Petition for Writ of Certiorari — Sheris v. Sheris Co.

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TABLE OF CONTENTS

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STATEMENT OF JURISDICTION ............---+-- 2

QUESTIONS PRESENTED .................. 002005 2

CONSTITUTIONAL, TREATY AND STATUTORY

PROVISIONS INVOLVED ................--000 3

STATEMENT OF THE CASE ...............---0-- 6

REASONS FOR ALLOWANCE OF THE WRIT........ 10

EEE (Wily 5 Owe Wales a dk 0 4 vitlb-a; av enace m 22

CONTENTS OF APPENDIX

Opinion of the Supreme Court of Virginia Dated

PP See io tea Seek ak ice ek be a eee la

Opinion and Award of the Deputy Commissioner of

the Industrial Commission of Virginia of Septem-

TUE eho Vier Fi EON ae oO ee bee kw ee oe 14a

Opinion and Order of the Full Industrial Commission

of Vieginia Dated Agel 22,1971 onc deen ln. 1S.

Judgment of the Supreme Court of Virginia of April

ITN scaly a Shs ie APRA Sok ow I anda alse 8A 20a

Order of the Industrial Commission of Virginia

OC A UN kis 54a ol didn x xem 4 2la

Statement of Petitioners’ Questions Presented to the

eS 8 ee ee 22a

Cases:

Berry v. Pacific Sportfishing, Inc., 372 F.2d 213 (9th

EE 66 eran eG RMR Ree oe eR ed 13

—

(ii)

Block v. Compagnie National Air France, 386 F.2d

323, 330-31 (Sth Cir. 1967), cert. denied, 392

MN IN 208 6! woah ibis Die wee al swe bow eS 18, 20

First Nat'l] Bank in Greenwich v. National Airlines,

288 F.2d 621 (2nd Cir. 1961), cert. denied, 368

SEM AT oa WANS bic 6 Cle 6 ke pee 13

Gibbons v. Ogden, 9 Wheat 1 (1824) ................. 12

Grey v. American Airlines, 227 F.2d 282 (2nd Cir.

1935), cart. Genet, SSO US. FOO oo. ok wc ek ce 18

Gully v. First Natl Bank, 299 U.S. 109, 116 (1936) ....... 21

Higa v. Transocean Airlines, 230 F.2d 780, 785 (9th

es Saaleeeayeer eA we Ae Raia oan a oh em ee ease od 14

Hines v. Davidowitz, 312 U.S.52,67(1941) ............ 14

Jennings v. Goodyear Aircraft Corp., 227 F. Supp.

PU sk a o's weil ee pba AD eben 13

Lisi v. Alitalia-Linee Aeree Italiane, 370 F.2d 508

(2nd Cir. 1966), aff'd, 390 U.S.455.............. 18,19

Mandell & Wright v. Thomas, 441 S.W.2d 841,

IR BI oaks Sivek yp 6bw 8 doa 84 9h is OOS 13

McCulloch v. Maryland, 4 Wheat 316 (1819) ............ 12

Nash v. Florida Indus. Comm’n, 389 U.S. 235 (1967)... . 12,14

National Mut. Ins. Co. v. Tidewater Transfer Co., 337

Re i oi Ciseke cmtds veces des 21

Noel v. Linea Aeropostal Venezolana, 247 F.2d 677

(2nd Cir. 1957), cert. denied, 355 US.907 ......... 12, 16

Notarian v. Trans World Airlines, 244 F. Supp. 874,

eh 58 Ue). | ae eae arora rare 16, 18

Perez v. Campbell, 402 U.S. 637 (1971) .........0--45- 12

Puerto Rico v. Russell & Co., 288 U.S. 476 (1933) ....... 21

The Tungus v. Skovgaard, 358 U.S. 58? “1959)........... 13

(iii)

Warren v. Flying Tiger Line, 352 F.2d 494 (9th Cir.

CN ce eae OWS tbe bh bbs 8 hare wene ks 19

Constitutional, Treaty and Statutory

Authorities Cited:

Constitution of the United States, Article VI, Clause

Bd KR EE ke de nS ota d eA eS a awe 3, 11-12, 21

Warsaw Convention, 49 Stat. 3000-3026 (1934):

pe er nees eee 3-4

OME Sor se es Se 4, 16,17

muse Senna). 3s... :

Ws BD oo 6 vb vb c ov vb weknancs 4,5

MURA Bree Geren Oe 6 6 oe eS Cdk esa S, 4,10, 11

46 US.C. §762 (1958 ed.).......... be sie ee dite 45,11

Virgynia Code §65.1-41 (1959), as amended ............. 5

Texts Cited:

43 Am. Jur. 2d, Insurance §1 (1969) ................. 20

The Warsaw Convention—Recent Developments and

the Withdrawal of the United States Denunciation,

32 J. Air L. & Com., No. 2, p. 243 (1966) ............ 17

IN THE

Supreme Court of the United States

OCTOBER TERM, 1972

No.

WILLIAM T. SHERIS (DECEASED), EMPLOYEE

MAIDA LUDVIK SHERIS, WIDOW, Er A1,

Petitioners,

v.

THE SHERIS CO., EMPLOYER

TRAVELERS INSURANCE COMPANY, INSURER,

Respondents.

PETITION FOR A WRIT OF CERTIORARI

To the Supreme Court of the State of Virginia

Petitioners pray that a Writ of Certiorari be granted

and issued to review the judgment of the Supreme Court

of Virginia entered in this cause on April 24, 1972.

OPINIONS BELOW

The opinion of the Supreme Court of Virginia is

reported at 212 Va. 825 (1972). The opinion of the

Industrial Commission of Virginia is also reported at 52

O.1.C. 232 (1970). A copy of each opinion is attached

hereto and included in the Appendix.

—

STATEMENT OF JURISDICTION

The judgment of the Supreme Court of Virginia was

rendered on April 24, 1972. The jurisdiction of this

Court is invoked pursuant to the provisions of 28 U.S.C.

§ 1257(3) (1958 ed.)..

QUESTIONS PRESENTED

Was the judgment of. the Supreme Court of Virginia in

its affirmance of the Industrial Commission’s order

terminating any further workmen’s compensation bene-

fits to the widow and dependent children of decedent

who was killed in an air crash in international waters

while~in the course of his employment consistent with

the mandate of the Supremacy Clause of the Constitution

of the United States, and otherwise did the Court in

reaching its decision properly construe and apply the

Federal Death on the High Seas Act and a Treaty of the

United States known as the Warsaw Convention where:

(a) the personal representatives recovered a judg-

ment against the air carrier under a controlling federal

statute which was designed for the benefit of certain

beneficiaries specifically and exclusively designated by

such statute;

(b) the action, although required to be instituted

pursuant to federal law, was predicated upon the Warsaw

Convention and certain supplemental agreements among

international airlines providing that in the event of a

passenger’s injury or death the air carrier would be

contractually liable within certain prescribed monetary

limits without regard to fault; and

(c) the contractual character of the air carrier’s

undertaking and consequential contractual, as distin-

—

3

guished from tortious, liability was in the nature of a

private insurance policy or in the form of an indemnity

arising from the Warsaw Convention and as such was not

subject to the subrogation rights of a workmen’s com-

pensation insurer.

CONSTITUTIONAL PROVISIONS,

TREATY AND STATUTES INVOLVED

Article VI, Clause 2, of the Constitution of the United

States provides as follows:

This Constitution, and the Laws of the United

States which shall be made in Pursuance thereof;

and all Treaties madé, or which shall be made, under

the Authority of the United States, shall be the

supreme Law of the Land; and the Judges in every

State shall be bound thereby, any Thing in the

Constitution or Laws of any State to the Contrary

notwithstanding.

Convention for the Unification of Certain Rules Relating

to International Transportation by Air (Warsaw Conven-

tion, 49 Stat. 3000-3026 (1934)), provides in pertinent

pert:

Article 1(1) This convention shall apply to all

international transportation of persons, baggage, or

goods performed by aircraft for hire. It shall apply

equally to gratuitous transportation by aircraft

performed by an air transportation enterprise.

Article 1(2) For the purposes of this convention, the

expression ‘international transportation’ shall mean

any transportation in which, according to the

contract 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 within the territories of two High Contr-

acting Parties, or within the territory of a single High

ar

4

Contracting Party, if there is an agreed stopping

place within the territory subject to the sovereignty,

suzerainty, mandate or authority of another power,

even though that power is not a party to this

convention.

