Petition for Writ of Certiorari — Aerolineas Argentinas S. A. v. Maro Leather Co.

Supreme Court of the Mites States

OCTOBER TERM, 1994

AEROLINEAS ARGENTINAS S.A.,

Petitioner,

vs.

MARO LEATHER CO.,

Respondent.

PETITION FOR A WRIT OF CERTIORARI TO THE

APPELLATE TERM, FIRST DEPARTMENT, OF THE

SUPREME COURT OF THE STATE OF NEW YORK

PETITION FOR A WRIT OF CERTIORARI

FRANCIS A. MONTBACH

Counsel of Record

PAUL AMBOS

BIGHAM ENGLAR JONES & HOUSTON

Counsel for Petitioner

14 Wall Street

New York, New York 10005

(212) 732-4646

20 PINOLE ANAT ah Ma a ee

QUESTIONS PRESENTED

1. Will this Court resolve the conflict between New York

State and the Second Circuit Court of Appeal and the highest

courts of Great Britain and the Netherlands, in the interpretation

of Warsaw Convention art. 26(2), as to whether failure to deliver

one or more packages of an air shipment requires written notice

of claim to the carrier within seven days of receipt of the balance

of the shipment?

2. Will this Court give effect to the term ‘‘partial loss’’ in

Cargo Tariff Rule No. 23 as filed with the Civil Aeronautics

Board by air carriers, to apply it to a carrier’s failure to deliver

one or more packages of an air shipment, and requiring written

notice of claim by the consignee to the carrier within seven days

of receipt of the balance of the shipment?

3. Will this Court resolve the three-way conflict among

New York State, the Fifth Circuit Court of Appeals, and the

Second and Seventh Circuit Courts of Appeals and other courts

within and without the United States, in the interpretation of

Warsaw Convention art. 22, as to whether prejudgment interest

under state law can be assessed against a carrier so as to allow

the total judgment to exceed the Convention’s limitation on dam-

ages based on the weight of the cargo involved?

ii

LIST OF PARTIES

Petitioner Aerolineas Argentinas S.A. is the corporate suc-

cessor to Aerolineas Argentinas Empresa del Estado, the original

defendant below. A third-party claim had been interposed by

Aerolineas Argentinas against Trans World Airlines, Inc., but

was discontinued prior to trial. Respondent Maro Leather Co.

was the original corporate plaintiff below.

The following statements are presented in accordance with

Rule 29.1 of the Rules of the Supreme Court of the United

States.

A majority of the stock of petitioner Aerolineas Argentinas,

S.A., is owned by Iberia Lineas Aereas de Espafia, S.A. Peti-

tioner’s only corporate subsidiary is Cielos del Sur S.A.

Petitioner believes that respondent Maro Leather Co. has no

corporate parents or subsidiaries.

iil

TABLE OF CONTENTS

QUESTIONS PRESENTED ............ iauehdieiedeebbbeuion’

ESE GO PARE EIN ccceescccccceseccevccsesccccccccecscerscsesons

TABLE OF CONTENTS .......cccscececccccseeses javkavabesabe

TABLE OF AUTHORITIES ........cccccccccccccscccccessseee

Ce ETD set vcevcsesscccvsccncesscessvecssesconsoeees

I. Prejudgment Interest ....... Lpokuelasesiewinastalenns

Be MID vidvecadvventdcecccsvescesasencsveoyns

PEFR CHIEE | ek tassntcccenostesrsecaisecusnccsssecsnesereses

CONSTITUTIONAL, TREATY , and STATUTORY

PROVISIONS INVOLVED .........ccccecescceceeeeenes

STATEMENT OF THE CASE _ ...........cc.ccccececesceeeees

i cide even seetnscs peekeareecnseceseseess

II. The Proceedings Below ...............:.0ceeeeeeees

REASONS FOR GRANTING THE WRIT ................

I. There Is Conflict Among State and Federal

Courts and Courts Abroad as to the Rule Re-

quiring a Notice of Claim Under the Warsaw

Convention for Partial Loss of Cargo ...........

