Petition for Writ of Certiorari — Chan v. Korean Air Lines, Ltd.
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IN THE —
Supreme Court of the United State
OCTOBER TERM, 1987
oe
IN RE KOREAN AIR LINES DISASTER
OF SEPTEMBER 1, 1983, MDL 565
PETITION FOR A WRIT OF CERTIORARI TO THE
UNITED STATES COURT OF APPEALS FOR THE
DISTRICT OF COLUMBIA
PLAINTIFFS’ STEERING COMMITTEE
MILTON G. SINCOFI
Co-Chairman and Counsel of Record
KREINDLER & KREINDLER
100 Park Avenue
New York, New York 10017
(212) 687-8181
DONALD W. MADOLE
Co-Chairman
SPEISER, KRAUSE & MADOL!
1216 16th Street, N.W.
Washington, D.C. 20036
(202; 223-8501
On the Brief:
MILTON G. SINCOFI
STEVEN R. POUNIAN
QUESTION PRESENTED FOR REVIEW
In actions governed by the Warsaw Convention Treaty
and Montreal Agreement, may the airline assert the
$75,000 damage limitation where it failed to give the
required warning of that limitation to its passengers? |
LIST OF PARTIES TO THE PROCEEDING
tv
If certiorari is granted, the Court may wish to address an
additional question to guide lower courts in the future: follow-
ing a transfer for pretria! proceedings only under 28 U.S.C.
§ 1407, is the transferee court required to apply the substantive
federal law existing in the transferor court?
The following plaintiffs are parties to this proceeding: Elisa
Chan, Roberta Cruz, Hans Ephraimson-Abt, Willie James,
Dorothy Jones, Michael D. Jones, Betty B. S. Lim, In Jig Lin
Marsha Maikovich, Louella Nassief, Kyung Hwa Park, Bar-
bara Swift, Christina Ting, David WuDunn, Sung Wha Yoo and
Marjorie Zicherman. After the motion below was filed, addi-
tional actions were commenced, are not formally included in
this appeal, but involve the same issue. The plaintiffs in those
actions are: Robert Boyar, Evelyn Chauncey, William Cun-
ningham, Lenore Lebow, Katherine McDonald, William
Stevens and Terry Weng. The defendant is Korean Air Lines,
Ltd.
TABLE OF CONTENTS
MBPERUeMEOw ES GOW BUS CASE .. 2... ccc ccc ecceeneee
ee Cece sev cacnancccccccccsces
i. CERTIORARI SHOULD BE GRANTED TO
RESOLVE A CONFLICT AMONG THE
CIRCUITS ON THE PROPER INTERPRETA-
TION OF THE WARSAW CONVENTION AND
MONTREAL AGREEMENT..................
A. The need for certiorari is substantial and was
B.
urged by both courts below ................
Korean Air Lines Disaster is contrary to the
Warsaw Convention and eight appellate deci-
sions which hold that adequate warning to the
passenger is required as a quid pro quo of the
ee ccc ccccecccece
. The Polish Airlines decision of the Second
Circuit and the New Orleans Disaster decision
of the Fifth Circuit are squarely in point and
oppose Korean Air Lines Disaster...........
1. Korean Air Lines Disaster upsets the
uniform 10 point minimum standard for
the Article 3 warning demanded by the
United States as a condition tor withdraw-
ing its denunciation of the Convention ...
mw
‘”
~~
iv
2. The decisions in Polish Airlines and New
Orleans Disaster are compelling .........
D. Korean Air Lines Disaster is contrary to the
Deutsche Lufthansa case decided by the same
GARs 6:5 44.6005 a0 apucucacccilanieeedcas
E. Denial of certiorari would present a serious
problem for the transferor courts ...........
F. Korean Air Lines Disaster lacks precedent in
support of its Warsaw holding and should be
PP PP rr ee te ee a
Il. THIS COURT MAY DESIRE TO CONSIDER
AN ADDITIONAL QUESTION CONCERNING
THE SUBSTANTIVE FEDERAL LAW TO BE
APPLIED FOLLOWING A TRANSFER FOR
PR BORO, PROC on cs cc cecccccess
A. Korean Air Lines Disaster conflicts with
numerous authorities which hold that follow-
ing a transfer for pretrial proceedings, the
transferee court is bound to apply the substan-
tive federal law of the transferor circuit .....
B. Contrary to the rationale of this Court’s ruling
in ban Dusen, Korean Air Lines Disaster
rewards the defendant for forum shopping...
€. Korean Air Lines Disaster undermines the
multidistrict transfer system................
LAME 8 ds cass bcesb hs eeesobus eats
PAGE
14
16
17
17
19
19
TABLE OF AUTHORITIES
Cases: PAGE
Benjamins v. British European Airways, 572 F.2d 913
(2d Cir. 1978), cert. denied, 439 U.S. 1114 (1979).... 3n
Berry Petroleum v. Adams & Peck, 518 F.2d 402 (2d Cir.
US ks 665d ke VED EE we een beets eee es aeeeke 19
Block v. Compagnie National Air France, 386 F.2d 323
CO Ge Bao cos cccecanensn cea cavewereeereesss )
Deutsche Lufthansa v. Civil Aeronautics Board, 479
i got Sa Perr rr ry 8, 9, 16, 18
Egan v. Kollsman Instrument Corp., 21 N.Y.2d 160, 234
N.E.2d 199, 287 N.Y.S.2d 14 (1967), cert. denied, 370
Ck RR RRR Sree etter Bar nena hae ome Seer 8, 10
In re Air Crash Disaster at Warsaw, Poland, 705 F.2d 85 |
(2d Cir.), cert. denied, 464 U.S. 845 (1983)......... passim
In re Air Crash Disaster Near New Orleans, Louisiana,
789 F.2d 1092 (Sth Cir. 1986), reh’g granted, 795 F.2d
381 (Sth Cir. 1986), reinstated, 821 F.2d 1147 (Sth Cir.
Ser ee IN k 6s tedonie décxceckhesavad 6, 8, 11, 15, 18
In re Four Seasons Securities Law Litigation, 370 F.
DE: BE Ce Cs HPO s 6 vc aceenpeseeicecess 19
In re Haven Industries, 462 F. Supp. 172 (S.D.N.Y. 1978) 19
In re Korean Air Lines Disaster, 575 ¥. Supp. 342
8 5 0 reer rye reer re rere ere ee 4, 21n
In re Korean Air Lines Disaster, 664 F. Supp. 1478
Ec ING oa cco ud bwedneuSecekeahnuh saeuseaees 20n
In re Plumbing Fixtures Litigation, 342 F. Supp. 756
CL, SE ok oanavas chow SRS ReuwEeNCKOeebeek! 19, 22
Ithaca College v. N.L.R.B., 623 F.2d 224 (2d Cir. 1980) 17
vi
PAGE
Lisi v. Alitalia, 390 U.S. 455 (1968), aff’g mem. by an
equally divided court, 370 F.2d 508 (2d Cir. 1966) .. .passim
Ludecke v. Canadian Pacific Airlines, 98 D.L.R.3d 52
Ss SEs 0 an a awadeus cin tccdacn eaves Ladcuke 17
Manion v. Pan American World Airways, 55 N.Y.2d
398, 434 N.E.2d 1060, 449 N.Y.S.2d 693 (1982) ..... 8, 10
Mertens v. Flying Tiger Line, 341 F.2d 851 (2d Cir.),
cert. denied, 382 U.S. 816 (1965) ..............00.- 8, 10
Philadelphia Housing Authority v. American Radiator,
309 F. Supp. 1053 (E.D. Pa. 1969)................. 19
Stirling v. Chemical Bank, 382 F. Supp. 1146 (S.D.N.Y.
cee, SEE Pe Pe A AR BL aa ome 19
Trans World Airlines v. Franklin Mint, 466 U.S. 243
RPGS Sete gene A SR ies Rtn alas 3n, 13, 15, 18
Van Dusen v. Barrack, 376 U.S. 612 (1964) ...19, 20n, 21, 22
Warren v. Flying Tiger Line, 352 F.2d 494 (9th Cir. 1965) 8, 10
Statutes, Rules and Regulations:
ee RR ee a |
a aI G5 how's kau ks vad cbuuen akan ncaee ce 4
es Es kok akeesuaeneed ceauakowiuwesswKs 3
Sees te ws 6 oko os seer oa ees deans eo eae 3
a Ns au was 0k <0 05 ¥ oo e ek kuee 19
is PMs conc ds deka chen écenewaeeeean a, 07, 205 ae
SG MEE 6246 55 hc cbb sodas piven exsSecauunn 15
Ps Us 6 ok Ub abducens cceeescweneesas passim
i4 C.F.R. § 213.7 2n, 3, 14
e229 2 8'¢ © 6'8.2 63,06 UO 6 6.6.6 6.0 € Oe eS 8 8 eo © 6 ae
Vil
PAGE
A Convention for the Unification of Certain Rules
Relating to International Transportation by Air, Octo-
ber 12, 1929, 49 Stat. 3000, T.S. No. 876 (1934),
reprinted in 49 U.S.C. § 1502 note (Warsaw Conven-
GR, . oc ceicdddvnvadetnsncesaceeesaeaneyesanseey passim
Agreement Relating to Liability Limitations of the War-
saw Convention and Hague Protocol, Agreement
CAB 18900, Approved by Executive Order E-23680,
May 13, 1966 (Docket 17325), 31 Fed. Reg. 7302
(1966), reprinted in Civil Aeronautics Board, Aero-
nautical Statutes and Related Material 515-16 (1974)
(Montreal Agreement) ............00ee cece eee eees passim
Other Authorities:
Lowenfeld & Mendelsohn, The United Siates and the
Warsaw Convention, 80 Harv. L. Rev. 497, 597
acd haneaeGddencnedséucepekaseennaseeses 12, 13, 18
Manual for Complex Litigation, Second (1985)......-. 22
1B J. Moore, Moore’s Federal Practice (2d ed. 1987) .. 17
Brief for Amicus Civil Aeronautics Board, Lisi v. Alita-
Ma, 308 U.S. GSS CIDER) 20 ccc cecccccccccvcesecccs 9n, 13
Brief for Appellee Civil Aeronautics Board, Deutsche
Lufthansa v. Civil Aeronautics Board, 479 F.2d 912,
4k fh eS , rrr rrr rrr re rer re 13
IN THE
Supreme Court of the United States
OCTOBER TERM, 1987
>
IN RE KOREAN AIR LINES DISASTER
OF SEPTEMBER 1, 1983, MDL 565
>
PETITION FOR A WRIT OF CERTIORARI TO THE
UNITED STATES COURT OF APPEALS FOR THE
DISTRICT OF COLUMBIA
OPINIONS BELOW
The op:nion of the Court of Appeals for the District of
Columbia Circuit (App. A, infra, pp. A-l to A-66) is
reported at 829 F.2d 1171 (D.C. Cir. 1987). It adopted the
firsi district court opinion (App. A, infra, pp. A-12 to A-
44) reported at 664 F. Supp. 1463 (D.D.C. 1985). The
second district court opinion (App. A, infra, pp. A-67 to
A-70) is reported at 664 F. Supp. 1488 (D.D.C. 1987).
JURISDICTION
The judgment of the Court of Appeals (App. A, infra,
A-71) was entered on September 25, 1987. By order dated
November 16, 1987 (App. A, infra, p. A-73), the Court of
Appeals denied a petition for rehearing en banc. The
jurisdiction of this Court is invoked under 28 U.S.C.
§ 1254(1).
2
PROVISIONS OF LAW INVOLVED
This case involves the Warsaw Convention Treaty. * the
4
Montreal Agreement’ and two Federal Aviation Regula-
, s , , —_
= Their pertinent provisions are set forth in App. B,
infra.
STATEMENT OF THE CASE
Petitioners are the surviving family members and estate
representatives of eighteen passengers killed in the Korean
Air Lines (KAL) catastrophe of September |, 1983. KAL
flight 7 departed from Kennedy Airport, New York
bound for Seoul, Korea. Instead of following its pre-
scribed and safe routing over international waters, the
pilots flew the plane more than three hundred miles off
course into the airspace of the Soviet Union. The KAL
plane was fired upon by a Soviet military fighter aircraft
and crashed, killing all 269 aboard.°
\ Convention for the Unification of Certain Rules Relating
to International Transportation by Air, October 12, 1929, 49
Stat. 3000, T.S. No. 876 (1934), reprinted in 49 U.S.C. § 1502
note. Oo
| Agreement Relating to Liability Limitations of the Warsaw
Convention and Hague Protocol, Agreement CAB 18900, Ap-
proved by Executive Order E-23680, May 13, 1966 (Docket
17325), 31 Fed. Reg. 7302 (1966), reprinted in Civil Aeronautics
wit Aeronautical Statutes and Related Material 515-16
(1974).
4)
14 C.F.R. § 221.175(a); 14 C.F.R. § 213.7.
Five years earlicr, another KAI passenger jet entered Soviet
airspace on a flight from Paris to Seoul, was fired upon and
crash landed in Siberia.
The damage limitation warning. Each of the cases are
governed by the Warsaw Convention and the Montreal
Agreement, which KAL signed in 1969. Pursuant to 14
C.F.R. § 213.7, foreign airlines must sign the Agreement
as a condition of their permit to operate in the United
States. While Article 22 of the Warsaw Convention im-
posed a damage limitation of 125,000 gold francs (ap-
proximately $8,300)’, the Montreal Agreement raised the
limitation tc $75,000. Article 3 of the Convention re-
quired that the airline deliver a ticket to the passenger
containing a statement giving notice of the limitation.
The Montreal Agreement and Federal Aviation Regula-
tion 14 ©.F.R. § 221.175(a) specify that the Article 3
notice be printed in at least 10 point type.
KAL admitted that it breached its Agreement and
violated the regulation by delivering warnings to the
petitioners’ passengers in smaller 8 point type.
Prior proceedings. Wrongful death actions were com-
menced against Korean Air Lines in various federal dis-
trict courts. Federal court jurisdiction in the actions was
based on 28 U.S.C. § 1331, by virtue of the Warsaw
Convention Treaty, and 28 U.S.C. § 1332.
7 This Court has previously upheld the Civil Aeronautics
Board regulation which converted the Convention's damage
limitation into dollars by using the last official price of gold.
Trans World Airlines v. Franklin Mint, 466 U.S. 243 (1984).
8 Of the seventeen actions for the deaths of eighteen passengers
involved in this petition, eleven were filed in the Southern and
Eastern Districts of New York, three in the Eastern District of
Michigan, two in the District for the District of Columbia and
one in the District of Massachusetts.
9 In Benjamins v. British European Airways, 572 F.2d 913 (2d
Cir. 1978). cert. denied, 439 U.S. 1114 (1979), the Second
4
Despite the opposition of those plaintiffs who com-
inenced suits in New York, the Judicial Panel on Multidis-
trict Litigation granted KAL’s 28 U.S.C. § 1407 motion
to transfer all cases arising out of the disaster to the
District of Columbia for pretrial discovery proceedings.
In re Korean Air Lines Disaster, 575 F. Supp. 342
(J.P.M.L. 1983).
On February 15, 1984, plaintiffs moved for partial
summary judgment declaring that KAL was liable for
actual damages, having forfeited the $75,000 damage
limitation of Warsaw/Montreal by delivering tickets with
small print warnings less than the required minimum.
On July 25, 1985, the district court rendered its memo-
randum and order denying plaintiffs’ motion (App. A,
infra, A-12 to A-44). The issue was certified for appeal
and leave to appeal was granted pursuant to 28 U.S.C.
§ 1292(b).
Following oral argument, the Court of Appeals re-
manded the appeal for further findings on the issue of
whether the district court was bound to apply the deci-
sions of the Court of Appeals for the Second Circuit in
those actions originally filed in New York and transferred
to the District of Columbia for pretrial proceedings. On
May 7, 1987, the district court ruled that it was not bound
by Second Circuit precedent in those cases (App. A,
infra, pp. A-67 to A-70).
On September 25, !987, the District of Columbia
Circuit rendered its opinion (App. A, infra, pp. A-l to A-
66) and judgment (App. A, infra, p. A-71) affirming the
district court. Plaintiffs petition this Court for a writ of
certiorari.
Circuit held that the Warsaw Convention created federal ques
tion yursdiction,
ARGUMENT
Certiorari should be granted to resolve a conflict
among the federal appellate courts in the interpretation of
the Warsaw Convention Treaty and Montreal Agreement
created by Korean Air Lines Disaster.
The Circuit Court below expressly acknowledged the
need for Supreme Court review herein, stating that this is
an appeal “meriting attention from Higher Authority”,
and “that the proper interpretation of the Convention
and Agreement, as well as the scope of the transferee
court’s interpretive authority in a case such as this one,
are matters in need of definitive resolution for our na-
tional court system”. App. A, infra, pp. A-6, A-11; 829
F.2d at 1174, 1176.
This Court has previously granted certiorari on the
same Warsaw notice issue but its determination did not
create binding precedent. By an equally divided panel,
this Court affirmed the Second Circuit’s holding that an
airline lost the limitation by giving a notice in inadequate
small print. Lisi v. Alitalia, 390 U.S. 455 (1968), aff’g by
an equally divided Court, 370 F.2d S08 (2d Cir. 1966).
Korean Air Lines Disaster departed from a previously
unbroken line of eight appellate decisions during the past
two decades which held that the Convention requires
delivery of an adequate warning to a passenger before the
airline may benefit from Warsaw's limitation. And Ao-
rean Air Lines Disaster upset the minimum 10 point type
print standard for the Warsaw notice established by the
Executive Branch through regulation and the Montreal
Agreement.
6
The Second Circuit and recently the Fifth Circuit issued
decisions squarely in point contrary to Korean Air Lines
Disaster. In re Air Crash Disaster at Warsaw, Poland, 705
F.2d 85 (2d Cir.), cert. denied, 464 U.S. 845 (1983)
(hereinafter Polish Airlines); In re Air Crash Disaster
Near New O?leans, Louisiana, 789 F.2d 1092, 1102 (Sth
Cir.), reh’g granted, 795 F.2d 381 (Sth Cir. 1986), rein-
stated, 821 F.2d 1147, 1171 (Sth Cir. 1987) (en banc)
(hereinafter New Orleans Disaster). Polish Airlines and
New Orleans Disaster held that airlines forfeited the
limitat‘on where they delivered ticket warnings printed in
smaller than the minimum permissible size.
