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Opinion:
TRANS WORLD AIRLINES, INC. v. FRANKLIN MINT CORP. et al.
No. 82-1186.
Argued November 30, 1983
Decided April 17, 1984
O’CONNOR, J., delivered the opinion of the Court, in which BURGER, C. J., and Brennan, White, Marshall, Blackmun, Powell, and Rehnquist, JJ., joined. Stevens, J., filed a dissenting opinion, post, p. 261.
John N. Romans argued the cause for Trans World Airlines, Inc. With him on the briefs was Robert S. Upton.
Joshua I. Schwartz argued the cause for the United States as amicus curiae in support of Trans World Airlines, Inc. With him on the brief were Solicitor General Lee, Assistant Attorney General McGrath, Deputy Solicitor General Geller, and Michael F. Hertz.
John B. Foster argued the cause and filed a brief for Franklin Mint Corp. et al.
Together with No. 82-1465, Franklin Mint Corp. et al. v. Trans World Airlines, Inc., also on certiorari to the same court.
Alden D. Halford filed a brief for Boehringer Mannheim Diagnostics, Inc., as amicus curiae urging reversal.
Briefs of amici curiae were filed for Marc Hammerschlag et al. by Marc S. Moller; for the Air Transport Association of America by James E. Landry and George S. Lapham, Jr.; and for the International Air Transport Association by Randal R. Craft, Jr., and Peter Hoenig.
Justice O’Connor
delivered the opinion of the Court.
The question presented in this litigation is whether an air carrier’s declared liability limit of $9.07 per pound of cargo is inconsistent with the “Warsaw Convention” (Convention), an international air carriage treaty that the United States has ratified. As a threshold matter we must determine whether the 1978 repeal of legislation setting an “official” price of gold in the United States renders the Convention’s gold-based liability limit unenforceable in this country. We conclude that the 1978 legislation was not intended to affect the enforceability of the Convention in the United States, and that a $9.07-per-pound liability limit is not inconsistent with the Convention.
I
In 1974 the Civil Aeronautics Board (CAB) informed international air carriers doing business in the United States that the minimum acceptable carrier liability limit for lost cargo would thenceforth be $9.07 per pound. Trans World Airlines, Inc. (TWA), has complied with the CAB order since that time. On March 23, 1979, Franklin Mint Corp. (Franklin Mint) delivered four packages of numismatic materials with a total weight of 714 pounds to TWA for transportation from Philadelphia to London. Franklin Mint made no special declaration of value at the time of delivery. The packages were subsequently lost. Franklin Mint brought suit in United States District Court to recover damages in the amount of $250,000. The parties stipulated that TWA was responsible for the loss of the packages. The only dispute concerns the extent of TWA’s liability.
The District Court ruled that under the Convention TWA’s liability was limited to $6,475.98, a figure derived from the weight of the packages, the liability limit set out in the Convention, and the last official price of gold in the United States. The Court of Appeals for the Second Circuit affirmed the judgment, but “rul[ed]” that 60 days from the issuance of the mandate the Convention’s liability limit would be unenforceable in the United States. 690 F. 2d 303 (1982).
In a petition for certiorari to this Court TWA challenged the Court of Appeals’ declaration that the Convention’s liability limit is prospectively unenforceable. In a cross-petition, Franklin Mint contended that the Court of Appeals’ actual holding should have been retrospective as well. We granted both petitions, 462 U. S. 1118 (1983). We now conclude that the Convention’s cargo liability limit remains enforceable in United States courts and that the CAB-sanctioned $9.07-per-pound liability limit is not inconsistent with the Convention. Accordingly, we affirm the judgment of the Court of Appeals but reject its declaration that the Convention is prospectively unenforceable.
II
The Convention was drafted at international conferences in Paris in 1925, and in Warsaw in 1929. The United States became a signatory in 1934. More than 120 nations now adhere to it. The Convention creates internationally uniform rules governing the air carriage of passengers, baggage, and cargo. Under Article 18 carriers are presumptively liable for the loss of cargo. Article 22 sets a limit on carrier liability:
“(2) In the transportation of checked baggage and of goods, the liability of the carrier shall be limited to a sum of 250 francs per kilogram, unless the consignor has made, at the time when the package was handed over to the carrier, a special declaration of the value at delivery and has paid a supplementary sum if the case so requires. . . .
