Petition for Writ of Certiorari — Gateway Center Corp. v. Merriam

„„

73 1519 f 1 11. 1

1

—— ———

Nr

IN THE

‘

Dem ee Oe te

Supreme Court of the United State

OCTOBER TERM

1973

Crospy & Company, IS.,

Petitioner,

against

Compagnit NATIONALE Arr FRANCE,

also known as Ain FRANCE,

Respondent.

PETITION FOR WRIT OF CERTIORARI

To the Appellate Division of the Supreme Court

of the State of New York, in the First Department

Cora Mixx,

Counsel for Petitioner,

150 Broadway,

New York, New York.

BA 77070

28 N. 60. F our, U

D

Jurisdiction... cscccccccccccccccsccscccccssssvesess

The Questions Present ea.

The Treaty and Statutes Involves/Pquͥe.

Statement of the Ce.

The Sued Om Cont racoeae ttt

Air France's Culpable Mishandling of

the Trial Shiüpeunttterteter

The Purchaser's Cancellation of the Contract ..

Air France's Invocation of the Warsaw

% ů˙ b rb ecericeccouevece

The Motion for Summary Judgneunt

The Memorandum Dec 186 1bobo—rmni:ii:i

Petitioner's Appeal

The Subsequent Proceedin ase

Reasons for Allowance of a Urltt Seaweed be

Supporting Argument

I The Warsaw Convention Does Not Apply to

Causes of Action for Frustration of Term

Contracts as Distinguished from Causes

of Action for the Value of a Shipped

Cargo or for Damage Thereto.

ꝙͤ P — — — -comenmen ——

r

‘ie

5

j

ii

II Even If The Sued On Contract Be Deemed

To Be Within The Purview Of The Warsaw

Convention, The Invoked Liability Lin-

itations Textually Accord No Defense.

III Insofar As The Defenses Depend Upon The

Air Waybill, They Are Ruled Out Also By

The Doctrine of Lisi v. Alitalia-Linee

Aerre Italiane, 370 F 2d 508 (2d Cir.

1966), Affd. 390 U.S. 1039 (1968) And

Egan v. Kollsman Instrument Corporation,

21 2d 160 (1967).

IV The Federal Aviation Statutes (49 U.S.C.

1301 Et Seq) And Air France's Rules Tar-

iff Filed Thereunder Have No Significant

Impact On This Case.

V In The Absence Of A Valid Limitation Of

Liability, Petitioner Clearly Is Entitled

To Its Loss Of Profits.

Cone lus ſon

APPENDIX

Air France Air Cargo Rules Tariif No. CR-2 2

Warsaw Convention, 49 Stat. 3000, T.S. 876,

Appendix 49 U.S.C.A. 87-91

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Article 1, 2

Article 5, 6

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Article 8-11

Article 18-19

Article 20-22

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Article 23-25

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46

111

AStlele hhhh)hh0 „„ „6. 4a

Asticle 2B-31 lll. 6969659 9 ꝙ .. 9a

Astiele )))) „555 2 0 10a

Federal Aviation Program 72 Stat. 737;

75 Stat. 467; 76 Stat. 143; 49 U.S.C.

10 GC 6% „ „ „ „ „ 0 56 6666 6% 6 6 lla

Gee. 1301 (49 9. 8s. 66. „4“e lla

= BOTS cccccccccess Coc „„ „„ „ 6 6 66 6 6 0 „ 60 lla

we 12. 96 66066 „„ 60 lla

N 11 l3a

Xs „„ „„ „ „ „„ „„ 14

Order and Judgment (Of Appellate Division)

Sought to Be Reviewed .......66:cecceeee „5 2 2 2 0 162

Appellate Division Order Denying Leave

To Appeal To Court of Appes lc .. 1Ba

Order of Court of Appeals Denying, Leave

TO A lll „44 32. 666 2 2 6700

The Affirmed Judgment 21

Memorandum Decision Dismissing Complaint ........ 25a

Memorandum of Saypol, J. Denying Hot on

To Diemiss De fene 512

Memorandum of Geller, J. En joining Defendant

From Impleading Plaintiff in Bondi Action

In France Against Air France 54a

Contract Sued o 560 „0 608

| Letter Crosby to Air France, 2/7/68 Mot

Referred to in Contract 50 2 60% „ „ „6 70

rr Sp air ge ere

1

5

* Page

i Letter Crosby to Air France, 2/14/68

| Not Referred to in Cont raet. 72a

3

4 Air France Air Waybill..........--ccccecececes 74

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i Comp la iult eees ‚(ͤ 55575 * 76a

4

AMGUBE TI2＋ʒiuutt „„ „„ „56„%% 6 n „660 Bla

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Latter Air France to Crosby 3/26/68 .......... 1012

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Letter Crosby's Attorney to Air France

8/13/68 ....... ) 0 1032

STATUTES, TREATY, TAKIFF

9

N Air France's Cargo Mule Tariff No.CR-2,

Free Seas 8, 15, 19, 46

Federal Aviation Program, 49 U.S.C.

1301 et %% ¶˖⁰ꝙꝗ 2 3% 8, 27, 46, 11-1

Jud ic try & Judictal Procedure,

// ²•vr˖¶r œ•örV nge. 4

Warsaw Convention, 49 Stat.3000 et seq.

T.S. 876 Appendix 49 U.S.C.A.pp. 87-91..4, 32, la-10a

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—— — —

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Pages

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CASES

American Synthetic Rubber Corp. v.