Article 22(1) In the carriage of passengers the

liability of the carrier for each passenger is limited

to the sum of 125,000 francs. Where, in accordance

with the law of the Court seised of the case,

damages may be awarded in the form of periodical

payments, the equivalent capital value of the said

payments shall not exceed 125,000 francs. Never-

theless, by special contract, the carrier and the

passenger may agree to a higher limit of liability.

Death on the High Seas by Wrongful Act, 46 U.S.C.

§ § 761-68 (1958 ed.), provides in pertinent part:

§761. Right of action; where and by whom

brought.

Whenever the death of a person shall be caused by

wrongful act, neglect, or default occurring on the

high seas beyond a marine league from the shore of

any State, or the District of Columbia, or the

Territories or dependencies of the United States, the

personal representative of the decedent may

maintain a suit for damages in the district courts of

the United States, in admiralty, for the exclusive

benefit of the decedent’s wife, husband, parent,

child, or dependant relative against the vessel,

person, or corporation which would have been liable

if death had not ensued. (Mar. 30, 1920, ch. 111,

§1, 41 Stat. 537.)

§ 762. Amount and apportionment of recovery.

The recovery in such suit shall be a fair and just

compensation for the pecuniary loss sustained by

the persons for whose benefit the suit is brought and

_—

5

shall be apportioned among them by the court in

proportion to the loss they may severally have

suffered by the reason of the death of the person by

whose representative the suit is brought. (Mar. 30,

1920, ch. 1.11, §2, 41 Stat. 537.)

Virginia Code §65.1-41 (1950), as amended_ provides:

The making of a lawtul claim against an employer

for compensation under this act for the injury or

death of his employee shall operate as an assignment

to the employer of any right to recover damages

which the injured employee or his personal repre-

sentative or other person may have against any other

party for such injury or death, and such employer

shall be subrogated to any such right and may

enforce, in his own name or in the name of the

injured employee or his personal representative, the

legal liability of such other party. The amount of

compensation paid by the employer or the amount

of compensation to which the injured employee or

his dependents are entitled shall not be admissible as

evidence in any action brought to recover damages.

Any amount collected by the employer under the

provisions of this section in excess of the amount

paid by the employer or for which he is liable shall

be held by the employer for the benefit of the

injured employee or other person entitled thereto,

less a proportionate share of such amounts as are

paid by the employe: for reasonable expenses and

attorney’s fees as provided in §65.1-43. No com-

promise settlement shall be made by the employer

in the exercise of such right of subrogation without

the approval of the Industrial Commission and the

injured employee or the personal representative or

dependents of the deceased employee being first had

and obtained.

6

STATEMENT OF THE CASE

This Petition seeks review and focuses upon the alleged

statutory right of a workmen’s compensation insurer to

be subrogated to and thereby benefit by a judgment

recovered by a decedent’s personal representatives under

a controlling federal statute. The action was instituted in

order to obtain judicial approval of a settlement for the

death of the decedent predicated exclusively upon the

Warsaw Convention, as supplemented by a certain inter-

carrier agreement among international airlines.(R. 27-29).

William T. Sheris, President of The Sheris Co., died

while a passenger, and in the course of his employment,

aboard a British European Airways flight which crashed

with no survivors in international waters between the

Islands of Rhodes and Cyprus on October 12, 1967.

(R. 1-4.) He was survived by his wife and two minor

daughters who are the Petitioners before this Court and -

were the workmen’s compensation claimants before the

Industrial Commission of Virginia.

In keeping with the agreement as to the payment of

compensation in a fatal case, the Industrial Commission

of Virginia on April 19, 1968, approved an Award of

compensation at the rate of $45 per week for a period of

400 weeks payable to the widow and the surviving

children, totaling $18,000. (R. 7-8). Workmen’s com-

pensation benefits were, accordingly, paid by the insur-

ance carrier from October 13, 1967, until November 25,

1969, aggregating $5,040, at which time the insurer

suspended payments and filed an application for hearing

before the Industrial Commission, alleging that the

Petitioners were about to conclude a court settlement

against British European Airways arising from the death

of the employee in an amount exceeding the compen-

sation benefits to which the Petitioners were entitled

_—

7

under the Virginia Workmen’s Compensation Act.

(R. 8-9).

This application of the insurance carrier followed the

filing on September 23, 1969, of an action against the air

carrier by the personal representatives of the decedent’s

estate in the United States District Court for the Eastern

District of Virginia. (R. 37-42).

The action was instituted under the Federal Death on

the High Seas Act and alleged that the death of the

Employee had been caused by the “wrongful act, neglect

or default” of the air carrier in that both under the

airline’s contract of carriage and its special contracts it

had breached its warranty of safe passage given to the

decedent for his benefit and in the event of his death for

the exclusive benefit of the statutory classes of those

members of his family who survived him. (R. 38-39). The

suit was brought in order to afford protection to British

European Airways Corporation from any contingent

claims that might otherwise arise in view of the minority

of the decedent’s children and the interest claimed by the

insurer. (R. 38). The source of the recovery, however, had

its underpinnings on the Warsaw Convention and certain

supplemental contracts of carriage entered into among

international air carriers in which, upon adequate proof

of damages, they had agreed to compensate the families

of fatal air crash victims in a sum not to exceed $75,000,

regardless of fault. (R. 27-39).

On December 12, 1969, the District Court entered

judgment in favor of the personal representatives and

against British European Airways Corporation in the

amount of $75,000. Under the terms of the judgment

and pursuant to the provisions of the Death on the High

Seas Act, the proceeds were distributed to the widow,

dependent children and mother of the deceased

8

employee. (R. 35-36). However, the sum of $5,040 from

the widow’s share was deposited into the Registry of the

District Court there to await the entitlement, if any, of

the workmen’s compensation carrier who had earlier

asserted a claim against the proceeds for reimbursement

of the payments theretofore made. (R. 36).

In due course, the application of the workmen’s

compensation carrier to terminate the payment of future

benefits came on to be heard before Deputy Commis-

sioner Rushbrooke on March 30, 1970. At this juncture,

the Deputy Commissioner requested that the respective

parties submit briefs on the legal points involved.

(R. 10-13). Thereafter, Petitioners submitted their brief to

the Industrial Commission asserting that the Death on the

High Seas Act was explicit and controlling both as to

federal jurisdiction and the parties who may benefit

thereunder. Thus, the issue of the proper construction of

a federal statute and the supremacy of the laws of the

United States were raised initially before the Deputy

Commissioner of the Industrial Commission of Virginia.

(14a). Also, Petitioners asserted that pursuant to the

Warsaw Convention and the supplemental air carrier

agreements that the recovery was substantively grounded

upon the contract of carriage and the workmen’s

compensation carrier was not entitled to benefit directly

or indirectly from the proceeds of judgment secured in

the District Court.

Subsequently, the Deputy Commissioner by Award

entered September 24, 1970, relieved the compensation

insurer of any further obligation to pay compensation

benefits. (14a-19a). In his opinion, the Deputy Commis-

sioner ruled that by virtue of the judgment secured against

the air carrier, Petitioners had obtained one full recovery

as provided by the Virginia Workmen’s Compensation sta-

eens

tute and that the insurer thereby became entitled to its

right of subrogation under Virginia law. (18a).

Petitioners thereupon took a timely appeal to the full

Industrial Commission and resubmitted its brief which

had earlier raised the federal issues involved. On appeal

from the Deputy Commissioner’s Award, it was affirmed

by the full Commission on April 22, 1971, without

opinion. (19a).

From this final Award of the Industrial Commission,

Petitioners sought leave to appeal to the Supreme Court

of Virginia. On October 12, 1971, the Supreme Court of

Virginia granted the allowance of an appeal. Once more,

Petitioners briefed and preserved the substantial federal

questions which were raised below in their appeal to

the Supreme Court of Virginia. (22a-23a). Petitioners

reasserted their position that the Federal Death on the

High Seas Act was exclusive as to the beneficiaries who

could participate in a recovery thereunder; that permitting

a workmen’s compensation carrier to terminate its pay-

ments would be a construction violative of the clear

intendment of the statute; and that the basis of the

recovery—not the source of the autherity to establish

it-was expressly founded upon the Warsaw Convention.