“(4) The sums mentioned above shall be deemed to refer to the French franc consisting of 65% milligrams of gold at the standard of fineness of nine hundred thousandths. These sums may be converted into any national currency in round figures. ” Reprinted (in English translation) in note following 49 U. S. C. § 1502.
In the United States the task of converting the Convention’s liability limit into “any national currency” falls within rulemaking authority which was, for many years including those at issue here, delegated to the CAB under the Federal Aviation Act of 1958 (FAA), 49 U. S. C. § 1301 et seq. International air carriers are required to file tariffs with the CAB specifying “in terms of lawful money of the United States” the rates and conditions of their services, including the cargo liability limit that they claim. The Act forbids any carrier to charge a “greater or less or different compensation for air transportation, or for any service in connection therewith, than the rates, fares, and charges specified in then currently effective tariffs . . . ,” The CAB, for its part, is empowered to reject any tariff that is inconsistent with the FAA or CAB regulations. 49 U. S. C. § 1373(a). CAB powers are to be exercised “consistently with any obligation assumed by the United States in any treaty, convention, or agreement that may be in force between the United States and any foreign country or foreign countries . . . .” 49 U. S. C. § 1502.
During the first 44 years of the United States’ adherence to the Convention there existed an “official” price of gold in the United States, and the CAB’s task of supervising carrier compliance with the Convention’s liability limit was correspondingly simple. The United States Gold Standard Act of 1900 set the value of the dollar at $20.67 per troy ounce of gold. On January 31, 1934, nine months before the United States ratified the Convention, President Roosevelt increased the official domestic price of gold to $35 per ounce. In 1945 the United States accepted membership in the International Monetary Fund (IMF) and so undertook to maintain a “par value” for the dollar and to buy and sell gold at the official price in exchange for balances of dollars officially held by other IMF nations. For almost 40 years the $35-per-ounce price of gold was used to derive from the Convention’s Article 22(2) a cargo liability limit of $7.50 per pound. See, e. g., 14 CFR §221.176 (1972).
When the central banks of most Western nations instituted a “two-tier” gold standard in 1968 the gold-based international monetary system began to collapse. Thereafter, official gold transactions were conducted at the official price, and private transactions at the floating, free market price. App. 21. In August 1971 the United States suspended convertibility of foreign official holdings of dollars into gold. In December 1971 and then again in February 1973 the official exchange rate of the dollar against gold was increased. These changes were approved by Congress in the Par Value Modification Act, passed in early 1972 (increasing the official price to $38 per ounce) and in its 1973 reenactment (setting a $42.22-per-ounce price). Each time, the CAB followed suit by directing carriers to increase the dollar-based liability limits in their tariffs accordingly, first to $8.16 per pound, then to $9.07 per pound.
In 1975 the member nations of the IMF formulated a plan, known as the Jamaica Accords, to eliminate gold as the basis of the international monetary system. Effective April 1, 1978, the “Special Drawing Right” (SDR) was to become the sole reserve asset that IMF nations would use in their mutual dealings. The SDR was defined as the average value of a defined basket of IMF member currencies. In 1976 Congress passed legislation to implement the new IMF agreement, repealing the Par Value Modification Act effective April 1, 1978.
As these developments unfolded, the Convention signatories met in Montreal in September 1975. In No. 4 of the “Montreal Protocols,” the delegates proposed to substitute 17 SDR’s per kilogram for the 250 French gold francs per kilogram in Article 22 of the Convention. Although the United States supported this change, and signed Protocol No. 4, the Senate has not yet consented to its ratification.