Il. There Is Conflict Among State and Federal

Courts and Courts Abroad as to the Rule Re-

quiring a Notice of Claim Under Tariffs for

Partial Loss of Air Cargo ................cseeeeeees

Ill. There is a Clear Three-Way Conflict Among

Two Federal Circuits and New York State

Courts as to Awarding Prejudgment Interest in

PAGE

iil

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id

id

17

Excess of the Warsaw Convention Weight Lim-

itation

CONCLUSION

APPENDICES

Appendix A:

Appendix B:

Appendix C:

Appendix D:

Appendix E:

Appendix F:

Appendix G:

ee

ee

Decision-Order of Supreme Court of

the State of New York, Appellate

Term, First Department, Per Curiam,

Rotered July 19, 19946 .......cccccccovess

Findings of Facts of Civil Court of

the City of New York, County of

New York, Jane S. Solomon, J., in

Proceedings, February 25, 1991, and

Judgment Entered thereon August 26,

SEE. sesnksakuetnndhibaaaadigiaiedas

Order of Supreme Court of the State

of New York, Appellate Term, First

Department, Denying Leave to Ap-

peal to Appellate Division, Entered

CREE Ty, FE ceca tptecescsevedecsoni

Order of Supreme Court of the State

of New York, Appellate Division,

First Department, Denying Leave to

Appeal to Appellate Division, En-

tered December 13, 1994 ..............

Notice of Appeal to Court of Appeals

of New York, Dated December 19,

RUE canchnieicadbanennaszaumicrnsbbchicubatan

Order of Court of Appeals of New

York Dismissing Appeal, Dated Feb-

SE By Te, bod siicarsinietatitcene

Order and Decision of Supreme Court

of the State of New York, Appellate

Division, First Department, Revers-

20

24

A-6

A-14

A-15

A-18

alienated ik Seer aiete tbc dS

Appendix H:

Appendix I:

Appendix J:

Appendix K:

Appendix L:

ing Decision of Appellate Term,.

First Department, Entered December

Di: TEE fini nitarescanindsaasinabeenianees

Order and Decision of Supreme Court

of the State of New York, Appellate

Term, First Department, Reversing

Decision of Civil Court of the City of

New York, County of New York,

Special Term, Entered October 21,

DUEEF : tintin dinesecniandcasiecmnebbatentinnn

Decision-Order of Civil Court of the

City of New York, County of New

York, Special Term, Part I, Dated

September 17, TTBS ......ccsccccreseses-

Order of Supreme Court of the State

of New York, Appellate Division,

First Department, Denying Leave to

Appeal to Court of Appeals, Entered

SE Sk. TEE. discctaerdakacweciassiaens

Summons, Civil Court of the City of

New York, County of New York,

Sebel Bally 8, FW tvcecccccssncccceess

Answer, Civil Court of the City of

New York, County of New York,

Dated September 3, 1983 ..............

PAGE

A-29

A-32

A-34

A-35

vi

TABLE OF AUTHORITIES

Cases: PAGE

Affretair (Compagnie Gabonaise d’Affretement Arien) v.

VOB (Versicherungsanstalt der Osterreichischen

Bundeslannder Versicherungsaktiengesellschaft),

Sper I I Siceicci ete 14, 25

Air France v. Saks, 470 U.S. 392, 105 S. Ct. 1338, 84

aie Ne Te I ae 22

Amazon Coffee Co. v. Trans World Airlines, Inc., 18

Av. Cas. (CCH) 17,264 (N.Y. Sup. Ct. 1983),

modified, 111 A.D.2d 776, 490 N.Y.S.2d 523

ae SIC EE tint a oP ee 18

American Insurance Co. v. Griswold, 14 Wend. 399

eG I cr 17

Boehringer-Mannheim Diagnostics, Inc. v Pan

American World Airways, Inc., 737 F.2d 456 (5th

Cir.), cert. denied, 469 U.S. 1186, 105 S. Ct. 951,

OP Rew Bs FE PIPED. Soecaccdcddnkusesecconctuscassevs 12, 22

Butler's Shoe Corp. v. Pan American World Airways,

ea Pk le A 2. eee 16, 17

Chan v. Korean Airlines, Ltd., 490 U.S. 122, 109 S. Ct.