On April 24, 1972, the Supreme Court of Virginia

affirmed the order of the Industrial Commission holding

that the recovery by the decedent’s personal representa-

tives was based in tort and that the compensation carrier

was entitled to its right of assignment and subroga-

tion under the Virginia Workmen’s Compensation Act.

(13a-14a). The Virginia Court further assessed costs

against your Petitioners and awarded damages in favor

of the compensation carrier in the sum of $30. (20a).

It is from this final judgment of the Supreme Court of

Virginia that this Petition for a Writ of Certiorari has

followed.

10

REASONS FOR ALLOWANCE OF THE WRIT

I. THE SUPREMACY CLAUSE OF THE CON-

STITUTION OF THE UNITED STATES AND

THE STATUTORY CONSTRUCTION OF THE

FEDERAL DEATH ON THE HIGH SEAS ACT.

In this case, the Supreme Court of Virginia has decided

a substantial federal question which has not been

previously decided by this Court nor by the courts of any

other jurisdiction. It presents a novel question as to the

interplay between a .state workmen’s compensation

statute, the Warsaw Convention and a federal maritime

enactment.

The judgment obtained by the decedent’s personal

representatives was derived from the provisions of the

Death on the High Seas Act which was essentially used as

a means of approving a settlement against the air carrier

due to the minority of the decedent’s surviving children

and the claim made by the compensation insurer. 46

U.S.C. § §761-68 (1958 ed.).

On its face, the federal statute clearly and without

equivocation recites that a suit for damages arising from

the death of a person beyond a marine league from the

shores of the United States must be maintained in

admiralty “for the exclusive benefit of the decedent’s

wife, husband, parent, child or dependent relative. . . Sy

ISection 761 arrests any different construction, in words of

limitation reciting that “whenever the death of a person shall be

caused by wrongful act, neglect, or default occurring on the high

seas beyond a marine league from the shore of any State, or the

District of Columbia, or the Territories or dependencies of the

United States, the personal representative of the decedent may

maintain a suit for damages in the district courts of the United

States, in admiralty, for the exclusive benefit of the decedent’s

wife, husband, parent, child or dependent relative against the

vessel, person or corporation which would have been liable if death

had not ensued.” [Emphasis added.]

—

46 U.S.C. §761 (1958 ed.) [Emphasis added.] Moreover,

the statute prescribes that the recovery in such a suit shall

constitute a fair and just compensation for the pecuniary

loss sustained by the decedent’s family and “shall be

apportioned among them by the Court in proportion to

the loss they may severally have suffered by reason of the

death of the person by whose representative the suit is

brought.” 46 U.S.C. §762 (1958 ed.)

Thus, it is manifest that it was not the intention of

Congress to permit a workmen’s compensation carrier or

any other person to benefit from a recovery under the

Death on the High Seas Act. The recovery is statutorily

confined to the various classes of beneficiaries incor-

porated within its provisions. However, the Supreme

Court of Virginia in its affirmance of the Industrial

Commission’s Order has permitted a compensation carrier

to participate in the proceeds of judgment designed for

the sole benefit of the decedent’s family. Consistent with

the judgment entered by the District Court, the sum of

$5,040 was deposited into the Registry of that Court to

await the entitlement thereto, if any, of the workmen’s

compensation carrier. By its decision, the Supreme Court

of Virginia has directly authorized the carrier to profit

and, hence, be reimbursed from the recovery obtained by

the decedent’s personal representative; and to be relieved

of the remainder of the $18,000 compensation award,

solely because of the settlement based on the Warsaw

Convention and awarded under the Federal Death on the

High Seas Act.

Within this context, an important and pressing con-

stitutional question has evolved in that the Virginia

Court’s ruling infringes upon the mandate of the

Supremacy Clause of the Constitution. U.S. Const. art.

12

V1, cl. 2. In the circumstances, the Virginia Work-

men’s Compensation statute, allowing the carrier certain

subrogation rights, falls squarely into conflict with an

overriding federal statute that affords not only exclusive

jurisdiction but more significantly exclusivity as to those

persons who may benefit thereunder.

As early as Gibbons v. Ogden, 9 Wheat | (1824), Chief

Justice Marshall stated the governing principle—that “‘acts

of the State Legislature .. . [which] interfere with, or are

contrary to the laws of Congress, made in pursuance of

the constitution,” are invalid under the Supremacy

Clause. Jd. at 211. [Emphasis added.] See Perez y.

Campbell, 402 U.S. 637 (1917); Nash v. Florida Indus.

Comm’n, 389 U.S. 235 (1967); Free v. Bland, 369 US.

663 (1962).

Likewise, in McCulloch v. Maryland, 4 Wheat 316

(1819), the Supremacy Clause was also construed to the

effect that the states were devoid of any power “to

retard, impede, burden or in any manner control, the

operations of the constitutional laws enacted by Congress

to carry into execution the powers vested in the general

government.” /d. at 436. [Emphasis added. ]

In the present situation and due to the absence of

congressional implementation of the Warsaw Convention,

49 Stat. 3000-3026 (1934), it was necessary for the

decedent’s personal representatives to bring their action

against the air carrier under the Death on the High Seas

Act inasmuch as it has been held that the Warsaw

Convention does not create an independent right of

action. See Noel v. Linea Aeropostal Venezolana, 247

F.2d 677 (2nd Cir. 1957), cert. denied, 355 U.S. 907.

The remedy afforded by the Convention is not, however,

to be found. in any state wrongful death act. The death

here occurred on the high seas beyond a marine league

_——

13

from the shore of any state and not within the territorial

waters of the United States. In this setting, it is well

established that the Death on the High Seas Act

conferred exclusive admiralty jurisdiction on the federal

court to determine the claim of the personal represen-

tatives? and to apportion the recovery among those for

the exclusive benefit of whom such an action may be

brought, all as expressly described in the Act. The action,

therefore, had to be brought by the personal represén- ;

tative of the deceased employee for the exclusive benefit ©

of those members of his family who survived him.

The Supreme Court of Texas in a cogent analysis of

the federal statute here involved has observed:

The ‘personal representative’ who asserts a course

of action under... the Death on the High Seas Act

is not suing for the benefit of the decedent’s estate

or as a representative thereof, nor does any amount

which the ‘personal representative’ may recover

become an asset of the estate. The Probate Court

has no interest in either the claim or damages

recovered thereunder....The ‘personal represen-

tative’ sues as trustee for the benefit of those for

whom the statute authorizes recovery.

Mandell & Wright v. Thomas, 441 S.W.2d 841, 844-45

(Tex. 1969). [Emphasis added. ]

This compelling digest should lay to rest any doubt

that the Death on the High Seas Act was enacted by

Congress to restrictively benefit the family survivors of a

decedent and no other person.

2The Tungus v. Skovgaard, 358 US. 588 (1959); Berry v.

Pacific Sportfishing, Inc., 372 F.2d 213 (9th Cir. 1967); First Nat’i

Bank in Greenwich v. National Airlines, 288 F.2d 621 (2nd Cir.

1961), cert. denied, 368 U.S. 859; Jennings v. Goodyear Aircraft

Corp., 227 F. Supp. 246 (D. Del. 1964).

14

The Virginia Courts were without jurisdiction of the

remedy afforded by the statute which reserved the action

to the sole purview of a federal court. Further, the

language carefully selected by Congress is without

ambiguity, in plain and unmistakable terms excluding any

but those classes of beneficiaries named from sharing in a

recovery under the Act. The Death on the High Seas Act

does not purport to and obviously was not intended to

profit or advantage a compensation carrier in the manner

provided in the Virginia Workmen’s Compensation Act or

in any manner. To include the compensation carrier

within the classes of family beneficiaries specifically

designated in the Act would be tantamount to a rewriting

of its unequivocal language. This, however, is precisely

the course that the Supreme Court of Virginia has elected

to follow.

The construction given the Act by the Supreme Court

of Virginia stands as a direct “obstacle to the accom-

plishment and execution of the full purposes and

objectives of Congress.”’ Hines v. Davidowitz, 312 US.

52, 67 (1941). And see Nash v. Florida Indus. Comm'n,

supra.