The erosion and final demise of the gold standard, coupled with the United States’ failure to ratify Montreal Protocol No. 4, left the CAB with the difficult task of supervising carrier compliance with the Convention’s liability limits without up-to-date guidance from Congress. Although the market price of gold began to diverge from the official price in 1969, the CAB continued to track the official price in Orders converting the Convention’s liability limit into dollars. Under CAB Order 74-1-16, promulgated in 1974, “the minimum acceptable figur[e] in United States dollars for liability limits applicable to ‘international transportation’ and ‘international carriage’ ... [is $] 9.07 [per pound of cargo].”
Since 1978 the CAB has actively reviewed this $9.07-per-pound liability limit. As of 1979, however, the CAB continued to sanction the use of the last official price of gold— $42.22 per ounce — as a conversion factor. A CAB Order published on August 14, 1978, restated the CAB’s position. The $9.07-per-pound limit remained codified in CAB regulations, see 14 CFR §221.176 (1979), and CAB Order 74-1-16 was still in force. TWA, like other international carriers, remained subject to Order 74-1-16.
HH H-H » — I
The most important issue raised by the parties is whether the 1978 repeal of the Par Value Modification Act rendered the Convention’s cargo liability limit unenforceable in the United States. The Court of Appeals so declared, reasoning that (i) enforcement of the Convention requires a factor for converting the liability limit into dollars and (ii) there is no United States legislation specifying a factor to be used by United States courts. We do not accept this analysis.
There is, first, a firm and obviously sound canon of construction against finding implicit repeal of a treaty in ambiguous congressional action. “A treaty will not be deemed to have been abrogated or modified by a later statute unless such purpose on the part of Congress has been clearly expressed.” Cook v. United States, 288 U. S. 102, 120 (1933). See also Washington v. Washington Commercial Passenger Fishing Vessel Assn., 443 U. S. 658, 690 (1979); Menominee Tribe of Indians v. United States, 391 U. S. 404, 412-413 (1968); Pigeon River Improvement, Slide & Boom Co. v. Charles W. Cox, Ltd., 291 U. S. 138, 160 (1934). Legislative silence is not sufficient to abrogate a treaty. Weinberger v. Rossi, 456 U. S. 25, 32 (1982). Neither the legislative histories of the Par Value Modification Acts, the history of the repealing Act, nor the repealing Act itself, make any reference to the Convention. The repeal was unrelated to the Convention; it was intended to give formal effect to a new international monetary system that had in fact evolved almost a decade earlier.
Second, the Convention is a self-executing treaty. Though the Convention permits individual signatories to convert liability limits into national currencies by legislation or otherwise, no domestic legislation is required to give the Convention the force of law in the United States. The repeal of a purely domestic piece of legislation should accordingly not be read as an implicit abrogation of any part of it. See generally Bacardi Corp. of America v. Domenech, 311 U. S. 150, 161-163 (1940).
Third, Article 39 of the Convention requires a signatory that wishes to withdraw from the Convention to provide other signatories with six months’ notice, formally communicated through the Government of Poland. The repeal of the Par Value Modification Act had a sufficient lead time, but Congress and the Executive Branch took no steps to notify other signatories that the United States planned to abrogate the Convention. To the contrary, the Executive Branch continues to maintain that the Convention’s liability limit remains enforceable in the United States. Brief for United States as Amicus Curiae. In these circumstances we are unwilling to impute to the political branches an intent to abrogate a treaty without following appropriate procedures set out in the Convention itself. See The Federalist No. 64, pp. 436-487 (J. Cooke ed. 1961) (J. Jay).
Franklin Mint suggests that a treaty ceases to be binding when there has been a substantial change in conditions since its promulgation. A treaty is in the nature of a contract between nations. The doctrine of rebus sic stantibus does recognize that a nation that is party to a treaty might conceivably invoke changed circumstances as an excuse for terminating its obligations under the treaty. But when the parties to a treaty continue to assert its vitality a private person who finds the continued existence of the treaty inconvenient may not invoke the doctrine on their behalf.
For these reasons the erosion of the international gold standard and the 1978 repeal of the Par Value Modification Act cannot be construed as terminating or repudiating the United States’ duty to abide by the Convention’s cargo liability limit. We conclude that the limit remains enforceable in United States courts.
