Petition for Writ of Certiorari — Singh v. Pan American World Airways, Inc.

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Supreme Court, U.S.

(, PILED

98 905 NOV 251998

En 7; |

Supreme Court of The United States

October Term 1998

SADANAND SINGH, et al.

Petitioners,

Vv.

PAN AMERICAN WORLD AIRWAYS, INC., et al.

Respondents.

Petition For A Writ Of Certiorari

To The United States Court of

Appeals For The Second Circuit

PETITION FOR WRIT OF CERTIORARI

REGINALD A. VITEK*

MARNIE S. SKEEN

Seltzer Caplan Wilkins & McMahon

2100 Symphony Towers

750 B Street

San Diego, California 92101

(619) 685-3003

Attorneys for Petitioners 7‘

*Counsel of Record \

APPELLATE ADVANTAGE

4264 N. OAK TRAFFICWAY@KANSAS CITy, MO 64116@816-453-2424

QUESTIONS PRESENTED

When the United States Supreme Court issues an opinion

but does not address retroactivity because the parties

waived any such argument, has the Court “reserved the

question” of whether the decision applies to the parties

before it so as to preclude retroactive application of the

Court’s decision?

What causation standard applies in fraud-based “willful

misconduct” cases under the Warsaw C onvention?

LIST OF PARTIES TO THE PROCEEDINGS

IN THE COURT BELOW

Petitioners in this case are Sadanand Singh, Individually

and as Executor of the Estate of Kala Singh, Deceased, Samir

Singh, by and through Sadanand Singh, and Kalpana Singh, by

and through Sadanand Singh (collectively “Singh plaintiffs”),

Petitioners were plaintiffs in the District Court and appellants in

the Court of Appeals.

Respondents, Pan American World Airways, Inc. (“Pan

Am”), a New York Corporation, and Alert Management

(“Alert”), a Florida Corporation, were defendants in the District

Court and appellees in the Court of Appeals.

TABLE OF CONTENTS

QUEENS PRESENTED ......................... i

BE sare Sorel nate mbceaineneagetioe il

I a ili

a ree St V

I i ag se ge ix

STATEMENT OF JURISDICTION .................. ix

TREATIES AND STATUTES INVOLVED ........... x :

oct cp esiapsesninis th, Se at eisepimnesaatas Crees l

I. Proceedings in the District Court ............... |

II. Proceedings in the Court Sees

A. Retroactive Application of

B. The Standard of Causation for Fraud-

Based Willful Misconduct Claims Under

the Warsaw Convention ................... 4

REASONS FOR GRANTING THE MEME eas ro ee. 5

ill

I. The Singh Plaintiff's Petition For Writ Of

Certiorari Should Be Granted Because The

Second Circuit’s Published Opinion Conflicts

With This Court’s Rulings in Lexecon v. Milberg

Weiss Bershad Hynes & Lerach and Harper v.

pe a ES ere a Dre eee 5

II. The Singh Plaintiff's Petition For Writ Of

Certiorari Should Be Granted Because The

Second Circuit Has Established A Standard

Of Causation For Fraud-Based Willful

Misconduct Cases Under The Warsaw

Convention Which Conflicts With A

Relevant Decision Of This Court; What

Standard Applies In Such Cases Has Not

Been, But Should Be, Settle By This Court ...... 10

A. California Law Governs the Standard of

Causation for Fraud-Based Misconduct .

Cases Under the Warsaw Convention

Because the Convention is Silent On

SRE Fo Gas oneseaees Lice rR 10

B. Under California Law, the Standard of

Causation for Fraud-Based Misconduct

Cases Brought Under the Warsaw

Convention Requires Proof of Reliance

and a Relationship Between the

Misrepresentation and Cause of Injury ...... 15

COCA A e's bi hee xc bh pase eee aces 19

APPENDICES

TABLE OF AUTHORITIES

Cases:

B.C. Rogers Processors, Inc. v. BOC Gr up Inc.,

__ US. __, 118 S.Ct. 2365,

4! LO Sd T3219) 2 ee

Brink's Ltd. v. South African Airways,

93 F.3d 1022 (2™ Cir. 1996), cert. denied,

__US.__,1178S.Ct. 959,

EPO AME WE 60 oe vce les eres

Chevron Oil v. Huson,

404 U.S. 97, 92 S.Ct. 349,

weLmaae etisil) 3. oe: 3, 6, 7, 8,9

Davis v. Michigan Dept. of Treasury,

489 U.S. 803, 109 S.Ct. 1500,

PS tne Oe ISO) CS

Garcia v. Superior Court,

50 Cal.3d 728. 789 P.2d 960,

MELa Res. TIS i sS:

Harper v. Virginia Department of Taxation,

509 U.S. 86, 113 S.Ct. 2510,

125 L.Ed.2d 74 (1993) ........... 5, 6, 7, 8,9, 10

In re Hijacking of Pan American World Airways, Inc.

Aircraft at Karachi International Airport,

Pakistan on September 5, 1986,

920 F.Supp. 408 (S.D.N.Y. 1996) ............ 1X

James B. Beam Distilling Co. v. Georgia,

501 U.S. 529, 111 S.Ct. 2439,

gry} 2 ei, | ee eee er reer eee 8,9

Lacher v. Superior Court,

230 Cal.App.3d 1038,

ref ge te ltt ee rae ee 15

Lexecon Inc. v. Milberg Weiss Bershad Hynes & Lerach,

__ US. __, 118 S.Ct. 956,

BOD LEP Gs CPO) ok bv nda setae rixne passim

Ohara v. Western Seven Trees Corp.,

75 Cal.App.3d 798,

eae kM shh les eee eee rer rer 15, 16

Pescatore v. Pan American World Airways, Inc.,

OF Ba 1" Cie. 19S) wo cv eckson 12, 13, 14

Reich v. Purcell,

67 Cal.2d 551, 432 P.2d 727,

ip Sn: PE ERIE 5965 ok ooh ok Shes 14

Saavedra v. Korean Airlines, Co. Ltd.,

93 F.3d 547, 552 (9" Cir. 1996),

cert. denied, U.S. __,117S.Ct. 584,

EA RA PU LEOUOD 6 oss 5 he o Sc e ewes 13

Shah v. Pan American World Services, Inc.,

BP. SeeeG ow. Te) se ee. 1X

Valley Juice Ltd., Inc. v. Evian Waters of France, Inc.,

87 F.3d 604, 607 (2 Cir. 1996) ............. 14

Van Dusen v. Barrack,

376 U.S. 612, 639, 84 S.Ct. 805,

55 Rie PRE OEE 6 ook hb oe oe eo 14

Zicherman v. Korean Air Lines Co. Ltd..

516 U.S. 217, 116 S.Ct. 629,

ESF hp Ree SPO LISI O) 6 cc occ icccecs passim

Other Materials Cited:

Be en WE CEE a cock oi oo ek ea wk X

Vil

p ER Fae RE: rg err ee xi, 7

yi LVRS ee Gy eee paren Sere” “3,3

Restatement (2d) Torts, § 435B, commenta.......... 17

Convention for the Unification of Certain

Rules Relating to International

Transportation by Air, Oct. 12, 1929,

49 Stat. 3000, TS No. 876 (1934),

reprinted in, 49 U.S.C.A. § 40105 (1997)

(“The Warsaw Convention”) ............ passim

Vill

PETITION FOR WRIT OF CERTIORARI

OPINIONS BELOW

The opinion of the United States Court of Appeals for

the Second Circuit is reported at Shah v. Pan American World

Services, Inc., 148 F.3d 84 (2™ Cir. 1998). A copy of the

opinion is reproduced in Appendix A. The opinions and

orders of the Southern District of New York are unreported,

with the exception of /n re Hijacking of Pan American World

Airways, Inc. Aircraft at Karachi International Airport,

Pakistan on September 5, 1986, 920 F.Supp. 408 (S.D.N.Y.

1996). Copies of these documents are reproduced in

Appendix B.

STATEMENT OF JURISDICTION

The judgment of the Court of Appeals was entered and

filed on June 15, 1998. A petition for rehearing and

suggestion for rehearing in banc' was timely filed on June 29,

1998. The Court of Appeals, on August 28, 1998, entered

and filed its order denying the petition for rehearing and

rejecting the suggestion for rehearing in banc. Apdx. A - 1.

The jurisdiction of this Court to review the judgment and

' Although typically deemed a “suggestion for rehearing en

banc,” the Court of Appeals for the Second Circuit uses the

term “suggestion for rehearing in banc.”

ia,

opinion of the United States Court of Appeals for the Second

Circuit is invoked pursuant to 28 U.S.C. section 1254(1).

TREATIES AND STATUTES INVOLVED

Convention for the Unification of Certain Rules Relating to

International Transportation by Air, Oct. 12, 1929, 49 Stat. :

3000, TS No. 876 (1934), reprinted in, 49 U.S.C.A. § 40105

(1997) (“The Warsaw Convention”)

Art. 17 of the Warsaw Convention states:

The carrier shall be liable for damage

sustained in the event of the death or

wounding of a passenger or any other bodily

injury suffered by a passenger, if the accident

which caused the damage so sustained took

place on board the aircraft or in the course of

any of the operations of embarking or

disembarking.

Art. 24(1) of the Warsaw Convention states:

In the cases covered by articles 18 and 19 any

action for damages, however founded, can

only be brought subject to conditions and

limits set out in this convention.

Art. 24(2) of ihe Warsaw Convention states: )

In the cases covered by article 17 the

provisions of the preceding paragraph shall

also apply, without prejudice to the questions

as to who are the persons who have the right

to bring suit and what are their respective

rights.

Art. 25 of the Warsaw Convention states:

The carrier shall not be entitled to avail

himself of the provisions of this convention

which exclude or limit his liability, if the

damage is caused by his wilful misconduct or

by such default on his part as, in accordance

with the law of the court to which the case is

submitted, is considered to be equivalent to

wilful misconduct.

28 U.S.C. section 1404(a) states:

For the convenience of the parties and

witnesses, in the interest of justice, a district

court may transfer any civil action to any

other district or division where it might have

been brought.

28 U.S.C. section 1407(a) states:

When civil actions involving one or more

common questions of fact are pending in

different districts, such actions may be

transferred to any district for coordinated or

consolidated pretrial proceedings. Such

transfers shall be raade by the judicial panel

on multidistrict litigation authorized by this

section upon its determination that transfers

for such proceedings will be for the

convenience of parties and witnesses and will

promote the just and efficient conduct of such

actions. Each action so transferred shall be

remanded by the panel at or before the

conclusion of such pretrial proceedings to the

district from which it was transferred unless it

shall have been previously terminated.

Provided however, that the panel may separate

any claim, cross-claim, counter-claim, or

third-party claim and remand any of such

claims before the remainder of the action is

remanded.

Xll

sarees tteneetseeae tana eatin

STATEMENT OF THE CASE

I. Proceedings i- he District Court

This petitior oncerns claims arising out of the

September 5, 1986, hijacking of a Pan Am aircraft in Karachi,

Pakistan, and the resulting death and injury to the passengers.

The Singh plaintiffs’ claims arise out of the

misconduct of Pan Am. Prior to the hijacking, Pan Am

published a series of advertisements containing promises of

future increases in the level of airport security and

representations of heightened security already implemented

(“Alert advertising program’’). Mrs. Singh, wife and mother

to the Singh plaintiffs, was terrified of flying into terrorist

countries and had postponed scheduled trips to India because

of terrorism in the Middle East. After reading the Alert

advertising program, Mrs. Singh booked her family on a Pan

Am flight because of Pan Am’s claims of heightened security.

Regrettably, the Singh family was on Pan Am Flight 73 when

terrorists hijacked the plane in Karachi, Pakistan, seriously

wounding the Singh plaintiffs, and killing Mrs. Singh.

On February 23, 1987, the Singh plaintiffs brought

suit in the Southern District of California seeking damages for

the personal injury and death suffered on-board Pan Am’s

aircraft. Because the incident occurred during international

travel, the provisions of the Warsaw Convention applied.’

* The Warsaw Convention provides strict liability in

international aviation accidents against airline carriers and a

cap on damages. If a plaintiff can show that his or her

BEST AVAILABLE COPY

On May 6, 1987, for purposes of pre-trial discovery

and motions only, the Judicial Panel on Multi-District

Litigation (“JPML”) transferred the Singh plaintiffs’ case,

along with twelve other cases, to the Southern District of New

York (“SDNY”) pursuant to 28 U.S.C. section 1407. Over the

Singh plaintiffs’ opposition, on December 13, 1993, the

SDNY granted Pan Am’s motion to transfer venue for trial,

thereby transferring the Singh plaintiffs’ case to itself where

it was ultimately consolidated with several other cases for

trial of “common liability issues.”

On April 14, 1994, a jury rendered a special verdict,

finding that Pan Am had engaged in willful misconduct in

connection with the Alert advertising program. The jury also

found Pan Am’s willful misconduct had not proximately

caused the hijacking; however, the jury did not address

whether the willful misconduct caused the Singh plaintiffs’

On February 14, 1996, the SDNY denied the Singh

plaintiffs’ post-trial motion to transfer their case back to the

Southern District of California. Apdx. B — 44-62.

damages were caused by the willful misconduct of the carrier,

the cap on damages is lifted.

I. Proceedings in the Court of Appeals

A. Retroactive Application of Lexecon v. Milberg

Weiss Bershad Hynes & Lerach

On March 3, 1998, while the Singh appeal was still

pending in the Second Circuit, this Court decided Lexecon

Inc. v. Milberg Weiss Bershad Hynes & Lerach, U.S. _,

118 S.Ct. 956, 140 L.Ed.2d 62 (1998), in which it held that a

district court conducting pre-trial proceedings over cases

transferred to it by the JPML cannot transfer such cases to

itself for trial because the responsibility of the JPML, under

28 U.S.C. section 1407(a) to remand the cases to their

transferor courts, precludes any such power of self-

assignment. /d. at 964.

The Singh plaintiffs argued on appeal that when the

SDNY transferred their case to itself, the transfer contravened

28 U.S.C. section 1407(a) as construed by this Court’s ruling

in Lexecon. The Second Circuit acknowledged Lexecon could

be dispositive, but affirmed the SDNY’s transfer order,

stating that Lexecon's holding was not retroactive because this

Court had reserved the question of whether its holding would

be applied to the parties before it. Apdx. A - 13-14. The

Second Circuit went on to decide that Lexecon was not

retroactive under Chevron Oil v. Huson, 404 U.S. 97, 92 S.Ct.

349, 30 L.Ed.2d 296 (1971), and that the SDNY’s transfer of

the Singh plaintiffs’ case to itself was not error. Apdx. A -

14-17.

B. The Standard of Causation for Fraud-

Based Willful Misconduct Claims Under

the Warsaw Convention.

The Singh plaintiffs also argued on appeal that the

trial court used an incorrect standard >f causation to

determine whether the willful misconduct of Pan Am had

caused their injuries. See Apdx. C - 82-90. In 1996, this

Court held in Zicherman v. Korean Air Lines Co. Lid., 516

U.S. 217, 116 S.Ct. 629, 133 L.Ed.2d 596 (1996), that if the

Warsaw Convention does not provide a rule of law to guide

a court in a decision, the applicable law is “the law that... .

govern{s] in the absence of the Warsaw Convention.” /d. at

229.

The Warsaw Convention does not provide a standard

of causation for fraud-based willful misconduct claims; yet,

the Second Circuit declared Zicherman was not on point.

Apdx. A - 21-24. Without the benefit of any precedent, the

Court rejected the standard which would apply under

Zicherman, and proceeded instead to craft its own standard of

causation for fraud-based willful misconduct claims under the

Warsaw Convention. Apdx. A - 24-27. Applying the new

standard, the Second Circuit found no error in the SDNY’s

instruction to the jury. Apdx. A - 27-29.

oor

REASONS FOR GRANTING THE WRIT

I. The Singh Plaintiffs’ Petition for Writ of

Certiorari Should Be Granted Because the Second

Circuit’s Published Opinion Conflicts With This

Court’s Rulings in Lexecon vy. Miberg Weiss

Bershad Hynes & Lerach and Harper v. Virginia

Dept. of Taxation.

As stated in Harper v. Virginia Department of

Taxation, 509 U.S. 86, 113 S.Ct. 2510, 125 L.Ed.2d 74

(1993):

[w]hen this Court applies a rule of federal law

to the parties before it, that rule is the

controlling interpretation of federal law and

must be given full retroactive effect in all

cases still open on direci review and as to all

events, regardless of whether such events

predate or postdate our announcement of the

rule.

Id. at 97 (emphasis added).

In Lexecon, this Court applied the newly announced

federal rule to the parties before it. Lexecon, supra, 118 S.Ct.

at 966 Moreover, Lexecon was decided while the Singh

plaintiffs’ case was still open on direct review. Thus, under

Harper, Lexecon “must be given full retroactive effect.”

Harper, supra, 509 U.S. at 97.

The Second Circuit held Lexecon was not retroactive

by erroneously concluding the Supreme Court “reserved the

question” of whether to apply its holding to the parties before

it. In so concluding, the Second Circuit stated:

Harper, however, did not require retroactive

application where the Supreme Court

explicitly reserves the question whether its

holding should be applied to the parties before

it. [citation] Lexecon is such a case.

Responding to respondent’s nonretroactivity

argument, the [Lexecon] Court concluded that

it was unnecessary for it to consider that issue

because it was not presented to the lower

courts or in opposition to the certiorari

position. [citation] The [Lexecon] Court then

remanded the case for further proceedings.

We therefore apply the _ three-factor

retroactivity analysis of Chevron Oil v. Huson.

[citation]

Apdx. A - 14.

The Second Circuit’s analysis is based on a mistaken

premise. This Court did not reserve the question whether its

holding applied to the parties before it in Lexecon. Rather,

this Court simply declined to consider an argument for non-

retroactivity because it had been waived:

In their brief to this Court, Milberg suggests

that any decision rejecting multidistrict

Acrobat

4: iN ata cE TE yer

litigation courts’ practice of ruling on § 1404

tran ier motions should be applied only

pro vcctively under Chevron Oil v. Huson.