The issue raised is an important one which governs the
transportation of thousands of international passengers
each day. Tne need for this Court to address this conflict
is particularly compelling because eleven of the seventeen
cases should be returned to New York district courts at
the conclusion of pretrial proceedings. If this Court does
not decide the issue, the New York federal courts would
be faced with the Second Circuit precedent in Polish
Airlines and Lisi v. Alitalia and the contrary ruling of the
District of Columbia Circuit.
>
CERTIORARI SHOULD BE GRANTED TO
RESOLVE A CONFLICT AMONG THE CIRCUITS
ON THE PROPER INTERPRETATION OF THE
WARSAW CONVENTION AND MONTREAL
AGREEMENT
A. The need for certiorari is substantial and was urged
by both courts below
While this Court’s affirmance of Lisi v. Alitalia, 390
U.S. 455 (1968), aff’g by an equally divided Court, 370
F.2d 508 (2d Cir. 1966), was by an equally divided panel
and did not create a binding precedent, Lisi has been
uniformly followed with one exception: the decision be-
low. Korean Air Lines Disaster is the only dissent to a
long settled area of law.
Both the court of appeals and the district court below
expressed the need for Supreme Court review of the
Warsaw/ Montreal issue. App. A, infra, p. A-11; 829 F.2d
at 1176; App. A, infra, p. A-70; 664 F. Supp. at 1490
(“[T]he Supreme Court is available to finally decide the
question after an application for certiorari. This should
be the course of the present litigation.”).
B. Korean Air Lines Disaster is contrary to the Warsaw
Convention and eight appellate decisions which
hold that adequate warning to the passenger is
required as a quid pro quo of the damage limitation
Article 3 of the Warsaw Convention provides that “the
carrier must deliver a passenger ticket which shall contain
. . . [a] statement that the transportation is subject to the
rules relating to liability established by this convention.”
The Convention’s central liability rule is the damage
limitation of Article 22, which provides that “the liability
of the carrier is limited to the sum of 125,000 francs.”
Failure to deliver the Warsaw ticket results in the forfeit-
ure of the limitation under Article 3: “if the carrier
accepts a passenger without a passenger ticket having
been delivered he shall not be entitled to avail himself of
those provisions of this convention which exclude or limit
his liability.”
Except for Korean Air Lines Disaster, there is complete
unanimity among all United States courts that Article 3
of the Warsaw Convention requires delivery of a ticket
with adequate warning of the damage limitation as a
condition for the airline to obtain the limitation. Lisi y.
Alitalia, 390 U.S. 455 (1968), aff’g mem. by an equally
divided Court, 370 F.2d S08 (2d Cir. 1966); In re Air
Crash Disaster Near New Orleans, Louisiana, 789 F.2d
1092 (Sth Cir. 1986), aff'd in relevant part, 821 F.2d 1147
(1987) (en banc); In re Air Crash Disaster at Warsaw
Poland, 705 F.2d 85 (2d Cir.), cert. denied, 464 U.S. 845
(1983); Deutsche Lufthansa v. Civil Aeronautics Board,
479 F.2d 912 (D.C. Cir. 1973); Warren vy. Flying Tiger
Line, 352 F.2d 494 (9th Cir. 1965); Mertens v. Flying
Tiger Line, 341 F.2d 851 (2d Cir.), cert. denied, 382 U.S.
816 (1965); Manion v. Pan American World Airways, 55
N.¥.2d 398, 434 N.E.2d 1060, 449 N.Y.S.2d 693 (1982):
Egan v. Kollsman Instrument Corp., 21 N.Y.2d 160, 234
N.f£.2d 199, 287 N.Y.S.2d 14 (1967), cert. denied, 390
U.S. 1039 (1968).
[he clear intent of the drafters of Article 3 was to make
passengers aware of the limitation so that they could take
self-protective measures, such as purchasing insurance,
9
prior to boarding a flight. Deutsche Lufthansa v. Civil
Aeronautics Board, 479 F.2d 912, 917 (D.C. Cir. 1973)
(“[T]he passenger is to receive full and effective notice of
any limitations of liability so that alternative protection
may be obtained.”); Block v. Compagnie National Air
France, 386 F.2d 323, 333-34 (1967).
Adequate size of the damage limitation is a key to
Article 3. Lisi v. Alitalia, 390 U.S. 455 (1968), aff’g mem.
by an equally divided Court, 370 F.2d 508 (2d Cir. 1966),
held that delivery of a small print notice was the equiva-
lent of no notice at all. The Second Circuit found that a
carrier’s 4-point type notice was “camouflaged in Lillipu-
tian print”, being “virtually invisible” and “diminutively
sized.” 370 F.2d at 514. Thus, the airline was barred from
asserting the limitation:
The Convention’s arbitrary limitations on liability—
which have been severely and repeatedly criticized—
are advantageous to the carrier. But the quid pro quo
for this one sided advantage is delivery to the passen-
ger of a ticket and baggage check which give him
notice that on the air trip he is about to make, the
amount of the recovery to him or his family in the
event of a crash, is limited very substantially.
Id. at 512-13.'"
Soon after Lisi, a unanimous panel of the New York
State Court of Appeals held that a similar small print
10, —s- The United States government opposed the grant of certiorar!
in Lisi and agreed with the Second Circuit “that a ticket!
purporting to warn of limited liability under the Warsaw Con-
vention does not of itself comply with Article 3 of the Conven
tion if printed in type too small to attract reasonable notice.”
Brief for Amicus C.A.B. at In, Lisi v. Alitalia, 390 U.S. 485
(1968).
10
warning (in 4.5 point type) violated Article 3 of the
Convention as a matter of law and voided the limitation.
Egan v. Kollsman Instrument Corp., 21 N.Y.2d 160, 234
N.E.2d 199, 287 N.Y.S.2d 14 (1967), cert. denied, 390
U.S. 1039 (1968)."'
Likewise, the Ninth Circuit, Second Circuit and the
New York State Court of Appeals have held that the
Article 3 notice must be delivered sufficiently in advance
of a flight to allow a passenger to take self protective
measures. Warren v. Flying Tiger Line, 352 F.2d 494 (9th
Cir. 1965) (limitation forfeited since ticket warning was
not delivered until passenger was on the ramp leading into
the aircraft); Mertens v. Flying Tiger Line, 341 F.2d 851
(2d Cir.), cert. denied, 382 U.S. 816 (1965) (airline denied
limitation where passenger received ticket notice after
boarding); Manion v. Pan American World Airways, 55
N.Y.2d 398, 434 N.E.2d 1060, 449 N.Y.S.2d 693 (1982)
(limitation denied since airline failed to deliver ticket until
after passenger had completed first leg of her trip).
Korean Air Lines Disaster is contrary to all other
United States cases in holding that adequate notice is not
a quid pro quo of the damage limitation. App. A, infra,
pp. A-30 to A-39; 664 F. Supp. at 1473-76.
1 List v. Alttalia and Egan v. Kollsman Instrument Corp.
involved air crashes which occurred several years before the
Montreal Agreement and Federal Aviation Regulation
§ 221.175(a) were enacted. Both courts noted, however, the then
recent adoption of the 10 point minimum standard. Lisi v.
Alitalia, 370 F.2d at 514 n. 10; Egan v. Kellsman Instrument
Corp., 21 N.Y.2d at 171, 234 N.E.2d at 204, 287 N.Y.S.2d at 21.
1}
C. The Poi. : Airlines decision of the Second Circuit
and the New Orleans Disaster decision of the Fifth
Circuit are squarely in point and oppose Korean Air
Lines Disaster
A clear standard for the minimum size of the Article 3
warning—1l0 point type—was set when the Executive
Branch promulgated 14 C.F.R. § 221.175(a) and then
required international airlines to enter the “special con-
tract” known as the Montreal Agreement. Korean Air
Lines signed the agreement in 1969. Both the regulation
and Agreement prescribe that the Warsaw notice be
printed “in type at least as large as 10 point modern
type”.
In Polish Airlines, 705 F.2d 85 (2d Cir.), cert. denied,
464 U.S. 845 (1983), the airline delivered an Article 3
warning in small 8.5 point type, violating the Agreement
and Regulation. Based on an exhaustive review of the
history of the Convention and its notice provisions, the
Second Circuit held that the carrier had forfeited the
limitation. /d. at 91. The Fifth Circuit recently reached
the same result where the airline delivered a 9 point
warning. New Orleans Disaster, 789 F.2d 1092, 1102 (Sth
Cir.), reh’g granted, 795 F.2d 381 (Sth Cir. 1986), rein-
stated, 821 F.2d 1147, 1171 (Sth Cir. 1987) (en banc).
In the case at bar, KAL printed its Article 3 notice in 8
point type print, smaller than the notices issued in Polish
Airlines and New Orleans Disaster. Yet Korean Air Lines
Disaster holds that KAL may benefit from the damage
limitation despite its failure to provide the specified
warning. This result contravenes the history, purpose and
language of the Warsaw/ Montreal system.
12
1. Aorean Air Lines Disaster upsets the uniform 10 point
minimum standard for the Article 3 warning demanded
by the United States as a condition for withdrawing its
denunciation of the Convention
The 10 point type standard was imposed because of the
concern of the United States government that interna-
tional airlines were avoiding their Warsaw obligation to
give passengers a proper notice of the unusual limited
liability system. Article 3 of the Convention did not
specify the size of the warning required to benefit from
the limitation and many airlines printed “notices” in
unreadable small type. Lowenfeld & Mendelsohn, The
United States and the Warsaw Convention, 80 Harv. L.
Rev. 497, 512-14 (1967) (“Even if the passenger could
read the ticket, he would hunt in vain for warning of the
liability limit.”). If the unorthodox damage limitation was
to continue, at least the passenger should receive a proper
Article 3 notice. /bid.
In 1955, American negotiators at the Hague Conven-
tion unsuccessfully argued for an Article 3 warning mea-
suring one half centimeter high—larger than 10 point
type. /d. at 514. The Protocol adopted by the Hague
Convention was subsequently rejected by the United
States because its revised limitation of $16,600 was con-
sidered too low and its ticket notice provisions were
inadequate. /d. at 512-16.
In 1963, the Civil Aeronautics Board enacted a regula-
tion requiring that the Article 3 notice be printed in at
least 10 point type. 14 C.F.R. § 221.17S(a). The regula-
tion applied to each “air carrier and foreign air carrier
which, to any extent, avails itself of the limitation on
liability to passengers provided by the Warsaw Conven-
tion”. Lbid.
13
The C.A.B. defended its 10 point standard by stating
that “lesser notice does not suffice to give adequate notice
appropriate in the public interest”, Brief for Amicus
C.A.B. at 9, Lisi v. Alitalia, 390 U.S. 455 (1968), and
that “[t]he fixing of standards of notice by either the
courts or the Board is in nowise inconsistent with War-
saw.” Brief for Appellee C.A.B. at 36, Deutsche Luf-
thansa v. Civil Aeronautics Board, 479 F.2d 912, 917
(D.C. Cir. 1973).
In Novembe;z 1965, continuing dissatisfaction led the
United States to denounce the Convention, effective six
months later. See Trans World Airlines v. Franklin Mint,
466 U.S. 243, 252 & n. 22. On the eve of the effective date
in May 1966, faced with the prospect of losing the
limitation entirely, international airlines drafted the Mon-
treal Agreement. As a “special contract” under Article
22(1) of the Convention, the Agreement “incorporates all
other provisions of the Convention.” Lowenfeld & Men-
delsohn, The United States and the Warsaw Convention,
80 Harv. L. Rev. 497, 597 (1967).
The Agreement added the terms demanded by the
United States: (1) the Warsaw limitation was raised to
$75,000; (2) the defense available to the carrier under
Article 20(1), that “all necessary measures” were taken to
avoid the accident, was waived, and; (3) airlines stipu-
lated that they would issue a ticket with an Article 3
notice printed in at least 10 point type, as set forth in the
C.A.B. regulation.
As a result of the airlines’ contractual commitment, the
United States formally accepted the Agreement and with-
drew its denunciation. /d. at 596. All foreign airlines must
sign the Agreement as a condition of their Foreign Air
14
Carrier Permit to conduct business in the United States.
14 C.F.R. § 213.7. KAL signed in 1969.
2. The decisions in Polish Airlines and New Orleans Disas-
ter are compelling
Polish Airlines held that the obligations an airline
accepts under the Montreal Agreement must be consid-
ered along with Article 3 of the Convention:
Under the Convention, the carrier must deliver a
ticket containing, inter alia, a statement referring to
the liability rules. Article 3(1)(e). Under the modify-
ing terms of the Montreal Agreement, however, that
statement must be in 10 point type. 705 F.2d at 89.
The Montreal Agreement supplemented the Warsaw
Convention by adding those terms demanded by the
United States in exchange for its continued participation
in the Treaty. As the Second Circuit observed, “adequacy
of notice was one of the concerns that led to the filing of
the Notice of Denunciation . . . and. . . the Montreal
Agreement specifically addressed this concern by requir-
ing ‘notice to each passenger in large type’ ”. 705 F.2d at
89-90. The United States relied upon this promise by
withdrawing its Notice of Denunciation and continuing as
a party to the Treaty. If the world’s airlines had not signed
the Agreement, “there would in all probability be no
Convention today.” 705 F.2d at 91.
With the 10 point requirement, the airlines stipulated to
a clear and uniform minimum standard for an acceptabie
Article 3 notice. Delivery of a notice in less than 10 point
type is inadequate as a matter of law:
The 10 point guideline is a clear one, and quite easy
to follow. To be sure, any such line drawing has an
15
arbitrary air, but LOT is a party to the line drawn
and it seems to us less arbitrary to accept the 10 point
standard than it would be to guess on a case-by-case
basis at what constitutes “adequate notice”. 705 F.2d
at 90 n. 10.
See also New Orleans Disaster, 789 F.2d 1092, 1098 (“10
point type means exactly that, 10 point type.”).
The Second Circuit also recognized the rulemaking
authority granted to the Executive Branch by statute to
implement the Warsaw Convention. 49 U.S.C. § 1502.
The court found that the promulgation of 14 C.F.R.
§ 221.175(a) and the negotiation and acceptance of the
Montreal Agreement by the United States “indicate a
judgment by at least the executive branch that 10 point
type was necessary to provide sufficient notice” to the
passenger under Article 3. 705 F.2d at 90.
In this regard, Polish Airlines is supported by this
Court’s recent ruling in Trans World Airlines v. Franklin
Mint, 466 U.S. 243 (1984), which upheld and applied
another Civil Aeronautics Board regulation interpreting
the cargo limitation of the Warsaw Convention. Franklin
Mint ruled an Executive Branch determination made
pursuant to properly delegated authority is controlling
“unless we find it contrary to law established by domestic
legislation or by the Convention itself.” /d. at 254.
The 10 point standard plainly gives substantive eftect
and meaning to Article 3 of the Convention and its
requirement of delivery. Not only has the Executive
Branch properly set this minimum standard by regula-
tion, but KAL bound itself to provide such notice by
signing the Montreal Agreement.
16
D. Korean Air Lines Disaster is contrary to the
Deutsche Lufthansa case decided by the same
Circuit
The ruling in Korean Air Lines Disaster also conflicts
with a prior decision of another panel of the District of
Columbia Circuit.
In Deutsche Lufthansa vy. Civil Aeronautics Board, 479
F.2d 912 (D.C. Cir. 1973), the German national airline
challenged the 10 point ticket notice requirement imposed
by the Civil Aeronautics Board as contrary to the Con-
vention. But the District of Columbia Circuit stated that
“the provisions of Article 3 may be supplemented by
additional regulations” and ruled that the 10 point stand-
ard “not only does not contradict the provisions of the
Warsaw Convention but gives [Article] 3(1)(e) substantive
effect.” Id. at 916, 918 (emphasis added).
The Circuit expressly adopted the Second Circuit ruling
in List v. Alitalia. Id. at 917. And Deutsche Lufthansa
stated that compiiance with the type size requirement will
dictate whether the airline may later raise the limitation:
Compliance with the [10 point type] regulation will
not only provide passengers with adequate notice of
the limitations on liability imposed on them but will
later enable the carrier to invoke the protection of
[Aricle] 3(1)(e), for unless adequate notice is ac-
corded its passengers, the carrier will later be pre-
cluded from using the Convention to limit liability.
Id. at 918 (emphasis added).
17
E. Denial of certiorari would present a serious prob-
lem for the transferor courts
As discussed in Section II, infra, eleven actions should
be transferred back to New York district courts at the end
of pretrial proceedings pursuant to 28 U.S.C. § 1407.
Korean Air Lines Disaster expresses its belief that the law
of the case should govern after the cases are returned.
App. A, infra, p. A-11; 829 F.2d at 1176. But the New
York courts are bound to apply the decisions of the
Second Circuit in Polish Airlines and Lisi v. Alitalia.
Ithaca College v. N.L.R.B., 623 F.2d 224 (2d Cir. 1980) (a
decision of the court of appeals, not overruled by the
Supreme Court, is binding on all inferior courts and
litigants within the Circuit).
If this Court declines to decide the Warsaw/ Montreal
issue, the New York district courts would find themselves
“suspended between the doctrine of stare decisis and the
doctrine of the law of the case. In such a circumstance the
_ court would invite reversal if it did not follow the
decisions of its own courts of appeals.” 1B J. Moore,
Moore’s Federal Practice € 0.404j4.-2], p. 129 (2d ed.
1987).
Fk. Korean Air Lines Disaster lacks precedent in sup-
port of its Warsaw holding and should be reversed
The sole decision cited favorably by Korean Air Lines
Disaster was a Canadian Supreme Court ruling: Ludecke
v. Canadian Pacific Airlines, 98 D.L.R.3d 52 (Can.
1979). App. A, p. A-34; 664 F. Supp. at 1474. But
Ludecke did not involve a ticket governed by the Mon-
treal Agreement or 14 C.F.R. § 221.17S(a). And Ludecke
is contrary to the uniform decisions of American courts
18
over the past two decades in Lisi v. Alitalia, Deutsche
Lufthansa, Polish Airlines and New Orleans Disaster.
Korean Air Lines Disaster overlooked the language and
purpose of Article 3 of the Convention that “unless
adequate notice is accorded its passenger, the carrier will
later be precluded from using the Convention to limit
liability.” Deutsche Lufthansa v. Civil Aeronautics Board,
479 F.2d 912, 918 (D.C. Cir. 1973). The opinion does not
address the historical relationship between the Conven-
tion and the Agreement and the United States’ efforts to
set a minimum warning standard. Polish Airlines, 705
F.2d at 89-90; Lowenfeld & Mendelsohn, The United
States and the Warsaw Convention, 80 Harv. L. Rev. 497,
599 (1967). Nor does it recognize the authority of the
Executive Branch to impose the 10 point minimum stand-
ard, Trans World Airlines v. Franklin Mint, 466 U.S. 243
(1984), or that the standard gives “substantive effect” to
the Convention’s notice requirements. Deutsche Luf-
thansa v. Civil Aeronautics Board, 479 F.2d 912, 918
(D.C. Cir. 1973).