> HH
The Court of Appeals correctly recognized that the Convention’s liability limit must be converted into dollars. This requirement derives not from the Convention itself — the Convention merely permits such a conversion — but from the tariff requirements of § 403(a) of the FAA. 49 U. S. C. § 1373(a).
In 1979, when Franklin Mint’s cargo was lost, TWA’s tariffs set the carrier’s cargo liability limit at $9.07 per pound. This tariff had been filed with and accepted by the CAB pursuant to § 403(a), and was squarely consistent with CAB Order 74-1-16. The $9.07-per-pound limit thus represented an Executive Branch determination, made pursuant to properly delegated authority, of the appropriate rate for converting the Convention’s liability limits into United States dollars. We are bound to uphold that determination unless we find it to be contrary to law established by domestic legislation or by the Convention itself.
It is clear, first, that the CAB’s choice of a cargo liability limit of $9.07 per pound does not contravene any domestic legislation. When an official price of gold was set by statute the CAB did, of course, use that price to translate the Convention’s gold-based liability limit into dollars. But when Congress repealed the Par Value Modification Act it did not suggest that the CAB should thereafter use a different conversion factor. Indeed, there is no hint that either of the political branches expected or intended that Act to affect the dollar equivalent of the Convention’s liability limit.
"Whether the CAB’s choice of a $9.07-per-pound limit is compatible with the Convention itself is more debatable. The Convention included liability limits, and expressed them in terms of gold, to effect several different and to some extent contradictory purposes. Our task of construing those purposes is, however, made considerably easier by the 50 years of consistent international and domestic practices under the Convention. For the reasons stated below we conclude that tying the Convention’s liability limit to today’s gold market would fail to effect any purpose of the Convention’s framers, and would be inconsistent with well-established international practice, acquiesced in by the Convention’s signatories over the past 50 years. A fixed $9.07-per~pound liability limit therefore represents a choice by the CAB sufficiently consistent with the Convention’s purposes.
The Convention’s first and most obvious purpose was to set some limit on a carrier’s liability for lost cargo. Any conversion factor will have this effect; in this regard a $9.07-per-pound liability limit is as reasonable as one based on SDR’s or the free market price of gold.
The Convention’s second objective was to set a stable, predictable, and internationally uniform limit that would encourage the growth of a fledgling industry. To this end the Convention’s framers chose an international, not a parochial, standard, free from the control of any one country. The CAB’s choice of a $9.07-per-pound liability limit is certainly a stable and predictable one on which carriers can rely. We recognize however that, in the long term, effectuation of the Convention’s objective of international uniformity might require periodic adjustment by the CAB of the dollar-based limit to account both for the dollar’s changing value relative to other Western currencies and, if necessary, for changes in the conversion rates adopted by other Convention signatories. Since 1978, however, no substantial changes of either type have occurred.
Despite the demise of the gold standard, the $9.07-per-pound liability limit retained since 1978 has represented a reasonably stable figure when converted into other Western currencies. This is easily established by reference to the SDR, which is the new, nonparochial, internationally recognized standard of conversion. On March 31, 1978, for example, one SDR was worth $1.23667; on March 23, 1979, $1.28626. At all times since 1978 a carrier that chose to set its liability limit at 17 SDR’s per kilogram as suggested by Montreal Protocol No. 4 would have arrived at a liability limit in dollars close to $9 per pound.
The CAB’s $9.07-per-pound liability limit also appears to have been a reasonable interim choice for keeping the Convention’s liability limit as enforced in the United States in line with limits enforced by other signatories. As of December 31,1975, 15 nations had signed Montreal Protocol No. 4, suggesting their intent to set a liability limit of 17 SDR’s per kilogram; other nations have chosen to continue using the last official price of gold for converting the Convention’s cargo liability limit into national currencies. Insofar as has been possible in the unsettled circumstances since 1975, the CAB’s choice of a $9.07-per-pound limit has thus furthered the Convention’s intent to set an internationally uniform liability limit.