[citation] Because this argument was not

presented below, [citation] or to this Court

when Milberg opposed petitioners’ petition

for certiorari, [citation] it is unnecessary for us

to consider it here.

Lexecon, supra, 118 S.Ct. at 966, n.5. Thus, the Second

Circuit’s underlying premise, and its resulting conclusion that

Lexecon should be applied only prospectively are erroneous.

Indeed, this Court has held that when it issues an

opinion and the opinion discusses remedial measures, the

opinion is retroactive. Harper, supra, 509 U.S. at 98. In

Harper, the Virginia Supreme Court had held Davis v.

Michigan Dept. of Treasury, 489 U.S. 803, 109 S.Ct. 1500,

103 L.Ed.2d 891 (1989) was not retroactive. After granting

Harper’s petition for writ of certiorari, this Court clarified that

Davis was retroactive, stating:

Far trom reserving the retroactivity question,

our response to the appellee’s concession

constituted a retroactive application of the rule

announced in Davis to the parties before the

Court. Because a decision to accord solely

prospective effect to Davis would have

foreclosed any discussion of remedial issues,

our “consideration of remedial issues” meant

“necessarily” that we retroactively applied the

rule we announced in Davis to the litigants

before us.

Harper, 509 U.S. at 98 (citing James B. Beam Distilling Co.

v. Georgia, 501 U.S. 529, 111 S.Ct. 2439, 115 L.Ed.2d 481

(1991) (opinion of Souter, J.)).

The Virginia Supreme Court’s erroneous

interpretation of the Davis decision in Harper parallels the

Second Circuit’s misinterpretation of Lexecon. The Second

Circuit assumed that because Lexecon did not expressly

discuss retroactivity (see, Lexecon, supra, 118 S.Ct. at 966,

n.5 (stating “it is unnecessary for us to consider it here’’)), the

decision was therefore reserved and the Second Circuit could

rely on Chevron Oil for its retroactivity analysis. Apdx. at A

- 14.

It is irrelevant under Harper and Beam whether

retroactivity is actually discussed if this Court addresses

remedial measures. Lexecon did just that. Lexecon held the

remedy for a violation of the 28 U.S.C. section 1407(a)

mandate is reversal of the Court’s decision. Lexecon, supra,

118 S.Ct. at 966. This Court, therefore, did apply its decision

in Lexecon to the parties before it; thus, it “must be given

retroactive effect.” See Harper, supra, 509 U.S. at 97-98.

Even if the Lexecon opinion were ambiguous as to

whether it should apply retroactively, an examination of post-

Lexecon events confirms the propriety of retroactive

application. This Court’s actions since Lexecon suggest an

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intent that it be applied retroactively. On June 26, 1998, this

Court granted a petition for writ of certiorari to the United

States Court of Appeals for the Eleventh Circuit in B.C.

Rogers Processors, Inc. v. BOC Group Inc., _ U.S. _, 118

S.Ct. 2365, 141 L.Ed.2d 732 (1998) and simultaneously

vacated the Eleventh Circuit’s judgment and remanded the

case to that court “for further consideration in light of

Lexecon.” Had this Court intended for Lexecon to apply only

prospectively, it would have been unnecessary for it to

remand B.C. Rogers to the Eleventh Circuit for further

consideration.

Despite evidence of Lexecon’s retroactive application,

the Second Circuit ignored Lexecon and applied Chevron Oil

to determine retroactivity. This was error. As Justice Souter

stated in James B. Beam, “the legal imperative to apply a rule

of federal law retroactively after the case announcing the rule

has already done so must prevail over any claim based on a

Chevron Oil analysis.” Harper, supra, 509 U.S. at 98

(quoting Beam, supra, 501 U.S. at 540).

When the Second Circuit declined to apply Lexecon

to the Singh plaintiffs’ case, it created an exception not

authorized by this Court, thereby denying litigants in its

jurisdiction relief otherwise conferred by Lexecon. Moreover,

the opinion creates uncertainty as to what constitutes

“reservation” by this court.

This Court should grant the Singh plaintiffs’ Petition

for Writ of Certiorari to eliminate the conflict of law between

the Second Circuit Court of Appeals, and the United States

Supreme Court’s decision in Lexecon and Harper.

The Singh Plaintiffs’ Petition For Writ Of

Certiorari Should Be Granted Because The Second

Circuit Has Established A Standard Of Causation

For Fraud-Based Willtul Misconduct Cases Under

The Warsaw Convention Which Conflicts With A

Relevant Decision of This Court; What Standard

Applies In Such Cases Has Not Been, But Should

Be, Settled By This Court.

As the Second Circuit acknowledged, the Warsaw

Convention does not provide a standard of causation for

fraud-based willful misconduct cases. In fact, the Court

specifically stated determination of such a standard was an

issue of “first impression”. Apdx. A - 24. That being true,

this Court’s recent case law guides the determination of the

proper standard.

California Law Governs the Standard of

Causation for Fraud-Based Misconduct Cases

Under the Warsaw Convention Because the

Convention is Silent On This Point.

In Zicherman v. Korean Air Lines Co. Ltd., 516 U.S.

217, 116 S.Ct. 629, 133 L.Ed.2d 596 (1996), this Court held

that in absence of a rule of law contained in the Warsaw

Convention itself, the law that will govern a cause of action

under the Convention is not federal common law, but rather,

SFR Fo Ge ee Moe SP Ne eT

——

“the law that would govern in the absence of the Warsaw

Convention.” /d. at 229.

The Second Circuit declined to follow Zicherman,

stating that even if the Warsaw Convention lacks a rule of law

to govern a cause of action under the Convention, a court may

look to the law that would govern in the absence of the

Convention only if the Convention expressly invites it to do

so. Apdx. A - 22-23. In this vein, the Court stated:

Article 24 of the Convention states that any

action for damages under Article 17 “can only

be brought subject to the condition and limits

set out in this convention.” Convention art.

24(1), 24(2) [sic]. We believe that this means

that unless the Convention reserves an issue

for determination by the law of another

jurisdiction, the law of the Convention — not

federal common law, state law, or any other

law of the forum court — applies.

Apdx. A - 23.

Prior to the Second Circuit’s opinion, however, there

was no “law of the Convention” governing the standard of

causation. The Warsaw Convention contains no such

standard. Nonetheless, the Second Circuit rejected Zicherman

in favor of crafting its own standard of causation for fraud-

based willful misconduct claims. In the process, the Second

Circuit considered three potential candidates for the

applicable standard: 1) factual causation; i.¢., proof that “but

for” the misrepresentation, the plaintiff would not have been

injured; 2) proof of reasonable reliance on_ the

misrepresentation coupled with a reasonable relationship

between the injuries and the representations relied upon;’ and

3) proof of reasonable reliance on the misrepresentation and

that the damages would not have occurred if the carrier had

performed as promised. Apdx. A — 25-27. The Second

Circuit rejected the first and second standard and adopted the

third. Apdx. A - 26-27.

The Second Circuit’s decision is incorrect for two

reasons. First, the Court misinterpreted Zicherman as holding

that absent a rule of law contained in the Warsaw Convention

itself, outside law will govern a cause of action only if the

Warsaw Convention specifically authorizes application of

outside law. Zicherman contains no such qualification;*

moreover, the Second Circuit itself previously acknowledged

in Pescatore v. Pan American World Airways, Inc., 97 F.3d

1 (2™ Cir. 1996), that if ‘[t]he Convention itself contains no

rule of law governing the [| | question”, then the law that

applies in the absence of the Warsaw Convention governs.

‘ This standard was advocated by the Singh plaintiffs at the

Court of Appeals, since it was the prevailing rule in

California which should have been applied according to

Zicherman.

* In fact, if such a qualification has been intended, it would

have been unnecessary for this Court to discuss the

ramification of the Convention’s silence on an issue.

Id. at 8. Accord, Brink's Ltd. v. South African Airways, 93

F.3d 1022 (2™ Cir. 1996), cert. denied, US. myc ire <¢ 4

959, 136 L.Ed.2d 845. Thus, the Second Circuit incorrectly

declined to look to outside law, when, in fact, it must.’

The Second Circuit further supported its rejection of

Zicherman by proclaiming uniform application of Warsaw

law to be the overriding concern, and concluding that use of

other forums’ law would inhibit this goal. Apdx. A - 24. This

reasoning conflicts with the Second Circuit’s previous

interpretation of Zicherman. In Pescatore, the Second Circuit

stated:

Zicherman ruled specifically that the Warsaw

Convention does not express a compelling

interest in uniformity that warrants

supplanting bodies of law that are otherwise

applicable . . . [and the Supreme] Court

determined that the law of international travel

is not an area in which the imposition of

uniformity was found feasible.

Pescatore, supra, 97 F.3d at 11. For these reasons, the

Second Circuit’s rejection of Zicherman was wrong.

*‘ See Saavedra v. Korean Airlines, Co. Ltd., 93 F.3d 547, 552

(9" Cir. 1996), cert. denied, U.S. _, 117 S.Ct. 584, 136

L.Ed.2d 514 (1996) (stating “no cause of action directly under

the Warsaw Convention exists; the Convention merely

provides ‘pass-through’ provisions, which allow the courts to

use only domestic causes of action.”’).

Under Zicherman, controlling law is determined

according to the choice of law rules of the forum jurisdiction.

Zicherman, supra, 516 U.S. at 231; Accord, Pescatore, supra,

97 F.3d at 5; Brink's, supra, 93 F.3d at 1030. When there

has been a change in venue, as here, the forum jurisdiction is

where the action was filed -- not the transferee jurisdiction.

Van Dusen v. Barrack, 376-U.S. 612, 639, 84 S.Ct. 805, 11

L.Ed.2d 945 (1964). Here, the action was filed in California;

thus, California’s choice of law rules determine which

substantive law controls the Singh plaintiffs’ fraud-based

willful misconduct claim. Valley Juice Ltd., Inc. v. Evian

Waters of France, Inc., 87 F.3d 604, 607 (2" Cir. 1996).

In a California choice of law analysis, the interests of

each potentially concerned state are compared. Reich v.

Purcell, 67 Cal.2d 551, 556, 432 P.2d 727, 63 Cal.Rptr. 31

(1967). Here, California has an overriding concern in

protecting its residents from the fraudulent activities of non-

resident enterprises conducting business within its borders.

The record shows the Singh plaintiffs are all residents of

California. Thus, California law must control.°

* Even if New York choice of law rules were used instead of

California, California law would still govern. See Pescatore,

supra, 97 F.3d at 13 (stating “Pan Am contends that we

should disregard Scottish law and instead apply the law of the

decedent’s and the plaintiff's domicile - Ohio. We agree.”’).

B. Under California law, the Standard of Causation

for Fraud-Based Misconduct Cases Brought Under

the Warsaw Convention Requires Proof of

Reliance and a _ Relationship Between the

Misrepresentation and Cause of Injury.

Under California law, two different standards of

causation have been applied for fraud-based personal injury

claims. One standard requires that causation be established

by simply proving that the plaintiff relied on the

representations, thereby subjecting himself to harm. See

Garcia v. Superior Court, 50 Cal.3d 728, 737, 789 P.2d 960,

268 Cal.Rptr. 779 (1990); Lacher v. Superior Court, 230

Cal.App.3d 1038, 1048-1050, 281 Cal.Rptr. 640 (1991). The

other standard requires proof of both reasonable reliance and

a reasonable relationship between the misrepresentation and

the cause of injury. See Ohara v. Western Seven Trees Corp.,

75 Cal.App.3d 798, 142 Cal.Rptr. 487 (1977).’ The Singh

plaintiffs conceded at oral argument that the second, more

onerous standard, should apply.

Unfortunately, the causation issue as framed by

California’s standard, was not decided by the jury at trial.

Pursuant to the SDNY’s direction, the jury heard no evidence,

’ In Ohara, the court found that a plaintiff who moved into an

apartment complex due to representations of safety could

recover for damage suffered from rape because the cause of

her injuries was related to the subject of the

misrepresentation. Ohara, 75 Cal.App.3d at 805.

received no instruction and made no finding concerning the

Singh plaintiffs’ reliance on the fraudulent advertising which

was found to constitute willful misconduct. Therefore, the

Singh plaintiffs’ case must be remanded to the trial court to

allow presentation of such evidence to the jury, and a

subsequent rendering of a jury verdict consistent with this

standard.

Even if the Second Circuit’s disregard of Zicherman

were not erroneous, the Court ‘vould still have arrived at the

wrong standard of causation for fraud-based willful

misconduct cases. Of the three possible standards discussed

by the Second Circuit, the second standard parallels

California law: that the plaintiff must prove reasonable

reliance on the misrepresentation plus a_ reasonable

relationship between the misrepresentation and the injury. See

Ohara, supra, 75 Cal.App.3d at 805. The Court disregarded

this standard stating:

The Convention’s clearly overriding purpose

-- to limit air carriers’ potential liability in the

event of accidents, would be undermined if air

carriers were held liable for damages that

would have occurred regardless of whether or

not the carrier’s representations of improved

security were ultimately performed as

promised.

Apdx. A — 26.

Bb oh Re oS Aaiat en Rt RY

The Second Circuit thus established a standard of

causation requiring proof of reasonable reliance on the

misrepresentation and proof that the damages would not have

occurred if the carrier had performed as promised. /d. The

Court’s conclusion is faulty for two reasons.

First, the standard provides no deterrent for fraudulent

willful misconduct. Under the Second Circuit’s standard of

causation, airlines can, with impunity, induce ridership by

fraudulent promises and misrepresentations, so long as the

victim of tragedy cannot satisfy the speculative burden of

proving their injuries would not have occurred if

circumstances were as promised and represented. In so

holding, the Second Circuit has insulated airlines from the

consequences of their own fraud.

Moreover, the Second Circuit’s standard is virtually

unsupported by any analysis or reference to existing law. If

allowed to stand, this faulty standard will set the precedent for

all fraud-based willful misconduct Warsaw Convention cases.

The causation standard in such cases should either be

determined according to applicable outside law under

Zicherman, or be carefully crafted by this Court to reflect the

principle of American tort law that “responsibility for harmful

consequences should be carried further in the case of one who

does an intentionally wrongful act than in the case of one who

is merely negligent or is not at fault.’”’ Restatement (2d) Torts,

§ 435B, comment a.

Because the standard of causation that applies to

fraud-based willful misconduct claims under the Warsaw

Convention is an issue of first impression throughout the

federal system, this Court should grant review to provide

guidance on what the standard should be.

CONCLUSION

For the foregoing reasons, petitioners the Singh

plaintiffs respectfully request that this Court grant a Writ of

Certiorari so as to correct the conflict of law between the

Second Circuit and the United States Supreme Court, and to

decide an important federal question, that has not been, but

should be, settled by this Court.

Dated: November 25, 1998

Respectfully Submitted,

Seltzer Caplan Wilkins & McMahon

Reginald A. Vitek*

Marnie S. Skeen

Attorneys for

Singh-Plaintiffs/Petitioners

*Counsel of Record

APPENDIX A

UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

P .

M °

;

UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

At a stated term of the United States Court of Appeals

for the Second circuit, held at the United States Courthouse,

Foley Square, in the city of New York, on the _28_ day of

August one thousand nine hundred and ninety-eight.

Singh,

Plaintiff-Appellant,

Vv. Dkt. No: 97-7428

Pan American World,

Defendant-Apellee. [sic]

A petition for rehearing containing a suggestion that the

action be reheard in [sic] banc having been filed herein by the

appellant Singh.

Upon consideration by the panel that decided

the appeal, it is Ordered that said petition for

rehearing is DENIED.

It is further noted that the suggestion for rehearing in banc has

been transmitted to the judges for the court in regular active

service and to any other judge that heard the appeal and that

no such judge has requested that a vote be taken thereon.

Apdx. A - |

UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

Kalpana SHAH, Mehul Shah, Utpala M. Desai, Milind

Sharad Desai, Narendra R. Desai, Swati N. Desai,

Plaintiffs, Sadanand Singh, Individually and as Executor of

the Estate of Kala Singh, Deceased, Samir Singh, by and

through Sadanand Singh, Guardian Ad Litem, Kalpana

Singh, by and through Sadanand Singh, Guardian Ad

Litem, Faraidoon Oshtory, Manjula S. Patel, Sangita Patel,

Nikita Patel, Individually and as Heirs at Law to Surendra

Patel, Deceased, Bakul Shah, Anthony Father Anthony

Theodore, Dilip Parekh, Avani B. Shah, Rupal B. Shah,

Aisha Begum, Mehboob Kahn, Gayatri Dave, Gargi Dave,

minors, by their Guardian Ad Litem, Vinod Dave, Sanjay

Patel, a minor, by and through his Guardian Ad Litem,

C.N. Patel, Ranjanben Patel, Jayshreeben Patel, minors, by

and through their Guardian Ad Litem, Pravin Patel,

Khanjan Dalal, Kalpesh Dalal, Deepali Desai, Nagin Patel,

Tara Patel, Satish Patel, Govind Patel, Chotubhai Patel,

Jamna Patel, Ganga Patel, Ajay Patel, a minor, by and

through his Guardian Ad Litem, Parvati Patel, Parvati

Patel, Plaintiffs-Appellants,

Vv,

PAN AMERICAN WORLD SERVICES, INC., Defendant,

Pan American World Airways, Inc., Alert Management, a

Apdx. A - 2

Florida Corporation, Does 1-50, Defendants-Appellees.

Docket Nos. 97-7428(L), 97-7526(CON), 97-7556(CON),

97-7558(CON), 97-7562(CON), 97-7564(CON), 97-

7566(CON), 97-7568(CON), 97-7572(CON), 97-

7574(CON) and 97-7576(CON).

United States Court of Appeals,

Second Circuit.

Argued March 13, 1998.

Decided June 15, 1998.

Before: CARDAMONE, WALKER and MAGILL.,! Circuit

Judges.