International airlines routinely comply with their obli-
gations and gain the limitation by performing the simple
mechanical act of issuing notices in at least 10 point type.
Such notice is the only measure of protection afforded to
passengers in return for the limitation. Korean Air Lines
Disaster should be reversed to restore the quid pro quo of
the Warsaw/Montreal system.
19
THIS COURT MAY DESIRE TO CONSIDER AN
ADDITIONAL QUESTION CONCERNING THE
SUBSTANTIVE FEDERAL LAW TO BE APPLIED
FOLLOWING A TRANSFER FOR PRETRIAL
PROCEEDINGS
If this Court grants certiorari to decide the Warsaw/
Montreal question, the second issue will become moot.
Nevertheless, the issue is the subject of a conflict among
the Circuits and the Court may desire to address the issue
to provide needed guidance in future cases.
A. Korean Air Lines Disaster conflicts with numerous
authorities which hold that following a transfer for
pretrial proceedings, the transferee court is bound
to apply the substantive federal law of the trans-
feror circuit
In Van Dusen vy. Barrack, 376 U.S. 612 (1964), the
Supreme Court held that following a 28 U.S.C. § 1404
transfer of a diversity case, the transferee court was
bound to apply the substantive law of the transferor
court. Van Dusen reasoned that a “change of court-
rooms” should not “significantly affect the outcome of
the case.” Jd. at 639 & n. 40.
Korean Air Lines Disaster limited the scope of Van
Dusen to questions of state law. App. A, infra, p. A-6 to
A-11; 829 F.2d at 1174-76. But the vast majority of courts
facing this issue have held otherwise and applied ban
Dusen to federal law issues. Berry Petroleum v. Adams &
Peck, 518 F.2d 402, 408 (2d Cir. 1975) (as to a federal
securities law issue: “Since this case was brought in a
district court in the Fifth Circuit, the substantive law of
20
that circuit is the law we must consider here.”); Jn re
Haven Industries, 462 F. Supp. 172, 179 (S.D.N.Y. 1978)
(as to a federal securities law issue: “As the transferee
court in this multidistrict litigation, this court must apply
the law of the transferor forum.”); Stirling v. Chemical
Bank, 382 F. Supp. 1146, 1150 n. 5 (S.D.N.Y. 1974) (as to
a federal securities law issue: “This Court must apply the
substantive law of the transferor forum.”); Jn re Four
Seasons Securities Laws Litigation, 370 F. Supp. 219, 228
(W.D. Okla. 1974) (as to a federal bankruptcy law issue:
“In cases transferred under 28 U.S.C. § 1407(a) the
substantive law of the transferor forum applies after
transter.”); Jn re Plumbing Fixtures Litigation, 342 F.
Supp. 756, 758 (J.P.M.L. 1972) (as to a federal antitrust
law issue: “It is clear that the substantive law of the
transferor forum will apply after transfer . . .”); Phila-
delphia Housing Authority v. American Radiator, 309 F.
Supp. 1053 (E.D. Pa. 1969) (as to a federal antitrust law
issue: “the applicable law to be applied in Section 1407
transters 1s the law of the transferor district.”).
Korean Air Lines Disaster conflicts with this line of
authority and holds that a transfer for pretrial proceed-
ings may result in a change of substantive federal law.'”
App. A, infra, p. A-7; 829 F.2d at 1174.
4, ,
lL At the oral argument of plaintitfs’ motion, the district court
judge stated that with regard to the cases filed in New York “1
know that | am bound by the Second Circuit.” Subsequently, in
a decision rendered on a separate Warsaw issue involving a case
transterred trom the Ninth Circuit, the district court held that
under ban Dusen v. Barrack, 376 U.S. 612 (1964), it was bound
to apply the law of the transferor Ninth Circuit. Jn re Korean
dir Lines Disaster, 664 F. Supp. 1478, 1480 (D. D.C. 1986). The
bun Dusen issue was not addressed by the district court in its
21
B. Contrary to the rationale of this Court’s ruling in
Van Dusen, Korean Air Lines Disaster rewards the
defendant for forum shopping
Korean Air Lines Disaster defeats the rationale of Van
Dusen by rewarding KAL for forum shopping. A transfer
for pretrial proceedings under 28 U.S.C. § 1407 “does
not justify the rather startling conclusion that one might
‘get a change in law as a bonus for a change of venue’.
Van Dusen, 376 U.S. at 636.
Eleven plaintiffs on this appeal filed in New York,
where six of them resided, where flight 7 departed, where
KAL issued nearly all of the defective tickets and where
KAL conducts regular flights. But soon after the disaster,
KAL realized that it had issued the small print tickets to
many passengers. It quickly sought a Section 1407 trans-
fer to the District of Columbia, which had no connection
to flight 7, KAL’s flight operations, any KAL witnesses or
the plaintiffs." KAL’s attempt to avoid the application of
Polish Airlines and Lisi v. Alitalia is obvious.
Korean Air Lines Disaster, however, does not address
the forum shopping considerations of Van Dusen.
first opinion on the Warsaw/Montreal ticket issue despite the
fact that it was briefed and argued by the parties. Subsequently,
the Court of Appeals specifically remanded for further findings
related to Van Dusen. The district court then reversed itself, and
held that the Kan Dusen rule did not apply to tederal law issues.
App. A, infra, pp. A-67 to A-70; 664 F. Supp. 1485-90.
13 The Multidistrict Panel granted KAL’s motion not on the
grounds of any convenience of the District of Columbia to the
airline, but because of the Panel’s belief that discovery would
be conducted of government agencies located in the District. /n
re Korean Air Disaster, 575 F. Supp. 342 (J.P-M.L. 1983).
22
C. Korean Air Lines Disaster undermines the multidis-
trict transfer system
The purpose of 28 U.S.C. § 1407 is to “promote the
just and efficient conduct” of complex actions. A Section
1407 transfer may be made to any district regardless of
federal venue requirements. The transfer determination
under Section 1407 is often based on court case loads and
the availability of a particular district judge.
The Multidistrict Panel certainly did not believe that its
transfer would result in a change of the applicable law. /n
re Plumbing Fixture Cases, 342 F. Supp. 756, 758
(J.PM.L. 1968); see Manual for Complex Litigation,
Second § 31.122, p. 254 n. 25.
But Korean Air Lines Disaster granted KAL a substan-
tive law benefit resulting from its transfer for mere
discovery convenience. If this ruling is allowed to stand,
courts “would at least be reluctant to grant transfers,
despite considerations of convenience, if to do so might
conceivably prejudice the claim of a plaintiff who had
initially selected a permissible forum.” Van Dusen, 376
U.S. at 636.
Prior to Korean Air Lines Disaster, every multidistrict
case which addressed whether this Court’s holding in Van
Dusen applied to federal law questions has respected the
law of the transferor Circuit. This is undoubtedly because
28 U.S.C. § 1407 contemplates that the case will eventu-
ally be returned to the transferor court for trial. But
Korean Air Lines Disaster threatens the proper working
of the multidistrict transfer system by allowing a change
in courtrooms to change the ultimate outcome of the
case.
23
CONCLUSION
Certiorari should be granted to address the conflict
among the Circuits created by Korean Air Lines Disaster
on the proper interpretation of the Warsaw Convention
and Montreal Agreement.
Respectfully submitted,
PLAINTIFFS’ STEERING COMMITTEE
MILTON G. SINCOFF
Co-Chairman and Counsel of Record
Kreindler & Kreindler
100 Park Avenue
New York, NY 10017
(212) 687-8181
DONALD W. MADOLE
Co-Chairman
Speiser, Krause & Madole
1216 16th Street, N.W.
Washington, D.C. 20036
(202) 223-8501
On the brief:
MILTON G. SINCOFF
STEVEN R. POUNIAN
INDEX TO APPENDICES
APPENDIX A:
Opinion of Court of Appeals for the District of Colum-
bia Circuit dated September 25, 1987 and reported at
829 F.2d 1171 (D.C. Cir. 1987) and 664 F. Supp. 1463
aa. SENG 6 Gok Chice sce Raa RR URAL a ena
Memorandum Opinion of the United States District
Court dated May 7, 1987 and reported at 664 F. Supp.
Se CS, I re oe eer eee eee eehua has
Judgment of the Court of Appeals for the District of
Columbia Circuit dated September 25, 1987.........
Order of the Court of Appeals for the District of Colum-
bia Circuit dated November 16, 1987...............
APPENDIX B:
A Convention for the Unification of Certain Rules Re-
lating to International Transportation by Air, October
12, 1929, 49 Stat. 3000, T.S. No. 876 (1934), reprinted
in 49 U.S.C. § 1502 note (Warsaw Convention)......
Agreement Relating to Liability Limitations of the War-
saw Convention and Hague Protocol, Agreement
CAB 18900, Approved by Executive Order E-23680,
May 13, 1966 (Docket 17325), 31 Fed. Reg. 7302
(1966), reprinted in Civil Aeronautics Board, Aero-
nautical Statutes and Related Material 515-16 (1974)
EY CN Se eee eackw sees
Federal Aviation Regulation, 14 C.F.R. § 221.17S(a) ...
Federal Aviation Regulation, 14 C.F.R. § 213.7........
PAGE
B-1
APPENDIX A
A-]
Opinion of Court of Appeals for the
District of Columbia Circuit
Notice: This opinion is subject to formal revision before publication
in the Federal Reporter or U.S.App.D.C. Reports. Users are requested
to notify the Clerk of any formal errors in order that corrections may be
made before the bound volumes go to press.
United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
No. 85-5982
IN RE: KOREAN AIR LINES DISASTER OF
SEPTEMBER 1, 1983
PLAINTIFF’S STEERING COMMITTEE, APPELLANT
Appeal from the United States District Court
for the District of Columbia
(Misc. No. 83-00345)
Argued January 20, 1987
Decided September 25, 1987
Milton G. Sincoff, with whom Donald W. Madole and
Steven R. Pounian were on the brief for appellant.
George N. Tompkins, Jr. for appellee.
Before: RuTH B. GINSBURG, WILLIAMS, and D.H. Grvs-
BURG, Circuit Judges.
Opinion for the Court filed by Circuit Judge RuTH B.
GINSBURG.
Bills of costs must be filed within 14 days after entry of judgment. The
court looks with disfavor upon motions to file bills of costs out of time.
A.?
Concurring opinion filed by Circutt Judge D.H. GINS-
BURG, in which Circuit Judge WILLIAMS joins.
GINSBURG, RUTH B., Circuit Judge: This case arises
out of an air disaster and raises turbulent federal _,
tions. On September 1, 1983, Korean Air Lines (K =
Flight 007, a commercial craft departing from +" y
Airport in New York and bound for Seoul, South orea,
was destroyed over the Sea of Japan by Soviet 7
military aircraft. Wrongful death actions were r-
against KAL in several federal district courts; the Judi-
cial Panel on Multidistrict Litigation transferred these
actions to the District Court for the District of er
for pretrial proceedings pursuant to 28 U.S.C. $1
(“(Clivil actions invoiving one or more common oe
of fact .. . pending in different districts es es Be
transferred to any district for coordinated or consolida
pretrial proceedings.”).
he nub of the controversy relates to the per passenger
Pe limitation of the Warsaw Convention,’ ——
$75,000 by an accord among airlines known as the wr -
real Agreement.? By motion for partial summary ju .
ment, plaintiffs sought a declaration that [KAL] :
liable without fault for compensatory damages ae
any limitation of $75,000.” Joint Appendix (J.A.) at 26.
Plaintiffs grounded this motion on the inadequate ee
size of the liability limitation notice printed on KAL
passenger tickets. The notice appeared in 8 point type;
the Montreal Agreement specifies 10 point type. Denying
plaintiffs’ motion, the district court, on July 25, 1985,
1 Convention for the Unification of Certain Rules Relating
to International Transportation by Air, October 12, 1$29,
49 Stat. 3000, T.S. No. 876, 137 L.N.T.S. 11, reprinted in
49 U.S.C. § 1502 note (1982).
i ili imitations of the War-
2 Avreement Relating to Liability L
RAW tewwancere and the Hague Protocol, CAB Bar po
12900. 31 Fep. Rec. 7302 (1966) (approved by C rder
F-23680, May 13, 1966).
A-3
held that KAL could avail itself of the $75,000 per pas-
senger limitation. In re Korean Air Lines Disaster of
September 1, 1983, 19 Av. L. Rep. (CCH) 17,584 (D.D.C.
1985). In so ruling, the district court considered and
rejected contrary Second Circuit precedent: In re Air
Crash Disaster at Warsaw, Poland, on March 14, 1980,
705 F.2d 85 (2d Cir.), cert. denied, 464 U.S. 845 (1983 ).
On September 24, 1985, the district court certified for
interlocutory appeal under 28 U.S.C. § 1292( b) the ques-
tion whether KAL “is entitled to avail itself of the lim.
itation of damages provided by the Warsaw Convention
and Montreal Agreement despite its defective tickets.”
We ruled that the requirements of section 1292(b) were
met and that “wise exercise of our discretion dictates
that the uppeal be allowed.” D.C. Cir. Order filed April
8, 1986.
On January 30, 1987, after argument of the appeal,
we remanded the record for clarification of the scope of
the district court’s order denying plaintiffs’ partial sum-
mary judgment motion. Specifically, we observed that
the cases consclidated in this appeal
can be grouped into three categories on the basis of
the fora in which they were originally filed and to
which they are to be remanded at or before the co
clusion of pretrial proceedings, unless the actio:..
are earlier terminated: (a) the Southern and East-
ern Districts of New York; (b) the Eastern District
of Michigan and the District of Massachusetts; and
(ce) the District of Columbia. The district judge, in
his order denying plaintiffs’ motion for partial sum-
mary judgment, did not expressly consider the con-
tention that, by analogy to the principle set forth in
Van Dusen v. Barrack, 376 U.S. 612 (1964), he was
bound by Second Circuit precedent in resolving the
claims of plaintiffs in the first category enumerated
above.
A-4
The extent of a transferee court’s authority under
28 U.S.C. § 1407 independently to resolve issues of
[federal] law already passed upon by the federal
court of appeals for the circuit in which the trans-
feror forum is located is apparently a question of
first impression, and our consideration of this issue
is hampered by uncertainty as to which plaintiffs
were covered by the district court’s July 1985 order.
D.C. Cir. Order filed January 30, 1987.
By Memorandum dated May 7, 1987, the district court
held that its July 25, 1985 decision denying plaintiffs
partial summary judgment motion applies to all three
categories of cases described in this court’s January 30,
1987 remand-for-clarification order. We now affirm the
district court’s dispositions. On the Warsaw Convention/
Montreal Agreement $75,000 per passenger damage lim-
itation issue, we adopt as our opinion the comprehensive
July 25, 1985 Memorandum of the district court, and we
reprint that disposition as an appendix hereto. We get
out below our reasons for concluding that the district
court properly adhered to its own interpretation of the
Warsaw Convention/Montreal Agreement in all actions,
including those transferred from district courts within
the Second Circuit.
The Supreme Court, in Van Dusen v. Barrack, 376
U.S. 612 (1964), addressed and resolved this question:
when a defendant in a diversity action moves for a venue
transfer under 28 U.S.C. § 1404(a),* which state’s law
applies post-transfer? The state law that would have
applied in the transferor court adheres to the case, the
Supreme Court held; in the Court’s words, “with respect
* Under this change of venue prescription, “[f]or the
convenience of parties and witnesses, in the interest of jus-
tice, a district court may transfer any civil action to any —ther
district or division where it might have been brought.”
A-5
to state law,” the venue change will accomplish “but a
change of courtrooms.” Van Dusen, 376 U.S. at 639.‘
The Van Dusen interpretation of 28 U.S.C. § 1404(a),
as the latter applies in diversity actions, rests on prin-
ciples advanced in Erie R.R. v. Tompkinz, 304 U.S. 64
(1938), and cases in the Erie line. Van Dusen, 376 US.
at 637-40; see particularly Klaxon Co. v. Stentor Elec.
Mfg. Co., 313 U.S. 387 (1941) (on issues of state law
arising in diversity cases, federal courts must apply
choice-of-law rules of states in which they sit). Justice
Goldberg explained for the Court in Van Dusen:
[Ojur interpretation [of §1404(a)] . . . is sup-
ported by the policy underlying Erie[.] ... [Wle
should ensure that the “accident” of federal diversity
jurisdiction does not enable a party to utilize a
transfer to achieve a result in federal court which
could not have been achieved in the courts of the
State where the action was filed... . What Erie
and the cases following it have sought was an iden-
tity or uniformity between federal and state courts:
and the fact that in most instances this could be
achieved by directing federal courts to apply the
laws of the States “in which they sit” should not
obscure that, in applying the same reasoning to
§ 1404(a), the critical identity to be maintained is
between the federal district court which decides the
*The Van Dusen Court expressly did not decide whether
the law of the state in which the transferor court sits would
apply if plaintiff rather than defendant sought the transfer,
or if a state court in the transferor court’s state would dis-
miss the case on forum non conveniens grounds. Van Dusen,
376 U.S. at 640. Wright, Miller & Cooper indicate that sev-
eral courts have applied the law of the transferor court even
when plaintiff rather than defendant, moves for a transfer.
15 C. WRIGHT, A. MILLER & E. Cooper, Federal Practice and
Procedure § 3846, at 367 (2d ed. 1986). A strong argument,
however, favors application of the law of the transferee state
in such instances. See ALI, Study of Division of Jurisdiction
Between State and Federal Courts, § 1306(c) & commentary
(1969).
A-6
case and the courts of the State in which the action
was filed.
Van Dusen, 376 U.S. at 637-39 (footnotes omitted).
Defendants in Van Dusen sought to transfer the case
from the Eastern District of Pennsylvania to the District
of Massachusetts. (Massachusetts, but not Pennsylvania,
limited the damages plaintiffs could recover.) Were the
transfer to be made, the Supreme Court ruled, though
all further proceedings would take place in the Massa-
chusetts district court, Pennsylvania law, not Massachu-
setts law, would furnish the governing state prescrip-
tions.