In Higa v. Transocean Airlines, 230 F.2d 780, 785 (9th

Cir. 1955), the Court aptly described the fundamental

features of the statute in question:

[T]he Death on the High Seas Act creates the right

to recover for wrongful death and designates not

only the federal court for its enforcement, but a

particular jurisdiction of that court. The right is a

matter of federal law where state courts would have

no special competence. There is more here than ‘the

grant of jurisdiction, of itself...’ which indicates

that jurisdiction was intended to be exclusive.

So, too, we should add were the beneficiaries enumerated

by the statute.

oO nee

15

The construction afforded the federal statute by the

Supreme Court of Virginia does violence to its plain and

simple language and as such effectively interferes in an

area which has been correctly entrusted by Congress to

federal supervision. The Supremacy Clause of the Con-

stitution requires that a state law should not frustrate the

operation of a valid federal enactment, and, therefore,

the application under these conditions of the Virginia

Workmen’s Compensation Act is a direct and imper-

missible interference with the intentions of Congress.

On this ground alone, the intrusion of the Virginia

Workmen’s Compensation Act into Petitioner’s recovery

under the Federal Death on the High Seas Act should not

be allowed to stand. The construction of the federal

statute by the Virginia Court interferes with and is in

derogation of the explicit purpose and policy of Congress

and should be reviewed by this Court. In this posture,

the Virginia Workmen’s Compensation Act must yield.

Il. THE WARSAW CONVENTION-THE FED-

ERAL NATURE AND CONTRACTUAL CHAR-

ACTER OF PETITIONERS’ RECOVERY.

The judgment recovered by Petitioners in the Federal

District Court was circumscribed by the provisions of the

Warsaw Convention? and as earlier mentioned, the

personal representatives of the decedent were compelled

349 Stat. 3000-3026. The official title is Convention for the

Unification of Certain Rules Relating to International Transporta-

tion by Air, hereinafter sometimes referred to as the Convention or

Treaty. R

The Convention was concluded at Warsaw, Poland, on October

12, 1929, and proclaimed by the President on October 29, 1934.

Over 90 countries have become signatories to the Convention.

16

to establish this right under the Convention by a suit

instituted under the Death on the High Seas Act. This

form of procedure was dictated by federal decisions,

although not decided by this Court, that the Convention

does not create an independent cause of action. See, e.g.,

Noel v. Linea Aeropostal Venezolana, supra.; Notarian y.

Trans World Airlines, 244 F. Supp. 874 (W.D. Pa. 1965).

The opinion of the Supreme Court of Virginia mis-

takenly concludes that Petitioners’ recovery was in tort

and thereby operated to permit the workmen’s compen-

sation carrier to avail itself of its statutory right of

subrogation. The decision, therefore, further poses an

additional federal question of substance not heretofore

determined by this Court. The disposition below touches

upon an important area of federal law which should be

settled by this Court inasmuch as the decision would

appear to be at variance with an impressive grouping of

federal decisional precedents.

The Warsaw Convention and the Death on the High

Seas Act have no interdependence with the Virginia

Workmen’s Compensation Act. The Virginia Court by so

interpreting the Death on the High Seas Act has done so

in a manner not only in conflict with the federal statute

under which the action was brought but misconstrues the

nature of Petitioners’ recovery under the Convention and

those supplemental inter-carrier agreements made pur-

suant to Article 22(1) of the Treaty.* The nature of

40On November 15, 1965, the United States sent a notice of

denunciation to the Polish Government stating that this country

opposed the Warsaw Convention’s low limits on liability for

personal injuries, and would withdraw from the Convention at the

end of six months pursuant to Article 39, 49 Stat. 3022. The State

Department made it known, however, that the denunciation would

be withdrawn if the world’s international air carriers agreed to raise

—_

17

Petitioners’ recovery was founded upon a multi-lateral

treaty to which the United States is an adherent. In this

position and consistent with authoritative statutory and

decisional law, the judgment entered by the District

Court accorded with the limits of liability established by

the interim agreement among the air carriers, including

the air carrier here involved. (R. 27-29, 32).

That inter-carrier agreement supplemented and was

made pursuant to Article 22(1) of the Convention which

provides that “by special contract, the carrier and the

passenger may agree to a higher limit of liability” than

that otherwise provided by the Convention. (R. 24). As

approved by order of the Civil Aeronautics Board dated

May 13, 1966 (R. 23-27), the agreement recites in

pertinent part:

{[F]or death of or personal injury to passengers

[recovery] is limited ... to proven damages not to

exceed US DOLLARS 75,000 per passenger, and

that this liability up to such limit shall not depend

on negligence on the part of the carrier. (R. 28).

ete

pte MeO NE a

In its press release distributed under date of May 31,

1967 (R. 30), the Civil Aeronautics Board explained:

The carriers participating to the Agreement provide

increased liability limits up to $75,000 for provable

ts

PO ER LS OAD | eS

the limitation first to $75,000 and ultimately to $100,000. There

followed an interim agreement reached among the carriers in the

spring of 1966 providing for increased limits of liability not to

exceed $75,000 inclusive of costs of litigation, under conditions of

absolute liability. On May 14, 1966, the United States withdrew its ;

previous notice of denunciation. See The Warsaw Convention— .

Recent Developments and the Withdrawal of the United States

Denunciation, 32 J. Air L.& Com., No. 2,p. 243 (1966). [Emphasis

added.]

18

damages and agree to waive defenses available under

the Convention, thus accepting the principle of

liability without fault. [Emphasis added.]

The federal courts have consistently recognized the

contractual composition of the undertaking. Thus, in

Notarian v. Trans World Airlines, supra at 877, it was

held that “the [Warsaw] Convention’s provisions are

contractual in nature as they affect carriers by air and

their passengers . . . .” And further,

The applicability of the Convention undeniably is

premised upon a contract, but on a contract of a

particular kind. It is based on a contract of carriage

that arises from the relationship between a “carrier”

and the passengers. This contractual relationship

requires only that the carrier consent to undertake

the international transportation of the passenger

from one designated spot to another, and that the

passenger in turn consent to the undertaking. [T]he

passenger’s cause of action under the Warsaw

Convention is based on this contract of carriage (the

sale and purchase of transportation), nof on any tort

theory.

Block v. Compagnie Nationale Air France, 386 F.2d 232,

330-31 (Sth Cir. 1967), cert. denied, 392 U.S. 9085.

{ Emphasis added. ]}

And these contractual provisions are prescriptive of an

absolute liability. Lisi v. Alitalia-Linee Aeree Italiane, 370

F.2d 508 (2nd Cir. 1966), aff'd, 390 U.S. 455; Grey v.

American Airlines, 227 F.2d 282 (2nd Cir. 1955), cert.

denied, 350 U.S. 989.

Upon delivery of a ticket to an international passenger,

and as an integral part of its conditions, the air carrier is

required to give written notice of the limits of liability

established by the inter-carrier agreement. As aptly stated

ne re.

19

in Warren v. Flying Tiger Line, 352 F.2d 494 (9th Cir.

1965):

The 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. The most

common self-protection measure is, of course, the

procurement of additional flight insurance.

Id. at 497.

Similarly, Lisi v. Alitalia-Linee Aeree Italiane, supra at

513, describes the purpose of the notice to give the

passenger the “opportunity to purchase additional flight

insurance... .”

The inter-carrier agreement itself states at the end of

paragraph 2 thereof that:

Additional protection can usually be obtained by

purchasing insurance from a private company. Such

insurance is not affected by any limitation of the

carrier’s liability under the Warsaw Convention or

such special contracts of carriage. . . . (R. 28-29).

The words “additional flight insurance” and the words

“additional protection” in the frameworks respectively

quoted above import insurance united with or joined to

insurance formerly purchased and forming one aggregate.

By necessary implication, these phrases presuppose that

the protection purchased by a passenger under its special

contract of carriage must in the first place be insurance

protection. Otherwise, the insurance purchased from a

private company could not be “additional protection” or

“additional flight insurance.”

It follows that the judgment of the District Court was

not patterned upon traditional concepts of tort liability,

being the standard upon which a compensation carrier

may invoke its right to subrogation under a state

workmen’s compensation act.

20

Contrariwise, the judgment was founded upon a

contractual liability having all the elements of a private

insurance contract or at the very least a contract of

indemnity between the passenger and the airline. In

essence, the agreement was one by which the air carrier

for consideration promised to pay money to the

decedent-passenger or his beneficiaries in the event of

death or injury during the course of carriage. In this

sense, the contract was one of insurance. See 43 Am.