WALKER, Circuit Judge:

Plaintiffs-appellants Sadanand Singh, et al., appeal

from the March 24, 1997 judgment of the United States

District Court for the Southern District of New York (John E.

Sprizzo, District Judge ) after jury trial, entered pursuant to

Fed.R.Civ.P. 50, 54(b), and 58, capping each appellant's

recovery at $75,000 under the Convention for the Unification

of Certain Rules Relating to International Transportation by

'The Honorable Frank J. Magill, of the United States Court

of Appeals for the Eighth Circuit, sitting by designation.

Apdx. A - 3

Air, Oct. 12, 1929, 49 Stat. 3000, TS No. 876 (1934),

reprinted in 49 U.S.C.A. § 40105 (1997) ("Warsaw

Convention" or "Convention"); dismissing various California

State law claims brought by plaintiffs-appellants Sadanand

Singh, individually and as executor of the Estate of Kala

Singh, and Samir and Kalpana Singh, through a guardian ad

litem (collectively, the "Singh plaintiffs"); and dismissing the

Singh plaintiffs’ motion, pursuant to 28 U.S.C. § 1404(a), to

transfer venue to the Southern District of California for trial

on the state claims and on Warsaw Convention claims

relevant only to the Singh plaintiffs (collectively, the "non-

common" claims). See Singh v. Pan American World

Airways, Inc. (In re Hijacking of Pan American World

Airways, Inc. Aircraft at Karachi Int'l Airport, Pakistan on

Sep. 5, 1986), 920 F.Supp. 408, 415 (S.D.N.Y.1996)

"Karachi ").

This case arises out of the tragic September 1986

hijacking of Pan Am Flight 73 in Karachi, Pakistan, that led

to approximately twenty deaths and numerous other injuries.

The case presents the issue of whether fraudulent

misrepresentation can constitute "wilful misconduct" within

Article 25(1) of the Convention and, if it can, what causation

as between the fraud and plaintiffs' damages is required. We

also address the threshold question of whether the recent

Supreme Court decision in Lexecon Inc. v. Milberg Weiss

Bershad Hynes & Lerach, --- U.S ---, 118 S.Ct. 956, 140

L.Ed.2d 62 (1998)-- requiring cases transferred under 28

Apdx. A-4

U.S.C. § 1407 to be remanded to the transferor courts at the

conclusion of pre-trial proceedings--applies as a general

matter to plaintiffs’ actions and, if Lexecon does apply,

whether it should apply retroactively in this case.

Affirmed.

Background

In 1986, in response to public concern over terrorism

on international airline flights, Pan American World Airways,

Inc. ("Pan Am") cont-acted with Alert Management Systems,

Inc. ("Alert") to provide a security system for its international

flights. Pan Am thereafter advertised its Alert program,

making various representations to the public about improved

airport security that either had already been implemented or

would be implemented by Pan Am. The Singh plaintiffs (but

none of the other plaintiffs-appellants) allege that they saw

Pan Am's advertisements and relied upon the representations

of improved security therein in deciding to fly on Pan Am

Flight 73. On September 5, 1986, Pan Am Flight 73 departed

Bombay, India, en route to New York, New York, with a

scheduled intermediary step at Karachi International Airport

in Karachi, Pakistan. While Flight 73 was on the ground at

Karachi International Airport, armed hijackers drove a vehicle

through a gate onto the airport tarmac, boarded the aircraft,

and eventually opened gunfire on its passengers, killing some

twenty passengers and injuring numerous others.

Plaintiffs-appellants are either passengers who were

injured or representatives of passengers who were killed as a

Apdx. A - 5

result of the hijacking. On February 23, 1987, the Singh

plaintiffs filed an action against defendants in the Southern

District of California asserting claims under the Warsaw

Convention and California state law for the personal injury

and death suffered on board Pan Am Flight 73. Numerous

other actions relating to the hijacking of Pan Am Flight 73

were filed against Pan Am in various courts across the United

States. With the exception of the action entitled Ganga Bahn

v. Pan American World Airways, Inc., No. 87-CV-0547, all of

these actions originated in courts other than the Southern

District of New York ("Southern District") and in 1987 and

1988 were transferred by the multidistrict litigation panel

("MDL panel") to the Southern District for consolidated pre-

trial proceedings under 28 U.S.C. § 1407. In December 1993,

the Southern District granted Pan Am's motion to transfer and

consolidate all of the actions for trial in that court.

On April 14, 1994, after a six-week jury trial of

plaintiffs’ Warsaw Convention claims, the jury returned a

special verdict answering the following four questions:

1)'‘Do you find by a fair preponderance of the evidence

that Pan Am [ ] engaged in wilful misconduct, as defined by

the Court, in connection with the Alert Security Program?

The jury answered "yes."

2) Do you find by a fair preponderance of the evidence

that Pan Am[ ] engaged in wilful misconduct, as defined by

the Court, by flying into Karachi International Airport on

September 5, 1986?

Apdx. A - 6

The jury answered "no."

3) If the answer to Question # | is Yes, do you find by

a fair preponderance of the evidence that the wilful

misconduct of Pan Am [ }, in connection with the Alert

Security Program, was a proximate cause of the hijacking?

The jury answered "no."

4) If the answer to Question # 2 is Yes, do you find by

a fair preponderance of the evidence that the wilful

misconduct of Pan Am [ ], by flying into Karachi

International Airport on September 5, 1986, was a proximate

cause of the hijacking?

The jury did not answer.

The jury found therefore that defendants had not

committed wilful misconduct by flying into Karachi, a claim

common to all plaintiffs. It is not clear, however, why the

district court submitted questions # | and # 3 to the jury as

claims common to all of the plaintiffs, since defendants’

alleged fraudulent misrepresentations could be relevant only

to plaintiffs such as the Singh plaintiffs who, at minimum,

were aware of defendants’ advertisements about the Alert

security program. Finally, the district court did not submit to

the jury the question of whether defendants’ inadequate

security itself constituted wilful misconduct, in all likelihood

because little if any evidence indicated that defendants had

any power to control the level of security at Karachi

International Airport.

On February 14, 1996, almost two years after the

Apdx. A - 7

jury's verdict, the district court denied the Singh plaintiffs’

motion, pursuant to 28 U.S.C. § 1404(a), to transfer back to

the Southern District of California their remaining

noncommon California law claims and their fraudulent

misrepresentation claim under the Convention. See Karachi,

920 F.Supp. at 415. The district court then dismissed the

Singh plaintiffs’ state claims as preempted by both the

Warsaw Convention and the Airline Deregulation Act of

1978, 49 U.S.C. app. § 1305(a)(1) (1993), reconstituted in 49

U.S.C. § 41713(b)(1), and dismissed their fraudulent

misrepresentation claim as barred by the jury's special verdict.

Karachi, 920 F.Supp. at 414. On March 24, 1997, the district

court entered final judgment, pursuant to Fed.R.Civ.P. 50,

54(b), and 58, awarding plaintiffs damages within the

limitations imposed. It refused to award damages in excess

of those limits because--as per the jury's special verdict--

plaintiffs had failed to establish either defendants’ wilful

misconduct or the requisite causation between such

misconduct and their damages.

Plaintiffs-appellants appeal from that judgment. In

particular, the Singh plaintiffs contend that (1)

notwithstanding the jury's special verdict, they are entitled to

bring their fraudulent misrepresentation claim under the

Convention, and (2) they are entitled to bring their California

state law claims in addition to their Warsaw Convention

claim. All of the plaintiffs-appellants also request a new trial

on the basis that the district court's alleged misconduct during

Apdx. A - 8

trial prejudiced the jury and that the court improperly refused

to qualify as an expert one of plaintiffs’ proffered witnesses.

Discussion

I. Remand Under 28 U.S.C. § 1407

We first address the threshold issue of whether the

Supreme Court's recent decision in Lexecon Inc. v. Milberg

Weiss Bershad Hynes & Lerach, --- U.S ---, 118 S.Ct. 956,

140 L.Ed.2d 62 (1998), requires this court to vacate the

district court's judgment as to all plaintiffs and remand all of

the actions to the transferor courts from which the MDL panel

transferred each action pursuant to 28 U.S.C. § 1407.

With the exception of Ganga Bahn, No. 87-CV-0547,

all of the appellants’ actions originated in courts other than the

Southern District and were transferred in 1987 and 1988 to

the Southern District by the MDL panel pursuant to 28 U.S.C.

§ 1407 § 1407"), which states:

When civil actions involving one or more

common questions of fact are pending in

different districts, such actions may be

transferred to any district for coordinated or

consolidated pretrial proceedings. Such

transfers shall be made by the judicial panel

on multidistrict litigation authorized by this

section upon its determination that transfers

for such proceedings will be for the

convenience of parties and witnesses and will

promote the just and efficient conduct of such

Apdx. A - 9

a a a Ny al ane

actions. Each action so transferred shall be

remanded by the panel at or before the

conclusion of such pretrial proceedings to the

district from which it was transferred unless it

shall have been previously terminated. . . .

(Emphasis added). In 1993, over the objections of all of the

plaintiffs, defendants moved to transfer the actions to the

Southern District for a consolidated liability trial, pursuant to

28 U.S.C. § 157(b)(5) (" § 157(6)(5)")--a bankruptcy statute--

or alternatively, pursuant to 28 U.S.C. § 1404(a) (" §

1404(a)")--a general venue statute. On December 13, 1993,

the district court granted defendants’ motion to transfer "for

the reasons stated at [the] Oral Argument" of December 10,

1993, but did not state whether it was relying on § 157(b)(5)

or § 1404(a). The parties have not furnished a transcript of

that oral argument and it is not a part of the record on appeal.

A 1994 joint pre-trial order signed by the district court and

lead counsel for both parties, however, states that "all actions

have been transferred to [the Southern District], pursuant to

Title 28 United States Code, § 1404(a), for the trial of all

common liability issues," and therefore it appears that the

district court did transfer the actions pursuant solely to §

1404(a). In 1994, following trial and prior to the district

court's entry of judgment, the Singh plaintiffs moved,

pursuant to § 1404(a), to transfer their action back to the

Southern District of California--a motion denied by the

district court in 1996. See Karachi, 920 F.Supp. at 415.

Apdx. A - 10

In Lexecon, the Supreme Court held that a district

court to which cases have been transferred pursuant to § 1407

for pretrial proceedings cannot, after conclusion of the pretrial

proceedings, transfer the case to itself for trial under §

1404(a). See --- U.S. at ---, 118 S.Ct. at 959. Because the

plain language of § 1407 dictates that "{e]Jach action ...

transferred [under § 1407] shall be remanded by the [MDL]

panel at or before the conclusion of ... pretrial proceedings,”

28 U.S.C. § 1407(a), the Court reasoned that "no exercise in

rulemaking can read that obligation out of the statute.”

Lexecon, --- U.S. ---, at 118 S.Ct. at 963.

Defendants respond with four arguments each of

which, if accepted, could independently bar application of

Lexecon: (1) that the district court transferred the action to

itself for trial pursuant to § 157(b)(5) and not § 1404(a), and

therefore Lexecon does not apply; (2) that even if the district

court did transfer pursuant to § 1404(a), it could have

transferred pursuant to § 157(b)(5) and, again, Lexecon would

not apply; (3) that even if Lexecon is applicable as a general

matter, it should not be applied retroactively in this case; and

(4) that plaintiffs failed to preserve their Lexecon remand

right by failing to request a remand under § 1407 or to object

properly to the district court's transfer of venue.

A. Lexecon's Applicability to Sectior. 157(b)(5)

We note first that the district court did transfer

plaintiffs’ action pursuant to § 1404(a) and not § 157(b)(5).

Apdx. A- 11

Even assuming, however, that we may look to whether venue

was sustainable under another legal basis such as § 157(b)(5),

and assuming that venue in this action would have been

sustainable under § 157(b)(5)--both issues as to which we

express no opinion-it appears that Lexecon should apply to §

157(b)(5) transfers as well as to § 1404(a) transfers.

Although Lexecon's holding applies explicitly only to §

1404(a)-the only statute under which the transferee district

court in that case purported to transfer venue--Lexecon’s

reasoning applies equally to transfers pursuant to any venue

statute. Lexecon recognizes that "no exercise in rulemaking

can read... out of the statute" the MDL panel's obligation to

remand each action to its respective transferor court at or

before the conclusion of pretrial proceedings. /d. (emphasis

added). Lexecon does not preclude later consolidation of

multiple suits for trial after they have first been returned to the

district courts from which they came. "[O]n any view of §

1407(a), if an order may be made under § 1404(a), it may be

made after remand of the case to the originating district

court.” /d. at 118 S.Ct. at 964 (footnote omitted) (emphasis

added). Indeed, Lexecon observes that § 1407

affects only the pretrial stages in multidistrict

litigation. It would not affect the place of trial

in any case or exclude the possibility of

transfer under other Federal statutes [such as

§ 157(b)(5) ]. . . . The subsection requires that

transferred cases be remanded to the

Apdx. A- 12

originating district at the close of coordinated

pretrial proceedings.

Id. (quoting H.R.Rep. No. 90-1130, at 3-4 (1968), reprinted

in 1968 U.S.C.C.A.N. 1898, 1900-01). Rather, posing "[t]he

relevant question . . . [of] whether a transferee court, and not

a transferor court, may grant . . . a motion [for transfer of

venue]," the Court concluded that "self-assignment is beyond

the scope of the transferee court's authority." /d.

We also note that Lexecon is not premised upon the

belief that § 1404(a) does not itself permit self-transfer

(whereas, as defendants may claim, § 157(b)(5) does).

Lexecon explicitly leaves unresolved the issue of whether §

1404(a) permits self-transfer See id. at ---- n. 4, 118 S.Ct. at

964 n. 4. In short, Lexecon and § 1407 require that the MDL

panel remand to the transferor court any action "at or before

the conclusion of . . . pretrial proceedings," and any further

transfers of venue for trial under any statute must follow such

remand. Whether, after remand to the transferor court, a court

has the power to transfer venue to itself under § 1404(a) or §

157(b)(5S) is a separate issue that we have no need to decide.

B. Retroactivity of Lexecon

We next turn to whether Lexecon should be applied

retroactively in this case.

When [the Supreme Court] applies a rule of

federal law to the parties before it, that rule is

the controlling interpretation of federal law

Apdx. A - 13

and must be given full retroactive effect in all

cases still open on direct review and as to all

events, regardless of whether such events

predate or postdate our announcement of the

rule.

Harper v. Virginia Dep't of Taxation, 509 U.S. 86, 97, 113

S.Ct. 2510, 125 L.Ed.2d 74 (1993). Harper, however, did not

require retroactive application where the Supreme Court

explicitly " 'reserve[s] the question whether its holding should

be applied to the parties before it.’ " /d. (quoting James B.

Beam Distilling Co. v. Georgia, 501 U.S. 529, 539, 111 S.Ct.

2439, 115 L.Ed.2d 481 (1991)). Lexecon is such a case.

Responding to respondent's nonretroactivity argument, the

Court concluded that it was "unnecessary for [it] to consider"

that issue because it was not presented to the lower courts or

in Opposition to the certiorari petition. See Lexecon, --- U.S.

at ---- n. 5, 118 S.Ct. at 965 n. 5. The Court then remanded

the case for further proceedings. We therefore apply the three

factor retroactivity analysis of Chevron Oil Co. v. Huson, 404

U.S. 97, 92 S.Ct. 349, 30 L.Ed.2d 296 (1971):

First, the decision to be applied

nonretroactively must establish a new

principle of law, either by overruling clear

past precedent on which litigants may have

relied or by deciding an issue of first

impression whose resolution was not clearly

foreshadowed. Second, ... we must ... look[ ]

Apdx. A- 14

to the prior history of the rule in question, its

purpose and effect, and whether retrospective

operation will further or retard its operation.

Finally, we have weighed the inequity

imposed by retroactive application, for where

a decision of this Court could produce

substantial inequitable results if applied

retroactively, there is ample basis in our cases

for avoiding the injustice or hardship by a

holding of nonretroactivity.

Id. at 106-07, 92 S.Ct. 349 (citations and quotation marks

omitted).

Because Lexecon "reverse[d] the longstanding practice

under [§ 1407]," --- U.S. at ---, 118 S.Ct. at 962: see, e.g.,

Pfizer, Inc. v. Lord, 447 F.2d 122, 122-25 (2d Cir.1971), it is

unquestionable that Lexecon “overrul{ed] clear past precedent

on which litigants may have relied. " Second, retrospective

application of Lexecon would frustrate the "essential [sic]

purpose of section 1407 to ‘promote the just and efficient

conduct’ of complex multidistrict litigation." Pfizer, 447 F.2d

at 125 (quoting 28 U.S.C. § 1407(a)); see Crown, Cork &

Seal Co. v. Parker, 462 U.S. 345, 353, 103 S.Ct. 2392, 76

L.Ed.2d 628 (1983) (section 1407 is one method "by which

the burdens of multiple lawsuits may be avoided"). In the

instant case, this primary concern outweighs the subsidiary

concem of § 1407 to "favor ... [the] plaintiffs’ choice of

forum." Lexecon, --U.S. ---, at 118 S.Ct. at 960. In 1993, the

Apdx. A - 15

transferee district court transferred the actions to itself for

trial; in 1994, that court held a six-week jury trial; and

Lexecon was not decided until March 1998, nearly a year after

the judgment of the district court and ten days before oral

argument in this court. Retroactive application of Lexecon

would require remand of each action to its respective

transferor court, with the possibility that some or all of the

actions will not be re-transferred to the Southern District. If

this should happen, the jury's special verdict will be of no

effect as to some or all of the actions, which would then have

to be retried, possibly separately. Retroactive application

could therefore lead to an enormous waste of judicial

resources, precisely the result Congress sought to avoid by

enacting § 1407. At least when a trial has been completed

and final judgment has been entered, as in the instant case, the

second Chevron factor weighs heavily in favor of non-

retroactive application.