The question before us is whether the Van Dusen
rule--that the law applicable in the transferor forum
attends the transfer—should apply to transferred federal
claims. It is a question meriting attention from Higher
Authority. Congress, it appears, has not focused on the
issue,» nor has the Supreme Court addressed it. The
Judicial Panel on Multidistrict Litigation assumed, on at
least one occasion, that the Van Dusen rule would apply
to transferred federal claims, see In re Plumbing Fiz-
5 In Senate hearings on the bill that eventually became the
multidistrict litigation statute, two witnesses stated that Van
Dusen would apply to choice-of-law issues under the measure.
The experience of those witnesses related to federal claims
for antitrust law violations and it may be that they intended
their statements to cover such claims. See Multidistrict Liti-
gation: Hearings on S. $815 Before the Subcomm. on Im-
provements in Judicial Machinery of the Senate Comm. on
the Judiciary, 89th Cong., 2d Sess. 13, 25 (1966) (statements
of Dean Phil Neal and Judge William Becker). The Supreme
Court, however, in explicit and repeated qualifications, con-
fined its Van Dusen opinion to questions of state law. See
8376 US. at 625-26, 630, 633, 635, 639. The snippet of legisla-
tive history just described, therefore, is at best equivocal; the
two witnesses perhaps “mean[t] only that Van Dusen would
apply to state law issues in cases transferred under the new
statute.” Marcus, Conflicts Among Circuits and Transfers
Within the Federal Judicial System, 93 YALE L.J. 677, 710-11
(1984).
—
A-7
tures Litigation, 342 F.Supp. 756, 758 (J.P.M.D.L.
1972),* but the Panel, from what we can glean, has
given the matter only fleeting consideration.’ Recogniz-
ing that the question is perplexing, particularly in the
context of 28 U.S.C. § 1407, a statute authorizing trans-
fers only for pretrial purposes, we are persuaded by
thoughtful commentary that “the transferee court
[should] be free to decide a federal claim in the manner
it views as correct without deferring to the interpreta-
tion of the transferor circuit.” Marcus, Conflict Among
Circuits and Transfers Within the Federal Judicial Sys
tem, 93 YALE L.J. 677, 721 (1984); see also Steinman,
Law of the Case: A Judicial Puzzle in Consolidated and
Transferred Cases and in Multidistrict Litigation, 135
U. Pa. L. Rev. 595, 662-706 (1987).
As the district court stressed in response to our
remand, the Erie policies served by the Van Dusen deci-
sion do not figure in the calculus when the law to be
applied is federal, not state. Given the reality of conflict
among the circuits on the proper interpretation of federal
law, however, why deny to a plaintiff with a federal
claim the “venue privilege” a diversity claimant enjoys?
Plaintiffs in the Van Dusen sitvation could effectively
pick Pennsylvania rather than Massachusetts law and
retain the benefit of that choice after transfer. Why
deny a similar right of selection and retention to plair
tiffs who would fare better under the Second Circuit
*In Plumbing Fizrtures, a plaintiff resisted § 1407 transfer
of his price-fixing claim on the ground that under transferee
forum precedent, his standing to sue would be rejected. The
Panel stated, with no elaboration: “It is clear [under Van
Dusen] that the substantive law of the transferor forum will
apply after transfer.” 342 F.Supp. at 758.
7 Severa! lower courts have also declared, without exposi-
tion, that Van Dusen’s reasoning would apply to transferred
federal claim cases. See Marcus, supra note 5, 93 YALE L.J.
at 692-93 & n.100 (citing cases). Other lower courts have
stated that Van Dusen does not apply to transferred federal
claims. /d. at 693 n.102 (citing cases).
A-8
interpretation of federal law than under the D.C. Cir-
cuit’s interpretation?
The point has been cogently made that venue provi-
sions are designed with geographical convenience in
mind, and not to “guarantee that the plaintiff will be
able to select the law that will govern the case.” Piper
Aircraft Co. v. Reyno, 454 U.S. 235, 257 n.24 (1981);
see Marcus, supra, 93 YALE L.J. at 696-701. In diversity
cases, however, federal courts are governed by Klazon
and therefore may not compose federal choice-of-law
principles; instead, they must look to stale prescriptions
in determining which state’s law applies. With “no fed-
eral choice-of-law principles that favor the application
of the law of one state over the law of another,” the
diversity plaintiff’s opening move or “venue privilege”
ordinarily fills the gap—it “prevails by default.” Marcus,
supra, 93 YALE L.J. at 700-01. For the adjudication of
federal claims, on the other hand, “[t]he federal courts
comprise a single system [in which each tribunal en-
deavors to apply] a single body of law,” H.L. Green Co.
v. MacMahon, 312 F.2d 650, 652 (2d Cir. 1962), cert.
denied, 372 U.S. 928 (1963); there is no compelling rea-
son to allow plaintiff to capture the most favorable inter-
pretation of that law simply and solely by virtue of his
or her right to choose the place to open the fray.
As summarized in the commentary we find persuasive:
The Van Dusen Court stressed the venue privilege
because [under Klazon] there is no federal prin-
ciple by which to select the state law that should
govern diversity cases. Where federal claims are
transferred, however, the principle that the trans-
feree federal court is competent to decide federal
issues correctly indicates that the transferee’s in-
terpretation should apply.
For federal courts, the most significant choice-of-
law difference between issues of state law and issues
A-9
of federal law is that they lack competence to [de-
velop rules of decision for} the former and are pre-
sumptively competent to decide the latter.... [T]he
federal courts have not only the power but the duty
to decide [issues of federal law] correctly. There is
no room in the federal system of review for rote
acceptance of the decision of a court outside the
chain of direct review. If a federal court simply
accepts the interpretation of another circuit without
[independently] addressing the merits, it is not
doing its job.
Marcus, supra, 93 YALE L.J. at 679, 702; see also
Friendly, The “Law of the Circuit” and All That, 46 £
JOHN’S L. REv. 406, 412 (1972) (“I take [Van Dusen|
to be limited to choices of state law.’’) (emphasis in
original).
Application of Van Dusen in the matter before us, we
emphasize, would not produce uniformity. There would
be one interpretation of federal law for the cases initially
filed in districts within the Second Circuit, and an
opposing interpretation for cases filed elsewhere. Apply-
ing divergent interpretations of the governing federal
law to plaintiffs, depending solely upon where they initi-
ally filed suit, would surely reduce the efficiencies achiev-
able through consolidated preparatory proceedings. In-
deed, because there is ultimately a single proper inter-
pretation of federal law, the attempt to ascertain and
apply diverse circuit interpretations simultaneously j
inherently self-contradictory. Our system contemplates
differences between different states’ laws; thus a multi-
district judge asked to apply divergent state positions on
a point of law would face a coherent, if sometimes diffi-
cult, task. But it is logically inconsistent to require one
judge to apply simultaneously different and conflicting
interpretations of what is supposed to be a unitary fed-
eral law."
* Even if it appears plausible to legal minds to mete out in
a consolidated case one version of federal law to plaintiffs
A-10
The district judge in the instant case observed that
{iJf . . . more than one interpretation of federal law
exists, the Supreme Court of the United States can
finally determine the issue and restore uniformity in
the federal system. The uniformity achieved in this
[way] is an “informed uniformity” unlike the “blind
uniformity” which would result from one court
applying the interpretation of another by rote.
May 7, 1987 D.D.C. Memorandum at 4. We agree. The
federal courts spread across the country owe respect to
each other’s efforts and should strive to avoid conflicts,
but each has an obligation to engage independently in
reasoned analysis. Binding precedent for all is set only
by the Supreme Court, and for the district courts within
a circuit, only by the court of appeals for that circuit.
We return, finally, to the most anomalous feature of
this case. As earlier observed, we deal here not with an
“all-purpose” transfer under 28 U.S.C. § 1404(a), but
with a transfer under 28 U.S.C. § 1407 “for coordinated
or consolidated pretrial proceedings.” We have held, in
accord with the district court, that the law of a trans-
feror forum—here, the law of the Second Circuit—merits
close consideration, but does not have stare decisis effect
in a transferee forum situated in another circuit. Should
the several cases consolidated for pretrial preparation in
the instant proceeding eventuaily return to transferor
courts outside this circuit,’ would our district court’s
whose counsel filed in the Southern or Eastern District of
New York, another to plaintiffs whose counsel filed in the
District Court for the District of Columbia, it would be diffi-
cult to explain the rationality of such divergencies to the lay
persons served by the federal judicial system.
*In practice, it has been reported, most cases transferred
under § 1407 are not remanded. See 1986 Ann. Rep. Director
Admin. Off. U.S. Courts 128 (as of June 30, 1986, 15,026
actions had been subject to § 1407 proceedings; of those,
10,903 had been terminated by the transferee court) ; Stein-
man, Law of the Case: A Judicwal Puzzle in Consolidated and
ry
A-1]
Warsaw Convention/Montreal Agreement ruling, which
we have affirmed, have binding force? We believe it
should, as “law of the case,” for if it did not, transfers
under 28 U.S.C. § 1407 could be counterproductive, i.e.,
capable of generating rather than reducing the duplica-
tion and protraction Congress sought to check. See Stein-
man, supra, 135 U. Pa. L. Rev. at 664-67, 700-704. On
this issue in the case at hand, however, our circuit is not
positioned to speak the last word.
We affirm the order of the district court that KAL is
entitled to avail itself of the limitation on damages pro-
vided by the Warsaw Convention and raised to $75,000
by the Montreal Agreement; and we note again that the
proper interpretation of the Convention and Agreement,
as well as the scope of the transferee court’s interpretive
authority in a case such as this one, are matters in need
of definitive resolution for our national court system.
Affirmed.
Transferred Cases and in Multidistrict Litigation, 135 U. Pa.
L. REV. 595, 667 & n.247, 700 & nn.410, 411 (1987); Weigel,
The Judicial Panel on Multidistrict Litigation, Transferor
Courts, and Transferee Courts, 78 F.R.D. 575, 583 (1978).
A-12
APPENDIX
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
MDL No. 565
Misc. Docket No. 83-0345
IN RE: KOREAN AIR LINES DISASTER
OF SEPTEMBER 1, 1983
Civil Action Nos. 83-2793,
83-2941, 83-3154, 83-3177,
83-3204, 83-3441, 83-3445,
83-3448, 83-3449, 83-3450,
83-3451, 83-3452, 83-3453,
83-3454, 83-3455, 83-3456,
83-3457, 83-3458, 83-3459,
83-3460, 83-3461, 83-3462,
83-3463, 83-3464, 83-3465,
83-3466, 83-3467, 83-3468,
83-3469, 83-3470, 83-3473,
83-3474, 83-3587, 83-3588,
83-3792, 83-3793, 83-3889,
83-3891, 83-3898, 83-3901,
83-3902, 83-3903; 84-0029,
84-0030, 84-0402
MEMORANDUM AND ORDER
INTRODUCTION |
Before the Court is a motion for summary judgment
on the sole issue of the enforceability of the limitation on
damages established by the Warsaw Convention (Conven-
A-13
tion)’ and asserted by Defendant Korean Air Lines Co.,
Ltd. (Korean Air Lines) in the above-captioned multidis-
trict litigation. These Plaintiffs argue that, as a matter
of law, Korean Air Lines is liable to them to the full
extent of their damages for having delivered defective
tickets to their decedents, passengers killed when a com-
mercial airliner (KAL 007) owned and operated by De-
fendant was tragically destroyed by Soviet military air-
eraft over the Sea of Japan.
The material facts are undisputed. Defendant deli-
vered tickets to Plaintiffs’ decedents before their “inter-
national transportation” began. The tickets contained
notice of the applicability of the Warsaw Convention’s
rules limiting Korean Air Lines’ liability. The notice was
printed in 8.0 type size. Since the passenger tickets at
issue included a point of origin, destination or stopping
place within the United States, the provisions of the
Montreal Intercarrier Agreement (Montreal Agree-
ment),? are also relevant. The question before the Court
is whether the failure to print notice to passengers of the
applicability of the Warsaw Convention in 10-point mod-
ern type size, as required by the Montreal Agreement,
strips the carrier of the Convention’s liability limitation.
Having considered the treaty, its history and develop-
ment, and all evidence presented, the Court concludes that
the carrier cannot be prevented from availing itself of
the limitation; Plaintiffs’ motion shall be denied.
1 Convention for the Unification of Certain Rules Relating
to In‘ernational Transportation by Air, October 12, 1929, 49
Stat. 3000, T.S. No. 876, 137 L.N.T.S. 11, reprinted in 49
U.S.C. § 1502 note (1982).
2 Agreement Relating to Liability Limiations of the War-
saw Convention and the Hague Protocol, CAB Agreement
18900, 31 FED. REG. 7302 (1966) (approved by CAB Order
E-23680, May 13, 1966).
A-14
HISTORY OF THE WARSAW CONVENTION
Before considering this motion, it is necessary to
clearly understand the Warsaw Convention. It is a
multilateral treaty intended to uniformly regulate inter-
national airline transportation. Today, more than 120
nations adhere to the rules contained in the Convention.
Originally negotiated at two international conferences,
the first in Paris in 1925 and the second in Warsaw ir
1929, the Convention had a dual purpose. In recognition
of the fact that the newly emerging air industry woul
link many nations of divergent systems and laws, the
first goal was to establish some degree of uniformity as
to documentation for tickets and the like and as to the
procedure and substantive rules of law which would
govern claims arising out of international transportation
by air. Lowenfeld & Mendelsohn, The United States
and the Warsaw Convention, 80 Harv. L. Rev. 497, 498-99
(1967). In order to help the then fledgling air industry
to attract needed capital, the second goal was to limit the
potential liability of the air carriers in the case of acci-
dents. Clearly recognized as the more important goal of
the Convention, in Article 22(1), the limitation on lia-
bility was set at 125,000 Poincare francs, or approxi-
mately 8,300 United States dollars.* In exchange for the
limitation, the Warsaw Convention, in Article 20, created
a rebuttable presumption of air carrier liability unl:
“he proves that he and his agents have taken all neces-
sary measures to avoid the damage or that it was impos-
sible for him or them to take such measures.” Article 25
then provided that, in cases where a plaintiff is able to
* The actual amount was $8,291.87. Block v. Compaignie
Nationale Air France, 386 F.2d 323, 325 (5th Cir. 1967).
Article 22(4) of the Convention provides that “The sums
mentioned above shall be deemed to refer to the French franc
consisting of 651% milligrams of gold at the standard of fine
ness of nine hundred thousandths. These sums may be con-
verted into any national currency in round figures.”
A-15
prove ‘‘willful misconduct” the carrier wil] not be entitled
to avail himself of the limitation on liability.
On July 31, 1934, the United States deposited its
instrument of adherence to the Warsaw Convention in
the archives of the Ministry of Foreign Affairs of Poland
in accordance with the procedure set forth in Article 37
of the treaty. At the time the Senate ratified the treaty,
notably during the time this country (and the world)
was in the midst of the Great Depression, the $8,300
amount of the limitation was thought to provide some
benefit to both passengers and carriers. Indeed, Secretary
of State Cordell Hull transmitted the Warsaw Convention
to the Senate with the following statements:
It is believed that the principle of limitation will not
only be beneficial to passengers and shippers as af-
fording a more definite basis of recovery and as
tending to lessen litigation, but that it will prove to
be an aid in the development of international air
transportation, as such limitation will afford the
carrier a more definite and equitable basis on which
to obtain insurance rates, with the probable result
that there would eventually be a reduction of operat-
ing expenses for the carrier and advantages to
travelers and shippers in the way of reduced trans-
portation charges.
Senate Comm. on Foreign Relations, Message from the
President of the United States Transmitting a Cenven-
tion for the Unification of Certain Rules, Sen. Exec. Doc.
No. G, 73d Cong., 2d Sess. 3-4 (1934). Therefore, at the
time of ratification, the principle and the amount of lim-
itation were assented to by the United States. Since that
time and especially with the growth of the air industry
to its present proportions, the limitation has become an
increasingly uncomfortable and unpopular proposition.
While the limitation was once accepted, it has con-
stantly been the focus of debate and disagreement. The
A-16
United States, although adhering to the uniform rules
relating to international transportation, has not been
satisfied with the low limits placed on air carrier liability.
As early as 1935, one year following United States ad-
herence, there was discussion of possible amendment to
the Convention. Lowenfeld & Mendelsohn at 502. As a
result of the alarm expressed by the United States and
other nations where full recovery for personal injury and
wrongful death had become the rule, discussions and pro-
posals for change continued until anolner conference met
in September 1955. Convened this time at the Hague, th-
stated goal was to resolve the debate concerning wheth
the liability limits had been set at an appropriate level.
Lowenfeld & Mendelsohn at 504. The Hague Conference,
therefore, had a limited purpose with the intent being to
retain uniformity in the rules and conditions expressed
in the Warsaw Convention while resolving the dissatis-
faction with the low limits of liability. S. Speiser & C.
KRAUSE, 1 Aviation Tort Law 670-74 (1978).
Through much negotiation and debate the Hague Pro-
tocol did, among other things, double the limitation to
$16,600. Nonetheless, the outcome of the Hague confer-
ence failed to resolve the dissatisfaction; the United
States never ratified the Hague Protocol. In fact, the
amendments to Warsaw were never presented to the Sen-
ate for ratification, since even the increased limitation
faced an unpleasant political climate. Lowenfeld & Men
delsohn at 515. The limitation amount therefore remained
at $8,300 in this country.
Discontent continued for another decade. Then, in 1965,
the United States determined that the Warsaw limitation
could no longer be tolerated and decided to denounce the
treaty. Deposited November 15, 1965 and in accordance
with Article 39, set to become effective six months later,
the State Department Press Release concerning the Notice
of Denunciation stated that “the United States wishes to
make clear that the action to denounce the Warsaw Con-
A-17
vention is taken solely because of the Convention’s low
limits of liability for injury or death to passengers, and
in no way represents a departure from the longstanding
commitment of the United States to the tradition of
international cooperation in matters relating to civil
aviation.” 53 Dept. State Bull. 923, 924 (1965) (em-
phasis added). The Notice continued to state clearly that
the threat of denunciation would be withdrawn if the
imitation were raised, by special contract or otherwise,
to preferably $100,000 but not less than $75,000.
The Montreal Agreement was adopted in response to
the United States’ decision to withdraw from the Warsaw
Convention. Unlike the Hague Protocol, the Montreal
Agreement did manage to calm the din of criticism of
the low limits which had, by 1965, “reached a crescendo.”
