Opinion ID: 487206
Heading Depth: 2
Heading Rank: 1

Heading: standard of review

Text: 15 A district court's granting of a motion for summary judgment is reviewed by this Court de novo. Lew v. Kona Hospital, 754 F.2d 1420, 1423 (9th Cir.1985). Summary judgment is appropriate only if there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. Culver v. Boat Transit, Inc., 782 F.2d 1467, 1469 (9th Cir.1986). 16 B. When is the Passenger of a Common Carrier Contractually Bound to the Fine-Print Liability Limitations in the Passenger Ticket? 17 The district court did not expressly address the issue of whether Deiro is contractually bound to the limitation of liability. The precise wording of the issue was aptly stated by the First Circuit in a recent case involving a steamship passenger, but which is equally applicable to passengers of air carriers. The First Circuit stated: 18 Beginning almost a century ago with the case of The Majestic, 166 U.S. 375 [17 S.Ct. 597, 41 L.Ed. 1039] (1897), courts have struggled to divine standards by which to determine whether steamship passengers are to be held bound by boilerplate conditions located in the fine print of adhesion contracts of passage. Although some discernible standards have begun to emerge in the past two decades, this is still largely a case-by-case determination. Differing circumstances may render the same ticket binding on one passenger in one case, yet invalid as against another passenger in another case. The basic inquiry is whether, and to what extent, a passenger, who in almost all cases does not actually bargain for a particular term or condition of a contract of passage, but who nevertheless accepts or signs the ticket before embarkation, is bound by the fine print of the ticket. 19 Recent cases reflect that courts examine the entire ticket to answer the question: Does the contract reasonably communicate to the passenger the existence therein of important terms and conditions which affect legal rights? [citations omitted]. 20 Shankles v. Costa Armatori, S.P.A., 722 F.2d 861, 863-64 (1st Cir.1983). 21 The Second, Fifth, and Sixth Circuits have also adopted this reasonable communicativeness test to determine when the passenger of a common carrier is contractually bound by the fine print of a passenger ticket. See, e.g., Barbachym v. Costa Line, Inc., 713 F.2d 216, 219 (6th Cir.1983) (referring to test as reasonable notice standard); Carpenter v. Klosters Rederi A/S, 604 F.2d 11, 12-13 (5th Cir.1979); Silvestri v. Italia Societa Per Azione di Navigazione, 388 F.2d 11, 14-17 (2d Cir.1968) (the Second Circuit was the first circuit to adopt the rule, in an opinion written by Judge Friendly). The reasonableness of notice under this test is a question of law to be determined by the court. Shankles, 722 F.2d at 867. 22 To determine reasonable communicativeness, the First Circuit in Shankles employed a two-pronged analysis. First, it recognized that, under what it entitled the Physical Characteristics of the Ticket/Contract, [f]eatures such as size of type, conspicuousness and clarity of notice on the face of the ticket, and the ease with which a passenger can read the provisions in question, are all called into question by reviewing courts in their assessment of a ticket's 'reasonable communicativeness.'  722 F.2d at 864. 23 Second, the court stated that the circumstances surrounding the passenger's purchase and subsequent retention of the ticket/contract may be of equal importance as the prominence of warnings and clarity of conditions in deciding whether a provision should be held to bind a particular passenger. Id. at 865. The surrounding circumstances to be considered include the passenger's familiarity with the ticket, the time and incentive under the circumstances to study the provisions of the ticket, and any other notice that the passenger received outside of the ticket. Id. at 866. 3 24 Therefore, the Shankles court concluded that the proper test of reasonable notice is an analysis of the overall circumstances on a case-by-case basis, with an examination not only of the ticket itself, but also of any extrinsic factors indicating the passenger's ability to become meaningfully informed of the contractual terms at stake. 722 F.2d at 866. 25 As in Shankles, if the only consideration in the instant case were the physical characteristics of the ticket, this would be a close case. The instant case falls between those cases in which notice on the face of the ticket is virtually nonexistent, see Shankles, 722 F.2d at 865, and those in which the notice is clear and conspicuous. See id. 26 Even relative to the small size of the face of the ticket, the type size of the message SUBJECT TO CONDITIONS CONTAINED IN THIS TICKET is tiny and not apparently highlighted by a different colored background. It is doubtful that this line alone could constitute an effort by the airline to provide a clear and conspicuous notice to its passengers that important conditions of carriage are listed inside the ticket coupon. 27 On the other hand, the warning is at the top of the ticket in the far-left corner. The message sought to be conveyed by the notice is clear. Importantly, the notices contained inside the ticket coupon are conspicuous and understandable, especially the notice in relatively large type under the sizeable heading NOTICE OF BAGGAGE LIABILITY LIMITATIONS. 