As to the third Chevron factor, which weighs the

equities of retroactive application, the Supreme Court has

recently observed that "we can scarcely permit ‘the

substantive law [to] shift and spring’ according to ‘the

particular equities of [individual parties'] claims’ of actual

reliance on an old rule and of harm from a retroactive

application of the new rule." Harper, 509 U.S. at 97, 113

S.Ct. 2510 (alterations in original) (quoting Beam, 501 U.S.

at 543, Ill S.Ct. 2439). This factor may therefore be of little,

if any, effect. Assuming that the third factor is no longer

Apdx. A - 16

valid, we easily hold that the first two Chevron factors in this

case preclude Lexecon 's retroactive application. To the

extent that the third Chevron factor still has force, the equities

still favor not applying Lexecon in this case. After twelve

years of litigation, the parties have an interest in resolution of

the fundamental issues in this case and, if we so decide, a

final judgment from this court.

Because we hold that Lexecon does not apply

retroactively to the instant action, we do not address whether

either the Singh or the non-Singh plaintiffs waived their right

to a remand under § 1407. See Lexecon, --- U.S. at ---, n. 1,

118 S.Ct. at 962 n. 1.

II. Warsaw Convention Claim

We next turn to the merits of appellants’ Warsaw

Convention claim. The Convention applies "to all

international transportation of persons, baggage, or goods

performed by aircraft for hire," Convention, art. 1, and

governs the liability of international air carriers for damages

resulting from an "accident," Convention, art. 17, which has

been interpreted to include hijacking or terrorist activity. See

Pflug v. Egyptair Corp., 961 F.2d 26, 29 (2d Cir.1992).

Under Article 17 of the Convention,

[t]he carrier shall be liable for damage

sustained in the event of the death or

wounding of a passenger or any other bodily

injury suffered by a passenger, if the accident

Apdx. A - 17

which caused the damage so sustained took

place on board the aircraft or in the course of

any of the operations of embarking or

disembarking.

Article 22 of the Convention, as modified by the Montreal

Agreement,’ limits the liability created by Article 17 “for each

passenger for death, wounding, or other bodily injury [to]

$75,000 inclusive of legal fees and costs, except that, in case

of a claim brought in a State where provision is made for

separate award of legal fees and costs, the !imit {shall be]

$58,000 exclusive of legal fees and costs." Defendants have

conceded liability and the district court entered judgment

against defendants for damages within the limits prescribed

by Article 22 as modified.

Article 25(1) of the Convention as translated,

however, provides that

[t]he carrier shall not be entitled to avail

himself of the provisions of this convention

which exclude or limit his liability, if the

damage is caused by his wilful misconduct or

?The Montreal Agreement, otherwise known as the

Agreement Relating to Liability Limitations of the Warsaw

Convention and the Hague Protocol Agreement CAB 18990,

applies where (as in the instant case) the flight itinerary includes

a stop in the United States. Pan Am is a signatory to the Montreal

Agreement, a private agreement that has been approved by the

United States government by Exec. Order No. 23,680, 31 Fed.Reg.

7,302 (1966).

Apdx. A- 18

by such default on his part as, in accordance

with the law of the court to which the case is

submitted, is considered to be equivaient to

wilful misconduct.

The Singh plaintiffs claim that the district court improperly

capped defendants’ liability to the limits prescribed by Article

22 as modified because defendants' misrepresentations on the

subject of improved airport security constitute "wilful

misconduct" within Article 25(1) and caused them damage.

This claim, sharply contested by defendants, is a principal

issue of this appeal.

A. Fraudulent Misrepresentation as "Wilful Misconduct"

As a preliminary matter, defendants maintain that the

district court erred when it held that fraudulent

misrepresentation by an air carrier can itself constitute "wilful

misconduct" within Article 25(1) of the Convention.

Defendants claim that such a holding "“transform[s] the

Convention into an international agreement that imposes

liability on air carriers for allegedly false or fraudulent

advertising,” and undermines the desired uniformity of the

Convention's liability scheme by “allow[ing] those passengers

who have 'relied' on fraudulent advertising to recover amounts

in excess of the generally applicable limits of the Convention,

while other passengers who suffered equal or greater injuries

in the same accident would not." The Singh plaintiffs respond

that the Convention was not designed to "insulate an airline

Apdx. A - 19

from the consequences of its own fraud," and that " where the

wilful misconduct consists of fraudulent statements made

before the flight to lure passengers onto the aircraft, it is only

logical that the misconduct c2n affect different passengers

differently, and that they may have different claims based on

their individual circumstances. "

"Wilful misconduct under the Convention means that

a carrier must have acted either 1) with knowledge that its

actions would probably result in injury or death, or 2) in

conscious or reckless disregard of the fact that death or injury

would be the probable consequence of its actions." Pagnucco

v. Pan American World Airways, Inc. (In re Air Disaster at

Lockerbie Scotland on Dec. 21, 1988 ), 37 F.3d 804, 812 (2d

Cir.1994) ("Lockerbie II"). The district court defined wilful

misconduct for the jury as making false statements either

knowingly or "with no basis in fact or with reckless disregard

of the truth" and with awareness that defendants’ "fail[ure] to

act in the way they promised to do" was "likely to cause

injuries to passengers." See Trial Tr. at 2750, 2762. It is

unclear to us why, as defendants contend, fraudulent

misrepresentations as to the state of an airline's security

should enjoy unique status as non-wilful misconduct within

Article 25. Indeed, we recognized such wilful misconduct in

Lockerbie II, 37 F.3d at 822 (admitting, as proof of

misconduct, "proof regarding the ‘Alert’ Security Program

*We discuss the causation aspect of wilful misconduct in

part 11(B), below.

Apdx. A - 20

reveal[ing] first, that it was neither related to security, nor was

it a program. Instituted by Pan Am in May 1986 during a

period of sharp decline in international travel due to terrorist

attacks, the program was a misleading public relations ploy

designed to make would-be travelers feel more secure. "). The

Convention's uniformity principle, moreover, plainly does not

require equal treatment of all passengers injured by an

aviation accident where only a subset of those passengers

were injured as a result of the carrier's wilful misconduct--

here, Pan Am's fraudulent misrepresentations.

B. Causation

Our conclusion that fraudulent misrepresentation can

constitute "wilful misconduct" leads to the much more

difficult question of what causal nexus must be shown

between the misrepresentation and plaintiffs’ damages. We

therefore determine first, the proper standard for causation

under the Cenvention and second, whether the jury's special

verdict precludes a finding of causation under that standard.

(1) Proper Standard of Causation. Article 25 of the

Convention which, as noted, removes the liability limitation

of Article 22, speaks only generally to causation: liability

exists where the plaintiffs’ "damage is caused by [the carrier's]

wilful misconduct. " Challenged to find the test for causation

in fraudulent misrepresentation cases, a matter the

Convention leaves unresolved, the Singh plaintiffs suggest a

winding path to that conclusion. They argue that, in the

Apdx. A - 21

LEDERER APTA IER SLL IRL SP LUANG MOTE IE EG at ne

2A 1h te 8 be a.

absence of a prescribed test for causation in fraudulent

misrepresentation cases, the Convention derogates that issue

to another source of law-here United States law, see

Zicherman vy. Korean Air Lines Co., 516 U.S. 217, 227-28,

116 S.Ct. 629, 133 L.Ed.2d 596 (1996); that Zicherman

forbids creation of a federal common-law rule of causation,

see id. at 230-31, 116 S.Ct. 629; that, in the absence of federal

statute, the controlling law (including choice of law rules) is

that of the forum jurisdiction see Brink's Ltd. v. South

African Airways, 93 F.3d 1022, 1030 (2d Cir.1996), cert.

denied, --- U.S ---, 117 S.Ct. 959, 136 L.Ed.2d 845 (1997);

that where there has been a change of venue, the forum

jurisdiction is where the action has been filed--here the

Southern District of California, see Van Dusen v. Barrack,

376 U.S. 612, 639, 84 S.Ct. 805, 11 L.Ed.2d 945 (1964); that

California's choice of law rules therefore determine which

substantive law applies, see Valley Juice Lid. v. Evian Waters

of France, Inc., 87 F.3d 604, 607 (2d Cir.1996); that under

California's if governmental interests" approach to choice of

law rules, California law would apply, see Reich v. Purcell,

67 Cal.2d 551, 555-56, 63 Cal.Rptr. 31, 432 P.2d 727 (1967);

and that California law prescribes a causal nexus between

wilful misconduct and damages that is weaker than the

causation test used by the district court. See Garcia v.

Superior Court of Santa Clara County, 50 Cal.3d 728, 737,

268 Cal.Rptr. 779, 789 P.2d 960 (1990). We disagree.

Article 24 of the Convention states that any action for

Apdx. A - 22

damages under Article 17 "can only be brought subject to the

conditions and limits set out in this convention. " Convention,

arts. 24(1), 24(2). We believe that this means that unless the

Convention reserves an issue for determination by the law of

another jurisdiction, the law of the Convention--not federal

common law, state law, or any other law of the forum court--

applies. Unlike in this case, the Convention articles at issue

in both Zicherman and Brink's suggested that the critical

questions in those cases were to be decided according to the

law of other fora. In determining whether loss of society

damages, resulting from the death of a relative in a plane

crash on the high seas, were recoverable, Zicherman looked

to Article 24(2), which states that Article 24 applies "without

prejudice to the questions as to who are the persons who have

the right to bring suit and what are their respective rights."

Zicherman, 516 U.S. at 224-25, 116 S.Ct. 629. Zicherman

therefore concluded that "the law of the Convention does not

affect the substantive questions of who may bring suit and

what they may be compensated for," and looked to United

States law to determine the result. /d.; see also Pescatore v.

Pan American World Airways, Inc., 97 F.3d 1, 8 (2d

Cir.1996). Similarly, in determining whether theft by an

employee acting within the scope of employment constitutes

"wilful misconduct," Brink's looked to the law of the forum

jurisdiction, as contemplated by the specific language of

Article 25(1), which applies to "wilful misconduct or [ ] such

default ... as, in accordance with the law of the court to which

Apdx. A - 23

the case is submitted, is considered to be equivalent te wilful

misconduct." See Brink's, 93 F.3d at 1028-29.

The Convention "was intended to serve as a uniform,

international law" and one of its central purposes was "to

establish uniformity in the aviation industry with regard to .

_. the substantive law applicable" to claims "arising out of

international transportation." Rein v. Pan American World

Airways Inc. (In re Air Disaster at Lockerbie, Scotland on

Dec. 21, 1988 ), 928 F.2d 1267, 1270, 1280 (2d Cir.1991)

("Lockerbie 1") (quotation marks omitted). Unless otherwise

indicated by the Convention, application of various rules of

substantive law on the same question, depending on the state

in which an action was brought and that state's choice of law

rules, tends to undermine the Convention's uniformity

principle. Because no provision of the Convention suggests

that the issue of causation should be decided according to the

law of another jurisdiction, we look to "the conditions and

limits set out in this convention." Convention, art. 24(1).

The issue of the standard of causation applicable in

fraud-based "wilful misconduct" cases under the Convention

is apparently one of first impression in the United States. In

interpreting the Convention, we therefore "begin with the text

of the treaty and the context in which the written words are

used," and if necessary to “ascertain their meaning we may

look beyond the written words to the history of the treaty, the

negotiations, and the practical construction adopted by the

parties." Eastern Airlines, Inc. v. Floyd, 499 U.S. 530, 534-

Apdx. A - 24

{ - 4

Sid

35, MI S.Ct. 1489, 113 L.Ed.2d 569 (1991) (quotation marks

omitted).

Article 25 of the Convention, as translated, applies

where the plaintiffs’ "damage is caused by [the carrier's]

wilful misconduct. "| Where fraudulent misrepresentation

constitutes the "wilful misconduct," the causation language of

Article 25 is susceptible to three interpretations. First, to the

extent a plaintiff reasonably relies on a misrepresentation and

is thereby induced to board an airplane that is hijacked--

leading piaintiff to suffer injury--the misrepresentation could

be said to have "caused" plaintiff's injury, or "damage." We

believe that this "but for" or "factual" causation is insufficient

to establish the causation required, by Article 25. It cannot

credibly be maintained, for example, that where a plaintiff

reasonably relies upon an_ airline's fraudulent

misrepresentations of good meals, padded seats, and ample

leg room and the plaintiffs plane is then hijacked and the

plaintiff injured, that the misrepresentation--by causing the

plaintiff to board the plane--in any way “caused” plaintiff's

injuries as defined by Article 25. At oral argument, the Singh

plaintiffs conceded the untenability of such a factual

causation theory.

A second interpretation--the one urged by the Singh

plaintiffs on appeal--would define causation as both

reasonable reliance on the misrepresentation inducing

passengers to use a carrier and a reasonable relationship

between the injuries and the representations relied upon.

Apdx. A - 25

Because the Singh plaintiffs were allegedly induced by Pan

Am's misrepresentations of improved security to fly Pan Am

and because one of the purposes of such security was to

prevent hijackings such as the one that caused plaintiffs’

injuries, the Singh plaintiffs contend that Pan Am's

misrepresentations "caused" their damage. If, however, Pan

Am's institution of the Alert program as promised would not

have prevented the hijacking of Pan Am Flight 73, then the

representation cannot have "caused" plaintiffs’ injuries any

more than the failure to serve a promised meal under the first

interpretation, and any "reasonable relationship" between the

representations and the injuries would be purely coincidental.

The Convention's "clearly [ ] overriding purpose--to limit air

carriers’ potential liability in the event of accidents," see

Lockerbie I, 928 F.2d at 1270, would be undermined if air

carriers were held liable for damages that would have

occurred regardless of whether or not the carrier's

representations of improved security were ultimately

performed as promised. We therefore reject this second,

"reasonable relationship" formulation of causation as well.

Rather, we believe that to establish Article 25(1), causation

for fraud-based wilful misconduct claims, the Convention

requires plaintiffs to prove by a preponderance of the

evidence first, that their reasonable reliance on the fraudulent

misrepresentations induced them to use the carrier and

second, that the damages would not have occurred if the

carrier had performed as promised. In the instant case,

Apdx. A - 26

;

_—

therefore, defendants would not be liable under Article 25(1)

if, assuming they had instituted the Alert security program as

represented to the Singh plaintiffs, the hijacking would still

have occurred.

(2) The Jury's Special Verdict.

Our next inquiry is whether the special verdict form

and jury charge properly applied the test elucidated above, in

which case the jury's special verdict would dispose of the

Causation issue and require dismissal of the Singh plaintiffs’

Warsaw Convention claims. "The formulation of special

verdict questions rests in the sound discretion of the trial

judge, and should be reviewed by an appellate court only for

an abuse of that discretion." Vichare v. AMBAC Inc., 106 F.3d

457, 465 (2d Cir. 1996). "Reversal is warranted if the

questions mislead or confuse the jury, or if they inaccurately

frame the issues to be resolved by the jury." Jd. However, the

court's special verdict questions "must be read in conjunction

with the judge's charge to the jury." /d. at 466.

The special verdict form in the instant case asked the

question: "[D]o you find by a fair preponderance of the

evidence that the wilful misconduct of Pan American World —

Airways, Inc., in connection with the Alert Security Program,

was a proximate cause of the hijacking?" to which the jury

answered "no." This somewhat ambiguous special verdict

form--asking whether the wilful misconduct in connection

with the Alert program proximately caused the hijacking-

could have left some room for misinterpretation by the jury.

Apdx. A - 27

An advertising program plainly cannot "cause" a hijacking

and it is not inconceivable that the jury could have rejected a

| finding of causation on this basis. The special verdict form

| should have asked: "Had Pan Am instituted the security as

promised in its Alert Security Program, would the hijacking--

and therefore plaintiffs’ injuries--have occurred?"

However, the district court's jury charge as to

causation stated:

Proximate cause means that the willful

misconduct of Pan Am was a substantial

contributing factor in bringing about the

hijacking. . . . Obviously we know that the

H conduct of the hijackers caused the hijacking

to a large extent. So the plaintiffs do not have

the burden of proving that the willful

misconduct of Pan Am was the sole cause of

the accident. . . . [I] f this hijacking would have

occurred in any event regardless of whether

Pan Am was guilty of willful misconduct or

not, then proximate cause would not be

shown... . If it was not a contributing factor

| in the sense that even if the willful conduct

had not taken place, the hijacking would have

happened anyway, . . . that even if all the

security arrangements had been put in place as

represented by Pan Am, even if they had done

everything they said they were supposed to

Apdx. A - 28

do, the hijacking would have occurred

anyway, then plaintiffs would not have carried

the burden of showing that it is a proximate

cause.

Trial Tr. at 2763-64 (emphasis added). This jury charge did

clarify the special verdict form by stating that the jury could

not find causation if "the hijacking would have occurred"

“even if all the security arrangements had been put in place as

represented by Pan Am, even if they had done everything they

said they were supposed to do." In light of plaintiffs’ failure

to request a more precise charge consistent with our earlier

discussion of the law, their failure to object to the district

court's proposed special verdict form, see Trial Tr. at 2543-

44, and their concession before the district court that in fact

the jury was "asked whether or not [the hijacking] would have

happened if [defendants] did everything that was promised,"

Tr., March 10, 1995, at 11, we find that the jury instructions,

taken as a whole, were not sufficiently misleading or

ambiguous as to constitute plain error. See United States v.

Ciak, 102 F.3d 38, 45 (2d Cir.1996) (applying plain error

review where party failed to object to jury charge). In the

context of the jury instructions that were given, the jury's

special verdict precludes any finding of causation as to the

Singh plaintiffs’ fraudulent misrepresentation claim under the

Warsaw Convention.

C. "Causes" v. "Arises From"

Apdx. A - 29

Be ee iy RL age ie cok eee

The Singh plaintiffs also challenge the district court's

special verdict form and jury charge on the theory that the

Article 25(1) causation test in the official American and

British translations of the Warsaw Convention is

mistranslated and improperly requires a stronger nexus

between wilful misconduct and damage than does the test as

set out in the original French text. The Singh plaintiffs note,

correctly, that "[b]ecause the only authentic text of the

Warsaw Convention is in French, the French text must guide

our analysis." Eastern Airlines, 499 U.S. at 535, 111 S.Ct.