Louisville & Nashville Railroad,

e... 47

Clark v. Ulster & Delaware Railroad

Company, 1690 N Y 93 (1900õʒꝶ.;ʒu;n) 26, 31

Cornell Steamboat Company v. Phoenix

Construction Co., 233 U.S. 593,

FOP CERRO) ccccenedeseeccecscscesececceres 30

Czarnikow-Rionda Co. v. Federal Sugar

"Refining Company, 255 N. 1 33, 41-7

7a) Bn ee 47

Evan v. Kollsman Instrument Corpora-

nn 41, 42

Feraco Inc. v. Georgia Pacific Corp.,

313 F.Supp. 660 (D.C.Del.1970) ........... 20, 27

Lisi v. Alitalia-Linee Aerre

Italiane, 370 F 2d 508 (2d Cir.1966)

Af fd. 390 U.S.1039 (1968) Rehearing,

— / DE awk sn en eaieecesersagae, 22, 41

Marks v. Cowdin, 226 N.Y. 138, 143

7 eneadsieusdcnenea ead ce T 30

2 eae |

alee Reg tei oR es

TO a ee ee eT

g

2

§

‘

4

3

a

vi

Marquette Cement Manufacturing, Co.

v. Loulsville & Nashville kailroad,

261 F.Supp. 944, Affd. 406 F 2d 73)

COCR Che. „ „ „ „ „„ 6

Muzak Corp. v. Hotel Taft Corp.,

1. r. 246 42, 4627 (1930)

Nader v. Allegheny Airlines, Inc.,

U.S.L.W. 2233 (us. b. C., D.C.10/18/73)

Northwest Airlines Inc. v. United States,

R rrr

St. Louts and Iron Mountain Kala

v. MeWhiter, 229 U.S. 265, 276-7 (1913)

United States v. Anasoctated Air

Transport, 275 F 2d 627 (th Cir.1960)

United States v. Pink, 315 U.S. 203,

217-18 (1942) ......445. „566 2 „6 2 6 „

Whitlock Truck Service Inc. v. kKegal

Drilling Co., 333 ¥ 2d 4868 (10th Cir.

| OTT Ere rere rere eer Cer er

Wills v. Transworld Airlines, Inc.

200 F.Supp. 360 (b. C., &.D.Cal., 1961)

Wood v. Duff-Gordon, 222 NM. T. 6 (1917) )

2 *

99686600

900

620

Paye

eed

In the

SUPREME COURT OF THE UNITED STATES

OCTOBER TERM

1973

CROSBY & COMPANY, IX.,

Petitioner,

~agAinat-

COMPAGNIE NATIONALE AIR FRANCE,

also known an AIR FRANCE,

Respondent.

PETITION FOR WRIT OF CERTIORARI

To the Appellate Division of the Supreme Court

of the State of New York, in the First Department

Petitioner, Crosby & Compeny, Inc,, re-

spectfully prays that 4 Writ of Certiorari tasue

to review the order and judgment of the Appellate

Division of the Supreme Court of the State of New

York, in the First Department, entered October 30,

1973 (which the Court of Appeals of the State of

New York declined to review, by order dated and

entered January 16, 1974), That order and judgment

*

affirmed a judgment of the Supreme Court, New

York County, dated and entered June 20, 1973,

which, on a motion by the defendant for summary

judgment, dismissed the plaintiff's complaint.

THE OPINLONS BELOW

The Justice who considered and granted

defendant's motion for summary judgment wrote

an opinion which is reproduced at pages 25a-50a*

infra. To date, that opinion has not been pub-

lished in any report.

On appeal to the Appellate Division of

the Supreme Court of the State of New York in

and for the First Department, from the judgment

entered on that opinion, that court affirmed the

judgment without opinion (42 A D 2d 1050) by

order dated and entered on October 30, 1973

which is reproduced at pages 162 17/0 infra.

There was no other opinion apart from

two memoranda on intermediate motions which are

reproduced at pages 5la-59a inirca.

„ Numerals followed by the letter "a" refer to

the page number of the Appendix which follows

page 47 infra.

2

JURISDICTION

(1). The order and judgment sought to be re-

viewed was dated and entered on October 30, 1973.

Thereby the Appellate division of the New York —

Supreme Court, First Department, affirmed a judg-

ment of the Supreme Court, New York County, dis-

missing Petitioner's complaint.

A timely motion in the Appellate Division

for leave to appeal to the Court of Appeals of

the State of New York was made on November l,

1973 and was denied by an order rendered and en-

tered on November 27, 1973.

Thereafter, on December 18, 1973, a te-

ly motion for leave to appeal was made in the

Court of Appeals. It was denied by an order ren-

dered and entered on January 16, 1974.

Copies of the above mentioned orders are

appended at pages 18a-20a infra.

The above motions for leave to appeal were

made pursuant to Article VI Section 3 of the Consti-

tution of the State of New York and Sections 5513,

5601 and 5602 of the New York State Civil Practice

Law and Rules. Under those provisions « unanimous

affirmance by an Appellate Division of a judgment

—

4

in a civil case which does not raise s constitu-

tional issue, is not further appealable except

by leave of the Appellate Division or the Court

of Appeals. Such motion may be made to either

court within 30 days; if made to and dented by

the Appellate Division, « motion y he asde in

the Court of Appeals within 30 days «efter such

denial.

If the applied for writ is issuable to

the New York Court of Appeals rather than to the

Appellate Division, it is respectfully prayed

that this petition be deemed amended according-

ly.

(2). This application is made pursuant to 28

U.S.C. 1257 (3) as « case where « right, priv-

Llege or immunity is specially set up or claimed

under treaties or statutes of the United States.

The treaty involved is the Convention

for the Unification of Certain Rules Relating to

International Transportation by Air, signed at

Warsaw, Poland, on October 12, 1929, as amended,

commonly known as "The Warsaw Convention” (49 Stat.

3000 et seq., T. 8. 876; Appendix 49 U.8.C.A. pp. 87-91).

o$e

The pertinent statutes of the United

States are the "Federal Aviation Program" of

1958, 49 U.S.C. 1301 et seq.

THE QUESTIONS PRESENTED FOR REVIEW

The questions presented by this case are;

1. Does the Warsaw Convention apply to

the February 20, 1968 contract, described

below, for 2,000,009 pounds of horse meat

to be shipped in weekly instalments of

80,000 pounds?

2. If it does, do the exculpatory provis-

fons and limitations, by their terms, apply

or have those provisions been misconstrued?

3. Similarly, does the Federal Aviation Act

or tariffs filed thereunder apply to the

contract, there being no preference, rebate

or discrimination?

4, Do the exculpatory provisions or limita-

tions in s March 1968 air waybill covering a

trial shipment of 21,795 pounds apply to the

2,000,000 pound February 20, 1968 contract?

5. Being in minuscule and illegible print,

—U—ä—ͤ ed

obo

do the provisions on the reverse side of

the air waybill have any effect?

Each of those questions was decided in

favor of Air France whereas Petitioner min-

tains that each should have been decided in

Petitioner's favor.