PF, TOF Gs Bile OE RO LOWED ccccwenvncssccesseccves 18

Corio Brothers Investment Corp. v. Fast Air Carrier,

S.A., 24 Av. Cas. (CCH) 17,719 (S.D. Fla. 1993) .. 22

Dalton v. Delta Airlines, Inc., 570 F.2d 1244 (Sth Cir.

1978), rev’g 14 Av. Cas. (CCH) 17,219 (S.D. Fla.

gg EN OAT AI TIE Ea A GR IY DN NR 15

Deere & Co., v. Deutsche Lufthansa Aktiengesellschaft,

ge Fag, 2 A. Anns ene 11, 22

Denby v. Seaboard World Airlines, Inc., 575 F. Supp.

ee Ot iia ec dai ee aetna passim

Domangue v. Eastern Air Lines, Inc., 722 F.2d 256 (Sth

ARERR ocd a on AN a passim

Eastern Airlines, Inc. v. Floyd, 499 U.S. 530, 111 S. Ct.

ee ae et | 3, 25

vil

PAGE

Eastern Airlines, Inc. v. Mahfoud, 474 U.S. 213, 106 S.

Ct. 586, 88 L. Ed. 2d 522 (1985), aff’g by an

equally divided court 729 F.2d 777 (Sth Cir. 1984),

mem. aff’g 17 Av. Cas. (CCH) 17,714 (W.D. La.

RONEN . Kcbnrsicnassaséthencedacgeeiebnentcbiseieteenians passim

Eli Lilly Argentina, S.A. v. Aerolineas Argentinas, 133

Misc. 2d 858, 508 N.Y.S.2d 865 (Civ. Ct.

PE. -duccutundsndiancuutdsatbingpeatentniemtdeited hace 11-12

23-24

Exim Industries, Inc. v. Pan American World Airways,

ne... TOO Fe TG GG Cae. FIGS) cccccssescccssecsenss 22

Famolare v. Seaboard World Airlines, 15 Av. Cas.

(OCH) 17,287 GN. Y. Sap. C2. ISTE)... ccccsesccceces. 17

Fothergill v. Monarch Airlines Ltd., [1981] A.C. 251,

SPE is ED Hisabsdickveaaciaiiaiaviigatin passim

Hartford Fire Insurance Co. v. Aerolineas Argentinas,

16 Av. Cas. (CCH) 17,940 (N.Y. App. T.

UNE -Lxsins ocka dak dwnuckS ceevebadetsdnetamiinanibeisontaes 18

Highlands Insurance Co. v. Trinidad and Tobago (BWIA

International) Airways Corp., 739 F.2d 536 (11th

Ranh PIII iiareshiessedhabscinkiaenveueonamsmasietianine 16

Hollie v. Korean Air Lines Co., 834 F. Supp. 65

Se x NU - saabennhaepsicechadnekiiascauadenemananice te 22

Hughes-Gibb & Co. v. Flying Tiger Line, Inc., 504 F.

SG. TAS Pea Wile BD hs vewsesinsouneresisacacens 16

Leather’s Best Inc. v. Aerolineas Argentinas, 136 Misc.

2d 797 (App. T. Ist Dep’t 1987), rev’g 131 Misc.

ee Ee ac IE son ciccnansartbatdauabielbliccincunte 10

Maschinenfabrik Kern, A.G. v. Northwest Airlines, Inc.,

SGn F. Sem. 232 CD. TR. TOGS) avcavseccsesercesens 16

O’Rourke v. Eastern Air Lines, Inc., 730 F.2d 842 (2d

Rts TENE inwniagusqninnsaasadsbuabinbeevalianoeiatvaniaias passim

Schwimmer v. Air France, 87 Misc. 2d 147, 384

eee ff + ese, | eer 16

Siemens Corp. v. KLM Royal Dutch Airlines, 19 Av.