Jur.2d, Insurance §1 (1969).

In its probing review of the Convention by the Block

Court, it noted that the contractual liability sprung from

the non-performance of the obligation flowing from the

contract of air transport in which third persons possess

the status of simple contracting parties and the air carrier

assumes to carry the passengers with “absolute security

throughout the journey. Such obligation even without

being specifically stipulated subsists, and in the case of

non-performance places the carrier in the role of a

contractual debtor and the passenger as his creditor.”

Block v. Compagnie Nationale Air France, supra at

331-32 n. 22. [Emphasis added.]

Thus, it cannot be gainsaid that the recovery, although

rooted upon a controlling federal statute, was forged pri-

marily upon a contract of carriage emanating from the

Treaty.

Within this context, the substance of the right upon

which the family was paid—the Warsaw Convention,

rather than the means of recovery —the Death on the High

Seas Act—should have been the only criterion upon

which the Virginia Court should have resorted and, in so

doing, should have precluded the compensation carrier

from any participation in the recovery.

— — —

21

In a not dissimilar situation, this Court has declared

that “the- federal nature of the right to be established is

decisive—not the source of the authority to establish it.”

Puerto Rico v. Russell & Co., 288 U.S. 476 (1933). And

see Gully v. First Nat'l Bank, 299 U.S. 109, 116 (1936).

Applying this principle to the instant case, Petitioners’

recovery was structured upon federal law—the Warsaw

Convention and, hence, it was from that Treaty which

determined the federal nature of Petitioners’ right to

assert a claim for the decedent’s death. In this light, the

Virginia Court’s decision is not in accord with several

lower federal cases interpreting the-remedy afforded by

the Convention and likewise is in direct conflict with a

treaty of the United States. Accordingly, the decision of

the Supreme Court of Virginia must not be allowed to

persist under the Supremacy Clause of the Constitution.

U.S. Const. art. VI, cl. 2.

In tandem, this Court has also held that “the right or

immunity must be such that it will be supported if the

Constitution or laws of the United States are given one

construction or effect, and defeated if they received

another....” National Mut. Ins. Co. v. Tidewater

Transfer Co. , 337 U.S. 582, 597 (1949).

The Petitioners’ right to relief was based upon and

arose from the Convention. The erroneous construction

placed upon the Convention’s remedial provisions and the

Death on the High Seas Act by the Supreme Court of

Virginia has infringed upon an area entrusted to the

primacy of federal law. The decision, therefore, possesses

those substantive federal requisites necessitating a plenary

review by this Court.

22

CONCLUSION

Wherefore, it is respectfully submitted that for the

foregoing reasons a Petition for a Writ of Certiorari be

granted to review the judgment of the Supreme Court of

Virginia.

Respectfully submitted,

JAMES H. SIMMONDS

15th St. & N. Courthouse Rd.

Arlington, Virginia 22201

RICHARD A. MEHLER

LAWRENCE S. SCHAFFNER

1225 Connecticut Avenue, N.W.

Washington, D.C. 20036

Attorneys for Petitioners

la

APPENDIX

IN THE

SUPREME COURT OF VIRGINIA

Present: All the Justices

MAIDA LUDVIK SHERIS, et al.,

v. Record No. 7831

THE SHERIS CO. AND

TRAVELERS INSURANCE COMPANY

OPINION BY JUSTICE ALBERTIS S. HARRISON, JR.

Richmond, Virginia, April 24, 1972

ON APPEAL FROM THE INDUSTRIAL

COMMISSION OF VIRGINIA

William T. Sheris, president of The Sheris Company,

died on October 12, 1967 while a passenger on a flight of

British European Airways Corporation (BEAC) which

crashed into the Aegean Sea. It is agreed that his death

arose out of and in the course of his employment by his

company. As a result the Industrial Commission of

Virginia (Commission) awarded compensation to Mrs.

Maida Ludvik Sheris, his widow, for the joint and equal

use of herself and two infant children.

Compensation was paid to the dependents of decedent

from the date of his death through November 25, 1969,

at which time the Travelers Insurance Company filed its

application with the Commission for a hearing. It alleged

2a |

that the dependents were in the process of settling with

BEAC a third party claim arising out of Sheris’ death and

for an amount in excess of the benefits to which they

would be entitled under the Virginia Workmen’s

Compensation Act. The Commission found that a settle-

ment had been made and that BEAC was “an other

party” under the provisions of Code §65.1-41 and as

such it and its insurance carrier, The Travelers, were

subrogated to any rights the personal representative of

the Sheris estate could assert against BEAC on account of

the death of decedent. The Commission further found

that the dependents of the deceased employee had each

received one full recovery, and ordered that the out-

standing award of the Commission be vacated and set

aside as of November 25, 1969. The widow, mother and

children of William T. Sheris, deceased, appeal this final

award entered by the Commission.

Appellants contend that their recovery from BEAC

under the Death on the High Seas Act was predicated

upon the Warsaw Convention and certain supplemental

agreements among international airlines providing that in

event of a passenger’s injury or death the air carrier

would be contractually liable within certain monetary

limits without regard to fault; that their recovery was by

virtue of the contractual character of the air carrier’s

undertaking and as a consequence was contractual as

distinguished from tortious; and that the liability of

BEAC was the equivalent of liability under a private

insurance policy, and therefore not subject to the

subrogation rights of a workmen’s compensation insurer.

Appellees contend that the recovery was for the

wrongful act, neglect or default of BEAC—a recovery for

negligence, wrong and breach of duty. It argues that

BEAC is the party responsible for the death of Sheris and

3a

that the policy behind subrogation is to allow an

employer’s compensation carrier to recover the amount it

has paid from another party who is responsible. They say

that appellants, having had one full recovery, are not

‘ entitled to any further compensation under the Virginia

Workmen’s Compensation Act.

Code §65.1-41 provides in part:

“The making of a lawful claim against an

employer for compensation under this Act for the

injury or death of his employee shall operate as an

assignment to the employer of any right to recover

damages which the injured employee or his personal

representative or other person may have against any

other party for such injury or death, and such

employer shall be subrogated to any such right and

may enforce, in his own name or in the name of the

injured employee or his personal representative, the

legal liability of such other party.”

Code §65.1-112 provides:

“When any employer is insured against liability

for compensation with an insurance carrier, and

such insurance carrier shall have paid any compen-

sation for which the employer is liable or shall have

assumed the liability of the employer therefor, it

shall be subrogated to all the rights and duties of the

employer and may enforce any such rights in its

own name or in the name of the injured employee

or his or her personal representative; provided,

however, nothing herein shall be construed as

conferring upon the insurance carriers any other or

further rights than those existing in the employer at

the time of the injury to his employee, anything in

the policy of insurance to the contrary notwith-

standing. No compromise settlement shall be made

by the insurance carrier in the exercise of such right

<7

of subrogation without the approval of the

Industrial Commission and the injured employee or

the personal representative or dependents of the

deceased employee being first had and obtained.”

The Death on the High Seas by Wrongful Act, 46

U.S.C.A. §§ 761-68 (1959 ed.) provides, in part:

Ҥ761. Right of action - where and by whom

brought. -

“Whenever the death of a person shall be caused

by wrongful act, neglect, or default occurring on the

high seas beyond a marine league from the shore of

any State, or the District of Columbia, or the

Territories or dependencies of the United States, the

personal representative of the decedent may

maintain a suit for damages in the district courts of

the United States, in admiralty, for the exclusive

benefit of the decedent’s wife, husband, parent,

child, or dependant relative against the vessel, person,

or corporation which would liave been liable if

death had not ensued. (Mar. 30, 1920, ch. 111, §1,.

41 Stat. 537.)”

-Subsequent to the award which was made by the

Commission the executors of the Sheris estate filed their

complaint in the U.S. District Court for the Eastern

District of Virginia against BEAC, The Travelers and the

widow, children and mother of the decedent. Jurisdiction

was alleged under the provisions of the Death on the High

Seas Act. Travelers was made a party defendant because

of its subrogation claim, the validity of which was denied

by the plaintiffs. The widow, children and mother were

allegedly the parties entitled to the recovery and made

parties for that reason. In paragraphs 7 and 8 of the

complaint it was alleged:

“That the death of said William T. Sheris was

caused by the wrongful act, neglect or default of the

-

Sa

defendant, British European Airways Corporation,

in that under both its contract of carriage and the

special contracts hereinafter mentioned, it breached

its warranty of safe passage given to the plaintiff for

his benefit and in the event of his death for the

exclusive benefit of those members of his family on

whose behalf this action is filed.