This action, in which the above qurr-

tions arise, is for damages for the frustration

by the respondent (hereinafter referred to as

Air France) of 4 contract between (i) Petition-

er as 4 seller (in the United States), (ii) a

Purchaser in France and (1i1)Air France asa foreign

international carrier by air, The contract was

entered into on February 20, 1968 for the sale

by Petitioner to the Purchaser and for gart agg.

b ir France from New York to the Purchaser in

Toulouse, France, of 2,000,000 pounds, in week-

ly instalments of 80,000 pounds, of frozen fresh

killed horse meat for human consumption, At tli

instance of the Purchasrr, thr contract ineluded

@ provision for s trial shipment and a clause

reading: "This contract will be void {f quality

27

of meat on trial shipment is not satisfactory to

Marino Bondi" (th: Purchaser). Air Francs culp-

ably mishandled the trial shipment. in consea-

uence, the Purchaser exercie:d his reserved right

to "void" the contract, This action ge inst Air

France is for the conseauent loss of profits.

Air France interposed as defenses pro-

visions of the Warsaw Convention (see pp. 83a-96a

infra) and urged also provisions of the Federal

Aviation Act and provisions said to be contained

in Air France's Atr Cargo Rules Tariff’ filed pur-

suant to that act and, also, provisions in its

air waybill covering only the March 1968 20, 795

pound trial shipment, On the basis of those de-

fenses, the complaint was dismissed by 4 summary

judgment.

TH) TREATY AND STATUTES INVOLVED

Articles 1, 5, 6, 8, 9, 10, 11, 18, 19,

20, 21-26, 28, 29 and 33 of the Conention for

the Unifteation of Certain Rules relating to Inter-

national Transportation by Air, signed at Warsaw,

Poland, on October 12, 1929, usually known an the

Warsaw Convention (49 Stat. 3000 et sea; Appen-

dix 49 b. s. c. A. pp. 87-91) which defendant in-

voked, or have s bearing thereon, are set torth

at pages la-10a infra.

The defendant invoked also 49 U.S.C.

Chapter 20, Section 1301 et sea, All of the rel-

evant portions of that Chapter, including Section

1373(a) are reproduced at pp. lla-l4a infra,

Defendant invoked also "Rule 2 (D)" of

ice “local and Joint International Air Cargo

Rules No. CR-2", That is set forth at page 15a

infra. Presumably, nothing else on file with

the Civil Aeronautics Board is material,

STATEMFNT OF THR CASF

The Sued Qn Contract

As already stated, the action herein in

for damages for causing the frustration of con-

tract betwern (1) Petitioner an a seller (in the

United States), (11) @ purchaser in France, and

(111) Air France as an international carrier by

—— —E‚ä4᷑— ——

-9-

air, for the carriage from New York to the pur-

chaser in Toulouse, France, of 2,000,000 pounds,

in weekly instalments of 80,000 pounds, of frozen

fresh killed horse meat for human consumption.

The contract is reproduced at pages 60a-

69a infra.

It stipulated that the horse meat be

{rozen at the plant "to a temperature of 14°

Fahrenheit" (pp. 60a-6la infra) and it stipulated

that the temperature on arrival" should be be-

tween zero and two degrees centigrade during the

winter and between two and four degrees centigrade

during the summer (pp. 64a, 65a infra). At the

instance of the purchaser, the contract incorpor-

ated a provision for a trial stipulation and a

clause reading: hie contract will be void if

quality of meat on trial shipment ie not satie-

factory to Marino Bondi" (the purchaser).

The contract was solicited by Air France,

through its "Sales Representative’ in the New York

Cargo region. It was entered into after a year of

negotiation, initiated, persevered in and conducted

by that Sales Representative and his Superior,

the New York Cargo District Manager (Record on

Appeal” in the Appellate Division pp. 43-9, 14-41,

147-50, 172, 184-204).

The record shows that the Sales kepresen-

tative, in pre-trial examination, testified that

his duties wery iv seil and promote th

of air cargo tians por tat ton in general (k A 47)

and that his purpose in negotiating with Petit-

foner and the purchaser was "mainly to arrange

for the transportation of the horse meat ... to

arrange 4 course ... @ series of transactions ...

to get that traffic" (id, 148-9),

The contract consisted of a letter dated

February 1, 1968, from the plaintiff addressed to

Air France, Cargo Division, was accepted“ by the

purchaser with two amendments and by Air France

with @ signature in its behalf by its Cargo Dis-

trict Manager “as per letter NYC. FF dated Feb,

* Hereinafter referred to as RA

11

16th Feb 20, 68" (p. 6% Inte). (The "Feb 20,

66" at the foot of plaintiff's letter of Feb-

ruary 1, 16 the date of the signature by the

Manager.) The letter of February 16th thus in-

corporated, was addressed to plaintiff, was

signed by the same New York Cargo District Han-

ager and was "accepted" by the plaintiff (p. 69a

infra).

Performance of the contract would have

yielded Air France $380,000 (at the rate of

19 cents per pound) for the carrying of the

2,000,000 pounds of meat from New York to

Toulouse,

Because that revenue and plaintiff's

jrospective profit hinged on satisfaction with

the trial shipment, the trial shipment was ac-

companied by Air Prance's Sales Representative

and also by s representative of the plaintiff

on the plane, and both proceeded to Toulouse

(u A 153, 159-169).

—— weet

-12-

Air France's ulpable Mishandling

2 nt

Despite the pivotel importance of the

trial shipment, Air Frence, concededly, so egreg-

fously mishandled the trial shipment that the

horse meat arrived in Toulouse, France, in so

putrefied condition, that upon its arrival it

was condeaned by the French Health Authorities,

in the presence of Air France's "Sales Repres-

entative” and the plaintiff's representative,

and then was destroyed by those authorities.

Air Prance (for the purpose ofits

motion for summary judgment) conceded that:

it exposed the meat, after its arrival at

Kennedy Airport, for over 15 hours in the open

air before loading it on the plane; it crammed

the mest into 4 plane which had no reofrigera-

tion; It delayed the departure of the plane for

4 number of hours; upon the arrivel of the

horse meat at Orly Airport, Paris, instead of

lamediately shipping it to Toulouse by air,

where it would have arrived within an hour, de-

fendant stuck the meat into s truck which was

too small and unrefrigerated or inadequately re-

frigerated and which did not arrive in Toulouse

until 24 hours leter.