Cas. (CCH) 18,502 (N.Y. Civ. Ct. 1986) ........... 18

Vili

PAGE

St. Paul Insurance Co. v. Venezuelan International Air-

ways, Inc., 807 F.2d 1543 (11th Cir. 1987) .......... 16

S.S. Pharmaceutical Co. v. Qantas Airways Ltd., [1989]

1 Lloyd’s Rep. 319 (Sup. Ct. N.S.W., Austl.,

Comm. Div. 1988), aff'd, 1 Lloyd’s Rep. 288, 297

(Asmath. Cr. AO. TOD ceccsccasvsesscesantscsscccacseces 23

Stud v. Trans International Airlines, 727 F.2d 880 (9th

Cr FE» vninaiactisis naar eidhndin ations: 18, 19

Swiss Bank Corp. v. Brink’s M.A.T. Lid., [1986] 1 Q.B.

GU ccs cise ee tt aeaa ee eludabegeraiapenbeuinnnesenees 23

The Limited Stores, Inc. v. Pan American World Air-

ways, Inc., 65 Ohio St. 3d 66, 600 N.E.2d 1027

Ci hei taskcceassiétetusds :tnvecebbbnisaaeberstome lined ais 22

Trans World Airlines, Inc. v. Franklin Mint Corp., 466

U.S. 243, 104 S. Ct. 1776, 80 L. Ed. 2d 273

CO sicscnicsincceatincsidasiusiniececepebliceksseelentivaten 20

Travelers Indemnity Co. v. Alia Airlines, 18 Av. Cas.

(CCH) 17,687 (N.Y.C. Civ. Ct. 1984), aff'd with-

out opinion, No. 84-630 (App. T. Ist Dep’t April

Bi, EEE | ackidenba Och eckannpeath a dendediaeneacdatinguenapennias 18

Legislative and Regulatory Materials:

U.S. Constitation. of. V1, CIOURO 2 .nccccccccccscsecczsccees: 3

The Convention for the Unification of Certain Rules

Relating to International Transportation by Air,

Oct. 12, 1929, 49 Stat. 3000, T.S. No. 876, 137

L.N.T.S. 11 (the ‘‘Warsaw Convention’’) ........... 3

Warsaw CaOnmverhia, B56. 2) oo cccccccccscccsccscccsccccccesene 22

Warsaw Convention, aff. 22 ......c.ccscscccccsecccsecesereses passim

Waren Convetioti, O90. 26 ....c.csccccveissicccccseeccccnens passim

Ware COMM, BEE TB occcresescedccvncosenccrecceseoee: 23

I CI, OE, FF niin ics cnn acstsvctaceisvcisaseseens 6, 17

alae i i

ix

PAGE

Carriage by Air Act 1961, 9 & 10 Eliz. 2, ch. 27,

amended by Carriage by Air and Road Act 1979,

FET NG IE: bh. Gulag dobseds sapencadedcoinetibionsnacreutanaen 14, 25

Be anes EET CRD NadiantisccttesteccdtivenGernnn 3

Federal Aviation Act § 403, 49 App. U.S.C. § 1373

(1988) (repealed by Revision of Transportation,

United States Code, Pub. L. No. 103-272 § 7(b),

108 Stat. 745, 1383) (current version to be codified

EE Us RIOD in dveedevdievccesasisniinvctiinctens 9

Agreement Relating to Liability Limitations of the War-

saw Convention and the Hague Protocol, Agree-

ment, C.A.B. No. 18900, approved by order E-

23680, May 13, 1966 (Docket 17325), 31 Fed.