“That by virtue of certain special contracts of

carriage to which the defendant, British European

Airways Corporation, is signatory and which were

entered into under the provisions of a treaty known

as the Warsaw Convention, as amended by the

Hague Protocol, the liability of the defendant,

British European Airways Corporation, is limited in

the circumstances here present to proven damages .

not to exceed the sum of Seventy-Five Thousand

Dollars ($75 ,000.00).”

The plaintiff sought to recover the sum of $75,000

damages, the maximum liability of BEAC under the

provisions of a treaty known as the Warsaw Convention,

as amended by the Hague Protocol, to which BEAC is a

party signatory. Judgment was entered against BEAC in

the full sum claimed, and the order provided that upon

payment it would be forever released and discharged of

all claims or causes of action against it arising out of the

death of William T. Sheris. From the recovery $69,960

was distributed to the surviving dependents, and the

balance, $5,040, was paid into the registry of the court,

there to await a final determination of the entitlement

thereto, if any, of The Travelers.

The Warsaw Convention was the result of two inter-

rational conferences, one held in Paris in 1925 and the

other in Warsaw in 1929. The United States was not one

of the original participating parties, but it adopted the

Convention by proclamation of the President of the

6a

United States on October 29, 1934 in accordance with

Congressional authority. 49 U.S. Stat. 3000 et seq. The

purpose of the Conference was two-fold. Because aviation

linked many countries with different legal systems it was

desirable to establish a certain degree of uniformity. The

Conference achieved this as to documentation, tickets,

waybills and the like. The second goal was to limit the

potential liability of the carrier in case of accidents in

return for which it would limit its defenses. The

Conference established a limitation of liability which

then amounted to approximately $4,898.

This limit remained in effect until September, 1955

when a treaty known as The Hague Protocol was

formulated. The treaty merely raised the limit to

$16,582. While it became operative on August 1, 1963

the United States did not ratify it and gave notice that it

would denounce the Warsaw Convention unless the

airlines serving the United States agreed by contract toa

$75,000 liability limit. The denunciation was announced,

but before it became effective the airlines acceded to

increased liability. At this time the International Air

Transport Association brought about an arrangement

among air carriers having landing privileges in the United

States which increased the limitations of liability of the

signatory airlines to $75,000 per passenger for death or

injury in international flight regardless of their negli-

gence. This agreement, commonly known as the Montreal

“Interim Agreement,” was approved by the Civil

Aeronautics Board on May 13, 1966, and the United

States withdrew its notice of denunciation. See Kennelly,

Problems Regarding Aviation Litigation, 20 De Paul L.

Rev. 436 (1971); Note, The 1966 Carrier Agreements:

The United States Retains the Warsaw Convention, 7 Va.

J. Int'l. L. 140 (1966).

eee

Ta

As was observed in Gray v. American Airlines, 227

F.2d 282, 285 (2d Cir. 1955), “‘[t]he scheme of the

Warsaw Convention is pretty plain on its face. . . . Article

17 imposes an absolute liability upon the carrier for all

personal injuries, regardless of fault, ‘if the action which

caused the damage so sustained took place on board the

aircraft.’ ”

This agreement by the carriers to waive their defenses

results in absolute liability. Although the claimant must

prove the amount of damages sustained up to $75,000

the need for litigation of fault is eliminated unless the

plaintiff seeks an unlimited recovery for failure to give

notice or for willful misconduct. The limitation of the

carrier’s defenses was agreed to as a guid pro quo for

limiting the liability of the carriers.

It is apparent from appellants’ brief that they rely on

the language of the Warsaw Convention to sustain their

position. However, as was said in Notarian v. Trans World

Airlines, Inc., 244 F. Supp. 874, 877 (W.D. Pa. 1965):

“The Warsaw Convention does not create an

independent right of action. Noel et al. v. Linea

Aeropostal Venezolana, [247 F.2d 677 (2nd Cir.

1957), cert. denied 355 U.S. 907]. While the

Warsaw Convention determines where actions

resulting from international airplane flights should

be litigated, it refers only to national boundaries and

not to places within the boundaries of countries.

Pitman v. Pan American World Airways, Inc., D.C.,

223 F. Supp. 887, 888, 1963.”

Numerous decisions establish that the Warsaw

Convention does not create an independent right of

action but only a presumption of liability leaving it for

local law to grant the right of action. In Noel v. Linear

Aeropastal Venezolana, supra, at p. 679, there is a

—

8a

quotation from Orr, The Warsaw Convention, 31 Va. L.

Rev.. 423 (1945) that the purpose of the Convention was

only “to affect a uniformity of procedure and remedies.”

It is an established principle of maritime law that in

the absence of a statute, there is no action for wrongful

death. “The Death on the High Seas Act was enacted to

fill a void in the maritime law which was found to exist

by the Supreme Court in The Harrisburg, 119 U.S. 199,7

S. Ct. 140, 30 L. Ed. 358 (1886). The Act provides an

admiralty remedy for wrongful death where none existed

before.” King v. Pan American World Airways, 270 F.2d

355, 362 (9th Cir. 1959). In fact, appellants concede that

the Death on the High Seas Act conferred exclusive

admiralty jurisdiction on the federal court to-determine

the claim of the executors of Sheris.

There is essentially no difference in form, pleading or

proof between an action brought under the Death on the

High Seas Act and an action brought under Virginia’s

Wrongful Death Statute. However, appellants claim their

recovery from BEAC was not a claim against a negligent

third party and was not patterned upon the traditional

concepts of tort liability. They say it was founded upon a

‘contractual liability, created by the purchase of a ticket,

having all the elements of a private insurance contract.

They further say the contract, whereby BEAC agreed to

transport Sheris, was one by which the air carrier, for

consideration, promised to pay money to the decedent-.

passenger, or his beneficiaries, in the event of injury or

death to Sheris during the course of the carriage. And in

that sense, they argue the contract was one of insurance

and cite Block v. Compagnie Nationale Air France, 386

F.2d 323, 330-31 (5th Cir. 1967) where it was said:

“The applicability of the Convention undeniably

is premised upon a contract, but on a contract of a

. eee

9a

particular kind. It is based on a contract of carriage

that arises from the relationship between a ‘carrier’

and the passengers. This contractual relationship

requires only that the carrier consent to undertake

the international transportation of the passenger

from one designated spot to another, and that the

passenger in turn consent to the undertaking. In a

charter situation the passenger’s cause of action

under the Warsaw Convention is based on this

contract of carriage (the sale and purchase of

transportation), not on any tort theory.”

The critical issue in Block was whether the Warsaw

Convention was applicable to international transportation

of passengers under contract of carriage on “voyage”

charter flights. In holding that the Convention was

applicable the court further said in its opinion:

“The contract plays a role fundamental to the

objectives of the Warsaw Conference. The obliga-

tions arising from the contract between the carrier

and the passenger carry out the Conference goal that

the rules of limited liability be known to both

parties. This knowledge enables the passenger to

determine in advance the amount of insurance he

needs; permits the carrier’s insurer to gauge the

carrier’s long-term risk, and act accordingly; and,

finally, advises the carrier as to what law it need

conform its transportation documents.” (Emphasis

supplied.) 386 F.2d at 333-34.

Appellants state that the language in the Death on the

High Seas Act, “wrongful act, neglect or default,”

includes something more than the traditional precepts of

negligence, McLaughlin v. Blidberg Rothchild Co., 167 F.

Supp. 714, 715 (S.D. N.Y. 1958), and that the language

has been construed to include an action for breach of

implied warranty. Middleton vy. United Aircraft Corp.,

204 F. Supp. 856 (S.D. N.Y. 1960).

10a

However, in Montgomery v. Goodyear Tire and

Rubber Co., 231 F. Supp. 447, 454 (S.D. N.Y. 1964), it

was said:

“Moreover, the recent trend in personal injury

and death cases based on warranty has been to treat

the action as one in the nature of tort, ignoring

contract considerations. [Citing cases.]”