The Purchaser's Cancellation

of the Contract

Naturally, the Toulouse purchaser was

dissatisfied with the quality of the trial ship-

ment meat upon its arrival, and he exercised

his reserved right to "void" the contract.

In consequence, the plaintiff, in the

words of the complaint, "was deprived of the

profit t would have made on this sale ... of

the two million pounds provided for in the ...

agreement", amounting to $100,000.00.

Air France“ e Inocation of

the Warsaw Convention Limit-

ations and Immunities

To the complaint for the lost profits of

9100, 000. 00, Air France, in its answer (reproduced

at pp.8la-100a infra), included four defenses pred-

icated on the Warsaw Convention. It cited and

quoted Articles 1, 5, 8, 10, 11, 18, 19, 20, 21,

-16-

22, 24 and 26 (see pp. b4n-96a infra ) and de-

manded "judgment dismissing the complaint ayainst

it, and in the alternative, for judgment limiting

its liability under the provisions of the Warsew

Comention ...".

The Motion for Summary Judgment

In moving, for simmery judgment of din-

misesal, the affidavit of one of the attormys for

Air France referred to a previous motion by the

plaintiff for the dismissal of Air France's af-

firmative defenses on the ground that they re-

anectively failed to set forth the material elem-

ents of defense and failed to state a defense,

and on their face, have no merit ..." and that

motion had been denied with s memorandum.” The

affidavit for Air France continued:

"Defendant has denied and continued to

deny, inter alia, the accuracy of the

plaintiff's description of the facts

„ The memorandum is reproduced at pp. Sla-53a infra.

-15-

forming the basis of this action. How-

ever, for the purposes of this motion

for summary judgment, except a6 set

forth in the accompanying effidevit of

Stephen Mackevicius, the defendant will

, arguendo, the accuracy of plein-

tiff's factual allegations (not the

legal conclusions) in paragraphs 5

through 8 of plaintiff's complaint and

paragraphs 2 through 10, 12 through 17,

19, 20 and 22 of the plaintiff's bill

of particulars, ..."

In the referred to accompanying affida-

vit of Mackevicius, Air France's "Legal Services

Manager’, he added as a further basins for judg-

ment in its favor "pertinent [emphasin added] Hor -

tions of Air rende Cargo kules Tariff No, Cu-2,

C. A. B., Mo. 17 which was (1led pursuant to the

Federal Aviation Act with the Civil Aeronautics

hoard and which was in effect on March 12, 1968"

(A A 93-4), Rellance was limited to "Rule 2(D)"

of those “pertinent port tons“ ( A 94). That

read (u A 105; p. 15% Infra):

— tern —

216.

"All carriage of cargo governed by this

tariff shall be subject to the rules,

regulations and conditions of carriage

in effect on the date that the trans-

portation begins"

Hr. Mackevicius continued (k 4 %):

"Those conditions of carriage are wt

forth on each air waybill and appear

on the aforementioned air waybill cover-

ing the shipment in question",

And he argued (k 4 94);

"Those conditions of carriage limited

Air France's liability and also limit-

ed the time permitted for the plaintift

to give written notice of its claim,

These limitations reflect those of the

Warsaw Convention, which was also applic-

able to the transportation in question"

(1d).

The tiny crowded print on the reverse snide

(p. 75a infra)

of the air waybill/whic ir France prepared (and

the delivery of which is disputed) dg the only doc-

ument which 16 claimed to have given actual notice

-17-

of the claimed limitations,

The Memorandum Decision

The Justice who granted the motion for

dismissal, in his 25 page Memorandum Decision

(pp.25a-50a infra), at the outset of his de-

cision, expressed the conclusion (pp. 30a-3la

infra):

"Air France cnly legal obliga-

tion under the alleged agreement was

to act a6 3 transfer agent of funds

for (the purchaser] Marino Bondi"

{emphasis added),

ah „„

"Consequently, there was no quest on

at the time the alleged agreement was

entered into, che the only villgelion

that could have been legally imposed

upon Air France under the agreement

wan to act 46 @ transmittal ayent for

Marino Bondi's funds . . . Any obliga-

tion of Air France to avoid wrongful

acts or omissions in transport ing the

-18-

trial shipment to France did not arise

under the alleged agreement” | emphasis

added).

The Justice added (p. 35a):

"It seems noteworthy that 4 portion of

Section 6 fof the contract] reads as

follows:

‘Conditions of carriage in re-

gards to this traffic shall be

those as convened on the trans-

portation contract shown on the

air waybill.' [Emphasis added)

Since the air waybill “included a limitation of

liability”, the Justice hopped to the conclusion

that those conditions of carrtlage" Appited

“to all shipments proporrd in the plain-

tft letter of February 1, 1968, and

not just to the shipment eventually

transported under an air waybill on

which these conditions appear.” (pp. 1

infra; emphasis added).

There follow over 15 pages (pp. %% % infra)

-19-

of discussion of the Warsaw Comwention, the Fed-

eral Avistion Act and Air France's Rules Tariff

No, CA-2, C.A.B. Mo. 17, with citations and

quotations of numerous cases which led him to

the conclusion that the liability and notice of

claim limitations in the Warsew Convention ap-

nlied to the frustration of the 2,000,000 pound

contract and also that the contract was "governed

by the provisions of the Federal Aviation Act

and, consequently this Act and the Tariffs filed

in conformance and compliance therewith are the

exclusive sources of the regulations and inter-

pretations of the contract of carriage" (p. /

infra).

These tariffs, the Justice continued,

"containing [Air France's] rules and regulations"

«ee control this case. Thereunder the "conditions

of carriage" that were set forth on the air waybill

were "binding" and two provisions therein, "a limit

of liability and a time limited for claim ,,, die

jose of the plaintiff's action herein" (p.42infra;

emphasis added).

* without noting the diatinetion betwaen domeant te

and internat lonal carriage

Accordingly, the Justice con luded,

"On the defendant's motion for suamery judgment,

the complaint should be dismissed ..." (p. 0

infra), Such @ judgment was thereafter entered,

A copy thereof appears at pages 21la-24a infra,

Petitioner's Appeal

A timely appeal was prosecuted in the

Appellate Division, Air France reiterated 11

ite contentions and added a sugyestion that the

contract, as viewed by the plaintiff, was illeyal,

citing Feraco Inc, v. Georgia Pacific Corp., 313

. Supp. 660, 662 (D.C. Del. 1970), and United

States v. Associated Air Transport, 275 F 2d 827

(Sth Cir. 1960).