28 What is a close case under the first part of our analysis, however, becomes decidedly clear upon consideration of the extrinsic factors indicating the passenger's ability to become meaningfully informed of the contractual terms at stake. In the instant case, it is undisputed that Deiro is an experienced commercial air traveler who flies commercial airlines six to ten times a year. It is also undisputed that, at the very least, Deiro knows that there is a whole bunch of stuff printed on the back of the ticket. That he does not read all of that only points to his knowledge of the existence of some kind of written provisions or notices in the ticket. 29 It is also undisputed that the ticket was delivered to Deiro nine days before his flight. Therefore, he had ample opportunity to become familiar with the baggage liability limitations, especially when he knew in advance that he would be shipping valuable baggage. 30 In summary, we find it difficult to imagine how any passenger with Deiro's experience, planning to check a quarter of a million dollars worth of baggage, could have had more opportunity or incentive to familiarize himself with the baggage liability provisions. We conclude that under the two-pronged reasonable communicativeness test, Deiro is contractually bound by the limitation of liability. We next consider whether American gave Deiro reasonable notice and a full and fair opportunity under the released valuation doctrine to declare a higher value for his baggage and obtain protection in an amount greater than $750. C. Released Valuation Doctrine 31 As a general rule, under the federal common law governing common carriers, carriers may partially limit their liability for injury, loss, or destruction of baggage on a released valuation basis. Klicker v. Northwest Airlines, Inc., 563 F.2d 1310, 1315 (9th Cir.1977). Under this doctrine, in exchange for a low carriage rate, the passenger-shipper is deemed to have released the carrier from liability beyond a stated amount. The carrier can lawfully limit recovery to an amount less than the actual loss sustained only if it grants its customers a fair opportunity to choose between higher or lower liability by paying a correspondingly greater or lesser charge. New York, N.H. & H.R.R. v. Nothnagle, 346 U.S. 128, 135, 73 S.Ct. 986, 990, 97 L.Ed. 1500 (1953). Therefore, the shipper is bound only if he has reasonable notice of the rate structure and is given a fair opportunity to pay the higher rate in order to obtain greater protection. Klicker, 563 F.2d at 1315; see also First Pennsylvania Bank v. Eastern Airlines, Inc., 731 F.2d 1113, 1117 (3d Cir.1984); Neal v. Republic Airlines, Inc., 605 F.Supp. 1145, 1148 (N.D.Ill.1985); Fireman's Fund Insurance Co. v. Barnes Electric, Inc., 540 F.Supp. 640, 645 (N.D.Ind.1982). 32 The federal common law applicable to carriers was not changed with the advent of regulation of air carriers. First Pennsylvania Bank, 731 F.2d at 1117; Klicker, 563 F.2d at 1314. Additionally, despite plaintiff's arguments to the contrary, the subsequent deregulation of air carriers in 1978 did not change the applicability or substantive content of the relevant federal common law. First Pennsylvania Bank, 731 F.2d at 1122; Neal, 605 F.Supp. at 1148 n. 2. 33 In the instant case, we find that the airline provided Deiro with a full and fair opportunity to declare a higher value for his dogs and receive protection against destruction in an amount greater than $750, and that Deiro received reasonable notice of this opportunity. 4 34 Despite plaintiff's assertion to the contrary, federal common law has never required actual notice of a carrier's liability limitation. See, e.g., New York C. & H.R.R. Co. v. Beaham, 242 U.S. 148, 151-52, 37 S.Ct. 43, 44, 61 L.Ed. 210 (1916) ([A]cceptance and use of the ticket sufficed to establish an agreement prima facie valid which limited the carrier's liability. Mere failure by the passenger to read the matter plainly placed before her could not overcome the presumption of assent.) Similarly, the passenger's signature is also not required. American Railway Express Co. v. Lindenburg, 260 U.S. 584, 590-91, 43 S.Ct. 206, 208-09, 67 L.Ed. 414 (1923). Finally, Deiro's contention that the notice in the ticket coupon was inadequate because it did not list in detail the actual rates for greater protection is unsupported. We have found no case holding that making the detail of the rate structure available at the carrier's office deprives a passenger of a fair opportunity to declare a higher value. 35 D. Validity of a Common Carrier's Contractual Limitation on its own Liability for Gross Negligence 36 Deiro contends that even if the liability limitation has legal effect, it cannot shield defendant from its own gross negligence. The case law is clearly to the contrary, however. Under the federal common law, only an appropriation of property by the carrier for its own use will vitiate limits on liability. See, e.g., Glickfeld v. Howard Van Lines, Inc., 213 F.2d 723, 727 (9th Cir.1954); Neal, 605 F.Supp. at 1149 n. 3. Consequently, if a liability limitation is valid, a passenger's recovery for damage cannot exceed the released value regardless of the degree of the carrier's negligence. Southeastern Express Co. v. Pastime Amusement Co., 299 U.S. 28, 29-30, 57 S.Ct. 73, 74, 81 L.Ed. 20 (1936); Quasar Co. v. The Atchison, Topeka and Santa Fe Ry. Co., 632 F.Supp. 1106, 1113 (N.D.Ill.1986).