Obviously when Sheris purchased a ticket from BEAC

he purchased transportation from point of departure to

point of destination, and implied in this purchase was the

agreement and duty of the carrier to transport him safely.

Its failure to do so constituted a breach of that agreement

and duty, and a wrongful act, neglect or default. In effect

a carrier says to its passenger, upon proper delivery of a

ticket which contains the required information, “If we

breach our duty to transport you as agreed, and you or

your estate sue to recover damages, it is agreed that the

amount of damages that can be recovered from us for

your injury or death is limited to a maximum of $75,000,

but no negligence on our part has to be established as a

prerequisite to a recovery.” Such an agreement contains

none of the basic elements of an insurance contract. It is

exactly what it purports to be, a waiver of certain

defenses in return for a limitation of liability in event of

an action alleging a breach of duty and damages

therefrom.

Appellants cite Lisi v. Alitalia-Linee Aeree Italiane,

370 F.2d 508 (2nd Cir. 1966), aff'd., 390 U.S. 455 and

Warren v. Flying Tiger Line, 352 F.2d 494 (9th Cir.

1965). In these cases the court reviewed the provisions of

the Warsaw Convention which specify that if a carrier

accepts a passenger without a passenger ticket having

been delivered, it shall not be entitled to avail itself of

provisions of the Convention limiting liability. Appellants

point to the following language in Warren:

—

“It is A ge of an Article of the Convention in

which the particulars to be contained in the

passenger ticket are spelled out in cetail. One of

these particulars, contained in Article 3(1)(e) is the

inclusion of a statement ‘* * * that the transpor-

tation is subject to the rules relating to liability

established by this convention.’ The purpose of such

a statement is to notify passengers of the applica-

bility of the Convention, thus affording them an

opportunity to take steps to protect against the

limitation of liability. The most common self-

protective measure is, of course, the procurement of

additional flight insurance. See Mertens v. Flying

Tiger Line, Inc., 2 Cir., 341 F.2d 851, 857.” 352

F.2d at 497.

Appellants find comfort in the statement which refers

to a purchase “of additional flight insurance,” and argue

that this imports “insurance united with or joined to

insurance formerly purchased and forming one

aggregate.” We do not agree. The May 11, 1966 agree-

ment between the carriers prescribed the notice or

“advice to international passengers on limitation of

liability”. This notice, among other things, advises a

passenger of the $75,000 liability limitation and that

liability shall not depend on negligence on the part of the

carrier. It further contains the following paragraph:

“Additional protection can usually be obtained

by purchasing insurance from a private company.

Such insurance is not affected by any limitation of

the carrier’s liability under the Warsaw Convention

or such special contracts of carriage, for further

information please consult your airline or insurance

company representative.”

a

It does not follow that the phrases “additional

protection”, as used in the agreement, or “additional

flight insurance”’, as used in Warren, presuppose that “the

protection purchased” by a passenger under its contract

of carriage “‘must in the first place be insurance protec-

tion”. An international passenger in buying a ticket does

not thereby purchase insurance protection. He purchases

passage. The language used in the agreement, which must

be incorporated in a statement to a passenger, was

designed to advise the passenger that on this passage the

carrier’s liability to him was limited, and to give him an

opportunity to protect himself by the purchase of

insurance from a private company, if he so desired.

12a

It is significant that at the time the Hague Protocol was

being considered an effort was made to alleviate the

Hague limitation by adding $50,000 compulsory

insurance. It was when this effort failed that the United

States gave notice that it would denounce the Warshaw

Convention unless the airlines serving the United States

agreed by contract to a $75,000 liability limit in

accordance with Article 22(1) of the Convention. See

The Warshaw Convention—Recent Developments and The

Withdrawal of The United States Denunciation, 32

J. Air L. & Com., 243, 247 (1966).

Horne v. Insurance Company, 203 Va. 282, 123

S.E.2d 401 (1962) does not support appellants’ position.

There an employee settled his case with his uninsured

mororist carrier. We held that the insurance was coverage

that he had separately contracted and paid for to protect

him under certain conditions, and that he was entitled to

receive the benefit therefrom. Further, the employee

there had not reached or recovered from the person who

was ultimately responsible for his injuries.

——_—

13a

In Ryan v. General Elec. Co., 26 N.Y.2d 6, 307

N.Y.S.2d 880, 256 N.E.2d 188 (1970) and in Ludeen v.

Dept of Labor and Indus., 469 P.2d 886 (Wash. 1970) it

was held that a Workingmen’s Compensation carrier has a

lien on payments made by the government under the

Military Claims Act on the theory that the Act served as a

substitute for a tort recovery, without reference to the

negligence or proof of wrong beyond causation, and that

as a matter of policy the lien should be extended to such

a recovery.

Further, the appellants alleged in their complaint “that

the death of said William T. Sheris was caused by the

wrongful act, neglect or default of the defendant, British

European Airways Corporation”. Their action was

grounded in tort and the recovery was had on that

theory.

The right of the appellees to subrogation is a right

expressly provided by Virginia's Workmen’s Compen-

sation Act. Admittedly the purpose of the Act is to

protect the employee and is liberally construed to that

end. The relief afforded an injured employee is fixed,

certain and speedy, and the damage he sustains from an

accident is treated as a part of the expenses of the

business and is to be borne as such. However, the Act

permits an injured employee the right to recover from a

negligent third party full damages for injuries inflicted on

him by such party, and the Act further gives to the

employer and his insurance carrier the right to recover

from such third party whatever amounts they actually

had to pay for the benefit of the injured employee. It

takes from the employee the right pro tanto to a double

recovery, but beyond this it leaves the cinployee’s right

to recover as it was before.

14a

While the death of Sheris did occur while he was ona

mission for the Sheris Company, and arose out of and

during the course of his employment, it was not the

negligent act of the Sheris Company, or any breach of its

duty to Sheris, that caused the employee’s death. His

death was occasioned by the crash of an airplane under

the control of BEAC, and was therefore due solely to its

wrongful act, neglect, default and breach of duty. The

party responsible for the death of Sheris is BEAC, and as

such it is “the other party” contemplated by Code

§65.1-41.

The appellant dependents of William T. Sheris have

obtained one full recovery, and the order of the

Industrial Commission is

Affirmed.

IN THE

INDUSTRIAL COMMISSION OF VIRGINIA

Opinion by RUSHB ROOKE

Deputy Commissioner

Sep. 24, 1970

Hearing before Deputy Commissioner RUSHB ROOKE,

at Alexandria, Virginia, on March 30, 1970.

William T. Sheris, president of The Sheris Company,

died on October 12, 1967 while a passenger on a

regularly scheduled passenger flight of British European

Airways Corporation which crashed into the Aegean Sea.

By written agreement of the parties, it was agreed that

the death was by accident arising out of and in the course

of the employment and, on the basis of this agreement,

our award was entered directing compensation at the rate

e~o~>OWV"

15a

of $45.00 per week to Mrs. Maida Ludvik Sheris, widow,

for the joint and equal use of herself and the dependents,

Christine Elizabeth Sheris and Candace Jo Sheris, in

accordance with the provisions of The Virginia Work-

men’s Compensation Act. Compensation was paid to the

dependents of the deceased from the date of death

through November 25, 1969, when the insurance carrier

filed its application for hearing, alleging that the depend-

ents were in the process of settling a third party claim

arising out of the death of the employee in excess of the

benefits to which the dependents would be entitled under

our Act.

On September 23, 1969, a complaint was filed by the

Executors of the Estate of William T. Sheris in the United

States District Court for the Eastern District of Virginia

for damages on account of the death of William T. Sheris

and alleging jurisdiction under the provisions of the

Death on the High Seas Act, 46 U.S.C. §761 et seq. The

employer’s workmen’s compensation insurance carrier

was named as a defendant to this action. On December

12, 1969, judgment was entered in the District Court in

favor of the plaintiffs and against British European

Airways Corporation in the amount of $75,000.00.

Under the Court’s apportionment, Christine Elizabeth

Sheris and Candace Jo Sheris each received $15,000.00

and the widow of the deceased, Maida Ludvik Sheris,

received $34,960.00.