As previously noted, the Appel lategbivin-

fon affirmed the judgment, without any comment

whatsoever.

The Subseauent Procecdings

As noted at payecs 3-4 supra, successive

timely motions to the Appellate Division and the

Court of Appeals for leave to appeal to the Court

21-

of Appeals were respectively denied by orders

dated and entered respectively on October 30,

1973 and Januery 16, 1974, Copies of those

orders are appended at pages 16% 20 infra.

Fach of the dente le was without any comment,

REASONS FOR ALLOWANCE

OF THE APPLIED FOR WRIT

1. It ie manifest that the case is

governed exclusively by Federal Law,

The basic question is whether, by

reason of the Warsaw Convention or by reason

of the Federal Aviation Act or Air France's tar-

iff thereunder or its March 12, 1968 air waybill

for the 21,795 pound trial shipment or, posasib-

ly, a8 @ matter of public policy - 211 of which

are matters of Federal law the agreement be-

tween the parties, as eet forth in their signed

and integrated writings, iamunized Air France

from liability for frustrating the February 20,

1968 two million pound contract by inexcusable

and appalling mishandling of the critical cria)

shipment,

—— — — ee oer

— ie

on

-22-

If any of those codes apply to the Febru-

ary 20, 1968 contract, another question is: Is

petitioner's claim for the culpable frustration

thereof by Air France barred by the terns of any

of their exculpatory and Limitation provistons?

It has been and is petitioner's position

that

(a) The Warsaw Convention and the air way-

bill and the filed tariff applied only to

the 21,795 pounds of the meat shipped in

March 1968 and had no cffect on the Febru-

ary 20, 1968 contract providing for 25 week-

ly shipments.

(b) Even If deemed applicable, the Limita-

tions as written do not have the cxculpatory

effect attributed to them - for a number of

reasons which are set forth in the course of

pages 33-45 = infra.

(c) The air waybill, moreover, can be ven

no effect whatsoever in respect to an inter-

national carriage under the rule of Lin! v.

Alitalia-Linee Acrre Italiane, 370 F 2d 508

(2d Cir. 1966) affd 390 U.S. 1039 (1964),

and there is no substance in the contention

-23-

that the rule is limited to passenger tick-

ets and baggage checks and does not apply to

alr waybills despite the uniformity of the

Convention language in regard to all three

of those categor tes.

2. The basic questions thus prosented, it

is submitted, are of substantial general import -

ance to this country's international trade. The

Justice who dismissed the complaint correctly

characterized this case as a "gignificant commer-

cial controversy" (p. 29a infra; emphasis added)

The February 20, 1968 contract is not an

isolated engagement. It ie apparent that Air

France employs sales representatives’ who soll -

cit term contracts for a course or a ser tes of

periodic carriage of cargo. In the words of the

"Sales Representative" who, in association with

Alr France's Cargo District Manager", solicited

and neyottated the contract in this case, his

duties were to "sell and promote the service of

alr cargo transportation in general" and his

particular purpose in this case waa "Lo arrange a

course . a series of transactions ... to pet

that traffic" (RA 147-9), Presumably, other air-

lines do likewise,

Such contracts are highly advantageous

to the carrier, shipper and consignee, They

assure the carrier specified quantities of cargo

at specified times - here during a specified

period 25 weekly shipments of an apgregate of

2,000,000 pounds and $380,000 of revenue; they

assure business concerns the necessary space and

facilities for carriage at specified timer - here

2,000,000 pounds in 25 weekly instalmente and

$530,000 of revenue; they assure the purchaser

continuity of delivery of specified quantities

at specified times,

If such a contract may be breached by the

carrier with impunity, then the commercial com-

munity should have notice of it by a decision of

this Court. Why should such a businesa-getting

and business assuring contract be treated different-

ly from any other business contract which carriers

may enter into?

It is respectfully suggested that rather

shocking is the holding in this case that under a

-25-

term contract for $380,000 cargo revenue to the

carrier and $100,000 or $130,000 profit to the

shipper, the carrier ie totelly tamune from

liability for the loss it caused the plaintiff

by culpably mishandling the triel shipment upon

which, to the carrier's knowledge, the contract

hinged,

J. neither the Warsaw Corvention nor Chap-

ter 20 of 49 U.S.C, nor Air France's tariffs

thereunder proscribe (or provide for) such term

contracts. Hence, it 1s submitted thet breaches

are subject to common law principles. On that

basis, the Court of Claims in Northwest Air-

lines Inc, va, United States, 444 F 24 1097

(1971), enforced s provision in a term contract

for advanced blocked-apace that such space when

not properly cancelled and not used should be

fully paid for an stipulated in the contract,

4, In sen, there ia no distinction he-

tween @ contract of the nature here involved and

4 reservation of « seat for a specific flight,

Ms aN <a St — |

3 ante i Nat

S

26

Whatever exculpatory provisions may be set forth

in «a flight ticket does not apply to the engage-

ment to furnish the passage, and for @ breach of

that engagement, the carrier is held liable for

whatever damage such breach causes and,in addition,’

ie aanessed exemplary damages (Wills uv. Transworld

Airlines, Inc., 200 . Supp. 360 (b. C., &.D.Cal.,

(1961) - actual damage $1.54, exemplary $5,000;

Nader v, Allegheny Airlines, Inc.,( U.S.D.C., D.C.

10/18/73, 42 U.8.L.W. 2233, not otherwise report-

ed ~ actual damage $20, exemplary $50,000).

Similarly, in holding 4 railroad liable

for the damage caused by its failure to perform

an agreement to furnieh a railroad car on 4 rpec-

fie date for the transportation of cattle to a

specific market on 4 specific market day, the New

York Court of Appeals in Clark v Ulster & Delaware

Railroad Company, 169 WY 93(1907), disregarded

the fact that the railroad's standard live stock

transportation contracts excluded liability for

such failure, The Court distinguished contracts

for prospective carriage from contracts which cover

-27-

actuel carriage and refused to import into the

former the limitations of the carriage contract.