We recognize that this inquiry into the dollar’s value relative to other currencies would have been unnecessary if the CAB had chosen to adopt the market price of gold for converting the Convention’s liability limits into dollars. Since gold is freely traded on an international market its price always provides a unique and internationally uniform conversion rate. But reliance on the gold market would entirely fail to provide a stable unit of conversion on which carriers could rely. To pick one extreme example, between January and April 1980 gold ranged from about $490 to $850 per ounce. App. 24. Far from providing predictability and stability, tying the Convention to the gold market would force every carrier and every air transport user to become a speculator in gold, exposed to the sudden and unpredictable swings in the price of that commodity. The CAB has correctly recognized that this is not at all what the Convention’s framers had in mind. The 1978 decision by many of the Convention’s signatories to exit from the gold market cannot sensibly be construed as a decision to compel every air carrier and air transport user to enter it.
A third purpose of the Convention’s gold-based limit may have been to link the Convention to a constant value, that would keep step with the average value of cargo carried and so remain equitable for carriers and transport users alike. We recognize that in an inflationary economy a fixed, dollar-based liability limit may fail in the long term to achieve that purpose. Nonetheless, for the reasons that follow, we cannot fault the CAB’s decision to adhere, in the six years since 1978, to a constant $9.07-per-pound liability limit.
The Convention’s framers viewed the treaty as one “drawn for a few years,” not for “one or two centuries.” That it has in fact been adhered to for over half a century is a tribute not only to the framers’ skills but to the signatories’ manifest willingness to accept a flexible implementation of the Convention’s terms. The indisputable fact is that between 1934 and 1978 the signatories, by common if unwritten consent, allowed the value of the liability limit as measured by the free market price of both gold and other commodities to decline substantially, even while the official price of gold was formally maintained. We may not ignore the actual, reasonably harmonious practice adopted by the United States and other signatories in the first 40 years of the Convention’s existence. See Factor v. Laubenheimer, 290 U. S. 276, 294-295 (1933); Day v. Trans World Airlines, Inc., 528 F. 2d 31, 35-36 (CA2 1975), cert. denied, 429 U. S. 890 (1976); Restatement (Second) of Foreign Relations Law of the United States § 147(1)(f) (1965); 2 C. Hyde, International Law 72 (1922). In determining whether the Executive Branch’s domestic implementation of the Convention is consistent with the Convention’s terms, our task is to construe a “contract” among nations. The conduct of the contracting parties in implementing that contract in the first 50 years of its operation cannot be ignored.
As of March 31, 1978, $9.07 per pound of cargo therefore represented a “correct” conversion of the Convention’s liability limit into dollars. Though the purchasing power of the dollar has declined somewhat since then, the $9.07-per-pound liability limit, viewed in light of international practice, cannot be declared inconsistent with the purposes of the Convention and the shared understanding of its signatories.
Moreover, tying the Convention’s liability limit to the free market price of gold would no longer serve to maintain a constant value of carriers' liability. Since 1978 gold has been only “a volatile commodity, not related to a price index, or to the rate of inflation, or indeed to any meaningful economic measure . . . .” A liability limit tied to the gold market might be convenient for a dispatcher of gold bullion, but such a limit would simply force other air transport users and carriers to become unwilling speculators in the gold market. Whatever other purposes they may have had, the Convention’s framers and signatories did not intend to adopt or agree to a liability limit that is fluid, uncertain, and altogether inconvenient. The Convention was intended to reduce, not to increase, the economic uncertainties of air transportation.
V
The political branches, which hold the authority to repudiate the Warsaw Convention, have given no indication that they wish to do so. Accordingly, the Convention’s cargo liability limit remains enforceable in the United States.
Article 22(4) of the Convention permits conversion of the liability limit into “any national currency.” In the United States the authority to make that conversion has been delegated by Congress to the Executive Branch. The courts are bound to respect that arrangement unless the properly delegated authority is exercised in a manner inconsistent with domestic or international law. We conclude that the CAB’s decision to continue using a $42.22 per ounce of gold conversion rate after the repeal of the Par Value Modification Act was consistent with domestic law and with the Convention itself, construed in light of its purposes, the understanding of its signatories, and its international implementation since 1929.