1489. The official French text of Article 25(1) reads: "si le

dommage provient de son,” which the Singh plaintiffs claim

to mean "if the damage arises out of " and not "if the damage

is caused by" the wilful misconduct. They note further that

Article 17, which in the American translation establishes

carrier liability where an "accident ... caused the damage,"

reads "cause le dommage " in the official French text. After

the jury returned its special verdict, the Singh plaintiffs

presented to the district court the uncontroverted declaration

of their French legal expert, Professor Alain Levasseur, that

"provient de son" means “arises from" in the context of

Article 25(1). The Singh plaintiffs maintain that because,

under the proper translation of Article 25(1), their damages

would only have to "arise from" Pan Am's fraudulent

misrepresentation, the jurv's special verdict as to causation

does not now preclude their fraudulent misrepresentation

claim.

Apdx. A - 30

ROE RE ere RENNIE EEE mE ey

* . ‘ > om

és

Ser oT IE TERR RRREOYT RT TH PRE aEIE ar ey

Defendants respond that, because Article 17--creating

the carrier's liability--requires proximate cause, plaintiffs’

reading of Article 25 is illogical because it would "allow

recovery of unlimited damages for an act of wilful

misconduct that could not, in the first instance, have

supported a finding of liability under Article 17." This

argument misses the fact that Article 17 requires proximate

causation as between the "accident " and plaintiffs’ "damage,"

while Article 25, under plaintiffs’ reading, would require the

looser "arising from" causation only as between defendants’

"wilful misconduct and _plaintiffs' "damage." (Emphasis

added). This interpretation appears to reconcile the

inconsistent standards of causation by attributing them to

differing levels of culpability.

Defendants next observe that no United States court

has ever questioned the American/British translation of

Article 25(1) as it relates to causation. "Age [, however,] is no

antidote to clear inconsistency with a statute," or a treaty.

Lexecon, --- U.S. at ---, 118 S.Ct. at 962 (quoting

Metropolitan Stevedore Co. v. Rambo, 515 U.S. 291, 300, 115

S.Ct. 2144, 132 L.Ed.2d 226 (1995)). Defendants note,

finally, that Article 25(2), which as translated states that a

carrier may not avail itself of liability limitations “if the

damage is caused [by the wilful misconduct of] any agent of

the carrier acting within the scope of his employment," reads

"a ete cause” in the original French text. ( Emphasis added).

Defendants reason that the Convention did not contemplate

Apdx. A - 31

"different standards of causation ... depending on whether the

party engaging in wilful misconduct [was| the air camer itself

or its agent. "

We note that the Singh plaintiffs’ translation error

argument logically applies not just to fraudulent

misrepresentation but to all wilful misconduct claims.

Because plaintiffs did not object to the jury charge or special

verdict form on this ground until after the jury's special

verdict, however, we do not resolve this translation error issue

except to hold-upon the limited record before us--that the

district court's instructions were not plain error. Plaintiffs’

argument based on the French text, while not without

substance, is one that the district court could not have

anticipated given the state of the law. See Ciak, 102 F.3d at

45 (applying plain error review where party failed to object to

jury charge). Plaintiffs’ own requested jury charge asked

"whether the wflful misconduct was a proximate cause of the

hijacking and the injuries and deaths of the passengers,” and

iheir requested special verdict form asked whether Pan Am's

wilful misconduct was "a cause" of plaintiffs’ damages. We

therefore leave to another day whether "provient de son" in

Article 25(1) is properly translated as "is caused by" or "arises

from," (and, if the latter, its significance), an issue of apparent

first impression in this country.

Ill. State Law Claims

The Singh plaintiffs’ common law claims for

Apdx. A - 32

rescission, negligence, wrongful death, conspiracy to defraud,

breach of contract, and fraud are all preempted by the Warsaw

Convention. It is now well-established that "[{a]ll state law

claims that fall within the scope of the Convention are

preempted." Fishman v. Delta Air Lines, Inc., 132 F.3d 138,

141 (2d Cir. 1998) (citing Lockerbie J, 928 F.2d at 1273); see

Coker v. Pan American World Airways, Inc. (In re Pan

American Corp.), 950 F.2d 839, 847 (2d Cir, 1991)

(transferee court in Second Circuit must apply preemption

law as construed by the Second Circuit). This is because the

Convention

had two primary goals: first, to establish

uniformity in the aviation industry with regard

to the procedure for dealing with claims

arising out of international transportation and

the substantive law applicable to such claims

. . . [and] second-clearly the overriding

purpose--to limit air carriers’ potential liability

in the event of accidents.

Lockerbie I, 928 F.2d at 1270 (quotation marks omitted).

Moreover, “‘[t]he existence of the state causes of action would

not only result in the inconsistent application of law to the

same accident, but also would cause enormous confusion for

airlines in predicting the law upon which they would be called

to respo-4.” /d. at 1276. All of the Singh plaintiffs’ common

law claims are "within the scope" of Article 17 of the

Convention, in that they all seek damages for "the death or

Apdx. A - 33

wounding of a passenger or any other bodily injury suffered

by a passenger" caused by an "accident . . . on board [an]

aircraft" in international transportation. Convention, arts. 1,

17; see Fishman, 132 F.3d at 141.

Because all of the Singh plaintiffs’ common law

claims are preempted by the Warsaw Convention, we have no

need to address the second arrow in defendants’ preemption

quiver: the questionable contention that somehow all of

plaintiffs’ state claims implicate state laws or regulations

"having the force and effect of law relating to rates, routes, or

services of any air carrier," and are therefore preempted by

the Airline Deregulation Act of 1978, 49 U.S.C. app. §

1305(a\(1) (1993), reconstituted in 49 U.S.C. § 41713(b)(1).

See generally American Airlines, Inc. v. Wolens, 513 US.

219. 115 S.Ct. 817, 130 L.Ed.2d 715 (1995); Morales v.

Trans World Airlines, Inc., 504 U.S. 374, 112 S.Ct. 2031, 119

L.Ed.2d 157 (1992).

1V. Challenge to the Trial Judge's Conduct

All of the plaintiffs argue that the trial judge

committed reversible error by improperly questioning

witnesses before the jury. In reviewing a challenge to a trial

judge's conduct, we determine not "whether the trial judge's

conduct left something to be desired, or even whether some

comments would have been better left unsaid[, but]. . .

whether the judge's behavior was so prejudicial that it denied

[a party] a fair, as opposed to a perfect, trial." United States v.

Apdx. A - 34

Rosa, 11 F.3d 315, 343 (2d Cir.1993) (quotation marks

omitted). Our statement of this legal standard in no sense

should be taken to detract from our counsel that, of course. “a

court must strive for ‘that atmosphere of perfect impartiality

which is so much to be desired in a judicial proceeding,”

Santa Maria v. Metro-North Commuter R.R., 81 F.3d 265.

273 (2d Cir.1996) (quoting Glasser v. United States, 315 US.

60, 82, 62 S.Ct. 457, 86 L.Ed. 680 (1942)), and "must be

especially cautious and circumsnect in language and conduct

during a jury trial. " /d. (quotation marks omitted). Although

"asking numerous and probing questions of witnesses" is

"unquestionably proper," a "trial judge should limit

questioning to inquiries necessary to clarify ambiguities,

correct misstatements, or obtain information necessary to

make rulings," United States v. Manko, 979 F.2d 900, 905 (2d

Cir.1992), and "[w]e will reverse on the basis of a judge's

improper remarks if the judge expresses [his] opinion on an

ultimate issue of fact in front of the jury or {argues} for one of

the parties." Causey v. Zinke (In re Aircrash in Bali.

Indonesia), 87\ F.2d 812, 815 (9th Cir.1989) (alteration in

original) (quotation marks omitted). "{I]t is only after an

examination of the entire record," however, "that we can

come to a conclusion about the conduct of the district court."

Manko, 979 F.2d at 905-06 (quotation marks omitted).

Of the many examples cited by plaintiffs, the trial

judge's conduct in the jury's presence was troublesome only

in the judge's questioning of plaintiffs’ principal airport

Apdx. A - 35

security expert, Isaac Yeffet, a former head of El Al security,

as follows:

THE COURT: Do you have an opinion as to what the state of

security was at Karachi Airport on September 5, 1986?

THE WITNESS: Yes, sir.

THE COURT: What is that opinion? THE WITNESS: That

if terrorists--

THE COURT: No, no, what is that opinion -- not if, not

hypothetically what could happen -- as to the state of security

at that airport?

THE WITNESS: That they cannot near the aircraft stop

terrorists who is [sic] coming to attack or to hijack the

aircraft.

THE COURT: That is not an opinion. That is just your

statement that they couldn't prevent what happened.

THE WITNESS: That's right.

THE COURT: I take it you have very good security on the

West Bank, isn't that correct, in Israel’?

THE WITNESS: Yes, your Honor.

THE COURT: Troops ali over the place?

THE WITNESS: Yes.

THE COURT: Somebody went into a mosque and shot 60

people. So what I am saying to you is, | ask you for your

opinion of the nature of security. Was it good, bad, or

indifferent? That is what | want to know. That is what they

need to know.

Apdx. A - 36

THE WITNESS: Your Honor, very bad.

Trial Tr. at 1057-58. The trial judge's reference to the Hebron

massacre,* while arguably a legitimate effort to draw a proper

expert opinion from Yeffet, could also have improperly

suggested to the jury that, if "very good security on the West

Bank" could not prevent the Hebron massacre, then the Pan

Am hyacking would have occurred even hiad Pan Am fulfilled

its promises of improved security. The trial judge

compounded this error when, in response to Yeffet's

contention that Pan Am should have had more armed guards

surrounding the plane on the tarmac, the district court stated:

THE COURT: [Y Jou are an expert in this field, but I have

flown and | am sure other people have flown. I don't have any

recollection of having seen armed guards in most of the

airplanes I have flown in that are flown by airlines. What I am

asking you is this: As of September 5, 1986, was it common

practice for airlines at that time to have armed guards, their

own paid armed guards in the terminal, in the airport?

THE WITNESS: They had armed guards -

THE COURT: But were they employed by the airlines or

were they soldiers?

THE WITNESS: No, they were from the local authorities, and

some of them that had air marshals, they were on the spot

‘On February 24, 1994, an armed gunman killed a number

of people in a mosque in Hebron on the West Bank.

Apdx. A - 37

until their aircraft took off.

THE COURT: But wouid it be fair to say that most airlines at

September 5, 1986, did not employ armed guards to patrol the

airline terminals? Is that true?

THE WITNESS: I cannot say most of them employed. But |

can say that the local authorities, with the cooperation with

the head of security of those airlines, they provide them

armed guards to secure their flight.

THE COURT: But normally the armed guards, the people

who patrol the terminals, are supplied by the local military

authorities or local civilian authorities?

THE WITNESS: Correct.

THE COURT: At least that is what I have seen, and tell me if

1 am right.

THE WITNESS: You are correct.

Id. at 1062-63. Apparently disbelieving Yeffet's expert

opinion that Pan Am should have employed armed guards and

that such armed guards may have prevented the hijacking, the

trial judge continued to question Yeffet during plaintiffs’

direct examination:

THE COURT: What I am saying to you is-and I have asked

you the question five times and I have gotten the same answer

all five times--the one thing you say Pan Am should have had

was more armed guards--at least five, as I heard your

testimony.

Apdx. A - 38

THE WITNESS: Yes, your Honor, upwards of six.

THF COURT: How long would it take a hijacker with a

machine gun to dispatch five armed guards?

THE WITNESS: What do you mean to dispatch?

THE COURT: Shoot them.

THE WITNESS: All this action is a question of seconds.

THE COURT: I know.

THE WITNESS: Now, if I have armed guard professionals,

some of them with uniforms, some of them without uniforms.

and they are aware why they are in the position, once the

terrorists are coming with their car, they might kill one or

two, but we still have professional armed guards to give the

answer to kill the four terrorists.

THE COURT: It depends how good they are. If they are as

good as these highly trained, specialized commando types

that El Al employs, I guess you have one scenario. But if they

are ordinary soldiers, you have another?

THE WITNESS: They [the security persons at Karachi] are

not even soldiers, your Honor.

THE COURT: But these people testified that they are highly

trained commando types, are they not?

THE WITNESS: When any other airlines decides [sic]

already to have armed guards-

THE COURT: I think I have your opinion.

Id. at 1069-70. The trial judge's own experiences with

airlines and his opinion as to whether E] Al commandos or

Apdx. A - 39

ordinary soldiers would have prevented the Pan Am hijacking

are plainly of no relevance to the jury. We cannot say that the

above colloquies reflected "questioning | limited] to inquiries

necessary to clarify ambiguities, correct misstatements, or

obtain information necessary to make rulings," Manko, 979

F.2d at 905, and indeed they approach the tone a cross-

examination on behalf of defendants. Moreover, the trial

judge's questioning went to the issue of causation, upon

which the jury ultimately found in favor of defendants.

During the six week trial and many thousands of pages of

testimony, however, the district court did not otherwise

engage in improper questioning in front of the jury. Although

a very Close issue, upon "examination of the entire record" in

this particular case, see Manko, 979 F.2d at 905-906, and

given the trial judge's otherwise proper conduct in front of the

jury throughout the entire six-week tral, we decline to vacate

the judgment of the district court based upon the trial judge's

questioning of Yeffet.

Plaintiffs also point to a number of remarks made by

the trial judge to counsel out of the jury's presence as

evidence of the district court's bias against plaintiffs. For

example, after the trial judge forbade one of the plaintiff's

lawyers from speaking and suggested that he go to "a trial

practice school," the judge stated to another plaintiff's lawyer:

THE COURT: If you want to improve his career, tell the firm

to send him to a trial practice seminar so he learns something

Apdx. A - 40

about the rudiments of asking a question, the rudiments of

what arguments to make to a judge, what arguments not to

make to a judge. . . .

[COUNSEL]: I don't want to focus on a narrow issue. |

understand what you are saying. I understand. I have heard it.

THE COURT: He doesn't know how to try a case, in my

view.

[COUNSEL]: I want you to know that. with my experience

and my confidence in [plaintiffs’ counsel], nothing has been

done to undermine that confidence in him.

THE COURT: That may be. That may only prove that you are

more obdurate than you should be. Frankly, when I was a

partner at a law firm, I took criticisms of federal judges more

seriously than that and I paid more attention to it, which is

probably why I learned more than you did. The fact of the

matter is that if a federal judge with my trial experience and

my judicial experience and my record as a practicing lawyer

before I came here, if that opinion is so unimportant to you,

maybe that explains why he is as bad as he is.

Tnal Tr. at 2780-82. Other similar comments, also outside the

jury's presence, are cited by the plaintiffs.

To be sure, the foregoing remarks are tough medicine,

not of the sort an attorney likes to hear, and perhaps their

message--that the trial attorney's performance was below par

and in serious need of improvement--could have been

conveyed in a less acerbic manner. If the remarks had been

Apdx. A - 41]

made in the jury's presence, we would be concerned that they

might have been taken by the jury as reflecting an opinion by

the judge on the merits of plaintiffs’ case. But the jury did not

hear them and we will not second-guess the trial judge's belief

that the attorney's performance warranted the rebuke. In our

view, the remarks are indicative not of judicial bias, but rather

of the judge's legitimate concern over the attorney's

performance at trial. Because the remarks were made outside

of the jury's presence and did not otherwise impede the

fairness of the proceedings, they did not influence or

prejudice the trial in any way, and we therefore decline to

vacate the district court's judgment on that basis. Cf Santa

Maria, 81 F.3d at 275 (ordering new trial because of trial

judge's prejudicial comments in jury's presence).

V. Expert Witness

Finally, all of the plaintiffs claim that the district

court's refusal to qualify plaintiffs' proffered perimeter

security expert--Gary Stubblefield--was an abuse of that

court's discretion. "The admission or exclusion of expert

testimony rests soundly in the broad discretion of the trial

court.” Lockerbie II, 37 F.3d at 824; see General Elec. Co. v.

Joiner, --- US ---, ---, 118 S.Ct. 512, 517, 139 L.Ed.2d 508

(1997) (same). Stubblefield had never been a security officer

with an American commercial airport or American airline,

had never performed a threat assessment of an airport, had

performed no recent consulting work., and had received no

Apdx. A - 42

training with respect to airport or airline security. In these

circumstances, we cannot say that the district court abused its

discretion in refusing to qualify Stubblefield as an expert.

Conciusion

We affirm the judgment of the district court for the

reasons set torth above. Each party shal! pay its Own costs

Apdx. A - 43

APPENDIX B

UNITED STATES DISTRICT COURT

FOR THE

SOUTHERN DISTRICT OF NEW YORK

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF NEW YORK

IN RE HIJACKING OF PAN

AMERICAN WORLD

AIRWAYS, INC. AIRCRAFT

AT KARACHI INTERNATIONAL

AIRPORT, PAKISTAN

ON SEPTEMBER 5, 1986.

SADANAND SINGH,

INDIVIDUALLY AND &

AS EXECUTOR OF THE

ESTATE OF KALA SINGH;

SAMIR SINGH, BY AND

THROUGH SADANAND

SINGH, GUARDIAN AD LITEM;

KALPANA SINGH, BY AND

THROUGH SADANAND SINGH,

GUARDIAN AD LITEM,

Plaintiffs,

MDL 724 (JES)

M 21-44

MEMORANDUM

OPINION AND ORDER

-against-

PAN AMERICAN WORLD

Apdx. B - 44

AIRWAYS, INC., A NEW

YORK CORPORATION,

PAN AM WORLD SERVICES,

INC., A FLORIDA

CORPORATION; ALERT

MANAGEMENT SYSTEMS,

INC., A FLORIDA

CORPORATION, ALERT

MANAGEMENT SYSTEMS,

INC., A FLORIDA CORPORATION,

Defendants.