5. Prohibitions of “any undue or unreason-

able preference or advantage" or of “any unjust

discriminstion or any undue or unreasonable prejudice

(49 U. s. c. 1374(b))

or disadvantage in any respect whatever"/do not

apply, since there is no claim and not an iota of

evidence that the contract gave plaintiff or Bondi

any such advantage or, in any way, was prejudicial

to any other shipper, actual or potential.

6. There appears to be no authority in sup-

port of the determination which is sought to be

reviewed,

Neither of the two cases cited by Air

France - Feraco Inc. v. Georgia Pacific Corp.,

313 F. Supp. 660 (D.C. Dec. 1970) nor United States

. Asrociated Air Transport, supra, 275 F 2d 827

(Sth Circ. 1960)- has any application,

In the Feraco case, there was an oral un-

derstanding, the performance of which, the Court

found, involved preferential treatment and shutting

out of others! shipments, Moreover, the defendant

— —— 4 |

was 4 domestic motor freight carrier,

The case against Associated Air ‘transport

has absolutely nothing in point; on the contrary,

although there were term contracts in that cate,

there was no suggestion that for that reason they

were illegal.

7. In the absence of the erroneous notion

that an international carrier (foreign or domen-

tic) may not enter into contracts for carriage

over @ period of time, it seems inconceivable

that the Justice who diaminned this cane or any

competent Judge would hold that the Vebruary 20,

1968 contract wasn devold of "legal obligation”

other than to act as a transfer agent of funds,

The specific provisions for (1) weekly deliver-

les by plaintiff to Air France's "JFK Inter-

national Airport Cargo fuilding 086", (11) tor

air waybille to be iasued at the "JFK's office",

(111) for payments to be made to plaintiff by Air

France out of funde which (iv) the purchaser

agreed to "deposit with Air France" ~- considered

cumulatively - inexorably implied a reciprocal

undertaking by Air France to accept and properly

carry the specified weekly instalments and to

receive from the purchaser the funds he under-

took periodically to deposit and to pay the pet-

itioner therefrom as specified. Only if the pur-

chaser failed to make his promised deposits was

Air France to be free of liability.

It 1s noteworthy that the Justice in this

case did not say thet the contract by its terms

imposed no obligation on Air France as « cerrier -

which was ite primery business - other then to act

as @ transfer agent of funds, What the Justice

ld is that the contract imposed upon Air France

only the "legal obligation ... to act as @ transfer

agent (pp. 30a-3le infra; emphasis added), There-

by, he clearly was construing the contract on the

basis of what he conceived to be the legal limit-

ations and not its language.

In any event, since the contract was for

international carriage from the United States by «

foreign carrier governed by Federal lew acting un-

der 4 Pederol permit tesued under o Federal atatute

-30-

and subject to the jurisdiction of a Federal

agency, it is submitted that the construction of

the contract is a matter of Federal law and thus

is reviewable by this Court, Surely, in such a

case this Court is not bound by a miaconstruct lon

of such a contract (United States v. Pink, 315

U.S. 203, 217-18 (1942); Cornell Steamboat Con-

pany v. "hoenix Conatruction Co.,233 U.8. 593,

599 (1914); St. Louls and Iron Mountain Kallway

eee ee!

v. McWhiter, 229 U.S. 265, 276-7 (1913)), eapeci-

ally in a case where under the authentic New York

la there can be no doubt that Air France obli-

pated itself to act as a carrier by air from New

York to Toulouse of the 2,000,000 pounds, at

specified times, in a specified way, with due care,

no long as the contract was performed by the Pett-

tloner and by purchaser bondi. Clearly, the con-

tract was fully mutual and reciprocal in all its

phases and bound Air France to properly perform

ite part so long as the contract was performed by

the other two part 108

» Wood but Gordon, 222 N.Y. 66 (1917);

* K. 8 5 I

Marks V. Cowen, 226 NV. 138, 143 (1919); Muzak

Cor wv. Hotel Tart Gorp.,, | N.Y. d 42, 46-7 —

I

SUPPORTING ARGUMENT

1

DU WARSAW CONVENTION DORKS NOT APPLY TO

CAUSES OF ACTION FOR FRUSTRATION OF TERM

CONTRACTS AS DISTINGULSHFD FROM CAUSES

OF ACTION FOR THE VALUE OF A SMIPPED

CARGO On FORK DAMAGE THERETO,

The basic contention that the Warsaw Con-

vention applies only to contracts of shipment

and not contracts for shipment, ae set forth at

pages 21-30 supra, petitioner believes requires

hardly any supplementation,

The distinction between the air waybi)l

(assuming it valid) covering the March 1968

21,795 pound shipment and the 2,000,000 pound

contract of February 20, 1968, seems obvious,

That diatinction was pointedly made in Clark v.

Ulster & Delaware Railroad Company, 169 N.Y. 93

(1907) nupra, The distinction also is the im-

plicit ret tonale of Northwest Airlines v. United

States, 444 ¥ 2d 1097 (1971) urs, of Wille v.

Transworld Airlines Inc,, 200 F. Supp. 360 (1961)

supra, and of Nader v. Allegheny Airlines Inc,

supra,

— —

—

32

The distinction, moreover, appears in

the terms of the February 20, 1968 contract,

That document makes no mention of the Warsaw

Convention, Mor does it set forth any limite~-

tions of liability under the contract, Iindirect-

ly, It provides only:

"Conditions of carriage in regards

to this traffic shill be those an

comened on the transportation

contract shown on the air waybill”

(emphasis added),

Thus, the air waybill to be issued for each ahip-

ment will constitute “the transportation contract”

containing the “conditions of corrtage” governing,

tat fusnment, Nothing ts said by way of limiting

Itability under the overall contract other than

in case the purchaser defaults in his obligation

to deposit funds. Moreover, the reference for

“conditions of carriage” is to the “air waybill”

and not the Warsaw Convention,

Although the distinction seems obe fou and

finds implicit support in the shove mentioned canes,

there {8 absent a direct controlling authority which,

-33-

this case demonstrates, is necded for the guid-

ance and protection of the businoan commnuntty

which engages in international trade depended

upon international carriage by air.