S. SPEISER & C. KRAUSE at 674. In order to avert United
States denunciation of the treaty, air carriers agreed to
raise the limitation amount to $75,000 and to submit to
virtual strict liability; the Montreal Agreement provides
that an air carrier “shall not . . . avail itself of any
defense under Article 20(1) of said Convention or said
Convention as amended by [Hague] Protocol.” In addi-
tion, the Agreement provided that the “Montreal Advice”
would be printed in 10-point type and in ink contrasting
with the ticket stock. However, the Montreal Agreement
is completely silent with respect to sanctions to be imposed
for failure to comply with any of its three provisions.
Contrary to the view that waiver of the limitation was
contemplated, the Montreal Agreement was entered into
to preserve the limitation. Intended only as an interim
agreement until the treaty could be amended, the Mont-
real Agreement achieved a stand-off on the issue of the
level of the limitation. By its very terms, the Agreement
is only a “special contract” under the Warsaw Conven-
tion. It applies to “international transportation” as de-
fined in Article 1{2) which includes a point in the United
States as a point of origin, point of destination, or agreed
stopping place. While leaving air carriers liable without
A-18
fault, the Agreement permits air carriers to avail them-
selves of the liability limitation found in Article 22(1) ;
however, the amount of the limitation is increased to
$75,000 and the defenses found in Article 20(1) have
been waived.
Although the increase from $8,300 to $75,000 was sig-
nificant, the fact remains that the United States will
probably never be satisfied with any amount as a limit
upon recovery. Therefore, while the debate has been
phrased in terms of the “appropriate” level of the limi-
tation, see, e.g., Lowenfeld & Mendelsohn at 504, it is the
very idea of any limit at all which has been and remains
the problem. The United States has consistently rejected
all limitation amounts; it certainly appears that “no con-
vention with a limitation of damages can possibly pass
the Senate of the United States.” Kreindler, A Plaintiff's
View of Montreal, 33 J. Air L. & Com. 528, 529 (1967).
ISSUES PRESENTED
At issue is the interpretation of Article 3 of the War-
saw Convention which provides:
(1) For the transportation of passengers the car-
riers must deliver a passenger ticket which shall
contain the following particulars:
(a) The place and date of issue;
(b) The place of departure and of destina-
tion;
(c) The agreed stopping places, provided that
the carrier may reserve the right to alter the
stopping places in case of necessity; and that if
he exercises that right, the alteration shall not
have the effect of depriving the transportation
of its international character;
(d) The name and address of the carrier or
carriers:
A-19
(e) A statement that the transportation is
subject to the rules relating to liability estab-
lished by this convention.
(2) The absence, irregularity, or loss of the pas-
senger ticket shall not affect the existence or the
validity of the contract of transportation, which
shall none the less be subject to the rules of this con-
vention. Nevertheless, if the carrier accepts a pas-
senger without a passenger ticket having been de-
livered he shall not be entitled to avail himself of
those provisions of this convention which exclude or
limit his liability. '
Convention for the Unification of Certain Rules Relating
to International Transportation by Air, October 12, 1929,
49 Stat. 3000, T.S. No. 876, 137 L.N.T.S. 11, reprinted in
49 U.S.C. § 1502 note (1982) (emphasis added).
Originally, Plaintiffs based their motion on a claim
that the Montreal Agreement modified these provisions
of the Convention so as to require air carriers to deliver
to passengers embarking on “international transporta-
tion” tickets containing notice of the applicability of the
Warsaw Convention in at least 10-point type size in
order to limit their liability. It is Plaintiffs’ position
that the Montreal Agreement also “modified” the treaty
provisions relating to the amount of the limitation, rais-
ing it from $8,300 to $75,000. Further, Plaintiffs argue
that a carrier’s failure to print the Montreal Advice in
at least 10-point type constitutes “non-delivery” of a
ticket under Article 3(2) and therefore triggers the
treaty sanction—-forfeiture of the limitation for air car-
rier liability.
In a subsequent pleading, Plaintiffs changed the focus
of their argument from a claim that the Convention was
modified in Montreal to a claim that the Warsaw Con-
vention is not applicable at all because “Korean Air
Lines, a corporate citizen of a nation not a party to the
Warsaw Conveniion, has no standing to avail itself of
A-20
the defenses contained in the Warsaw Convention.”
Plaintiffs’ Reply Brief at 3. This argument is based on
the notion that there is no treaty relationship between
the Republic of Korea and the United States and that,
therefore, the Convention cannot apply to an air carrier
incorporated in Korea. Plaintiffs contend that the ab-
sence of a treaty relationship with Korea, if indeed there
is no such relationship, prevents Korean Air Lines from
asserting the Warsaw Convention limitation on liability.
However, if Plaintiffs are correct and the applicability
of the Convention rests on the existence of recipra
ratification by Korea and there has been no such ratifica-
tion, then, not only would Korean Air Lines be pre-
cluded from claiming the limitation, the Court would be
altogether precluded from exercising jurisdiction over
the air carrier.
Korean Air Lines vigorously opposes the motion for
partial summary judgment. Under either of the some-
what contradictory theories posited by Plaintiffs, Defend-
ant claims that the Montreal Agreement, being an agree-
ment between air carriers, not nations, cannot modify
the Warsaw Convention to require or trigger the imposi-
tion of the treaty sanction of unlimited liability. Fur-
ther, Korean Air Lines argues that the United States
and the Republic of Korea do maintain a treaty rela-
tionship with respect to the Convention; consequent
Plaintiffs’ second theory cannot be correct.
By challenging Korean Air Lines’ statement that “the
rights of the moving plaintiffs and defendant KAL are
governed exclusively by the provisions of a treaty of
the United States known as the Warsaw Convention,”
Plaintiffs’ second theory impugns the jurisdiction of the
Court. The challenge to “treaty jurisdiction” affects not
only the actions filed by these Plaintiffs, but this entire
multidistrict litigation. Therefore, the question concern-
ing jurisdiction and the requirement of a treaty rela-
tionship with Korea must be examined before proceed-
A-21
ing to the issue of the applicability of the Warsaw Con-
venticn limitation on liability.
JURISDICTION UNDER THE WARSAW
CONVENTION
Article 1(1) provides that “(t}his Convention shall
apply to ali international transportation of persons, bag-
gage or goods performed by aircraft for hire.” Article
17 of the Convention makes the carrier liable for the
death or personal injury ef passengers sustained while
engaged in international transportation. Article 24 of
the Convention further states that cases brought for dam-
ages sustained in the event of wounding of passengers
“can only be brought subject to the conditions and limits
set out in this convention”; Article 32 emphasizes this
point by stating that the parties are prevented from
“deciding the law to be applied” or “altering the rules
as to jurisdiction.” Therefore, nations which are parties
to the Warsaw Convention have agreed that actions for
wrongful death or personal injury occurring during “in-
ternational transportation” will be governed by the rules
of the Convention.
As a treaty of the United States and, therefore, the
“supreme Law of the Land,” U.S. Const. art. VI, the
Warsaw Convention preempts other laws. Since the
Warsaw Convention applies to “international transporta-
tion” and since the United States has agreed to this
treaty, as “supreme Law of the Land” the Convention
exclusively and specifically controls the recovery which
plaintiffs seeking damages for wrongful death or per-
sonal injury occurring during “international transporta-
tion” may receive in American courts. Jn re Air Crash
Disaster at Warsaw, Poland on March 14, 1980, 535 F.
Supp. 833, 844-45 (E.D.N.Y. 1982), aff'd, 705 F.2d 85
(2d Cir.), cert. denied, 464 U.S. 845 (1983). The Con-
vention also governs the question of jurisdiction; there-
fore, the Court must look to the terms of the Convention
to determine its applicability.
A.)
By its terms, the Warsaw Convention applies only to
‘international transportation,” defined in Article 1(2)
as
any transportation in which, according to the con-
tract made by the parties, the place of departure
and the place of destination, whether or not there
be a break in the transportation or transshipment,
are situated either within the territories of two High
Contracting Parties, or within the territory of a
single High Contracting Party, if there is an agreed
stopping place within a territory subject to tl
sovereignty, suzerainty, mandate or authority of an-
other power, even though that power is not a party
to this convention.
The four conditions specified in Article 28(1), te.,
domicile of the carrier, principal place of business, place
where the ticket was purchased or the place of destina-
tion, are generally thought to control jurisdiction once
“international transportation” has been established. See,
e.g., Vergara v. Aeroflot “Soviet Airlines”, 390 F. Supp.
1266; 1269 (D. Neb. 1975); Smith v. Canadian Pacific
Airways, Ltd. 452 F.2d 798 (2d Cir. 1971); Benjamins
v. British European Airways, 572 F.2d 913 (2d Cir.
1978), cert. denied, 439 U.S. 1114 (1979). There being
no genuine issue respecting either Article 1(2) or Article
28(1) for the tickets relevant to this motion there she
be no question that the Warsaw Convention applies .v
these actions and that there is treaty jurisdiction in this
Court. However, Plaintiffs raise the question of juris-
diction by contending that there is no treaty relationship
between Korea and the United States as regards the
Warsaw Convention and that the absence of a treaty re-
lationship prevents the Court from exercising any of the
Convention’s provisions in favor of Defendant, Korean
Air Lines, a corporate citizen of Korea. Instead, Plain-
tiffs would have the Court “enforce” the Montreal Agree-
ment, as though it were a separate contract, without re-
gard to the Warsaw Convention.
A-23
Plaintiffs’ argument assumes “treaty jurisdiction” is
not necessary to maintain these actions. That is incor-
rect. “If treaty jurisdiction under the Convention does
not lie, federal jurisdiction under 28 U.S.C. § 1331(a),
which permits cases arising under United States treaties,
clearly cannot be established.” Smith v. Canadian Pacific
Airways, Ltd., 452 F.2d at 802 (emphasis in original) ;
accord, In re Air Crash in Bali, Indonesia on April 22,
1974, 684 F.2d 1301 (9th Cir. 1982). If Plaintiffs are
correct, and there is no treaty jurisdiction because there
is no treaty relationship, then there is no federal juris-
diction over the Defendant at all.
The Court rejects Plaintiffs’ contention that there is
no treaty relationship between the United States and
Korea. Central to Plaintiffs’ argument is the fact that
the Republic of Korea adheres to the Protocol! Amending
the 1929 Convention for the Unification of Certain Rules
Relating to International Carriage by Air (Hague Pro-
tovol), 478 U.N.T.S. 371 (1955) rather than to the War-
saw Convention. By distinguishing the Protocol from the
Convention as though the two are independent treaties
and by arguing that there is no treaty relationship be-
tween this nation and Korea, Plaintiffs ignore the devel-
opment of the Warsaw system. Having considered the
history of the Hague Protocol, the Court concludes that
the Protocol cannot be considered separately from the
Warsaw Convention; it consists of nothing more than a
list of amendments to the original treaty. Indeed, the
only difference between the titles of the Convention and
the Protocol are the very words “Protocol to Amend.”
The very name of the Hague Protocol gives evidence that
it was intended and, in fact, is merely the Warsaw Con-
vention with certain alterations.
Knowing the history of the conference which produced
the Hague Protocol and the reasons the United States
negotiated and signed but never ratified the Hague Pro-
A-24
tocol provides a context for understanding the relation-
ship of the United States to those countries which choose
to adopt those amendments. First, since the Protocol
came later than the Convention it essentially offered new
nations a choice: adopt the Warsaw Convention as orig-
inally formulated in 1929 or adopt the amended version
as formulated in 1955. The purpose of the Warsaw Con-
vention was to unify the rules; the purpose of the Hague
Protocol was merely to amend those same rules. Korea
has chosen to adhere to the Hague Protocol and is the
fore a High Contracting Party to the Warsaw Conve.
tion through those amendments. In fact, Article XXIll
of the Hague Protocol states:
Adherence to this Protocol by any State which is not
a Party to the Convention shall have the effect of
adherence to the Convention as amended by the Pro-
tocol.
Therefore, since July 13, 1967, Korea has adhered to
the Warsaw Convention through its ratification of the
Hague Protocol. At least with respect to the unamended
portions of the Convention, the United States and Korea
are parties to the same treaty.
Moreover, it would hardly encourage the goal of the
Warsaw Convention to establish uniform rules, law an”
procedure for claims arising out of international aviatio:.
and then to complicate the application of those rules by
requiring reciprocity in ratification. The delegates to
the Hague Conference were well aware of this and delib-
erately adopted the negotiated amendments merely as a
Protocol to amend Warsaw rather than as an entirely new
convention specifically to retain uniformity. S. SPEISER &
C. KRAUSE at 671-72. Plaintiffs’ argument fails because
“(t]he Convention is not concerned with reciprocal treat-
ment of nationals; its purpose is to unify rules relating
to international transportation by air.” S. Speiser & C.
KRAUSE at 666.
A-25
The negotiations and events which led to the Montreal
Agreement were themselves tied to the convention. Plain-
tiffs’ argument that the Montreal Agreement may be con-
sidered without resort to the entire Warsaw system of
recovery is untenable.
INTERPRETING THE WARSAW/MONTREAL
LIMITATION OF LIABILITY
On the issue of maximum liability limits, there has
been considerable debate and clash of ideology. Yet more
than five decades of discussion have managed to produce
no more than an uneasy truce on the issue. The level of
the limitation has been tinkered with in hopes of making
it more palatable. The United States has been able to
force some concessions, principally in the nature of a
“special contract”—the Montreal Intercarrier Agree-
ment—increasing the limit for wounding, injury or death
occurring during the international transportation of pas-
sengers involving a point of origin, point of destination
or agreed stopping place in the United States; however,
the United States remains unhappy with the concept of a
limitation on damages.
While the increase from $8,300 to $75,000 brought
about by the Montreal Agreement is certainly significant,
evidence of continuing American dissatisfaction with any
limit is found in the fact that the United States Senate
has ratified no Convention, Protocol or Agreement since
joining the original Convention. This is true even though
the United States has been presented with at least three
opportunities to join in treaty amendments to raise the
limitation. First, there was the Hague Protocol, and then
the proposed Guatemala Protocol. The Guatemala Pro-
tocol is drafted so as not to become effective without
United States ratification. Although these amendments
‘ Protocol to Amend the Convention for the Unification of
Certain Rules Relating to International Carriage by Air,
ICAO Doc. No. 8932 (1971), reprinted in A. Lowenfeld, Avia-
tion Law Documents Supplement 975-84 (2d ed. 1981).
A-26
would have raised the limitation to $100,000, the United
States Senate failed to ratify by the required two-thirds
margin. The most recent amendments proposed to the
Convention were drafted in Montreal. These amend-
ments, known collectively as the Montreal Protocols,’
would have provided for a maximum recovery of approxi-
mately $105,000; still the Senate failed to ratify. See
129 Conc. Rec. $2237 (daily ed. March 7, 1983); 129
Conc. Rec. $2279 (daily ed. March 8, 1983). Having
rejected all proposals to date, it certainly seems that t’
United States is determined to accept no convention
which imposes a limitation on the recovery available to
citizens of this country. Therefore, while the debate has
been couched in terms of the appropriate level of the
limitation, it is the presence of a limitation at all that
has been the real concern.
A. Criticisms of the Treaty Limitation
There have been two principal criticisms of the Con-
vention’s limitations. First, the limitations have been
objected to on the ground that the reason for limiting
liability in 1929 no longer exists today. In 1929, the
limitation was adopted in order to promote a fledgling
industry. “The international air giants of today were
literally in their swaddling clothes.” L. KREINDLER '
Aviation Accident Law 342 (1963) [hereinafter 1 Av
tion Accident Law). Then, the air industry was strug-
gling to become truly international. Capital had yet to
be invested and needed encouragement. It was hoped
that the limitation on damages would attract capital and
allow carriers to obtain insurance that might otherwise
be discouraged by the threat of a single catastrophic acci-
dent. Lowenfeld & Mendelsohn at 499.
* Additional Protocol Nos. 1-4 to Amend the Convention
for the Unification of Certain Rules Relating to International
Carriage by Air, ICAO Nos. 9145-9148 (1975), reprinted tn
A. Lowenfeld, Aviation Law Documents Supplement 985-
1001 (2d ed. 1981).
A.27
Today, however, the world of aviation is vastly dif-
ferent. In the fifty years since the Convention, air
carriers have obtained both the necessary capital and
insurance to allow the industry to grow to tremendous
proportions. It is now the air industry, not individual
members of society, which is best able to bear the bur-
den of loss in cases of catastrophic accidents. Society,
having accepted the burden of low recoveries during the
industry’s infancy, now feels that the risk of loss is better
placed on what have grown to be major, mature corpora-
tions, often operating as world enterprises, instead of the
individua’ victims. The consensus seems to be that “there
is no longer any need to provide special protection to an
industry which is capable of reimbursing customers for
the damages it causes them.” Comment, The Growth of
American Judicial Hostility to the Liability Limitations
of the Warsaw Convention, 48 J. AiR L. & Com. 805,
830 (1983). Moreover, it has been noted that domestic
airlines managed to flourish without a similar limitation
placed on liability. 1 Aviation Accident Law at 346.
The second, related, criticism of the treaty limitation
has been that liability limitations are “an affront to the
American ideal of full and adequate compensation to in-
jured plaintiffs by those responsible for the harm.” /d.
American courts operate under the principle that “(i]t
is absolutely basic and fundamental . . . that an injured
person should be appropriately compensated for the loss
he has sustained.” KREINDLER, supra, 33 J. AiR L. &
Com. at 530. Within our system of law, the imposition of
a maximum recovery, without regard to the amount of
damages which may be proven, is a significant deviation
from traditional American tort law principles. See 1
Aviation Accident Law at 344-45.
The two major criticisms together, that a limitation
on tort recovery is anathema to traditional American
legal principles and that the air industry has long since
A-28
outgrown the need for special protection, combine for a
forceful argument against continued application of the
liability limits found in the Convention. “It is not in-
significant to note however, that the original policy has
lost a great deal of its persuasive force; air travel is no
longer an infant industry.” S. SPEISER & C. KRAUSE
at 636-37. Nevertheless, the fact remains that the
United States is a High Contracting Party to the Warsaw
Convention, complete with treaty limitation. While this
may be at variance with traditional tort law, as long *s
the political branches of our government choose to adb.
to the Convention, the courts of the nation are obliged to
enforce it as it was negotiated and written. Trans World
Airlines, Inc. v. Franklin Mint Corp., 466 U.S. 243, 273;
(1984) (Stevens, J., dissenting).
B. Interpretations of the Treaty Limitation
It is well established that treaty interpretation involves
a consideration of the history and intent of the contract-
ing sovereigns. Choctaw Nation v. United States, 318
U.S. 423 (1943). Treaties are to be construed liberally
but are not deemed to be abrogated or modified unless
such intent has been clearly expressed. “Legislative si-
lence is not sufficient to abrogate a treaty.” Trans World
Airlines, Inc. v. Franklin Mint Corp., 466 U.S. at 252.