- xX

Sprizzo, D.J.:

Plaintiffs Sadanand Singh, individually and as

executor of the Estate of Kala Singh, and Samir and Kalpana

Singh, through a Guardian Ad Litem, (collectively, the "Singh

plaintiffs") and other plaintiffs bring the instant actions

against defendants Pan American World Airways, Inc. ("Pan

Am"), Pan Am World Services, Inc. ("PAWS") , and Alert

Management Systems, Inc. ("AMS") for damages arising out

of the hijacking of a Pan Am airplane in Karachi, Pakistan in

1986. Pursuant to 28 U.S.C. § 1404(a), the Singh plaintiffs

move to transfer venue to the Southern District of California

for trial on the remaining non-common claims. Pursuant to

Federal Rules of Civil Procedure 50, 54(b) and 58, Pan Am

cross-moves for entry of judgment limiting the amount of

damages to $75,000 under the Warsaw Convention and

~ Apdx. B - 45

dismissing the remaining non-common claims.°

BACKGROUND

In 1986, in response to increasing public concern over

threats against United States air carriers operating

international flights, Pan Am contracted with AMS to provide

a security system for its international flights. See Declaration

of Bruce H. Fagan Sworn to November 12, 1993 ("Fagan

Decl.") | 2-9, Exhs. 1-8. Pan Am thereafter implemented

and advertised its "Alert Security Program" as one which

provided enhanced security measures. See id.

On September 5, 1980, Pan Am flight number 73

departed Bombay, India en route to New York, New York

with a scheduled intermediary stop at Karachi International

Airport in Karachi, Pakistan. Joint Pre-Trial Order ("PTO"),

Undisputed Facts § 1. Plaintiff Sadanand Singh, his wife

Kala, and their two minor children Samir and Kalpana were

passengers on board flight 73. Declaration of Sadanand Singh

Swom to November 12, 1993 ("Singh Dec!l.") § 2.

While flight 73 was on the ground at Karachi

International Airport, terrorists boarded and assumed contro!

of the aircraft. PTO, Plaintiffs’ Contentions of Fact #4 86-87,

*Pan Am consents to entry of judgment in the amount of

$75,000 per passenger seat in cases governed by the Warsaw

Convention and $ 20,000 in cases governed by the Hague Protocol.

See Memorandum in Support of Pan Am's Motion for Judgment as

a Matter of Law Dismissing All of Plaintiffs (sic} Claims in Excess

of $75.000 at 1.

Apdx. B - 46

Defendant's Contentions of Fact | 245-48. While in control

of the aircraft, the terrorists opened gunfire on the passengers,

killing abouttwenty passengers and injuring numerous others.

See PTO, Plaintiffs’ Contentions of Facts {ff 95-97,

Defendants’ Contentions of Facts 4 283. During the hijacking,

Kala Singh was killed, and Mr. Singh and his two children

were injured. See Singh Decl. 4 3.

On February 23, 1987, Mr. Singh filed an action,

against Pan Am on behalf of himself and his two minor

children in the United States District Court for the Southern

District of California, claiming damages for wrongful death,

personal injury and false advertising. See Singh, et al. v. Pan

American World Airways, Inc., et al., 87 Civ. 3108 (JES) .

Numerous other wrongful death and personal injury lawsuits

relating to the hijacking of Pan Am flight 73 were filed

against Pan Am in various courts across the United States.

See Declaration of Randoiph S. Hicks, Esq. Sworn to October

15, 1993 ("Hicks Decl.") 4 3.

By Order filed April 7, 1987, the Judicial Panel on

Multidistrict Litigation selected venue in the Southern District

of New York for consolidated pre-trial proceedings pursuant

to 28 U.S.C. § 1407.° See PTO, Jurisdiction | 2. At the time

On January 8, 1991, Pan Am voluntarily initiated Chapter

11 reorganization bankruptcy proceedings pursuant to 11 U.S.C.

362(a), thereby causing an automatic stay of the actions. The United

States Bankruptcy Court of the Southern District of New York

subsequently granted conditional relief from the automatic stay for

the instant trial on liability and damages. See Hicks Decl. 1 6; see

Apdx. B - 47

Si eR tanh a Raa 8 ls ah

—————————

of consolidation, eighteen actions, including the Singh action,

had been filed. See Pan Am's Notice of Motion dated

October 15, 1993, Ex. C. As of October 15, 1993, thirty-five

actions arising out of the hijacking of Pan Am flight 73 had

been consolidated before this Court.

On October 15, 1993, Pan Am moved pursuant to 28

U.S.C. § 157 (b)(5), or in the alternative pursuant to 28

U.S.C. § 1404 (a), to transfer eighteen cases filed in the

Centra! District of California, including the Singh action, to

the Southern District of New York for a consolidated liability

trial. See PTO, Jurisdiction 4 1. By Order dated December

13, 1993, this Court granted Pan Am's motion and, pursuant

to Federal Rule of Civil Rrocedure 42(a), consolidated those

cases for trial of all common liability issues. Id.

On Apmil 14, 1994, after a six week jury trial, the jury

found that Pan Am's conduct in connection with the Alert

Security Program constituted willful misconduct. However,

the jury also found that the willful misconduct was not a

proximate cause of the damages claimed.’

also Stipulation and Order Modifying Lifting of Automatic Stay,

filed January 5, 1995.

’Four special interrogatories were put to the jury as follows:

1) Do you find by a fair preponderance of the evidence that

Pan American World Airways, Inc. engaged in willful

misconduct, as defined by the Court, in connection with the

Alert Security Program?

Apdx. B - 48

Thereafter, pursuant to 28 U.S.C. 1404(a), the Singh

plaintiffs moved for transfer of the remaining claims to the

The jury answered "yes."

2) Do you find by a fair preponderance of the evidence that

Pan American World Airways, !nc. engaged in willful

misconduct, as defined by the Court, by flying into Karachi

International Airport on September 5, 1986?

The jury answered "no."

3) If the answer to Question #1 is Yes, do you find by a fair

preponderance of the evidence that the willful misconduct

of Pan American World Airways, Inc., in connection with

the Alert Security Program, was a proximate cause of the

hyacking?

The jury answered "no."

4) If the answer to Question #2 is Yes, do you find by a fair

preponderance of the evidence that the willful misconduct

of Pan American Airways, Inc. in flying into Karachi

International Airport on September 5, 1986 was a

proximate cause of the hijacking?

The jury left the fourth interrogatory unanswered, because

the jury's answer to the second interrogatory made it

inapplicable.

Trial Transcript at 2734-35, 2804-05.

Apdx. B - 49

| een

MENTION EF ~~

ieee Teddies ee

rT ain inca ee

treet PCa

rene ron) \ eae wera Exe

Southern District of California’ for tnal on the ground that

since the Singh plaintiffs actually relied upon the

misrepresentations made by the defendants in connection with

the Alert Secunty Program, their claims were not common to

those already tried. Pan Am opposed that motion on the

grounds that (1) it is entitled to judgment notwithstanding the

verdict on the issue of willfu' misconduct; (2) that any

remaining claims are, in any event, preempted both by the

Warsaw Convention and by the Airline Deregulation Act.’

Pan Am also sought entry of judgment under the Warsaw

Convention in the amount of $75,000 per passenger seat and

dismissal of all remaining claims.'”

“The Singh plaintiffs assert that their remaining

noncommon claims include a "damages claim based 01: common

law," set forth in their Eleventh Claim for Relief of the Second

Amended Complaint, and a "fraud-based Warsaw claim" in which

the fraud constitutes the willful misconduct, set forth in the Third

Claim for Rehef of the Second Amended Complaint. See

Memorandum of Points and Authorities in Support of the Singh

Family's Motion to change Venue, n.3.

*AMS and PAWS join Pan Am's motion as it applies to the

Singh action, 87 Civ. 3108 (JES), which is the only action in which

they remain parties. AMS and PAWS are also subject to the

protections and limitations of the Warsaw Convention, see In re Air

Disaster at Lockerbie, 776 F. Supp. 710 (E.D.N.Y. 1991 )(holding

Lockerbie plaintiffs’ claims against AMS and PAWS are likewise

subject to conditions and limitations of Warsaw Convention).

‘Pan Am seeks entry of judgment in the amount of $20,000

per passenger seat on the claims governed by the Hague Protocol

rather than the Montreal Agreement. The parties have indicated to

Apdx. B - 50

DISCUSSION

The Warsaw Convention'’ limits liability of

international air carriers for damages resulting from an

"accident," which has been construed to include hijacking or

terrorist activity. See Pf mex _Egyp aoa om. 961 F.2d 26, 29

(2d Cir. 1992) ; »» 528 F.2d

31, 33 (2d Cir. 1975) (en banc) , cert. denied, 429 U.S. 890

(1976). Article 17 of the Warsaw Convention states that:

The Carner shall be liable for damage

sustained in the event of the death or

wounding of a passenger or any other bodily

injury suffered by a passenger, if the accident

which caused the damage so sustained took

place on board the aircraft or in the course of

any of the operations of embarking or

the Court that they agree that the Hague Protocol and its $20,000

limitation of liability may apply to the actions brought by plaintiffs

Dilip Parekh, Parag Sheth, Father Anthony Theodore and Kodiyttu

Kurian. See Defendants’ Opposition to Singh Family's Motion to

Change Venue at 1-2; Transcript of Oral Argument dated

September 30, 1994 at 2-3. In any event, the applicability of the

Hague Protocol limitations is not currently before the Court.

However, if the parties cannot reach a final agreement on the

applicability of the Hague Protocol limitations in each of these

cases, the Court will resolve that issue at a later time.

"Convention for the Unification of Certain Rules Relating

to International Transportation by Air, done at Warsaw, Oct. 12,

1929, 49 Stat. 3000, reprinted in 49 U.S.C. § 1502 Note, T.S. No.

876, 137 L.N.T.S. 11.

Apdx. B - 51

disembarking.

Article 22 of the Warsaw Convention limits the liability

created by Article 17.'° The Montreal Agreement!) which

subsequently modified the Warsaw Convention, subjects the

airlines to absolute liability when the flight itinerary includes

a stop in the United States. The Montreal Agreement states

that:

[The] limit of liability for each passenger for

death, wounding, or other bodily injury [shall

be the sum of US] $75,000 inclusive of legal

fees and costs, except that, in case of a claim

brought in a State where provision is made for

Separate award of legal fees and costs, the

limit [shall be the sum of US] $58,000

"Article 22 provides:

(1) In the transportation of passengers the liability of the carrier for

each passenger shall be limited to the sum of 125,000 francs [about

$8,300 in 1934]. Where, in accordance with the law of the court to

which the case is submitted, damages may be awarded in the form

of periodical payments, the equivalent capital value of the said

payments shall not exceed 125,000 francs. Nevertheless, by special

contract, the carrer and the passenger may agree to a higher limit of

lability.

Agreement Relating to Liability Limitations of the

Warsaw convention and the Hague Protocol Agreement CAB

18990. Pan AM isa signatory to the Montreal Agreement, a private

agreement that has been approved by the United States government

by order E23680, May 13, 1966 (Docket 17325), 31 Fed. Reg. 7302

(1966).

Apdx. B - 52

LG SESS IR Aha Si eC LB LO VORB APS BIS

ad NAS Mead GRRE ae EE LS ean, te eee 2

sows

LES

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exclusive of legal fees and costs.

Article 25 of the Convention lifts the liability

limitation set forth in Article 22 where the damage is "caused

by" the carrier's willfui misconduct. Article 25 provides:

(1) The carrier shall not be entitled to avail

himself of the provisions of this convention

which exclude or limit his liability, if the

damage is caused by his willful misconduct or

by such default on his part as. . . equivalent

to willful misconduct.

Pan Am's threshold contention is that the Court need not even

address the issues of whether, and to what extent, the jury's

finding of willful misconduct in the conduct of its "Alert

Security Program" can or should bar any remaining claims on

behalf of passengers who actually relied upon those

representations, because that finding should be set aside as

unsupported by the trial proof. The Court rejects that

contention.

Ample evidence was elicited at trial which rationally

supports the jury's conclusion that Pan Am made

representations of enhanced security measures in connection

with its "Alert" program, which Pan Am either 1) knew could

not or would not be implemented; or 2) had no basis to

believe that they could or would be implemented. Without

reciting in detail all of the trial proof regarding this issue,

suffice it to say that the evidence established, inter alia, (1)

that Pan Am made the alleged misrepresentations in an effort

to encourage increased travel at a time when concerns about

Apdx. B - 53

sag tires Pin ait iene RAO Ho

a aie Fat We 8 He

security had led to declining revenues, Trial Transcript ("Tr.")

at 80, 204, 356; (2) that Pan Am was aware that terrorist

activity, especially at European and other middle eastern high

risk airports, including Karachi, was a major factor in

passengers’ security fears, id. 81, 82; (3) that very little was

actually done to provide enhanced security at any foreign

airports, notwithstanding Pan Ar.1's well publicized campaign,

id, at 209-219, 444-447, 480, 828-29, 898: see also Plaintiffs’

Exhs. 2, 6, 9, 119, 33A; and (4) that virtually nothing was

done at Karachi Airport, where Pan Am clearly knew that it

had very little, if any, control over airport security, Tr. at 93,

116, 248-49, 323, 415, 417, 630, 635-636, 692, 747, 810,

1045, 1983. In the face of this evidence and other proof

which is set forth in greater detail in Plaintiffs’ Memorandum

of Law in Opposition To Defendant Pan-Am's Post-Trial

Motion at 4-13, defendants’ argument that the jury verdict was

either rationally unsupported or against the weight of the

evidence, lacks merit.'*

However, the Court must also reject plaintiffs’

contention that since they allege actual reliance on,

defendants’ misrepresentations, they need not prove that those

misrepresentations were the proximate cause of plaintiffs’

injuries. This argument is based upon the literal language of

Article 25, where the French verb "provenir" is used, which

‘*Because the Court has rejected defendants’ claim of

evidentiary insufficiency, there is no need for the Court to pass upon

the issue of whether Pan Am waived this claim by failing to make

a timely motion under Federal Rule of Civil Procedure 50.

Apdx. B - 54

plaintiffs contend is properly translated as "arising out" of and

not as "caused by," as would be the case if the drafters of the

Convention had employed the verb "causer," set forth in the

French version of Article 17.'°

Plaintiffs conclude from this difference in language

that plaintiffs’ injuries need only bear a _ reasonable

relationship to the representations relied upon, see Eastern

Airlines v. Floyd, 499 U.S. 530, 535 (1991 (looking to, inter

alia, French legal meaning of Convention terms for guidance

in interpretation) ; Air Saks v. France, 470 U.S. 392, 399-400

(same) , which relationship is established by the fact that

protection against terrorist activity was a major reason for the

representations made in the "Alert Security Program." The

Court cannot accept that argument for the following reasons.

) Article 25 does not in itself create any liability on the

| part of international air carriers; it merely removes a

limitation on the liability already imposed by Article 17 where

the airline is guilty of willful misconduct. Thus, where, as

here there is no liability under Article 17 because the

defendants’ conduct was not the proximate cause of the

| hijacking, there is no liability that can be increased as a

‘Article 25 of the Warsaw convention, in its original

French version, states, in pertinent part, “[s]i le dommage provient

de son dol ou d'une faute qui... .” Declaration of Professor Alain

Levasseur Sworn to December 6, 1994, at 2.

Article 17 provides in its original French version, in

pertinent part, “le transporteur est responsable du dommage survenu

er :as de mort...” and “lorsque l'accident qui a cause le dommage

s'est produit A bord... .” Id.

BEBE SA ASO AES ABBE MBI Fe FA

Apdx. B - 55

consequence of defendants’ willful misconduct. In sum,

Article 25 serves only to remove a limitation of a liability that

already exists under Article 17. See In re Lockerbie, 928

F.2d 1267, 1285-86 (2d Cir. 191) ; In re Korean Air Line

Disaster, 932 F.2d 1475, 1489 (D.C. Cir. 1991) ; Floyd v.

Eastern Airlines, Inc., 872 F.2d 1462, 1484 (11th Cir. 1989),

rev'd on other grounds, 499 U.S. 1991. It does not create an

additional and independent predicate for liability, and no

court has ever so held.

This is especially true since to accept plaintiffs’

argument would seriously undermine the Warsaw

Convention's primary goal of providing uniformity with

respect to the liability of international air carriers, see

O'Rourke v. Eastern Air Lines, Inc., 730 F.2d 842, 852 (2d

Cir. 1984) ; Reed v. Wiser, 555 F.2d 1079, 1089-90 (2d Cir.),

cert. denied, 434 U.S. 922 (1977) , a goal which the drafters

of the convention did not intend to be impacted by local laws.

See Reed, 555 F.2d at 1090. Indeed, it is for that reason that

the convention preempts all claims arising out of airline

operations regardless of the theory upon which they are

grounded or where the injury occurs.'® See In re Lockerbie,

“Article 24 of the Warsaw Convention provides that, "any

action for damages however found can only be brought subject to

the Warsaw Convention limitations." See, é.g., Pflug v. Egyptair

Corp). , 961 F.2d 26, 28-30 (2d Cir. 1992) (Conventi n preempt

state law claims); Chendrimada v, Air-India, 802 F. pp. 1089,

1091 (S.D.N.Y. 1992) (Convention preempts breach of contract and

negligence claims for persorial injury); Vv

Airlines, 23 Avi. Cas. (CCH) 18, 157 (S.D.N.Y. 1992) (Convention

Apdx. B - 56

928 F.2d 1267, 1273 (2d Cir. 1991) (state law claims falling

within scope of Warsaw convention are preempted); see also

In re Pan American Corp., 950 F.2d 839, 847 (2d Cir. 1991)

(transferee court in Second Circuit must apply preemption iaw

as construed by the Second Circuit). It would hardly be

consistent with these objectives to apply different standards

of causation depending upon whether or not the willful

conduct giving rise to plaintiffs’ injuries consists of fraudulent

misrepresentations. It follows that if plaintiffs’ claims cannot

be predicated upon the Convention, they cannot be based

upon federal or state common law because it is clear and

indeed undisputed that plaintiffs’ claims arise out of

international travel.