11

EVEN IT THE SUED ON CONTRACT BA DEEMED

TO BE WITHIM THE PURVIEW OF THE WARSAW

CONVENTLON, THE [INVOKED LIABILITY LIM-

ITATLONS TEXTUALLY ACCORD NO DEFENSE.

The pertinent provisions of the Convention

(with added underscoring) are:

"Article 1

(1) This convention shall apply to all inter-

national transportation ... performed by air-

craft for hire

Article 6

The air waybill shall contain the following

particulars:

(m) The amount of the value declared in ac-

cordance with article 22(2);

(g) A statement that the transportation ia

subject to the rules relating, to Liability

— — — |

3

— . AS

30

established by this convention.

Article 9

If the carrier accepts goods without an air

waydill having been made out, or if the air

waybill does not contain all the particulars

set out in article 8(a) to (1), inclusive, and

(q), the carrier shall not be entitled to

avail himself of the provisions of this con-

vention which exclude or limit his Liability.

Article 18

(1) The carrier shall be liable for damaye

sustained ... if the occurrence which caused

the damage so sustained took place duriny the

transportation by air.

(2) The transportation by air within the mean-

ing of the preceding paragraph shall comprine

the period during which the baggaye or goods

are in charge of the carrier, whether in an

airport or on board an aircraft, or, in the

case of a landing outside an airport, in any

place whatsoever.

3

Article 19

The carrier shall be llable for damage oc-

cas toned by delay in the transportation by air

Article 22

(2) In the transportation of ... goods, the

liability of the carrier shall be limited to

a sum of 250 france per kilogram, unless the

consignor had made, at the time when the pack

age was handed over to the carrier, a special

declaration of the value at delivery and had

paid a supplementary sum if the case so re-

quires. In that case the carrter will be

liable to pay a sum not exceeding the declared

sum, unless he proves that that sum is greater

than the actual value to the consignor at de-

livery.

Article 25

(1) The carrier shall not be entitled to avail

himse.f of the provistons of this convent lon

which exclude or limit his liability, if the

E

~ 36-

damage 19 caused by his wilful misconduct or

by such default on his part a in accordance

with the law of the court to which the case ta

submitted, 1s considered to be equivalent to

wilful misconduct.

Article 26

(2) la case of damage, the person entitled

to delivery must complain to the carrier

forthwith after the discovery of the damage,

and at the latest, within 5 days from the date

of receipt in the case of baggane and 7 days

from the date of receipt in the case of goods.

In case of delay the complaint must be made

at the latest within 14 days from the date on

which the baggage or yoods have been placed

at his disposal.

(4) Failing complaint within the times gore

said, no action shall lie ayainat the carrier,

save in the case of fraud on hie part.

«37.

Article 31

(1) In the case of combined transportation

performed partly by air and partly by any

other mode of transportation, the provisions

of this convention shall apply only to the

transportation by air, provided that the

transportation by air falle within the terme

of article l.

Here the horse meat was in a plane only about

8 of the approximately 60 hours which intervened

between arrival of the 21,795 pounds at Kennedy

Airport on March 11, 1968 at about noon and the ar-

rival thereof at Toulouse on March 14th at about

5 A.M. local time (approximately midnight New York

time).

Of the other 52 hours, the horse meat wan

in a properly refrigerated truck the firet 10 hours;

then, at the direction of Air France's personnel,

over petitioner's protest, the horec meat was re

moved from the truck and put out in the open air

until the afternoon of the following day; then the

ee a — ·

-38-

horse meat was crowded into an unrefrigerated

plane which took the horse meat to Orly Airport;

then, instead of transporting the meat to Toulouse

by air which would have taken about an hour

(RA 159), the horse meat was crammed into an un-

refrigerated or inadequately refrigerated under-

sized truck which did not arrive at Toulouse unt!

23 or 24 houre later (RA 72-6, 149-167, 172-4).

Did the putrefaction take place before ar-

rival at Toulouse? Or most likely, as the evidence

indicates, did it take place during the 24 hours

in the unauthorized transportation by truck from

Orly Airport to Toulouse?

Be that as it may, the totality of the

conceded mishandling of the cargo, as out Mined a-

bove and at pages 12-13 supra, certainly con-

stituted "wilful misconduct or ... such default on

(the part of the carrier] as, in accordance with

the law of the court to which the case is submitted,

in considered to be the cquivalent of ‘wilful mie-

conduct"’, and, under Article 25 of the Convent ton

disentitles the carrier from availing itself ot

-9.

the provisions ... which exclude or limit his

liability”.

It is also of some significance that where

the Liability limitation in Article 22 applies,

the amount of the Liability in the absence of a

declaration 16 250 france per kiloyram” ($7.57

per pound (p. 35a infra). That „for the 21,/95

pounds amounted tu $163,898.40 - 963,498 in „„

cess of the $100,000 sued for herein. Thus the

amount sued for did not entail « ‘supplementary’

charge.

The notice of claim requirements in

Article 26 of the Convent ton, even if the Con

ventlon applled, would have no effect on thie

case. That ia 80 for each of four reasons:

1. They are excluded by Article 25 which

nullified In ceses of “wilful conduct" or

ite equivalent.

2. Article 26 provides for notice only by

t he person entitled to delivery’. The Con-

vention contains no provision for notice by

any other person. Thus notice te not required

-40-

of claims of persons oth: r than the one“ en-

titled to delivery”.

3. Atr France on March 26, 1968 informed pe-

tit toner "that Bondi has taken steps to file a

claim for the total loss of the shipment"

p.101a infra). Presumably, since nothing was

said to the contrary, that claim was deemed

timely. Uf it be argued that such a limited

claim by the “person entitled to delivery" did

not cover the claim made here, that can serve

only to emphasize the inapplicability of

Article 26, turely the petitioner's rights

Which were not derived {rum the consigner

could not be prejudiced by what the ‘person

entitled to delivery’ chose to do by way of a

Claim, Obviously, the cone nee could make a

claim only for himself and not for petitioner.

4. Air Veance's "Sales Kepresentative" accom-

panied the shipment on the plane and was at

Toulouse on the morning, of the arrival of the

horse meat there, We received immediate and

41 -

direct notice of the condition in which the

horse meat arrived and of the condemnation and

destruction thereof by the health authorities.