We reject the Court of Appeals’ declaration that the Convention is prospectively unenforceable; the judgment of the Court of Appeals affirming the judgment of the District Court is
Affirmed.
Convention for the Unification of Certain Rules Relating to International Transportation by Air, Oct. 12, 1929, 49 Stat. 3000, T. S. No. 876 (1934), reprinted in note following 49 U. S. C. § 1502.
Had such a declaration been made, and an additional fee paid, Franklin Mint would have been able to recover in an amount not exceeding the declared value. See Convention, Art. 22(2), note following 49 U. S. C. § 1502.
With respect to foreign air transportation FAA powers are now exercised by the Department of Transportation in consultation with the Department of State. 49 U. S. C. §§ 1551(b)(1)(B) and (b)(2). For simplicity this opinion will continue to refer only to the CAB.
See 49 U. S. C. § 1373(a); cf. 14 CFR §§ 221.38(a)(2), 221.38(j) (1983).
49 U. S. C. § 1373(b)(1). CAB regulations require each carrier to notify air transport users of liability limits. “The notice shall be clearly and conspicuously included on or attached to all of [the carrier’s] rate sheets and airwaybills.” 14 CFR § 205.8 (1983).
See Ch. 41, § 1, 31 Stat. 45 (exchange rate stated in terms of grains of gold per dollar).
Presidential Proclamation No. 2072, 48 Stat. 1730, pursuant to the Gold Reserve Act of 1934, 48 Stat. 337.
The domestic enabling legislation was the Bretton Woods Agreements Act, 59 Stat. 512. See Articles of Agreement of the International Monetary Fund, 60 Stat. 1401, 2 U. N. T. S. 39, T. I. A. S. No. 1501 (1945).
Par Value Modification Act, Pub. L. 92-268, §2, 86 Stat. 116.
Par Value Modification Act, Pub. L. 93-110, § 1, 87 Stat. 352.
CAB Order 72-6-7, 37 Fed. Reg. 11384 (1973), implemented (for checked passenger baggage) in 14 CFR §221.176 (1973).
CAB Order 74-1-16, App. 54, 39 Fed. Reg. 1526 (1974), implemented (for checked passenger baggage) in 14 CFR §221.176 (1975).
Second Amendment of Articles of Agreement of the International Monetary Fund, Apr. 30, 1976, [1976-1977] 29 U. S. T. 2203, T. I. A. S. No. 8937.
The SDR was originally created by the IMF nations in 1969. It was then valued at one thirty-fifth of an ounce of gold, or one 1969 dollar. See First Amendment of the Articles of Agreement of the International Monetary Fund, May 31, 1968, [1969] 20 U. S. T. 2775, T. I. A. S. No. 6748. However there is no longer any fixed correspondence between the SDR and gold; the SDR is defined as a specified basket of Western currencies.
Bretton Woods Agreements Act of 1976, Pub. L. 94-564, § 6, 90 Stat. 2660.
Montreal Protocol No. 4, done Sept. 25, 1975, reprinted in A. Lowen-feld, Aviation Law, Documents Supplement 991, 996 (2d ed. 1981). Convention signatories who do not belong to the IMF determine for themselves how the liability limit will be converted into their national currencies. Ibid.
See Lowenfeld, supra, §6.51, at 7-171.
On November 17, 1981, the Senate Committee on Foreign Relations reported in favor of consenting to ratification. But on March 8,1983, by a vote of 50 to 42 in favor of ratification, the Senate failed to reach the two-thirds majority required for consent. The matter remains on the Senate calendar. See S. Exec. Rep. No. 97-45 (1981); 129 Cong. Rec. S2270, S2279 (daily ed. Mar. 8, 1983); S. Exec. Rep. No. 98-1 (1983).
App. 56-57; 39 Fed. Reg. 1526 (1974). TWA is included in the Order’s appendix that lists the carriers at which the Order is directed. Id., at 1527.