Further, the Warsaw Convention being a treaty of v
untary adhesion, should the political branches of our gov-
ernment determine that the treaty obligations have he-
come more onerous than the foreign policy considerations
justify, the treaty’s provision for denunciation could be
invoked again. For this reason, “|p]lainly, a party to a
treaty of voluntary adhesion can have no need for the
doctrine of rebus sic stantibus [changed circumstances],
except insofar as it might wish to avoid the notice re-
quirement [Article 39].” /d. at 253 n.24. If the ad-
hering nations have no use of the doctrine, then clearly
private parties such as these may not invoke the doctrine
on their behalf. /d. at 253.
A-29
And yet American courts, faced with the prospect of
enforcing a limitation which has become outmoded and
contrary to domestic law, have taken avoidance of the
treaty limitation upon themselves and have arrived at an
interpretation of the Warsaw system which, in cases such
as those presented by Plaintiffs here, eliminates the treaty
limitation altogether. There are two provisions in the
Warsaw Convention which, as a sanction, strip the limi-
tation of liability from an air carrier. First, there is the
“wilful misconduct” section, Article 25, which excepts
from the limitation those cases in which a plaintiff can
prove that the accident generating the action was caused
by the carrier’s “wilful misconduct,” which is to be de-
fined by the court of law to which the case is submitted.
Since the plaintiff’s burden under this provision is a
heavy one, this Article provides little ground from which
to attack the limitation.
Consequently, the majority of courts have addressed
the issue through judicial interpretation of Article 3.°
This provision has provided much space for judicia] ma-
neuverings and innovative interpretations. Specifically,
Article 3(2) provides:
The absence, irregularity, or loss of the passenger
ticket shall not affect the existence or the validity of
the contract of transportation, which shui! : «nethe-
less be subject to the rules of this convention. Never-
theless, if the carrier accepts a passenger without a
passenger ticket having been delivered he shall not
be entitled to avail himself of those provisions of
this convention which exclude or limii his liability.
(Emphasis added. )
* The limitation has been attacked on constitutional grounds
as well, see, e.g., In re Aircrash in Bali, Indonesia ci: April 11,
1974, 684 F.2d 1301 (9th Cir. 1982); Burdell v. Canadian
Pacific Airways, 10 Av. Cas. (CCH) 18,151 (fi. Cir. Ct.
1968).
A-30)
By providing for unlimited liability where there has been
“nondelivery” of a passenger ticket, this Article of the
Warsaw Convention has been given a construction, in
conjunction with the Montreal Agreement, which elim-
inates the limitation for many plaintiffs.
a 1. “Adequate notice”
‘Construing the phrase “accept a passenger without a
passenger ticket having been delivered” to include physi-
cally delivered tickets which fail to contain “adequate
notice” of the Warsaw/Montreal limitation, courts have
made a way for full recovery where there was none.
a line of cases beginning with Mertens v. Flying Tiger
Line, Inc., 341 F.2d 851 (2d Cir.), cert. denied, 382 U.S.
816 (1965), through the most recently decided /n re Air
Crash Disaster at Warsaw, Poland on March 14, 1980,
supra, increasing importance has been placed on the pas-
senger’s need to know that in the case of tragedy during
international air travel his recovery will be severely lim-
ited. “Adequate notice,” ordinarily thought of as a
domestic legal concept, has been judicially written into
the Convention, in order to give “substance” to the pro-
vision regarding passenger tickets.
Ironically, a dissenting view in List may have been a
premonition of the developments to come. Noting that
“t]he majority do not approve of the terms of the treaty
and, therefore, by judicial fiat they rewrite it,” Li».
Alitalia-Linee Aeree Italiane, S.p.A., 370 F.2d 508, u15
(2d Cir. 1966) (Moore, J., dissenting), aff'd by equaily
divided court, 390 U.S. 455 (1968), the dissent termed
the court’s action in what was a turning point in the law
“judicial treatymaking.” /d. Further, Judge Moore
noted that “|wlere actual notice to be the requirement,
every airline would have to have its agents explain to
every passenger the legal effect of the treaty and, in all!
probability, insist that each passenger be represented by
counsel who would certify that he had explained the im-
port of the Convention to Ins client who, in turn, both
i nim
A-31
understood and agreed to the limitation.” Jd. While it
may be overstated, the hypothetical does drive home the
point that preoccupation with the type size has less to do
with “adequate notice” than with rejection of the lim-
itation.
Although Article 3(1)(e) specifies that a passenger
ticket shall contain “{a} statement that the transporta-
tion is subjeci lo the rules relating to liability established
by this convention,” Article 3(2) says nothing regarding
the “adequacy” of notice or any other particulars of the
required statement. A literal reading of the provision
would seem to indicate that the Convention is intended
to apply regardless of whether or not the physical ticket
is retained once it has been delivered into the possession
of the passenger; certainly, there is no requirement that
it be read by the passenger. Also, defects in the physical
ticket are not to interfere with the enforceability of the
liability rules. Indeed, inadequate notice through the
Statement could be considered an “irregularity” or defect
in the pasenger ticket which “shall not affect the exist-
ence or the validity of the contract of transportation,
which shall nonetheless be subject to the rules of this
convention.”
Nevertheless, in Mertens v. Flying Tiger Line, Inc.
the Second Circuit found that physical delivery of a ticket
once the passenger has boarded the airplane is inade-
quate and constitutes “nondelivery” under Article 3(2).
The court scated: “We read Article 3(2) to require that
the ticket be delivered to the passenger in such a manner
as to afford him a reasonable opportunity to take meas-
ures to protect himself against the limitation of liability.
... The delivery requirement of Article 3(2) would make
little sense if it could be satisfied by delivering the ticket
to the passenger when the aircraft was several] thousand
feet in the air.” 341 F.2d at 856-57. However, the situ-
ation presented to the Mertens court involved physica!
delivery of the passenger ticket. While it is not surpris-
ing that an American court would find it necessary that
A-32
notice, once required, be given “in such a manner as to
afford [the passenger] a reasonable opportunity to take
self-protective measures,” a notice requirement is no-
where within the treaty nor is the Article 3(1) (e) state-
ment linked with the limitation.
The definition of “adequate notice” found in Mertens
was dependent upon the timing of the physical delivery
of the ticket. The court found that the ticket containing
notice must be delivered in circumstances allowing the
passenger to obtain additional protection, if desired.
Given that the Mertens court had decided that the" ‘-
tation was such an alarming prospect for any passenger
to face, it is not surprising that the standard for permit-
ting the limitation to stand and for protecting the pas-
senger against the limitation became strict notice of the
limitation.
In Warren v. Flying Tiger Line, Inc., 352 F.2d 494
(9th Cir. 1965), the court followed the reasoning in Mer-
tens and held that the very inclusion of a requirement
to provide a statement of the applicability of the Conven-
tion’s limitation meant that “(t]he purpose of such a
statement is to notify passengers of the applicability of
the Convention, thus affording them an opportunity to
take steps to protect against the limitation of liability.”
359 F.2d at 497. The Ninth Circuit expanded the Mer-
tens holding, stating that there is an “implied requi”>-
ment of Article 3(2), that delivery of the passen,
ticket be made sufficiently in advance of the flight so
that the passenger may, if he desires, obtain additional
insurance protection.” 352 F.2d at 498.
Occurring before the Montreal Agreement became ef-
fective, and indeed, before the United States threatened
denunciation of the Warsaw Convention, these cases did
not rely on the nature or size of the print found on the
passenger ticket Nonetheless, the courts managed to
sidestep the limitation and provide what is already proper
under domestic law: full recovery to injured plaintiffs.
A-33
Then, almost immediately following these cases, again
before the Montreal Agreement, focus began to be placed
on the “adequacy of notice” as related to the print of the
ticket. A landmark case, Lisi v. Alitalia-Linee Acree
Italiane, S.p.A., 253 F. Supp. 237 (S.D.N.Y.), aff'd, 370
F.2d 508 (2d Cir. 1966), aff'd by equally divided court
390 U.S. 455 (1968), held that “compliance with the
Convention requires not mere physical delivery of a ticket
and check before departure but delivery of a ticket and
check which notify the passenger that the provisions of
the Convention which exclude or limit liability are appli-
cable.” 253 F. Supp. at 239 (footnote omitted). Having
phrased the question with respect to Article 3(2) as one
of “adequate notice,” the lower court in Lisi went on to
find that the notice of the applicability of the liability
limitations was in fact inadequate because it was printed
in microscopic type,” “camouflaged in Lilliputian print
in a thicket of ‘Conditions of Contract.’” 253 F. Supp
at 243. Further, the court found that the required atate-
ment was “ineffectively positioned, diminutively sized
and unemphasized by bold face type, contrasting color,
or anything else. The simple truth is that they are 20
artfully camouflaged that their presence is concealed.”
Id. In effect, then, the court found that even with ad-
vance physical delivery, without a properly legible state-
ment of the limitation, there could be no delivery of the
ticket. In this way, the court rewrote that provision in
the Convention which states that failure to include the
statement of limitation on liability does not affect the
applicability of the Conventien’s rules. While the Lisi
court may well have construed the diminutive statement
as equivalent to no statement at all, it seems at least
somewhat extreme to have equated this fact to non-deliver !
of the entire contract of carriage. Article 3(2) ap st
directed to the entire ticket, which is evidence thet .
contract has been formed, and appears much less pm
cerned with notice of limitation on liability than Amer-
can courts iase imputed to the drafters of the treaty
A-34
On appeal, the Second Circuit noted:
The Convention’s arbitrary limitations on liability—
which have been severely and repeatedly criticized—
are advantageous to the carrier. But the quid pro
quo for this one-sided advantage is delivery to the
passenger of a ticket and baggage check which give
him notice that on the air trip he is about to take,
the amount of recovery to him or his family in the
event of a crash, is limited very substantially. Thus
the passenger is given the opportunity to purchas*
additional flight insurance or to take such other ste,
for his self-protection as he sees fit.
370 F.2d at 512-13 (footnote omitted). Again, the court
was concerned with giving the Convention meaning; this
meant giving the passenger “notice” of the position he
was placing himself in by traveling internationally by
air. Moreover, it has generally been agreed that the quid
pro quo for the limitation is, not notice, but liability with-
out fault. Even at the Hague Conference, liability as
determined under the “wilful misconduct” provision was
linked to the attempts to raise the limitation. Lowenfeld
& Mendelsohn at 505. There is no evidence that the
treaty drafters and signatories intended “adequate no-
tice” to affect the operation of the treaty limitation.
There is in fact evidence to the contrary. In Ludec’e
v. Canadian Pacific Airlines, Ltd., 98 D.L.R.3d 52 (C
1979), rev’g 53 D.L.R.3d 636 (Que. C.A. 1974), aff’g in
part and rev’g in part, 12 Av. Cas. (CCH) 17,191 (Que.
Super. Ct. 1971), the reasoning which was developed in
Mertens, Warren and Lisi was considered and rejected.
In Ludecke, the Supreme Court of Canada found:
{The words of art. 3(2) are plain and can admit of
no misunderstanding. The absence, irregularity or
loss of a passenger ticket will not affect the existence
or the validity of the contract of carriage. The ben-
efit of the limitation will be lost only where no ticket
is delivered. The American cases referred to above
A-35
which hold that delivery of a ticket with an irregu-
larity, that is, a statement as required by art. 1(e)
which is illegible, amounts to no delivery of a ticket,
igncre this plain language and fail to give effect to
a precise statement of the law. I am unable, how-
ever harsh and unreasonable I may consider the lim-
itation, to adopt the American test.
98 D.L.R.3d at 67.
Given the history of discontent with the limitation, it
seems that the decisions rendered in these cases were
directed toward correcting what is admittedly an_ in-
equitable burden as presently borne between carriers and
passengers. Instead of giving weight to the history of
the Warsaw/Montreal system, the courts have managed
to interpret an additional waiver provision into the
treaty.
Following the acceptance of the Montreal Agreement
and the United States withdrawal of its Notice of De-
nunciation, the courts have continued to view with dis-
approval the limitation on air carrier liability. Judicial
circumvention of the treaty limitation has taken a slightly
different direction upon United States acceptance of the
Montreal Agreement. Instead of focusing upon the tim-
ing of physical delivery, as in Warren and Mertens, the
Lisi concern with the statement, which is never referred
to as “notice’’ in the Convention itself, and the size of
the print, increasingly became the focal point for attack.
2. 10-point type size requirement
As early as 1963, before the Montreal Agreement, the
Civil Aeronautics Board promulgated regulations for air
carriers which required the statement of applicability of
the limitation to be printed in at least 10-point modern
type size on paper of contrasting color. See 14 C.F.R.
§ 221.175(a). In Deutsche Lufthansa Aktiengesellschaft
v. C.A.B., 479 F.2d 912 (DC. Cir. 1973), this Cir-
cuit Court of Appeals rejected the petitioning air car-
A-36
rier’s argument that promulgation of the C.A.B. regula-
tion aaa with the Warsaw Convention and exceeded
the agency’s authority. The Circuit Court first found
that the terms of Article 3 do not preclude the addition
of more specific requirements regarding the statement.
Further, the Court found that “(t]he recent trend of
appellate court decisions has been to accord substance to
the protections that Article 3 of the Convention intended
to provide airline passengers.” 479 F.2d at 917. The
Court continued to find that “[t]he passenger is to receive
full and effective notice of any limitations of liability
that alternative protection may be obtained.” I/d. 4
Deutsche Lufthansa case first determined that the C.A.B.
regulations are valid and do not contravene the purposes
of the treaty; in making this finding the Circuit also
accepted the Lisi holding that “unless adequate notice 18
accorded its passengers, the carrier will later be pre-
cluded from using the Convention to limit liability.” Jd.
at 918. In dicta surrounding the challenge to the domes-
tic regulation, this Circuit noted that compliance with
the regulation will not only provide passengers with ade-
quate notice of the limitations on liability imposed on
them but will later enable the carrier to invoke the pro-
tection of Article 3(1) (e) ; however this Circuit did not
and has not yet addressed the question of what consti-
tutes “adequate notice.”
Having gone beyond the question of whether notice
required by the treaty, the question of just what con-
stitutes “adequate notice” was addressed by the Second
Circuit in In re Air Crash Disaster of Warsaw, Poland
on March 14, 1980, 705 F.2d 85 (2d Cir. 1983). Essen-
tially, the Court accepted the premise that the statement
must provide notice of the limitation in order for the
limitation to apply. From this premise, the Court pro-
gressed to a determination of “adequate notice.” The
Second Circuit decided that the “bright line” for “ade-
quacy of notice”.should be drawn at the 10-point type
requirement found in both the C.A.B. regulation and the
A-37
Montreal Agreement. Thus, the 10-point type require-
ment has been grafted onto the treaty as the next phase
in the attempt to circumvent the treaty provision. Jn re
Air Crash Disaster at Warsaw, Poland, supra, went so far
as to construe the “special contract” that was the Montreal
Agreement as part and parcel of the treaty, and indeed,
to piace that new, “modified” provision just where the
courts wanted it to be.
Construing the Article in this way is intended to give
it a meaning parallel to that found in American law, but
does not accord the treaty provision the meaning evident
from the negotiation and debate which led to its prom-
ulgation. Nothing in the Montreal Agreement requires
that an air carrier provide the statement of liability limi-
tation in 10-point type or lose the benefit of that limita-
tion. Nothing in the debate or dissatisfaction with the
limitation which led to the Montreal Agreement confirms
the contention that “adequate notice” was an issue. At
the core of the debate is dissatisfaction with the very
existence of the limitation; the erosion of the circum-
stances in which carriers may avail themselves of that
limitation is the result of judicial frustration at the
fact that courts are prevented from fully compensating
plaintiffs, especially victims of air tragedies such as pre-
sented in this case. This disturbing feature of the treaty
has not been eradicated through political process.
While American courts may be justifiably frustrated
with the anachronism which the treaty limitation has be-
come, it is not within the province of the judiciary to
alter the quid pro quo agreed to by the political branches.
It has been generally understood that in exchange for
virtual strict liability against air carriers, international
passengers are limited in their recovery. The “special
contract” known as the Montreal Agreement supple-
mented the quid pro quo by raising the amount of the
limitation and waiving the carriers’ defenses under Ar-
ticle 20 leaving only the presumption of liability. It also
SS ———— —
A-38
supplemented the Article 3 requirements that a state-
ment be included in the passenger ticket by providing
specifics to be provided by carriers stopping in the United
States; it did not alter the quid pro quo by linking Ar-
ticles 22 and 20 with Article 3.
In any case, the political branches are vested with the
power and authority to make express their intent regard-
ing the enforceability of the treaty limitations in cases
where the C.A.B. regulation and Montreal Agreement
directive for 10-point type has“been violated. However,
the United States must be explicit if it is its intent to
abrogate the obligation to enforce the treaty limitation
in cases such as these Plaintiffs present. The Court
notes that were the violation of the regulation for 10-
point type and the carrier agreement indeed crucial, a
more appropriate sanction would be to prohibit the re-
calcitrant carriers from engaging in air transportation
to or from the United States. While the Government does
not have the unilateral power or authority to be rid of
the treaty limitation altogether (even the earlier threat
of denunciation by the largest participant in interna-
tional aviation could not accomplish this) the Govern-
ment could suspend the operating permits of those car-
riers who do not abide by our domestic laws and regu-
lations. 49 U.S.C. § 1372. The 10-point type size regula-
tion is such a domestic requirement. While the carrie
agreed to it in the Montreal Agreement as well, the for-
eign air carriers are not the contracting parties to the
treaty. Therefore, Plaintiffs’ argument that this carrier
was on notice that it would be stripped of limited liability
for failing to provide “adequate notice” must fail. While
it is indeed correct that the Montreal Agreement must be
read in connection with the Warsaw Convention, the re-
sulting Warsaw Montreal system does not include de-
limiting liability for failure to provide the statement in
10-point type size. In short, the Montreal Agreement may
not be read wholesale into the Warsaw Convention.
A-39
Although Plaintiffs derive their argument linking the
treaty sanction to the statement from case precedent, the
basic flaw in their argument is the assumption that the
Montreal Agreement can operate as an amendment to the
Warsaw Convention; it cannot. Under the Convention’s
provisions, the carrier and the passenger may agree to a
higher limit of liability. While the limit may be raised,
nothing in the “special contract” provision allows it to be
completely removed. There is nothing in the “special con-
tract” provision which allows the carrier to waive its de-
fenses under Article 20. However, an express, written
agreement to waive those defenses, which the Montreal
Agreement contains, should be honored by the courts.