Plaintiffs’ reliance on The Normannia, 62 F. 469

(S.D.N.Y. 1894) is misplaced. Not only does that case have

no bearing upon the issue of preemption, but even assuming,

arguendo, that plaintiffs’ remaining claims were not

preempted by the Convention, The Nermannia would still not

support plaintiffs’ argument that the jury's verdict does not bar

these claims. In that case, although the court did suggest that

there need only be a relationship between the subject matter

of the defendants’ representation, L¢., that no steerage

passengers would sail on the vessel on which plaintiffs

booked passage, and plaintiffs’ alleged damage, Le., detention

in quarantine as a result of a cholera epidemic among steerage

passengers, id. at 481, it was nonetheless true that the

preempts claims for emotional distress resulting from hijacking).

Apdx. B - 57

existence of a cholera epidemic among those passengers was

in fact a proximate cause of plaintiff's detention. Id. Although

defendants’ misrepresentations did not cause the epidemic,

had the defendants’ musrepresentations been true, the

plaintiffs might not have been detained since those steerage

passengers would not have been aboard the vessel.” Id.

In the instant case, defendants’ misrepresentation

played no part whatsoever in causing plaintiffs’ injury, except

in the sense that but for defendants’ misrepresentations,

plaintiffs might not have been on board the aircraft. Plaintiffs

concede that is not legally sufficient. See Memorandum in

Support of Singh Family's Motion to Change Venue at 10-11.

Thus, unlike The Normannia, Supra, where, had the

defendants’ misrepresentations been true. there may well have

been no cholera epidemic, or at least a minimized risk of

cholera, aboard the vessel, in the instant action, the jury found

that, even if all the representations made were true and fully

implemented, the hijacking still would have occurred. That

"For the same reason, plaintiffs’ reliance on two other cases

cited ts similarly misplaced. In O' v. W Vv

Corp. Intercoast Management, 75 Cal. App. 3d 798, 803 (1977),

plaintiffs complaint, alleging proximate causation between

defendant's failure to fulfill its representations regarding 24 hour

security patrol at its apartment complex and plaintiff Is rape, was

held sufficient to state a claim. See also Collins v. American

Optometric Ass'n., 693 F.2d 636 (7th Cir. 1982) (defendani

misrepresented the ability of his optometrists to diagnose

glaucoma). In both cases, had the representations made been true,

plaintiffs, injuries would not have occurred.

Apdx. B - 58

verdict forecloses any claims for injuries suffered as a

consequence of the hyacking.

Furthermore, even assuming, arguendo, that plaintiffs

have state and/or federal common law claims which are not

preempted by the Convention and are not barred by the jury's

verdict, those claims wou'd nonetheless be preempted by the

Airline Deregulation Act. See Amencan Airlines v. Wolens,

115 S.Ct. 817 (1995) ; Morales v. Trans World Airlines, Inc.,

112 S.Ct. 2031 (1992). The Airline Deregulation Act of 1987

("ADA"), 49 U.S.C.App. § 1301 et. seg., contains an express

preemption clause providing:

No State or political subdivision thereof and

no interstate agency or other political agency

of two or more States shall enact or enforce

any law, rule, regulation, standard or other

provision having the force and effect of law

relating to rates, routes, or services of any air

COMET 5...

Title 49 U.S.C.App. § 1305(a) (1)."*

'“Congress recodified this provision to provide:

[A] State, political subdivision of a State, or

political authority of at least two States may not

enact or enforce a law, regulation, or other

provision having the force and effect of law

relating to a price, route or service of an air carrer

that may provide transportation under this

subpart.”

Title 49 U.S.C. § 41713(b)(1). The change in wording was not

Apdx. B - 59

While the parameters of preemption under the ADA

are not yet clearly defined, where, as here, the essence of the

willful conduct alleged is a false ady ertising claim, the Court

concludes that the survivai of that claim would be

incompatible with Congress’ tnanifest intent to preempt all

state law claims pertaining to airline fares and serv ices.”

In Morales v. Trans World Airlines Inc. . 112 S. Ct.

2031 (1992), the Supreme Court held that the ADA preempts

state regulation of matters relating to airline fares and

services. Looking to its interpretation of identical preemptive

language in ERISA, 29 U.S.C. § 144 (a), the Supreme Court

in Morales, mindful of the fact that the ADA has a “broad

pre-emptive purpose,” id. at 2037, interpreted the phrase

“relating to” to mean “having a connection with or reference

to airline ‘rates, routes, or services.”” Id. The Court therefore

concluded that the ADA preempts state regulation and

prohibitions of allegedly deceptive airline advertisement

through enforcement of general consumer protection statutes.

Id. at 2041.

Subsequently, in American Airlines v. Wolens. 115

S.Ct. 817 (1995), the Supreme Court held that with respect to

frequent flyer programs, federal law preempted all claims

intended to be substantive. Pub. L. No. 103-272. § l(a), 108 Stat.

745 (1994).

“This is especially true here, since the surcharge imposed

for the promised enhanced security was a part of the fare structure

and was collected as such. Tr. 745, 747-48.

Apdx. B - 60

based upon consumer fraud or false advertising. Although the

Supreme Court held that the ADA does not preempt claims

against air carriers for breach of contract, see Wolens, 115

S.Ct. at 824, and did suggest that some personal injury claims

may not be preempted, id. at 827, n. 9; 830 (O'Connor, J.,

concurring) (personal injury claim may not be preempted if

particular tort claim is not "related to" airline service), those

exceptions can have no relevance where, as here, the alleged

personal injuries suffered allegedly resulted from plaintiffs’

reliance on false representations in the promotion and

advertisement of airline services.” In sum, because the

claims here are not "tenuous, remote or peripheral to" airline

services, Morales at 2040, but rather at their core, they are

preempted by the ADA. See Vail v. Pan Am Corp., 616 A.2d

523, 526 (N.J. Super, A.D. 1992) (holding ADA preempts

“In their Reply Memorandum of Points and Authorities in

Support of the Singh Family's Mot.on to Change Venue at 2, the

Singh plaintiffs state for the first time that they assert noncommon

claims for breach of contract which they now argue are not

preempted under Wolens. The Singh plaintiffs claim that Pan Am

breached its contract with the Singh plaintiffs to provide special

security, Second Amended Complaint 4] 36-42, and that PAWS and

‘AMS breached their contracts with Pan Am to which plaintiffs were

intended third party beneficiaries, id. {| 67-71. However, plaintiffs

would still, even on a contract theory, be required to establish that

the defendants’ breach of contract or fraud caused their mjuries, an

issue which the jury has already resolved against them. Thus, these

claims are also precluded by the jury's finding that the hijacking

would have occurred even if defendants had provided the security

as advertised.

Apdx. B - 61

state false advertising claims relating to Alert Security

Program because claims “clearly relate} to the ‘services’ of

an air Carrier’).

CONCLUSION

For the reasons set forth above. the Singh plaintiffs’

motion to transfer is in all respects denied. Defendants’

motion for judgment on all clai:ns in the amount of $75,000

per passenger under the Warsaw Convention or $20,000 in

the cases governed by the Hague Protocol, subject to offsets

in cases where Pan Am has made advances to plaintiffs, is

granted. For the reasons set forth above, defendants’ motion

to dismiss the Singh plaintiffs’ remaining non-common claims

is granted. The parties shall file a stipulation setting forth

which cases are governed by the Hague Protocol and which

cases are subject to advance offsets and in what amount, on or

before April 22, 1996, and a pre-trial conference shall be held

on May 3, 1996 at 1:00 P.M. in courtroom 705.

Itis SO ORDERED.

DATED: New York, New York

February 14, 1996

‘s/ John E. Sprizzo

United States District Judge

Apdx. B - 62

UNITFD STATES DISTRICT COURT

IN RE HIJACKING OF PAN : M.D.L. 724 (JES)

AMERICAN WORLD AIRWAYS, :

INC. AIRCRAFT AT KARACHI : JUDGMENT

INTERNATIONAL AIRPORT,

PAKISTAN ON SEPTEMBER 5, : (AEH-4562)

1986

AJAY PATEL, a minor, by and

through his Guardian Ad L item,

PARVATI PATEL; and PARVATI

PATEL, : 87 Civ. 2993 (JES)

Plaintiffs,

VS.

PAN AMERICAN WORLD

AIRWAYS, INC., a corporation,

and DOES | through 50, inclusive,

Defendants.

AVANI B. SHAH and RUPAL B.

SHAH, minors, by their Guardian

Ad Litem, BIPIN M. SHAH, BIPIN :

Apdx. B - 63

M. SHAH,

Plaintiffs. S7 Civ. 299] (JES)

VS.

PAN AMERICAN WORLD

AIRWAYS, INC., a corporation,

and DOES | through 50, inclusive.

Defendants.

AISHA BEGUM and

MEHBOOB KAHN.

Plaintiffs.

87 Civ. 3686 (JES)

VS.

PAN AMERICAN WORLD

AIRWAYS, INC., a corporation,

and DOES | through 50, inclusive.

Defendants.

SS ssssssssssssssnsessessesssssstenssnstnses x

GAYATRI DAVE and GARGI

DAVE, minors, by their guardian

Ad Litem, VINOD DAVE:

VINOD DAVE,

Plaintiffs,

87 Civ. 3975 (JES)

VS.

Apdx. B - 64

eR od ee 2 he ee SS ed

PAN AMERICAN WORLD

AIRWAYS, INC., a corporations;

PAN AMERICAN WORLD

SERVICES, INC., a corporation;

and DOES | through 50, inclusive,

Defendants.

SANJAY PATEL, a minor, by and

through his Guardian Ad Litem,

C.N. PATEL; C.N. PATEL,

Plaintiffs,

VS.

PAN AMERICAN WORLD

AIRWAYS, INC., a corporations;

PAN AMERICAN WORLD

SERVICES, INC., a corporation;

and DOES | through 50, inclusive,

Defendants.

RANJANBEN PATEL and

JAYSHREEBEN PATEL, minors,

by and through their Guardian

Ad Litem, PRAVIN PATEL;

PRAVIN PATEL,

Plaintiffs,

Apdx. B - 65

87 Civ. 3687 (JES)

87 Civ. 7488 (JES)

PAN AMERICAN WORLD

AIRWAYS, INC., a corporations:

PAN AMERICAN WORLD

SERVICES, INC., a corporation,

Defendants.

KHANJAN DALAL; KALPESH

DALAH; KALPANA SHAH;

DEEPALI DESAI; MEHUL SHAH; :

UTPALA M. DESAI; MILIND

SHARAD DESAI; NARENDRA R. :

DESAI; SWATIN. DESAI,

Plaintiffs, : 87 Civ. 7490 (JES)

VS.

PAN AMERICAN WORLD

AIRWAYS, INC., a corporations;

PAN AMERICAN WORLD

SERVICES, INC., a corporation,

Defendants.

GANGA BAHN: FATHER.

ANTHONY THEODORE: REKHA :

ADVANI; POONAM ADVANI:

Apdx. B - 66

DINESH ADVANI; KISHIN

AP ANI; TARA PATEL, as

personal representative of the

estate of KUVAR PATEL,

deceased; MRUGESH PATEL,

SANJAY PATEL, a miner, by his

father and natural guardian

C.N. PATEL; C.N. PATEL,

individually; DAHIBEN PATEL

and DILIP PAREKH,

Plaintiffs, : $87 Civ. 0547 (JES)

VS.

PAN AMERICAN WORLD

AIRWAYS,

| Defendants.

| x

| NAGIN PATEL, TERA PATEL,

| SATISH PATEL, NATHUBAI

| PATEL, GOVIND PATEL,

CHOTUBHAI PATEL, JAMNA

PATEL, GANGA PATEL, ,

Plaintiffs : $7 Civ. 9108 (JES)

. vs .

PAN AMERICAN WORLD

AIRWAYS, INC., a corporations;

4 Apdx. B - 67

PAN AMERICAN WORLD

SERVICES, INC., a corporation,

Defendants.

FARAIDOON OSHTORY.

Plaintiffs, : $7 Civ. 2990 (JES)

VS.

PAN AMERICAN WORLD

AIRWAYS, INC. and PAN

AMERICAN WORLD

SERVICES, INC..,

Defendants.

MANJULA S. PATEL, Individually :

and as Guardian Ad Litem for

MEHUL PATEL, a minor, and as

Heir at Law to SURENDRA

PATEL, deceased, SANGITA

PATEL, NIKITA PATEL,

Individually and as Heirs at Law

to SURENDRA PATEL, Deceased

and MANJULA S. PATEL. as

Administrator of the Estate of

SURENDRA PATEL, Deceased.

Plaintiffs, : 87 Civ. 2996 (JES)

Apdx. B - 68

PAN AMERICAN WORLD

AIRWAYS, INC., a corporations;

PAN AMERICAN WORLD

SERVICES, INC., a corporation,

Defendants.

BAKUL and VASANTI SHAH,

Plaintiffs, : 87 Civ. 3690 (JES)

PAN AMERICAN WORLD

AIRWAYS, INC., a corporations;

PAN AMERICAN WORLD

SERVICES, INC., a corporation,

Defendants.

HARA GOPAL; HADI ALI RIZVI; :

MRS. HADI ALI RIZVI; NIGAR

ZEHRA RIZVI; FARHANA

RIZVI; PUSHPAVATHI

MURAKONDA; HANSA

MERCHANT; KANKUBEN

GALA; JASWANTIBEN SHAH

and JIGHISHA H. SHAH, Minors

Apdx. B - 69

their Father; MRS. FARHAT

HUSSAIN, MABIHAH Y.

HUSSAIN and HAMEED

HUSSAIN, Minors by and through

MRS. FARHAT HUSSAIN. their

Mother; ARMISH BHAETT:

JAYABEN R. SANGHANI: MRS.

JAYABEN SANGHANI:

JAY GRANTIER; SAID FAIZ

KIDWAI; DR. SUHAIL: SUHAIL

HAMED; HASSAN SYED: M.

JAYED; R.A. AHMED:

AMTELIVA IBRAHIM: MALIK

NETRAKANTI; IMRAN ALI:

KHADIYA ALI:

Plaintiffs,

VS.

PAM AMERICAN WORLD

AIRWAYS, INC.; THE BOEING

COMPANY; THE BOEING

COMMERCIAL AIRPLANE

COMPANY: B.F. GOODRICH

CORPORATION; and PAN

AMERICAN WORLD

SERVICES, INC..

Defendants.

Apdx. B - 70

by and through HARSHAD SHAH. -

87 Civ. 3692 (JES)

MAZHERULLAH BAIG;

KHALIDIA BAIG; SHRIKANT

PATEL; SHATEL PATEL; HARA

GOPAL: KUSUM NAIK;

HARSHAD SHAH; MOHAMMED :

HUSSAIN, MADHAVDAS

MERCHANT; ROBERTO MUNOZ :

FLORES; DELFINA ROQUE DE

MUNOZ; FRANCISCO JAVIER

DE MUNOZ; MICHAELA DE

MUNOZ; RICARDO DE MUNOZ

MARIANA DE MUNOZ;

individually and as survivors of

RICARDO MUNOZ ROSALES,

deceased; ORALIAGARICA DE

ALVAREZ;

ALVAREz:

ALVAREZ;

ALVAREZ:

ALVAREZ;

AMICUTA DE

AMELIA DE

ELISA DE

JOSE ANTONIO DE

ORALIA DE

NORMA DE

JONATHAN DE

JULIO CAESAR DE

individuaily and as

survivors of JOSE ALVAREZ

LAMAR NUNEZ, deceased;

Plaintiffs,

88 Civ. 0299 (JES)

Apdx. B - 71

VS.

PAM AMERICAN WORLD

AIRWAYS, INC.; THE BOEING

COMPANY: THE BOEING

COMMERCIAL AIRPLANE

COMPANY; B.F. GOODRICH

CORPORATION; and PAN

AMERICAN WORLD

SERVICES, INC..,

Defendants.

ROS NIVED Ost NASON, LE OES

SURINDER SINGH AHLUWALIA. :

Individually and Guardian Ad Litem -

for JEET INDER SINGH: a minor:

NEELAM AHLUWALIA:

HERMINDER SINGH; CYNTHIA

BUTHELLO; PARAG SHETH: .

FATHER ANTHONY THEODORE::

SAID FAIZ KIDWAI; SUHAIL

QAMAR; HARISH CHANDRA

PATEL and MADHUKANTA

PATEL, .

Plaintiffs, : 87 Civ. 6570 (JES)

VS.

PAN AMERICAN WORLD

AIRWAYS, INC. and PAN

Apdx. B - 72

AMERICAN WORLD

SERVICES, INC.,

Defendants.

SADANAND SINGH, Individually:

and as Executor of the Estate of

Kala Singh, Deceased; SAMIR

SINGH, by and through

SADANAND SINGH, Guardian Ad :

litem; KALPANA SINGH,

by and through SADANAND

SINGH, Guardian Ad Litem,

Plaintiffs,

VS.

PAN AMERICAN WORLD

AIRWAYS, INC., a New York

corporation, PAN AM WORLD

SERVICES, INC., a Florida

corporation; ALERT

MANAGEMENT SYSTEMS, INC., :

a Florida corporation,

REKHA P. KUMAR, as Sole Heir

of RAJESH KUMAR, deceased,

and MAHKHENDRA R. PATEL,

Apdx. B - 73

87 Civ. 3108 (JES)

Administrator of the Estate of

RAJESH KUMAR.

Plaintiffs. : $7 Civ. 2999 (JES)

VS.

PAN AMERICAN WORLD

AIRWAYS, INC. and PAN

AMERICAN WORLD

SERVICES, INC.,

Defendants.

VINOD DAVE and NIRANJANA

DAVE, :

Plaintiffs, : 88 Civ. 0929 (JES)

VS.

PAN AMERICAN WORLD

AIRWAYS, INC., a corporation,

and PAN AMERICAN WORLD

SERVICES, INC., a corporation,

and DOES | through 50, inclusive.

Defendants.