Three internal agency memoranda have addressed the problem. J. Golden, Director, Bureau of Compliance and Consumer Protection, CAB, Memorandum (May 20, 1981), App. 33 (urging retention of the $42.22 conversion rate until the CAB and the Departments of Transportation and State have agreed on a new rate); P. Kennedy, Chief, Policy Development Division, Bureau of Consumer Protection, CAB, Memorandum (Mar. 18, 1980), id., at 42 (urging adoption of the free market price of gold as the conversion factor); J. Gaynes, Attorney, Legal Division, Bureau of International Aviation, CAB, Memorandum (Apr. 18,1980), id., at 60 (opposing the Kennedy memorandum recommendation).
CAB Order 78-8-10, 43 Fed. Reg. 35971, 35972 (1978) (liability limit of $20 per kilogram).
Note following 49 U. S. C. §1502. The United States has, in fact, followed this procedure once before. On November 15, 1965, the United States delivered a formal notice of denunciation of the Convention to the Polish Peoples Republic. See Lowenfeld & Mendelsohn, The United States and the Warsaw Convention, 80 Harv. L. Rev. 497, 546-552 (1967). The notice was later withdrawn.
See Restatement (Second) of Foreign Relations Law of the United States § 153, and Comment c (1965).
However, Article 39(2) of the Convention expressly permits a Convention signatory to withdraw by giving timely notice. Plainly, a party to a treaty of voluntary adhesion can have no need for the doctrine of rebus sic stantibus, except insofar as it might wish to avoid the notice requirement.
In this connection the Court of Appeals stated:
“[In repealing the Par Value Modification Act] Congress thus abandoned the unit of conversion specified by the Convention and did not substitute a new one. Substitution of a new term is a political question, unfit for judicial resolution. We hold, therefore, that the Convention’s limits on liability for loss of cargo are unenforceable in United States Courts.” 690 F. 2d 303, 311 (CA2 1982) (footnote omitted).
In our view Congress has not abandoned any “unit of conversion specified by the Convention” — the Convention specifies liability limits in terms of gold francs and provides no unit of conversion whatsoever. To the contrary, the Convention invites signatories to make the conversion into national currencies for themselves. In the United States the CAB has been delegated the power to make the conversion, and has exercised the power most recently in Order 74-1-16. We are not called upon to “[s]ubstitut[e] a new term,” but merely to determine whether the CAB’s Order is inconsistent with the Convention. That determination does not engage the “political question” doctrine.
The dissent apparently has no difficulty accepting that while Congress selected the conversion rate between gold and the dollar “[o]ur practice was consistent with the Convention,” see post, at 277, n. 6, even though the conversion rate selected bore no relation whatsoever to the dollar price of gold on the free market, see nn. 35, 37, infra. The dissent does not explain why the CAB, whose powers are exercised pursuant to express congressional delegation, was disqualified from setting a similar conversion rate one year after Congress stopped doing so.
Article 22(4) of the Convention expressly permits each signatory nation to convert the Convention’s liability limits into any national currency, but provides no conversion rates for doing so. In this country, 49 U. S. C. § 1373(a) requires such a conversion into dollars. The CAB has been delegated authority under which it may determine the appropriate conversion rate, and it has exercised that authority. Thus, for the extremely narrow purpose of converting the Convention’s liability limits into dollars Congress has indeed “delegated its authority over the currency to the CAB.” See post, at 278, n. 6. We may overrule the CAB’s action only if we conclude that it is inconsistent with the purposes of the Convention or with domestic law.
See generally Heller, The Value of the Gold Franc — A Different Point of View, 6 J. Mar. L. & Com. 73, 94-95 (1974); Asser, Golden Limitations of Liability in International Transport Conventions and the Currency Crisis, 5 J. Mar. L. & Com. 645, 664 (1974); Lowenfeld & Mendelsohn, supra n. 22, at 499; H. Drion, Limitation of Liabilities in International Air Law 183 (1954); Excerpt From Warsaw Convention Conference Minutes, October 4-12, 1929, reprinted at App. 161-164.
See IMF Survey 125 (Apr. 17, 1978); IMF Survey 114 (Apr. 9, 1979).