Waiver by express agreement is not claimed by these
Plaintiffs. Defendant Korean Air Lines, having agreed
to the Montreal Agreement, has come forward to make
an express denial of waiver in these circumstances. Were
the Court faced with a clear, political decision to avoid
the treaty limitation where there has not been ‘‘adequate
notice,” however defined, or were it faced with an ex-
press waiver, as with the Article 20 defenses, then a
different decision would be possible.
Putting aside for the moment the question of whether
the Montreal Agreement may amend the treaty, the
principal concern in adopting the Agreement was the
United States’ threat to withdraw from the Convention;
notice of the limitation’s operation was not an issue.
Where the political branches have been stymied, “judicial
treatymaking”’ to include notice has proved irresistible
to some courts. In the view of this Court, treaty revision
is not the right or responsibility of the judicial branch.
Moreover, the Executive Branch has recognized the con-
tinued vitality of the Warsaw Convention. In its amicus
curiae brief in the Franklin Mint case, the United
States cautioned against rendering the treaty limitation
entirely unenforceable. While not addressing the exact
question which faces this Court, the Government brief
noted that “The United States remains committed to the
A-40
Convention as the basic instrument governing questions of
liability in the international aviation industry.” Amicus
Curiae Brief of the United States at 2. Trans World
Airlines, Inc. v. Franklin Mint Corp., 466 US. 243
(1984). As the Supreme Court noted in its decision in
the case, “when the parties to a treaty continue to assert
its vitality a private person who finds the continued ex-
istence of the treaty inconvenient may not invoke the doc-
trine on their behalf.” Jd. at 253. Since the branches of
Government vested by the Constitution with the power to
make and break treaty obligations continue to assert th
utility of the Convention, and to assert the enforceability
of the treaty limitation, these private citizens may not,
indeed the Court may not, define the treaty limitation out
of existence, even in narrow circumstances. That task,
difficult though it has proven to be, has been assigned to
the legislative and executive branches of our Government.
3. Immediate payment of $75,000
In addition to seeking unlimited liability against Ko
rean Air Lines, Plaintiffs have requested an immediate
payment of $75,000 as partial damages. Plaintiffs mis-
conceive the nature of the limitation. The $75,000 limi-
tation on air carrier liability is a maximum, not a mini-
mum, on the amount of damages which a plaintiff may
receive, once he has proven his damages. While the
Montreal Agreement subjects air carriers to virtual stric.
liability, air carriers are not automatically liable for an
amount of $75,000. The limitation does not operate as
would insurance; Plaintiffs are still required to prove
the amount of their damages and are entitled to receive
only the amount which they can prove.
Moreover, the nature and amount of unliquidated dam-
ages cannot be proved in a motion for summary judg-
ment. Since the amount of damages must be established
on an individual basis, there are still material issues of
A-41
fact which remain to be tried. Defendant cannot be pre-
cluded from conducting discovery with which to defend
against Plaintiffs’ claims. There being material issues
of fact with respect to the amount of individual damages,
it would be entirely inappropriate to award the maxi-
mum damages. The request for immediate payment of
$75,000 must be denied.
CONCLUSION
“Judicial predilection for their own views as to limi-
tation of liability should not prevail over the limitations
fixed by the legislative and executive branches of Gov-
ernment even though this result is obtained by ostensibly
adding to the treaty a requirement of actual understand-
ing notice.” Lisi v. Alitalia-Linee Aeree Italiane, S.p.A.,
370 F.2d at 515 (Moore, J., dissenting). The Montreal
Agreement is not a negotiated amendment to the Warsaw
Convention. Even if the Agreement could rise to the level
of an amendment to the treaty, which it cannot, the prin-
ciple of law requiring clear expression of the intent of
the political branches would prevent a finding that the
treaty is to be abrogated. Plaintiffs’ construction is not
supported by the negotiating history of the Warsaw/
Montreal system.
It may be arguable that American courts have been
justified in arriving at the conclusion that the Montreal
Agreement affects the application of the treaty sanction
since the Agreement applies only to transportation in-
cluding the United States; however, such an interpreta-
tion rejects the fact of the clear intransigence of a ma-
jority of High Contracting Parties to the Convention with
regard to delimiting carrier liability. There is every in-
dication that the majority of the more than 120 nations
adhering to the Convention intend to continue the special
protection afforded international carriers, even at the ex-
pense of international passengers. In light of this in-
transigence, it is especially inappropriate for the Court to
A-42
interpret the treaty provisions in such a way as to re-
lieve the United States of its treaty obligations. in ad-
dition, the Montreal Agreement contains no expression
of the carriers’ intent to waive the limitation. In fact,
it makes no mention at all of the sanction tc be imposed
for a carrier’s failure to include proper notice to pas-
sengers. Making tolerable an intolerable treaty provision
is simply not the province of the courts. Therefore, for
the foregoing reasons, the motion for partial summary
judgment against Korean Air Lines shall be DENIED.
An appropriate Order accompanies this Memorandum
/a/ Aubrey E. Robinson, Jr.
AUBREY E. ROBINSON, JR.
Chief Judge
DATE: July 25, 1985
A-43
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
MDL No. 565
Misc. Docket No. 83-0345
IN RE: KOREAN AIR LINES DISASTER
OF SEPTEMBER 1, 1983
Civil Action Nos. 83-2793,
83-2941, 83-3154, 83-3177,
83-3204, 83-3441, 83-3445,
83-3448, 83-3449, 83-3450,
83-3451, 83-3452, 83-3453,
83-3454, 83-3455, 83-3456,
83-3457, 83-3458, 83-3459,
83-3460, 83-3461, 83-3462,
83-3463, 83-3464, 83-3465,
83-3466, 83-3467, 83-3468,
83-3469, 83-3470, 83-3473,
83-3474, 83-3587, 83-3588,
83-3792, 83-3793, 83-3889,
83-3891, 83-3898, 83-3901,
83-3902, 83-3903; 84-0029,
84-0030, 84-0402
ORDER
In accordance with the Memorandum entered this date,
it is by the Court this 25th day of July, 1985,
ORDERED, that Plaintiffs’ Motion for Partial Sum-
mary Judgment Against Defendant Korean Air Lines
Co., Ltd. is DENIED; and it is
FURTHER ORDERED, that Korean Air Lines Co.
Ltd., is entitled to avail itself of the limitation on dam-
A-44
ages provided by the Warsaw Convention and raised to
$75,000 by the Montreal Agreement; and it is
FURTHER ORDERED, that Plaintiffs may not re-
ceive immediate payment of $75,000, there being material
issues of fact with respect to the amount of unliquidated
damages.
/a/ Aubrey E. Robinson, Jr.
AUBREY E. ROBINSON, JR.
Chief Judge
A-45
D.H. GINSBURG, Circuit Judge, concurring: I join in
the court’s opinion and add some reflections on the
“choice of law” problem in the context of a federal claim
transferred under 28 U.S.C. § 1407 from courts in vari-
ous circuits to a court in another circuit. I write sepa-
rately to emphasize the practical problems inherent in
any resolution of this problem under the statute as writ-
ten, and to surface preliminarily some ameliorative steps
open only to Congress.
I. CONGRESSIONAL INTENT IN SECTION 1407 (a)
The problem is simply enough stated. The Second Cir-
cuit takes one view of the relevant federal law, this court
takes another, and still other circuits have not addressed
the question. Cases filed in district courts in the Second
Circuit, in this circuit, and in other circuits were con-
solidated in the district court here for pretrial proceed-
ings under § 1407. On a motion for summary judgment
as to all the cases, which view of the applicable federal
law is the district court to apply to the cases filed out-
side thia circuit? The New York plaintiffs in this case
contend that, under Van Dusen v. Barrack,' the trans-
feree district court must apply the Second Circuit’s inter-
pretation to the cases filed originally in that venue. The
court rejects that argument because the Erie policies
underlying Van Dusen do not extend beyond the sta
law context of that case.’ I agree.
' 376 U.S. 612 (1964).
2 Opinion of the Court, supra, at 7. Plaintiffs cite several
authorities for the proposition that Van Dusen requires a
transferee court under section 1407 to apply the case law of
the transferor circuit to a transferred case. Plaintiffs’ Brief
at 7. See Berry Petroleum v. Adams & Peck, 518 F.2d 402,
408 n.7 (2d Cir. 1975) (“Since this case was brought in a dis-
trict court in the Fifth Circuit, the substantive law of that
circuit is the law we must consider here.) ; Jn re National
Student Marketing Litigation, 517 F.Supp. 1345, 1346 n.3
(D.D.C. 1981); In re Haven Industries, 462 F.2d 172, 179
A-46
Quite apart from whether Van Dusen is controlling,
there are some circumstances in which a federal court
is bound to apply the decisions of another circuit, but
(S.D.N.Y. 1978); Stirling v. Chemical Bank, 382 F.Supp.
1146, 1150 n.5 (S.D.N.Y. 1974), aff'd 516 F.2d 1396 (2d Cir.
1975); In re Four Seasons Securities Laws Litigation, 370
F.Supp. 219, 228 (W.D.Okl. 1974) ; Jn re Plumbing Firtures
Litigation, 342 F.Supp. 756, 758 (Jud. Pan.Mult.Lit. 1972) ;
Philadelphia Housing Authority v. American Radiator &
Standard Sanitary Corp., 309 F.Supp. 1053, 1055 (E.D.Pa.
1969).
The cursory “‘analysis” employed in the cases amounts bo
the following. In Philadelphia Housing Authority, the parties
did not dispute the proposition, and the court cited Van Dusen
as authority. The issue was disputed in Plumbing Fiztures,
but the court relied upon Van Dusen and Philadelphia Hous-
ing Authority without analysis. National Student Marketing,
Four Seasons, and Stirling v. Chemical Bank merely boot-
strapped on Plumbing Fiztures, while Haven Industries cited
Plumbing Fixtures as well as the Second Circuit’s decision in
Berry Petroleum (the only court of appeals decision favorable
to the New York plaintiffs) which itself cited both Plumbing
Fixtures and Van Dusen without discussion. That these cases
fail to acknowledge the differences between the application of
state and federal law was also pointed out /n re Pittsburgh
& L.E.R. Co. Securities & Antitrust Litigation, 543 F.2d 1058,
1065 n.19 (3rd Cir. 1976), which particularly undermines the
value of Philadelphia Housing Authority as precedent on this
point. Berry Petroleum is also questionable because it fails
to address two prior decisions of the Second Circuit that are
in direct conflict with it. See H.L. Green Co. v. MacMahon,
312 F.2d 650 (1962), cert. denied, 372 U.S. 928 (1963);
Ackert v. Bruan, 299 F.2d 65, 69-70 (1962) ; see also Clayton
v. Warlick, 232 F.2d 699, 706 (4th Cir. 1956); Scheinbart v.
Certain-Teed Products Corp., 367 F.Supp. 707 (S.D.N.Y.
1973).
Two other cited cases, Jn re Air Crash Disaster at Boston,
Massachusetts ov July $1, 1978, 399 F.Supp. 1106, 1108 (D.
Mass. 1975); In re Air Crash Disaster Near Hanover, New
Hampshire, 314 F.Supp. 62, 63 (Jud.Pan.Mult.Lit. 1970), are
inapposite here; like Van Dusen, they involved the issue of
which state law to apply. See also In re Nucorp Energy
Securities Litigation, 772 F.2d 1486, 1491-92 (9th Cir. 1985) ;
A-47
they are the rare instances where a preclusion doctrine
80 requires. The doctrines of res judicata, collateral
estoppel, and law of the case come to mind. The New
York plaintiffs do not, and cannot, however, rely upon
any of these doctrines to support application of Polish
Airlines to their transferred cases.
Consequently, the New York plaintiffs’ suggestion that
transfer under section 1407(a) presents the type of ex-
ceptional circumstance that justifies imposing upon a
federal court the duty to accept as binding another cir-
cuit’s interpretation of federal law would constitute
novel departure from the norm of independent judgment.
If Congress had intended such a departure, therefore,
we should expect to find language in section 1407(a)
that mandates, or at least suggests, it. Obviously, Con-
gress could have directed transferee courts to apply the
case law of the transferor court. Less directly, Congress
could have suggested this practice by transforming the
transferee judge into a temporary judge of each trans-
feror court for the purposes of deciding the transferred
cases."
In re Eastern Airlines, Inc., Engine Failure, Miami Interna-
tional Airport on May 5, 1988, 629 F.Supp. 307, 315-16
(S.D.Fla. 1986). Judge Weigel cited the federal and state
law cases together as supporting the proposition that “the
transferee court must apply the substantive law of the tran.
feror forum.” Weigel, The Judicial Panel on Multidistrict
Litigation, Transferor Courts and Transferee Courts, 78
F.R.D. 575, 584 (1978). See also Manual for Complex Litiya-
tion, Second § 831.122 at 254 n.25 (1985) (“The transferee
judge is bound . . . by the law that would apply in the
transferor court, even if the case is later transferred to the
transferee court under 28 U.S.C. § 1404”).
* Congress took this type of approach in Section 1407(b)
in apparent recognition that transferee judges, } cause they
often preside over cases from far-flung transferor courts,
would of necessity have to perform in unfamiliar roles. In
section 1407(b), Congress authorized transferee judges to
A-48
We find no such language in section 1407(a), how-
ever. Instead, the transfer scheme contemplates that a
transferee court will adjudicate transferred cases no dif-
ferently than cases originally filed before it. This is ap-
parent throughout the scheme, from the point of transfer
to the final disposition of the case. Rather than confine
the transferee judge merely to presiding over the pre-
trial phase of cases that may be resolved finally in the
transferor courts, section 1407(a) transfers jurisdiction
over whole cases to the transferee court; upon transfer,
the transferor courts retain no jurisdiction whatsoever."
order pretrial depositions outside of their normal jurisdiction.
As we determined In re Corrugated Container Antitrust Liti-
gation, 662 F.2d 875, 880-881 (D.C. Cir. 1981), however, it did
so by making the transferee judge, for that purpose, a “‘tem-
porary judge” of the district court for the district in which
the deposition is taken. Congress seemingly could have drafted
section 1407(a) also to transform the transferee judge into
a judge of each transferor court for purposes of deciding the
cases transferred from that court. (Such an approach would
still preserve the efficiencies of requiring only one federal
judge to become versed in the facts of a controversy.) If Con-
cress also provided for transferor circuit review of such
cases, then we might conclude that Congress’ intent under such
a version of section 1407(a) was for the case law of the
transferor court to govern the transferred case.
‘Section 1407(a) was enacted in 1968, and its legislative
history indicates that Van Dusen, decided four years earlier,
would apply in the pretrial context. See Opinion for the Court,
supra, at n.5. There is no indication, however, that Congress
believed that Van Dusen extended beyond its own context of
federal courts applying state law.
5 See Glasstech, Inc. v. AB Kyro OY, 769 F.2d 1574 (Fed.
Cir. 1985) ; Astarte Shipping v. Allied Steel & Export Serv-
ice, 767 F.2d 86, 87 (5th Cir. 1985) ; In re Upjohn Co. Antt-
biotic Cleocin Products Liability Litigation, 664 F.2d 114,
118 (6th Cir. 1981) ; General Elec. Co. v. Byrne, 611 F.2d 670,
673 (7th Cir. 1979) ; In re FMC Corp. Patent Litigation, 422
F.Supp. 1163, 1165 (Jud.Pa.Mult.Lit. 1976). Cf. Starnes v.
McGuire, 512 F.2d 918, 924 (D.C. Cir. 1974) (en banc)
(transfer under section 1404(a)).
A-49
Indeed, Congress contemplated that transferred cases
might never return to the transferor courts, but instead
might be settled or resolved by summary judgment in
the transferee court,’ or else transferred under section
1404(a) to that same transferee court for joint trial.’
In practice, the vast majority of transferred cases are so
resolved, and do not return to the transferor courts.*
Finally, during the period of the 1407(a) transfer, any
appeals—interlocutory or after summary judgment—go
to the court of appeals for the transferee court, not to
the courts of appeals for the transferor circuits.* I ¢:
* See Weigel, supra note 2, 78 F.R.D. at 582-83:
v. international Rectifier Inc., 538 F.2d 180 4 ae fn
denied, 429 U.S. 1040 (1976) ; Humphreys v. Tann, 487 F.2d
666, 668 (6th Cir. 1973), cert. denied, 416 U.S. 956 (1974) ;
In re Western Liquid Asphalt Cases, 487 F.2d 191 (9th Cir.
1973), cert. denied sub nom. Standard Oil Co. v. Alaska. 415
U.S. 919 (1974); Reidinger v. Trans World Airlines. Inc
463 F.2d 1017, 1018 n.2 (6th Cir. 1972). oe
™ See, e.g., In re Air Crash Disaster at John F
e.9., . Kenned
International Airport on June 24, 1975, 479 F.Supp. 1118,
1121-22 (E.D.N.Y. 1978), and cases cited; In re Yarn Proc.
essing Patent Validity Litigation, 472 F.Supp. 174 (S.D.Fla.
pean dy In re Antibiotic Actions, 333 F.Supp. 299 (S.D.N.Y.
®* See Weigel, supra note 2, 78 F.R.D. at 583 i
that less than 6 percent of transferred cases vera rs 7
transferor courts. More recent statistics indicate that 1.
number may now approximate 25 percent. See 1986 Ann.Rep.
Director Admin.Off. U.S. Courts 128; Steinman, Law of the
a pak aay herd in Consolidated and Transferred
; in Multidistrict Litigati oy Fj
wep caer. Litigation, 135 U.Pa.L.Rev. 595,
® See Corruqated Container, 662 F.2d at 88: Glasste
v. AB Kyro OY, 769 F.2d at 1576-78; Astarte rere
Allied Steel & Export Service, 767 F.2d at 87. In a number
of other decisions, see, e.g., Gulf Oil Co. v. Copp Paving Co
419 U.S. 186 (1974), as well as the cases cited supra note 6.
the authority of the transferee circuit to review a transferee
district court’s order was assumed sub silentio. |
A.S()
see no indication, from the outline of this scheme, that
Congress intended for transferee courts to apply to each
transferred case the case law of the transferor court,
nor any reason why it would so intend.
