (5th Cir.1984).
While the presumption may at times work a hardship on air carriers, it can be seen as a concession granted to shippers in exchange for the limitation on liability air carriers enjoy under the Warsaw Convention. It furthers the Convention's goal to "balance the interests of [those] seeking recovery for ... injuries, and the interests of air carriers seeking to limit potential liability." Tseng, 525 U.S. at 170, 119 S. Ct. 662; see also Magnus Elects., 611 F.Supp. at 439 n. 3 (noting that the Convention is not simply "an exculpatory treaty for the benefit of air carriers" and that in the case of mysterious disappearance of goods it seeks to "plac[e] the burden of proof on the carrier").
The district court recognized, as we do, that in light of the evidence, it strains credulity to believe that the two Gavas have no corporate connection, as defendants assert, and thus service on one did not effect service on the other, see Bulova Watch Co. v. K. Hattori & Co., 508 F. Supp. 1322, 1333 (E.D.N.Y.1981) (collecting cases and discussing how a foreign company may be amenable to suit via a domestic agent or subsidiary). The fact that the two companies share substantially the same name, the same counsel at trial and on appeal, and the same Internet site, strongly suggests a connection. The fact that Gava S.p.A.'s employees refer to Gava USA as "the New York office," also points to a corporate relationship.
We pass to the final issue, one raised by plaintiff's cross-appeal. Following the grant of summary judgment in favor of Commercial Union, it petitioned for prejudgment interest on the award. It maintains that the Supreme Court's decision in Zicherman establishes that local law governs. See Zicherman v. Korean Air Lines Co., 516 U.S. 217, 116 S. Ct. 629, 133 L. Ed. 2d 596 (1996); NY CPLR § 5001 (McKinney 2003) (party entitled to prejudgment interest as of right for contract claims); Adams v. Lindblad Travel, Inc., 730 F.2d 89, 93 (2d Cir.1984) (same). The district court denied plaintiff's petition.
In O'Rourke v. Eastern Airlines, Inc., 730 F.2d 842 (2d Cir.1984), overruled on other grounds by Salve Regina College v. Russell, 499 U.S. 225, 230, 111 S. Ct. 1217, 113 L. Ed. 2d 190 (1991), we considered the prejudgment interest issue. That case involved an action pursuant to Article 17 of the Convention for damages resulting from the death of a passenger that occurred on a flight en route from New Orleans to New York. A jury found for the victim and awarded damages, which were subsequently reduced to $75,000 pursuant to the Convention's then effective limit of liability for personal injury. The plaintiff requested prejudgment interest on the award, which, if granted, would have raised the total award above the $75,000 liability cap. The argument advanced was that because the Convention does not mention prejudgment interest, it is a matter of local law and therefore not subject to the liability cap. Id. at 852. We denied the award, ruling that prejudgment interest is not a subject where courts are directed to apply the law of the forum, and that to allow prejudgment interest in excess of the Convention's liability cap undermines its framers' primary aim to limit recovery against airlines for negligence. Id. at 853. We extended this principle to cargo cases in Exim Industries v. Pan Am. World Airways, Inc., 754 F.2d 106, 109 (2d Cir.1985).
Commercial Union declares our precedents are no longer good law in light of the Supreme Court's decision in Zicherman. In Zicherman, plaintiffs were relatives of a person killed when a Korean Airlines jet strayed into Soviet airspace and was shot down. The relatives sought, among other claims, damages for loss of the victim's society. See Zicherman, 516 U.S. at 220, 116 S. Ct. 629. The question was which law applied to determine the types of injuries or loss for which the Warsaw Convention allowed recovery. The Supreme Court looked to Article 17, which governs personal injuries. It states that "[t]he carrier shall be liable for damage sustained in the event of ... death." Warsaw Convention, art. 17. The Court held that Article 17 leaves to adjudicating courts the task of specifying what harm is cognizable. The Court read this provision together with Article 24(2), which provides that actions under Article 17 are brought "without prejudice as to who are the persons who have the right to bring suit and what are their respective rights." Accordingly, the Court ruled that "the law of the Convention does not affect the substantive questions of who may bring suit and what they may be compensated for. Those questions are to be answered by the domestic law selected by the courts of the contracting states." The Court determined that the local law that governs is the law of the forum state. Zicherman, 516 U.S. at 218-19, 116 S. Ct. 629. Commercial Union contends that Zicherman overrules our precedents so that prejudgment interest should be allowed under local law. Cf. Pescatore v. Pan Am. World Airways, Inc., 97 F.3d 1, 20-21 (2d Cir.1996) (remanding issue of prejudgment interest for determination under Ohio law).
Prejudgment interest is not available in the present case under Zicherman. Rather, the reasoning of O'Rourke controls. Applying local law to plaintiff's request for prejudgment interest would grant it an award in excess of the Convention's limits. To say that local law applies under Zicherman fails to address O'Rourke's central argument or the Convention's primary mandate. Nothing in Zicherman suggests that local law may be employed to allow a successful party to circumvent the liability limits set out in the Convention, absent special circumstances not here relevant. The Supreme Court's declaration that the Convention does not "affect the substantive questions of who may bring suit and what they may be compensated for," 516 U.S. at 225, 116 S. Ct. 629 (emphasis added), has no bearing on the Convention's restrictions on the amount a party may recover. To the contrary, the Convention explicitly states that plaintiffs in suits for cargo damage are subject to the limitation of liabilities contained in Article 22 of the Convention. See Warsaw Convention, arts. 22, 24(1); Tseng, 525 U.S. at 171, 119 S. Ct. 662.
Freight forwarders are recognized as having the ability to enter into contracts for air carriage, even though they perform no air carriage themselves. They are often thus labeled "indirect air carriers."DHL Corp. v. Civil Aeronautics Bd., 584 F.2d 914, 915 (9th Cir.1978) (finding freight forwarders to be indirect air carriers which undertake the responsibilities of air carriers without performing the actual carriage); Martin Marietta Corp. v. Harper Group, 950 F. Supp. 1250, 1257 (S.D.N.Y.1997) (holding freight forwarder to be "issuing carrier" and "first carrier" to deal with shipper, despite statements on waybill to the contrary).
DocketNumber： 02-7202
Citation Numbers： 347 F.3d 448
Filed Date： 10/23/2003
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