This multi-district litigation, comprised of a number

of individual constituent actions, came on for trial before this

Apdx. B - 74

Court and a jury, Honorable John E. Sprizzo, United States

District Judge, presiding; and the issues of liability having

been duly tried commencing on March 8, 1994; the jury

having rendered a special verdict on April 14, 1994, and this

Court having determined as a result of that verdict that

Defendant, Pan American World Airways, Inc., is not liable

for damages in excess of the applicable limitation on liability

imposed by the Convention for the Unification of Certain

Rules Relating to International Transportation by Air, done at

Warsaw, October 12, 1929 (the "Warsaw Convention"); and

Defendant; Pan American World Airways, Inc., having

represented that it will not contest judgments entered in the

amount of the applicable limitation on liability imposed by

the Warsaw Convention, less any advances previously made

by Defendant to Plaintiffs,

IT IS HEREBY ORDERED, ADJUDGED AND

DECREED, that the Plaintiffs identified below recover of

Defendant, Pan American World Airways, Inc., the following

amounts:

U.S.D.C./S.D.N.Y.

Plaintiff(s) Amount Civ. No.

Ajay Patel $66,548.90 87 Civ. 2993

Parvati Patel $75,000 87 Civ. 2993

Avani B. Shah and $75,000 87 Civ. 2991

Bipin M. Shah, jointly

Apdx. B - 75

U.S.D.C/S.D.NLY.

Plaintiffi(s) Amount Civ. No.

Rupal B. Shah and $75,009 87 Civ. 299]

Bipin M. Shah, jointly

Aisha Begum and $75,006 87 Civ. 3686

Mehboob Khan,

jointly

Gayatri Dave, Vinod $50,000 87 Civ. 3975

Dave, and Niranjana

Dave, jointly

Gargi Dave, Vinod $50,000 87 Civ. 3975

Dave and Niranjana

Dave, jointly

Sanjay Patel and $12,936.50 8&7 Civ. 3687

C.N. Patel, jointly

Jayshreeben Patel and $75,000 87 Civ. 7488

Pravin Patel, jointly

Ranjanben Patel and $75,000 87 Civ. 7488

Pravin Patel, jointly

Deepali Desai $75.000 87 Civ. 7490

Apdx. B - 76

Plainuffis) Amount

Kalpesh Dalal and $75,000

Khanjan Dalal, jointly,

as survivors of Trupti

Dalal, deceased

Dilip Parikh $5,722.17

Tara Patel, Nathubai $75,000

Patel, Govind Patel,

Chotubhai Patel, Jamna

Patel and Ganga Patel,

jointly, as survivors

of Kuvar Patel,

deceased

Nagin Patel, $75,000

Tara Patel and

Satish Patel,

jointly, as survivors

of Rajesh Kumar,

deceased

Faraidoon Oshtory $68,748.20

Apdx. B - 77

U-S.D.C./S.D.N.Y.

Civ. No.

87 Civ. 7490

87 Civ. 0547

87 Civ. 9108

87 Civ.9108

87 Crv. 2990

"rene oe ee re ee

U.S.D.C/S.D.N.Y

Plaintiffis) Amount Civ. No. Rae

Manjula S. Patel, $225,000 87 Civ. 2996

individually, as

guardian ad litem and

as heir and administrator

of the estate of Surendra

Patel, deceased; Sangita

Patel and Nikita Patel.

individually and as

heirs of Surendra Patel.

deceased; and Mehul

Patel, as heir of Surendra

Patel, deceased

Bakul Shah $75,000 87 Civ. 3690

Father Anthony $10,000 87 Civ. 6570

Theodore

Sadanand Singh, $300,000 87 Civ. 3108

individually and as

executor of the estate

of Kala Singh,

deceased; Samir Singh

and Kalpana Singh

Apdx. B - 78

: U.S.D.C,/S.D.N.Y.

Plaintiffis) mo Civ. No.

Nabihah Y. Hussain $75,000 87 Civ. 3692

and Mrs. Farhat

Hussain, jointly

Hameed Hussain and $75,000 87 Civ. 3692

Mrs. Farhat Hussain,

jointly

Mohammed Hussain $75,000 87 Civ. 3692 and

and Mrs. Farhat 88 Civ. 0299

Hussain, jointly

IT IS FURTHER ORDERED, ADJUDGED AND

DECREED, that the Complaints of the Plaintiffs identified

below be dismissed on the merits:

U.S.D.C./S.D.N.Y.

Plaintiff(s) Civ. No.

Rekha P. Kumar, as 87 Civ. 2999

heir of Rajesh Kumar,

deceased, and Mahendra

R. Patel, as administrator

of the estate of Rajesh

Kumar

Vinod Dave and 88 Civ. 0929

Niranjan Dave

Apdx. B - 79

IT IS FURTHER ORDERED, ADJUDGED AND

DECREED, that Defendant, Pan American World Airways,

Inc., be and is allowed costs as the prevailing party.

DATED: New York, New York.

/s/ 3-24-97

/$/

UNITED STATES DISTRICT JUDGE

THIS DOCUMENT WAS ENTERED ON THE DOCKET

ON 4s/ 4/1/97

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF NEW YORK

IN RE HIJACKING OF PAN AMERICAN

WORLD AIRWAYS, INC., AIRCRAFT _M.D.L. 724 (JES)

AT KARACHI INTERNATIONAL (All Cases)

AIRPORT, PAKISTAN ON Verdict Form

SEPTEMBER 5, 1986

Re heintathllciniainenntneieniainaniniminvrcntesisiniiontionmsinsanmenntt

1) Do you find by a fair preponderance of the evidence that

Pan American World Airways, Inc. Engaged in wilful

misconduct, as defined by the Court, in connection with the

Alert Security Program?

YES _X_ ig

Apdx. B - 80

2) Do you find by a fair preponderance of the evidence that

Pan American World Airways, Inc. Engaged in wilful

misconduct, as defined by the Court, by flying into Karachi

International Airport on September 5, 1986?

¥ES NO _X_

If the answer to neither Question #1 nor Question #2 1s YES

proceed no further.

3) If the answer to Question #1 is Yes, do you find by a fair

preponderance of the evidence that the wilful misconduct of

Pan American World Airways, Inc., in the connection with

ine Alert Security Program, was a proximate cause of the

hijacking?

/s/Susa >. Gr /s/4-14-94

Signature (Foreman of the Jury)

Apdx. B - 81

APPENDIX C

UNITED STATES DISTRICT COURT

FOR THE

SOUTHERN DISTRICT OF NEW YORK

(Excerpts from Brief of Plaintiffs-Appellants filed in the

U.S. Court of Appeals. In original, Pages 7-14)

V. ARGUMENT.

A. The District Court committed reversible error in

granting judgment for defendants and dismissing

the Singh plaintiffs' non-common. fraud-based

Warsaw claim.

l. The standard of review applicable to a

motion for judgment as a matter of law is

de novo.

The standard of review by which an appellate court

reviews a trial court's decision to grant judgment as a matter

of law is de novo. Cf. Brady v. Southern Ry. Co., 320 U.S.

476, 479-804 1943).

2. There has been an intervening change in

the applicable substantive law which

impacts upon the analysis, but not the

conclusion that the District Court

committed reversible error in dismissing

the Singh plaintiffs’ non-common, fraud-

based Warsaw claim.

In its post-trial motion for judgment, Pan Am asserted

that the jury's finding “that the advertising campaign was not

Apdx. C - 82

a proximate cause of the hijacking . . . resolves all causes of

action arising under the Warsaw Convention." (4 J.A. A-

1468.) In their opposition to that motion, the Singh plaintiffs

resisted the notion that the jury's verdict had resolved their

non-common claims and urged that passengers who suffer

death or injury as the result of having been induced by

fraudulent misrepresentations and promises to fly Pan Am

must have a fraud-based wilful misconduct claim: (a) which

is cognizable under the Warsaw Convention; (b) which is

different than the claims of passengers oblivious to the fraud;

and, (c) which has a causation test different than that

addressed by the jury. (2 J.A. A-922.) The Singh plaintiffs

aruged that fraud, in contrast to the more common forms of

wilful misconduct, is a tort of communication which rarely,

if ever, causes the occurrence -- the crash, the hijacking, the

“accident.” Rather, it induces a plaintiff to alter his position

in reliance and may, thereby, subject him to the nsk of injury.

The Singh plaintiffs argued that reliance is, therefore, the

basis for a finding of causation in a fraud claim. (/d. at A-

923-4.) That proposition remains sound; however, because of

an intervening change in the law controlling Warsaw claims,

the supporting analysis has changed since the post-trial

motions were briefed and argued.

To show that their non-common fraud claim presented

a Causation question different than that decided by the jury,

the Singh plaintiffs relied primarily on federal common law,

as embodied in Beers v. Hamburg-American Packet Co.

Apdx. C - 83

("The Normannia"), 62 F. 469 (S.D.N.Y. 1894), to supply the

causation test in a fraud-based Warsaw claim. They did so

because this Court had adopted “substantive federal common

law as the law governing [2] cause of action under the

Warsaw Convention.” In_re Air Disaster at Lockerbie.

Scotland on December 21, 1988 ("Lockerbie I"), 928 F.2d

1267, 1279 (2d Cir. 1991). The two-fold causation test under

federal common law asks whether the plaintiff relied on the

fraudulent statement and, if so, whether the injury was related

to the subject matter of the statement. The Normannia, 62 F.

at 480.°

Since the post-trial motions were briefed and argued,

*In The Normannia, the plaintiff feared contagion and

quarantine that might result from the presence of steerage

passengers on board the vessel, because of a cholera outbreak in

the port of departure. After the plaintiff had boarded the vessel in

reliance on false representations that there would be no steerage

passengers, there was a cholera outbreak on board and the vessel

was detained for quarantine. The District Court distinguished The

Normannia, but did so by adopting Pan Am's misreading of the

case. Just as Pan Am had, the District Court purported to

distinguish the case, and explain away its finding of causation, by

observing that “had the defendant's representations been true. the

plaintiff might not have been detained since those steerage

passengers would not have been aboard the vessel.” (4 J.A. A-

1699). In fact, The Normannia court found Just the opposite:

"Upon the evidence, I must find, therefore, that the detention of the

Normannia's passengers would have been the same. had no

steerage passengers been on board." The Normannia, 62 F. at 480.

Using the two-fold test, The Normannia court found causation

despite that fact. ag

Apdx. C - 84

the Supreme Court has held that, in the absence of a rule of

law contained in the Warsaw Convention itself, the law that

will govern a cause of action under the Convention is not

federal common law but, rather, “the law that would govern

in the absence of the Warsaw Convention." Zicherman v.

Korean Air Lines Co., Ltd., 116 S.Ct. 629, 636 (1996)’

Zicherman thus requires an analysis of controlling law

different than that which the Singh plaintiffs submitted to the

District Court. Pescatore v. Pan American World Airways,

Inc., 97 F.3d 1, 5 (2d Cir. 1996) ("We agree that Zicherman

embodies an intervening change in controlling law that

requires us to alter the law of this case.").

3. California choice of law rules determine

which substantive law supplies the elements

of the Singh plaintiffs' non-common, fraud-

based Warsaw claim.

Under Zicherman, the controlling law is to be

determined in accordance with the choice of law rules of the

forum jurisdiction. Zicherman v. Korean Airlines Co., Inc.,

116 S.Ct. at 637; Brinks Limited v. South African Airways,

"In Zicherman, because the downing of the KAL aircraft

was over the high seas, the Death on the High Seas Act

("DOHSA") was held to control. Zicherman v. Korean Airlines

Co., Inc., 116 S.Ct. at 637. In this case, the hacking did not occur

over open sea and, thus, DOHSA has no application under

Zicherman, rather, as set forth herein (see intra Section V.A.4 at p.

11), California substantive law is "the law that would govern in the

absence of the Warsaw Convention."

Apdx. C - 85

93 F.3d 1022, 1030 (2d Cir. 1996); Pescatore. 97 F.2d at 5.

Where, as here, there has been a change of venue, the forum

jurisdiction is where the action was filed -- not the transferee

jurisdiction. Van Dusen v. Barrack, 376 U.S. 612, 639 (1964)

("A change of venue under §1404(a) generally should be,

with respect to state law, but a change of courtrooms.").* In

this case, the choice of law rules of California must determine

which substantive law controls the Singh plaintiffs’ fraud-

based wilful misconduct claim. Valley Juice Ltd.. Inc. v.

Evian Waters of France, Inc., 87 F.3d 604, 607 (2d Cir. 1996)

(citing Menowitz v. Brown, 991 F.2d 36, 40 (2d Cir. 1993)

"[A] transferee court applies the substantive state law.

including choice-of-law rules, of the jurisdiction in which the

action was filed.").

4. Under California choice-of-law rules,

California substantive law supplies the

elements of the Singh plaintiffs’ non-

common, fraud-based Warsaw claim.

California follows the so-called "governmental

interests" approach to analyzing choice of law issues. in

which the interests of each potentially concerned state are

compared. Reich v. Purcell, 67 Cal.2d 551. 556 (1967) (“The

interest of a state in a wrongful death action insofar as

“Pan Am moved to transfer venue alternativ ely under 28

U.S.C. 157 (b) (5) and 28 U.S.C. 1464 (a) ; however, § 157 (b) (5)

had no application because the case did not involve the exercise of

bankruptcy jurisdiction. The order transferring the case was silent

as to the statutory basis. (3 J.A. A-1110.)

Apdx. C - 86

plaintiffs are concerned is in determining the distribution of

proceeds to the beneficiaries and that interest extends only to

local decedents and beneficiaries.”’)’ In addition to its interest

in the distribution of proceeds, California has a significant

interest in protecting its residents from the fraudulent

activities of non-resident enterprises conducting business

within its borders. The Singh plaintiffs are all residents of

California. (2 J.A. A-741-2.) California law must control.

Even if New York choice of law rules were instead

used, the substantive law of the Singh plaintiffs’ domicile

would still control. See Pescatore, 97 F.3d at 13 (“Pan Am

contends that we should disregard Scottish law and instead

apply the law of the decedent’s and the plaintiff's domicile --

Ohio. We agree.”).

5. The test for causation in a fraud claim

under California law is different than that

which was applied by the jury on the

common claims.

The causation question which the District Court

submitted to the jury was whether the wilful misconduct

caused the hijacking.'’ That is not the causation question to

*See also Bernhard v. Harrah's Club, 16 Cal. 3d 313

(1976); Hernandez v. Burger, 102 Cal.App.3d 795 (1980).

‘There is no requirement in Article 25, or in any other

provision of the Warsaw Convention that the accident [hijacking]

be proximately caused by the carrier's misconduct. (See infra

Sections V.B. and C. at pp. 20-30.)

Apdx. C - 87

be resolved under California law.

Under California law, the causation element of the tort

of fraudulent misrepresentation is established by proof that

"as a result of the reliance upon the truth of the representation,

the plainuff . . . sustained damage." BAJI Cal. Jury

Instructions (Civ. 8th ed.) (1994) No. 12.31. Where fraudulent

misrepresentation results in personal injury, causation is

established by proving that the plaintiff relied on the

representations, thereby subjecting himself to harm. Garcia v.

Superior Court, 50 Cal.3d 728, 737 (1990); Lacher_v.

Superior Court, 230 Cal.App.3d 1038, 1048-1050 (1991).

6. The jury’s verdict did not resolve the

causation issue as to the Singh plaintiffs’

non-common, fraud-based Warsaw claim.

The causation issue framed by California law was not

decided by the jury in the consolidated trial. The jury heard

no evidence, received no instruction and made no finding

concerning the Singh plaintiffs’ reliance on the fraudulent

advertising which was found to constitute wilful misconduct.

The District Court specifically stated, “I am not going to take

anything in this trial about reliance, etc. That is for the

transferor court.” (Tr 339:19-21 at 4 J.A. A-1806.)

Nonetheless, the District Court later entered judgment for Pan

Am, dismissing the very Warsaw claim that is based on

reliance. In doing so, the District Court rejected reliance as a

viable test for causation in a fraud case, based on its view that

there cannot be different causation standards under the

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Warsaw Convention:

"It would hardly be consistent with [the

objectives of the Warsaw Convention] to

apply different standards of causation

depending on whether or not the willful

misconduct giving rise to plainuffs’ injures

consists of fraudulent misrepresentations."

(4 J.A. A-1698.)

The main objective alluded to by the District Court is that of

"providing uniformity [so as not to be] impacted by local

laws." Id. The desire for uniformity, however, is not a

legitimate reason for declining to apply California's causation

test in a Warsaw case. As this Court has observed,

“Zicherman ruled specifically that the Warsaw Convention

does not express a compelling interest in uniformity that

warrants supplanting bodies of law that are otherwise

applicable . . . [and the Supreme] Court determined that the

law of international travel ‘is not an area in which the

imposition of uniformity was found feasible.” Pescatore v.

Pan Amencan World Airways, Inc., 97 F.3d at 11. The

District Court's edict that there cannot be different causation

standards under Warsaw contravenes the Supreme Court's

mandate in Zicherman.

Nowhere in the express terms of the Convention, or in

the minutes of the Convention debates, is there any

requirement that claims arising from en "accident" be

common to all passengers. In a typical airplane mishap, the

Apdx. C - 89

facts supporting the passengers’ liability claims are identical

because all passengers have been subjected to the same set of

circumstances and events. On the other hand, where the wilful ;

misconduct consists of fraudulent statements made before the

flight to lure passengers onto the aircraft, it is only logical that

the misconduct can affect different passengers differently, and

that they may have different claims based on their individual

circumstances. The net effect of the District Court's ruling is

that passengers lured to their death or injury by the fraudulent

misrepresentations of an airline have no different or greater

claim than one who simply boards the plane by chance. If

affirmed, this anomalous result would effectively insulate an

airline from the consequences of its own fraud.

Although not yet permitted to offer evidence of their

reliance, the Singh plaintiffs are prepared to do so. Given the

opportunity, the Singh plaintiffs will establish the causal!

nexus between their damage and Pan Am's wilful misconduct,

according to the standard prescribed by California law. The

judgment should be reversed and the action remanded to give

the Singh plaintiffs their day in court.

Apdx. C - 90

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.