Before concluding, based on the lack of any evidence
to the contrary, that Congress did not intend transferee
federal courts to depart from the norm of independent
judgment on matters of federal law, one final inquiry 1s
necessary. For we should still hesitate to adhere to that
norm if doing so would, for some other reason, frustrate
the purpose of section 1407(a) “to promote the just and
efficient conduct” of multidistrict actions, and part by
“eliminat{ing] the potential for conflicting contempo-
raneous pretrial rulings by coordinate district and appel-
iate courts.” ”
In order to discern whether the norm of independent
judgment would have this result, we may assess its opera-
tion in the instant case. To recapitulate the procedural
facts a bit, cases from district courts in the First, Sec-
ond. and Sixth Circuits were transferred to the District
Court for the District of Columbia for pretrial proceed-
ings to be conducted jointly with cases filed here. KAL
then filed a motion for summary judgment on the issue
of damages, arguing that the Warsaw Convention im-
posed a maximum no-fault liability of $75,000 per pas-
senger. When the motion was filed, only the Second Cir-
cuit had spoken on the pertinent question, holding in
Polish Airlines" that an airline that does not give pas-
sengers tickets with 10-point type loses the protection
© In re Plumbing Firtures Cases, 298 F.Supp. 484, 491-92
(Jud.Pan.Mult.Lit. 1968).
‘In re Air Crash Disaster at Warsaw Poland, 705 F.2d
85 (2d Cir.), cert. denied sub nom. Polskie Linie Lotnicze v.
Robles, 464 U.S. 845, reh. denied, 464 US. 978 (1983), eub-
sequent proceedings, 748 F.2d 94 (2d Cir. 1984), on appeal
after remand, Harris v. Polskie Linte Lotnicze, No. 86-2323
slip op. (9th Cir. June 22, 1987).
4-5]
of the damage ceiling. The other circuits, in particular
the District of Columbia, First, and Sixth Circuits, had
not yet addressed the issue."* Analyzing the Convention
for himself, Chief Judge Robinson concluded that Polish
Airlines was wrongly decided: noncompliance with the
“10-point type” rule does not remove the ceiling.
Adhering to the norm of independent judgment, Chief
Judge Robinson also determined that his ruling should
apply to all of the cases before him, not only to those
originally filed here. At least in the first instance, such
uniform application of his ruling furthers considerat’
the efficiency and consistency goals of section 1407(a).
All the cases will be governed by one rule as to damages,
and they will all proceed in a like direction, rather than
being bifurcated into two groups of cases with diverging
litigation paths.
The only problem that does seem potentially to arise
from this approach involves the eventual appellate re-
view of Chief Judge Robinson’s ruling on the Conven-
tion. Assuming for the purposes of illustration that in-
terlocutory appeal to this court had not been granted
and, furthermore, that the cases would not subsequently
terminate for one or another reason in this circuit, then
the transferred cases would return to the respective
trausferor courts for trial. The several courts of appeals,
either on interlocutory appeal or on appeal of the fina!
judgment, would in all probability review the course o
pretrial proceedings, including Chief Judge Robinson’s
potentially outcome-determinative ruling on the Conven-
12? Subsequent to the district court’s grant of summary judg-
ment in this case, the Fifth Circuit adopted the Polish Air-
lines rule. See In re Air Crash Near New Orleans, Louisiana,
789 F.2d 1092, 1098, vacated, 795 F.2d 381 (1986), aff'd in
relevant part, 821 F.2d 1147 (1987) (en banc). As the dis-
trict court's opinion in this case was not then published, how-
ever, the Fifth Circuit discussed only the Second Circuit's
decision.
A-52
tion. Reversal would be most likely to occur, of course,
in the Second Circuit, where his ruling would conflict
directly with Polish Airlines.
Since this court would still review the cases filed in
the District of Columbia, and as confirmed by the court
today we do not agree with the Polish Airlines decision,
the results on appeal would lead to two (or depending
upon the views of the First and Sixth Circuits, perhaps
more) different holdings on a determinative issue of dam-
ages. A series of inconsistent appellate judgments is
not a desirable outcome, however, particularly since the
result in some cases might be to require renewed pre-
trial or trial proceedings. This whole course of case de-
velopment, starting with divergent paths of appeal and
ending with either conflicting or duplicative results,
would clearly frustrate the primary goals of section 1407
(a) “to promote the just and efficient conduct” of multi-
district actions.
Having a transferee court apply the norm of independ-
ent judgment in ruling on transferred cases, therefore,
does pose some risk of undermining on appeal the inter-
ests served by section 1407(a). The question 1s therefore
whether this potential risk is great enough to frustrate
Congress’ remedial intent in enacting section 1407(a),
and thereby to persuade us that transferee courts must
abandon the norm of independent judgment in deciding
transferred cases. In this regard, I believe that, although
there is some risk of cases unraveling upon review by
transferor circuits, it is not significant. First, relatively
few cases ever return to the transferor courts." Second,
most transferee court rulings will not be outcoime-deter-
18 In other situations, the disputed issue may involve liability.
1* See supra note 8. Of course, fewer cases would be settled
and more would return to their transferor courts if the other
circuits show themselves ready to reverse transferee courts
pretrial rulings, thus inviting such encore appearances.
A-53
minative, but instead will involve routine matters, such
as discovery orders, that will not provide grounds for a
transferor circuit court to reverse a pretrial ruling by
the transferee district court.
Third, as to those few outcome-determinative rulings
of the transferee district court, there exists the possibil-
ity of interlocutory appeal to the transferee court, pur-
suant to 28 U.S.C. 1292(b), as indeed occurred in this
case. If the transferee circuit reviews such a ruling,
it of course would also exercise independent judgment
and apply its own precedents rather than those of the
transferor circuits. By reviewing the ruling, the trans-
feree circuit probably will have insured that, if the cases
are retransfered to the transferor courts, they will not
unravel on later appeal. That is because, in contrast to
the rulings of the district court under review, the inter-
locutory decisions of a coordinate court of appeals are
likely to be accepted as binding, under the doctrine of
law of the case, in the courts of appeals reviewing the
final decision of the district court."* I therefore believe
* No decision of this court has directly resolved the ques-
tion of how courts should apply the law of the case doctrine
after a case is transferred back to a transferor court. See
Int’) Union, UAW v. Donovan, 756 F.2d 162, 165 n.16 (D.C.
Cir. 1985) ; Laffey v. Northwest Airlines, Inc., 740 F.2d 107°
1082-83 (D.C. Cir. 1984), cert. denied, 469 U.S. 1181 (1985.
McCandless v. Beech Aircraft Co., 697 F.2d 1156 (D.C. Cir.
1983). Our precedents do suggest, however, that the trans-
feror circuit should not disturb the transferee circuit ruling.
In Laffey, we held that the law of the case doctrine precludes—
absent clear error or manifest injustice—our reviewing, on
appeal from a final judgment, a previous ruling of this court
rendered on interlocutory appeal. The next question is whether
the fact of transfer, and the resulting lack of identity of the
two appellate courts, would alter our conclusion that an in-
terlocutory appellate ruling is law of the case for the purpose
of a subsequent appeal. Donovan would seem to reject this
possibility by holding that, in the context of a transfer for
lack of jurisdiction, the transferee court should not reexamine
A-54
that if (1) transferee circuits are receptive to inter-
locutory appeals involving outcome-determinative rulings
by a transferee district court—again, as occurred in this
the ruling of a transferor court of coordinate jurisdiction ab-
sent exceptional circumstances. In fact, this principle has
been stated by other circuits. See Aori Corp. v. Wilco Marsh
Buggies & Draglines, Inc., 761 F.2d 649, 657 (Fed. Cir.),
cert. denied, 106 S.Ct. 230 (1985) ; Central Soya Co., Inc. v.
Geo. A. Hormel & Co., 723 F.2d 1573, 1580 (Fed. Cir. 1983) ;
Hayman Cash Register Co. v. Sarokin, 669 F.2d 162, 169
(8rd Cir. 1982) ; Skil Corp. v. Millers Falls Co., 541 F.2d 554,
558 (6th Cir.), cert. denied, 429 U.S. 1029 (1976). See also
Sentner v. Amtrak, 540 F.Supp. 557, 558-59 n3 (D.N.J.
1982) ; Steinman, supra note 73, 136 U.Pa.L.Rev. at 702-03 &
n.417; Weigel, supra note 5, 78 F.R.D. at 577.
While a transferor court of appeals might disagree with
the transferee circuit’s reading of the law, there is good rea-
son in this context to accept a reasoned opinion as presenting
something less than the clear error or exceptional circum-
stance that warrant departing from the law of the case doc.
trine. Chief Judge Robinson well put the case for trans-
feror courts giving preclusive effect to rulings of a transferee
court: “if transferor courts were free to readjudicate issues
determined by transferee courts, transfers pursuant to 28
U.S.C. § 1407 could become meaningless exercises perpetuat-
ing the very duplication they were designed to eliminate.”
In re Korean Air Lines Disaster of September 1, 1983, MDL
565, Civ. No. 83-0345, Order on Remand at 5 (May 7, 1987).
See also Inre Multi-Piece Rim Products Liability Litigation,
653 F.2d 671, 678 (D.C. Cir. 1981) (“Proper coordination of
complex litigation may be frustrated if other courts do not
follow the lead of the transferee court.”). Multi-Piece Rim
Products did not directly address the situation discussed in the
text. Instead, it involved whether a pre-transfer order of a
transferor district court had preclusive effect, as law of the
ease. on a transferee district court. Cf. Blaski v. Hoffman,
260 F.2d 317, 322 (7th Cir. 1958), aff'd, 363 U.S. 335 (1960)
(the transferee Seventh Circuit refused to abide by the “er-
roneous” jurisdictional ruling of the transferor Fifth Cir-
cuit: the Supreme Court adopted the Seventh Circuit’s view
of the merits, but the law of the case issue was not raised
to the court, although in dictum it suggested that, because
the ruling involved the Seventh Circuit's jurisdiction, it would
case as well as in Polish Airlines"*; and if (2) trans-
feror circuits are receptive, on appeal after retransfer,
to the law of the case as it was decided in the transferee
circuit court, then even a continuing disagreement be-
tween the transferee and transferor circuits on the cer-
tified issue need not cause particular cases in a multi-
district litigation to come unglued.
As a result, any harm to the interests Congress meant
to further in section 1407(a) wi!! be limited to those
outcome-determinative rulings of a transferee district
court that are not the subject of an interlocutory appe
in the transferee circuit, and, assuming that the cases
are transferred back to the transferor courts, result in
reversals by one or more transferor circuit courts.”
Whether this harm, which seems likely to be insignificant,
is nevertheless great enough that transferee district
courts must abandon the norm of independent judgment,
not be bound by the Fifth Circuit’s ruling on that point, 363
US. at 340 & n.9) ; In re Upjohn Co. Antibiotic Cleocin Prod-
ucts Liability Litigation, 664 F.2d 114, at 118-20 (6th Cir.
1981) ; In re Long Distance Telecommunication Litigation, 612
F.Supp. 892, 900-03 (E.D.Mich. 1985).
18 Polish Airlines, 705 F.2d at 86 n.2 (a second interlocu-
tory appeal followed—see 748 F.2d at 94-95). See Gulf Ou
Corp. v. Copp Paving Co., 419 U.S. at 192; In re Western
Liquid Asphalt Cases, 487 F.2d at 192-93; In re Air Disaster
at John F. Kennedy International Airport, 479 F.Supp. @
1124-29, and cases there cited.
17 This harm would be further minimized if transferor cir-
cuit courts required, as a condition of reviewing @ ruling by
the transferee district court, that the appellant at least have
sought interlocutory appellate review of that ruling while in
the transferee circuit. This ru'e is comparable to that under
which an appellate court will decline to reach an issue not
raised before the trial court, see District of Columbia v. Atr
Florida, Inc., 750 F.2d 1077, 1084-85 (D.C. Cir. 1984), and the
institutional interests served are similar. In each instance,
the rule requires the litigant to raise an issue at a particular
stage in the litigation in order to prevent the litigant from, in
A-S6
depends upon the probabie effects of the alternative rule,
under which the transferee district court would apply
what it believes would be the interpretations of the re-
spective transferor courts.” Again, the facts of this case
are illustrative.
Under that alternative, Chief Judge Robinson, having
determined that KAL’s issuance of 8-point type tickets
did not remove the limitation on damages provided under
the Convention, would then have to determine the scope
of his ruling. Certainly it would govern the cases filed
in this district originally; no one disputes that proposi-
tion. Under the New York plaintiffs’ argument, however,
the ruling should not govern their cases, because Polish
Airlines clearly dictates the contrary interpretation of
the Convention.
When applied only to the District of Columbia and
New York cases, adherence to the case law of the trans-
feror circuit would be a fairly easy procedure for the
transferee district court. It is almost a certainty, how-
ever, that the bifurcated ruling it produces would place
the District of Columbia and New York cases on increas-
effect, confronting the court on appeal with an issue that has
not been sorted out by a court of first instance, thereby creat-
ing “‘{e]normous confusion and interminable delay.’” Id.
at 1084, quoting Johnston ». Reily, 160 F.2d 249, 250 (D.C.
Cir. 1947). In the transfer context, this suggestion would de
prive parties who lose before the transferee district court,
and anticipate losing as well before the transferee circuit
court, of the incentive to avoid interlocutory appeal and to
forestall settlement in the hope of having the case retrans-
ferred to the circuit whose more favorable case law renders
appellate success more likely.
18 If transferor circuit law were applicable, the transferee
district court might also remand the case to the respective
transferor districts for resolution of an issue. Depending upon
the issue and its disposition, retransfer (even after inter-
locutory appeal in the transferor circuit) might be in order.
The cost and delay of proceeding in this manner undercuts,
however, Congress’ purpose in enacting section 1407.
4-57
ingly divergent courses. The District of Columbia plain-
tiffs, in conducting discovery, will have to pursue evi-
dence of fault on the part of KAL, whereas the New
York plaintiffs would be able to recover without such a
showing. The entire course of discovery, and thus the
motions that come before Chief Judge Robinson, would
differ entirely between what would have become, in ef-
fect, two separate groups of consolidated cases. These
differences would be further magnified by the vastly dif-
ferent incentives for settlement facing the two groups ‘
plaintiffs. The District of Columbia plaintiffs, having tu
prove fault, will presumably be more amenable to settle-
ment than would be the New York plaintiffs. All in all,
therefore, it is unlikely that the bifurcated ruling would
preserve, to any significant extent, either the efficiency
or the consistency that section 1407(a) was intended to
promote.
Under the New York plaintiffs’ rule, therefore, the
threat that the Second Circuit would reverse Chief J udge
Robinson and thereby unravel the New York cases is
averted, in effect, by preemptively unraveling them in the
transferee court. This seems to be a high price to pay—
a virtual abandonment of the efficiency and consistency
goals of section 1407(a)—to protect against a threat,
i.e. unraveling in the transferor circuit courts, that co:"*
instead be avoided, at no cost to consistency and at
much lower cost in efficiency, through interlocutory ap-
peal to the transferee circuit court and subsequent ap-
plication by the transferor circuit of the law of the case
doctrine.
The price that must be paid in abandoning the norm
of independent judgment, however, looms even larger
when one realizes that the New York plaintiffs have pre-
sented us with the deceptively easy alternative by apply-
ing Polish Airlines to the New York cases, without sug-
gesting to us how the district judge should have ruled
with respect to the cases from districts in the First and
A-58
Sixth Circuits, which have not decided this issue.”* In at-
tempting to rule as would a district court in those cir-
cuits, he could have simply applied his own ruling to
those cases, happy to believe that, if called upon, those
circuits would see things his way. Or, taking to heart
the New York plaintiffs’ contention that, under Van
Dusen, transfer should result in merely “a change of
courtrooms,” *® he could have seriously attempted to
divine how the First and Sixth Circuits might interpret
the Convention if called upon to do so.
This enterprise is far more problematic than Erie’s
familiar requirement that a federal court assume the
perspective of the highest court in each transferor state,
and anticipate how each one of those courts would decide
an issue of state law. As to some Erie issues, the trans-
feror states will have significantly different laws; as to
others, such as those addressed by the sundry and not
entirely “uniform” codes adopted by the several states,
there may be only subtle differences, difficult to discern,
among them. Regardless of the difficulty, however, the
duty of the transferee court under Van Dusen and Erie
is simply to arrive at what it, in good faith, believes to
be an accurate statement of each state’s law, as applied
to the facts before it. When this results in the transferee
court rendering different judgments in cases transferred
1» We see nothing in section 1407(a) that would justify a
transferee court in applying transferor precedent when it is
clear, as is Polish Airlines in the Second Circuit, but not
tryin to discern what other transferor circuits would decide
when their case law is not as clear on the precise point in
question but offers some guidance. Introducing such a dis-
tinction would constitute an act of legislation appropriate for
Congress, not of interpretation of the existing statute by a
court. Hence, either a transferee court must apply its own
interpretation of federal law to all transferred cases, or it
must attempt to apply what it believes to be each transferor
court’s probable interpretation. There is no middle road.
20 376 U.S. at 639.
A-59
from different fora, therefore, it is only because the
states in question have exercised their undoubted “right
to pursue local policies diverging from those of [their]
neighbors.” 7"
When we turn to questions involving federal law, the
transferee judge’s task becomes much more difficult,
because here the court deals with a single federal law
that can ultimately have only one proper interpretation.
For example, in the instant case, a violation of the “10-
point type” rule cannot both impose and not impose
unlimited liability under the Warsaw Convention; eith
the Second Circuit or we have interpreted it erroneously.*-
As a result, any attempt by Chief Judge Robinson to
predict how the First and Sixth Circuits would interpret
the Warsaw Convention on this precise point would neces-
sitate casuistical musings concerning whether another
circuit’s case law might be read to compel, or even per-
haps just to suggest, an interpretation in conflict with
his. Such intellectual practices fall within the domain
of the sophist, not that of the judge.
21 Klazon Co. v. Stentor Elec. Mfg. Co., Inc., 313 U.S. 487,
496 (1941).
72 Albeit not necessarily “clearly erroneous’ for purposes
of the law of the case doctrine. See note 15, supra.
23 See Marcus, Conflicts Among Circuits and Transfe
Within the Federal Judicial System, 93 Yale LJ. 677, 713-14
(1984). For the federal-law transfer situation to be analogous
to what occurs under Van Dusen, in which the federal court
assumes the perspective of the transferor state’s highest court
(i.e. of the supreme interpreter of the state’s law), the ques-
tion in the KAL case would not be (as the New York plain-
tiffs suggest it is)—‘“how would the other federal circuits
interpret the Warsaw Convention?” Rather, the analogous
question would be the same one that a circuit court normally
poses when addressing an issue of federal law—“how would
the U.S. Supreme Court (the supreme interpreter of federu!
law) interpret the Wars
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