The employer’s workmen’s compensation carrier now

seeks to have the outstanding award of the Industrial

Commission vacated and set aside and have its obligation

to the dependents terminated on the grounds that the

dependents have made one full recovery and that the

third party claim was settled to the carrier’s prejudice.

l6a

The dependents contend that the carrier is not entitled to

subrogation under The Virginia Workmen’s Compen-

sation Act to the recovery made by the dependents in the

action brought in the District Court. It is contended that

the liability of the defendant in that action was based on

a contractual obligation and that the Virginia Workmen’s

Compensation Act does not contemplate that the

employer can be subrogated to the rights of the depend-

ents against the Airline in this situation.

Section 65.1-41, Code of Virginia, provides in part:

“The making of a lawful claim against an employer

for compensation under this act for the injury or

death of his employee shall operate as an assignment

to the employer of any right to recover damages

which the injured employee or his personal repre-

sentative or other person may have against any other

party for such injury or death, and such employer

shall be subrogated to any such right and may

enforce, in his own name or in the name of the

injured employee or his personal representative, the

legal liability of such other party.”

Section 65.1-112, Code of Virginia, says:

“When any employer is insured against liability for

compensation with any insurance carrier, and such

insurance carrier shall have paid any compensation

for which the employer is liable or shall have

assumed the liability of the employer therefor, it

shall be subrogated to all the rights and duties of the

employer and may enforce any such rights in its

own name or in the name of the injured employee

or his or her personal representative; provided,

however, nothing herein shall be construed as

conferring upon the insurance carriers any other or

further rights than those existing in the employer at

the time of the injury to his employee, anything in

17a

the policy of insurance to the contrary notwith-

standing. No compromise settlement shall be made

by the insurance carrier in the exercise of such right

of subrogation without the approval of the

Industrial Commission and the injured employees or

the personal representative or dependents of the

deceased employee being first had and obtained.”

In §761 of The Federal Death on the High Seas Act

(46 U.S.C. §761), it is provided that whenever the death

of a person shall be caused by wrongful act, neglect, or

default occurring on the high seas beyond a marine league

from the shore of any state, or the District of Columbia,

or the territories or dependencies of the United States,

the personal representative of the decedent may main-

tain a suit for damages in the District Courts of the

United States, in admiralty, for the exclusive benefit of

the decedent’s wife, husbant, parent, child, or dependent

relative against the vessel, person, or corporation which

would have been liable if death had not ensued.

It is clear to us that the cause of action under the

Death on the High Seas Act is predicated on tort liability

rather than contractual liability. In fact, the complaint

filed by the Executors of the Estate of the Deceased

alleges in Paragraph 7, that the death was caused by the

wrongful act, neglect, or default of the defendant. The

Warsaw Convention and the agreement providing for

increased liability limits and- waiver of defenses under the

Convention, do not alter the tortious nature of the action

brought under the Death on the High Seas Act which

affords the remedy. Those carriers signatory to the

agreement have simply agreed to accept the principle of

liability without fault in an action granted by local law

such as the Federal Death on the High Seas Act. The

cause of action, however, is conformed not by the

Warsaw Convention or agreements pursuant thereto, but

by the Death on the High Seas Act.

a

18a

In King v. Pan American World Airways, 270 F.2d

355, a flight service supervisor, employed by the defend-

ant, was killed in the course of his employment when the

plane on which he was traveling crashed on the high seas

between the United States and Hawaii. The California

Workmen’s Compensation Act declared that the right to

receive compensation in accordance with its terms was

the employee’s exclusive remedy against the employer

and thus it was held that the provisions of that Act

abrogated an admiralty remedy against the employer

under the Death on the High Seas Act brought by

dependents of the deceased.

It is the finding of the Industrial Commission that

British European Airways Corporation is an “other

party” under the provisions of §65.1-41, Code of

Virginia. The making of a claim for compensation, by the

express terms of this statute, operated as an assignment

to the employer of any right which the personal

representatives of the Estate of William T. Sheris had:

against British European Airways Corporation and as

such the employer and its insurance carrier were subro-

gated to any rights the personal representative could

assert against the Airline on account of the death of

William T. Sheris. Recovery was apportioned by the

District Court to the dependents of the compensation

award to such an extent that it is patently clear that these

dependents have each had one full recovery as defined by

law. See Hoblin v. Randolph Corp., 180 Va. 345, 23

S.E.2d 209; Stone v. Helme Co., 184 Va. 1051, 37 S.E.2d

70.

We cannot find that the claim against British European

Airways Corporation was settled without the consent or

participation of the workmen’s compensation insurance

carrier, but we do find that the dependents of the

19a

deceased employee named in the Commission’s award

have each made one full recovery and for this reason the

outstanding award of the Industrial Commission is

vacated and set aside as of November 25, 1969, the last

day for which compensation was paid.

AWARD

It is Ordered that the outstanding award of the

Industrial Commission be, and it hereby is, vacated and

set aside as of November 25, 1969, for the reason that

the dependents have obtained one full recovery as

defined by law.

IN THE

INDUSTRIAL COMMISSION OF VIRGINIA

Opinion by HARWOOD,

Commissioner

Apr. 22, 1971

REVIEW before the full Commission at Richmond,

Virginia, on December 1, 1970.

From a decision and award of September 24, 1970, the

claimants have appealed, and this case is before the full

Commission upon review.

Having maturely considered the record in its entirety,

we adopt the findings of fact and conclusions of law of

the Deputy Commissioner as those of the full Commis-

sion upon review, and the award appealed from is

Affirmed.

20a

VIRGINIA:

In the Supreme Court of Virginia held at the Supreme

Court Building in the City of Richmond on Monday the

24th day of April, 1972.

Maida Ludvik Sheris, Christine Elizabeth

Sheris and Candace Jo Sheris,

Appellants,

against Record No. 7831

The Sheris Co. and Travelers Insurance :

Company, Appellees,

Upon an appeal from an

award entered by the Indus-

trial Commission of Virginia

on the 22nd day of April,

1971.

This day came again the parties, by counsel, and the

court having maturely considered the transcript of the

record of the award aforesaid and agruments of counsel,

is of opinion, for reasons stated in writing and filed with

the record, that there is no error in the award appealed

from. It is therefore adjudged, ordered and decreed that

the said award be, and the same is hereby, affirmed, and

that the appellants pay to the appellees thirty dollars

damages, and also their costs by them expended about

their defense herein.

a

21a

Which is ordered to be certified to the Industrial

Commission of Virginia.

A Copy,

Teste:

/s/ Howard G. Turner

Clerk

Appellees’ costs:

Attorney’s fee $50.00

Cost of printing brief not to

exceed $200-Code, §14.1-182

Teste:

/s/ Howard C. Turner Clerk

IN THE

INDUSTRIAL COMMISSION OF VIRGINIA

May 24, 1972

ORDER entered by HARWOOD, Chairman:

The award of the Industrial Commission entered on

April 22, 1971, having been affirmed by the Supreme

Court of Virginia by mandate of April 24, 1972, it is

ordered that the claim be dismissed from the docket.

In accordance with the provisions of the said mandate,

it is ordered that the claimants pay to the employer and

22a

its insurer thirty dollars damages and also their costs by

them expended about their defense therein, to-wit:

Attorney’s fee $50.00

Cost of printing brief

not to exceed $200.00

INDUSTRIAL COMMISSION OF VIRGINIA

—oe /s/ Thomas P. Harwood, Jr.

Chairman

Attest:

E. M. Scott

Clerk

The following is the Statement of Questions on Appeal

which were presented for review and determination by

the Supreme Court of Virginia and as they were set forth

in Petitioners’ original brief before that Court.

QUESTIONS ON APPEAL

Was the final award of the Industrial Commission

terminating any further Workmen’s Compensation

benefits to the widow and dependent children of

decedent who was killed in an air crash in inter-

national waters while in the course of his employ-

ment consistent with law and the evidence where:

(a) the personal representatives recovered a

judgment against the air carrier under a controlling

federal statute which was designed for the benefit of

certain beneficiaries specifically and exclusively

designated by such statute;

—_

23a

(b) the action, although required to be instituted

pursuant to federal law, was predicated upon the

Warsaw Convention and certain supplemental

agreements among international airlines providing

that in the event of a passenger’s injury or death the

air carrier would be contractually liable within

certain prescribed monetary limits without regard to

fault; and i

(c) the contractual character of the air carrier’s

undertaking and consequential contractual, as dis-

tinguished from tortious, liability was in the nature

of a private insurance policy and as such not subject

to the subrogation rights of a Workmen’s Compen-

sation insurer.