On March 26, 1968 Air France's New York Cargo

District Manager, in the letter already men-

tioned, informed petitioner thereof (p.102a

infra). He also iuformed petitioner that

there would be no further shipments until

Bondi advised Air France otherwise and pron-

led: ‘We shall not fail to keep in touch

I

111

INSOFAK AS THE DEFENSES DEPEND UPON THE

AIK WAYULLL, THEY ARE RULED OUT ALSO BY

THE DOCTRINE OF LISI V. ALITALLA-LINEE

AERKE ITALINE, 370 F 2d 505 2d 508 (2d CIA. 1966),

Ar. 390 U.8. 1039 (1968)"AND EGAN v

KOLLSMAN INSTRUMENT CORPORATION, 21 * *

24d 160 (1967).

(1). The air waybill has no significance

other than ae an incorporator (f valid) of the

Warnaw Convention as setting forth the "conditions

of [the] carriage’ of the 21,795 pounds of horse

meat covered thereby.

—— — —ͤ—ũ—ã — — —— —

* kehearing denied 391 U.S. 929.

/

fi

1

4

{

i

1

i

“42-

(2) However, it did not fulfill even that

function, for several reasons.

Whether the alr waybill wae delivered tu

the petitioner 16 a disputed tasue (MA /, 77,

172-6, 2086). That dispute, of course, 1s not re-

solvable without an evidentiary hearing, and none

took place.

It ia not disputed that the relied on air

waybill was made out by Air France, not by the

constgnor as required by the Convent ton; and the

consignor was not consulted. The value specified

in the air waybill apparently was taken from the

invoice to purchaser bondi,

Above and beyond the foregoing, it in not

disputable that the ‘conditions of contract" ap-

pearing on the reverse aide of the alr waybill are

at least of as minuscule type and Lilegtbility an

those contained in the above ment toned List and

Egan cases. An examinatton of the accurately re-

produced alr waybill at payew . % (note eapeci-

ally 750), infra demonstrates that the alr way-

bill in this case falle within the condemnat fon

13.

of those cases,

Those cases eatabliah that tu have any

legal effect, provisions tn an alr waybill of inter

national cer mist be in reasonably larye and

et net type.

While those cases arose under passenger

tickets or baywage checks, no reason 1s apparent

for holding them Inapplteable to transportation

of cargo under atr waybills, since the provi-

sions in the Convention as to wach of the cate-

gortes are completely parallel,

Articole 3, ln respect to pasnenyer tick-

ete provides:

'(7) The abseneer, Irreyularity, or loss of

the passenyer ticket shall not affect the

exintence or the validity of the contract of

transportation, which shall none the less be

hubject tu the rules of this convention.

Neverthclews, If the carcler accepts n pass

enger without « passenger ticket having, been

delivered he shall not be entitled to avati

himaclif of those pros tone of this convent lon

— ny ae

—— aie See

which exclude or Limit hin liability. '

Article 4, in regard to haygaye checks

provides:

"(4) The absence, irreyularity, or lows of

the baggape check shall not aftect the exist

ence or the validity of the contract .

transportation which shall none the less be

subject to the rules of thla convent ton,

Nevertheless, if the carrier accepts bay jaye

without « bagyage check having been delivered,

or It the baggage chock does not contatn the

particulars set out at (d), (f), and (h) a-

bove, the carrier shall not be entitled to

avail himself of those provistony ot the con-

vention which exclude or Limit hia ltlability.”

In respect to air waybille, Article % pro-

vides:

"(2) The absence, trregulartty, or loss of

len air waybill] shall not affect the oxint-

ence or the validity of the contract of

transportation which shall, subject to the

provisions of article 9, he none the lean

governed by the rules of this convention."

—

-65-

And the thus referred to Article 9 provides:

"If the carrler accepts goods without an

air waybill having been made out, or if the

air waybill does not contain all the particu-

lars set out in article 8(a) to (1), inelu-

sive, and (q), the carrier shall not be en-

titled to avail himself of the provistons of

this convention which exclude or Limit his

Liability.”

Under such completely parallel language,

if minuscule type and illegibility are the equi-

valent of total absence of a passenger ticket or

of a baggage check containing the specified re-

quirements, then it inexorably seems to follow

that an air wayb1ll of that character likewine

ie a nullity.

However, there appears to be no specific

authority to that effect or to the contrary.

(3). The court below was misled by the num-

ermus canen vhich he cited holding that the Lhled

tarlf{{a yovern regardless of absence of notice of

their provisions. ie fatled to realize that those

cases related exclusively to domestic transporta-

tion and do not apply to international carriage

: governed by the procedures required by the Warsaw

. Convention.

ire.

THE FEDERAL AVIATION STATUTES (49 U.S.C.

1301 ET SEQ) AND AIR FRANCE'S RULES

TARIFF FILED THEREUNDER HAVE NO SIGNIFI-

CANT IMPACT ON THIS CASE.

In respect to the regulation of foreign air

.carrier-shipper duties and obligations, the federal

statutes do no more than (1) recognize the para-

mountcy of the Warsaw Convention (49 U.S.C. 1501),

(11) require the filing of tariffs and adherence

thereto, and (i111) prohibit discrimination (49 U.S.C.

1301, 1372-4).

Of Air France's filed Cargo Rules Tariff",

it imvoked and quoted only Rule 2(D) which read

(152 infra):

"Effective Rules: All carriage of cargo

governed by this tariff shall be subject

to the rules, rejulations and conditions

of carriage in effect on the date that the

transportation begins.”

Obviously, by itself that ta wholly an ing less

— ]—I—̃ ———ę— — —ę— —

17.

v

IN THE ABSENCE OF A VALLD LIMITATION

OF LIABILITY, VETITLONER CLEAMLY 15

ENTITLED TO ITS LOSS OF PROFITS.

Aner ie Synthett bb orp. vy. ville

& Nas * ad, F 0 th Cir.

~ 197

* 10th Cir.

uette ent

12 0 ’

shan 31 (6th Cir. 1969)

410 eee ee,

Company , . 1 She

CONCLUS LON

F. hupp

It is respectfully submitted that the prayed

for writ of certiorari should ftesue.

Respectfully submitted,

COPAL MINTZ

Counsel for Petittoner

April 8,1974.

A

Ce ee i, i Cr bee ne e oe Coe e