See S. Exec. Rep. No. 98-1, p. 42 (1983); IMF, International Financial Statistics, Yearbook 521 (1983).
The CAB has in fact accepted airline tariffs in which liability limits are based on SDR’s instead of the fixed $9.07 figure. See, e. g., Passenger Rules, Tariff No. PR-3 (CAB No. 55), Rule 25(D)(l)(a)(ii) (Mar. 30,1983); CAB Order 81-3-143 (Application of British Caledonian Airways Limited (Mar. 24, 1981).
FitzGerald, The Four Montreal Protocols to Amend the Warsaw Convention Regime Governing International Carriage by Air, 42 J. Air Law & Comm. 273, 277, n. 12 (1976).
SDR’s have been adopted as the basis for converting the Convention limits into national currencies in Canada (Currency and Exchange Act: Carriage By Air Act Gold Franc Conversion Regulations, Jan. 13, 1983, 117 Can. Gaz., pt. II, No. 2, at 431 (Jan. 26, 1983)) (reprinted in App. to Brief for Petitioner TWA, at BA36); Italy (Law No. 84, Mar. 26, 1983, 90 Gaz. Uff. (Apr. 1,1983)) (English translation at App. to Brief for Petitioner TWA, at BA37); the Republic of South Africa (Carriage by Air Act, No. 17 of 1946, as amended by No. 5 of 1964 and No. 81 of 1979, Stat. Rep. S. Afi*. (Issue No. 13) 15, implemented by Dept. of Transport Notice R2031 (Sept. 14, 1979)) (reprinted in App. to Brief for Petitioner TWA, at BA39); Sweden (Carrier by Air Act (1957:297), ch. 9, § 22 (as amended Mar. 30, 1978)) (reprinted at App. 67); and Great Britain (Stat. Inst. 1980, No. 281) (reprinted at App. 70).
In other countries the courts have taken the initiative in adopting the SDR as the new unit of conversion. See, e. g., Kislinger v. Austrian Airtransport, No. 1 R 145/83 (Commercial Court of Appeals of Vienna, Austria, June 21,1983) (English translation in App. to Brief for Petitioner TWA, at BA12); Rendezvous-Boutique-Parfumerie Friedrich and Albine Breitinger GmbH v. Austrian Airlines, No. 14 R 11/83 (Court of Appeals of Linz, Austria, June 17, 1983) (English translation in App. to Brief for Petitioner TWA, at BA22).
At least one court has relied instead on the last official price of gold. See Costell v. Iberia, Lineas Aereas de Espana, S. A., No. 255 (Court of Appeal of Valencia, Spain, Oct. 16, 1981) (English translation in App. to Brief for Petitioner TWA, at BA6).
See references cited in n. 27, supra.
Excerpt From Warsaw Convention Conference Minutes, October 4-12, 1929, reprinted at App. 162 (remark of Mr. Rippert (France)).
For a hypothetical 44-pound lost suitcase the liability limit was $330 in 1934, $359 in 1972, and $400 in 1974. In terms of purchasing power, $330 in 1934 were equivalent to $1,031 in 1972 and $1,215 in 1974. Id., at 48. Clearly, the $9.07-per-pound liability limit does not represent the same value that was in effect when the United States adhered to the Convention.
On that date the official price of gold remained at $42.22 per ounce; the free market price of gold was about $182 per ounce. See The Wall Street Journal, Apr. 3, 1978, p. 29, col. 1.
Lowenfeld, supra n. 17, § 6.51, at 7-169.
It is noteworthy that in the decade between 1968 and 1978 the free market price of gold rose as high as $200 per ounce, App. 24, yet the $42.22 official price of gold was uniformly accepted during that period as appropriate for converting the Convention’s liability limit into dollars.

Question: What is the basis of the Supreme Court's decision?

Choices:
judicial review (national level)
judicial review (state level)
Supreme Court supervision of lower federal or state courts or original jurisdiction
statutory construction
interpretation of administrative regulation or rule, or executive order
diversity jurisdiction
federal common law

Answer: 3