Reg. 7302 (1966) (Montreal Agreement) ............. 20, 21

a See SN EP | reduce tidinnediacseicraserivcavecs 9, 17-18

New York Civil Practice Law & Rules ("CPLR") 5001 .. passim

SE Ue LE | ain vedncddenedrccisebicthensonenniundes 8, 11-12

Fe UI ne sccsdkenspeaduedanenesnncnaceventons 8, 12

Pe TE cod ldiek mneidcundipounenneoetwsaieuabane 11

NE I CE EE ass cntcapnnesikcianivebnvenctocxonvananes 13

Pe WAU IE UIE Sidddbunecebesnsncamisstadscamssauduasans 11

Commentary:

Note, Supreme Court of the Netherlands: Affretair v.

VOB or Fothergill’s Dutch Treatment: decision of

12 February 1982, 7 J. AIR L. 173 (1982) ........... 15

l

IN THE

SUPREME COURT OF THE UNITED STATES

OCTOBER TERM 1994

AEROLINEAS ARGENTINAS S.A..,

Petitioner,

al . —

MARO LEATHER CoO.,

Respondent.

PETITION FOR A WRIT OF CERTIORARI TO THE

: APPELLATE TERM, FIRST DEPARTMENT, OF THE

| SUPREME COURT OF THE STATE OF NEW YORK

Petitioner Aerolineas Argentinas S.A. respectfully

prays that a writ of certiorari be issued to review the deci-

sion of the Appellate Term, First Department, of the Su-

preme Court of the State of New York, entered in these

proceedings on July 19, 1994, and now final. Review is

also sought of a prior nonfinal decision of the Supreme

Court of the State of New York, Appellate Division, First

Department in the same case entered December 20, 1988.

OPINIONS BELOW

I. Prejudgment Interest

The July 19, 1994 Order and Decision of the Appellate

Term affirming the judgment of the Civil Court of the City

of New York, County of New York, is reported at 161

Misc. 2d 920, 617 N.Y.S.2d 617, and is reprinted in the

Appendix hereto as Appendix A.

2

The trial transcript of proceedings on February 25,

1991 containing the findings of fact of the trial judge sup-

porting the judgment entered August 26, 1992, and such

judgment, are not reported but are reprinted in the Appen-

dix hereto as Appendix B.

The October 13, 1994 Order of Appellate Term deny-

ing reargument of its July 19, 1994 order or leave to appeal

to the Appellate Division is not reported but is reprinted in

the Appendix hereto as Appendix C. The Order of the Ap-

pellate Division denying leave to appeal from the July 19,

1994 order of Appellate Term is not reported but is reprint-

ed in the Appendix hereto as Appendix D. Defendant’s

Notice of Appeal from such order to the New York Court

of Appeals is reprinted in the Appendix hereto as Appendix

E. The February 14, 1995 Order of the Court of Appeals

dismissing such appeal is reported at 1995 N.Y. LEXIS 220

and is reprinted in the Appendix hereto as Appendix F.

II. Notice of Claim

The December 20, 1988 Order and Decision of the Ap-

pellate Division, First Department, of the Supreme Court of

the State of New York reversing the October 21, 1987 order

of the Appellate Term, First Department is reported at 142

A.D.2d 265, 535 N.Y.S.2d 982, and is reprinted in the Ap-

pendix hereto as Appendix G.

The Order and Decision of Appellate Term reversing

the September 23, 1986 order of the Civil Court of the City

of New York is not reported but is reprinted in the Ap-

pendix hereto as Appendix H.

The Order and Decision of the Civil Court of the City

of New York entered September 23, 1988 is not reported

but is reprinted in the Appendix hereto as Appendix I.

The March 16, 1989 Order of the Appellate Division,

denying leave to appeal to the Court of Appeals of the State

of New York is not reported but is reprinted in the Appen-

dix hereto as Appendix J.

3

JURISDICTION

The Order of the Appellate Term, First Department af-

firming the judgment below was entered on December 13,

1994. This Petition for a Writ of Certiorari is filed within

ninety days of that date.

The jurisdiction of this Court is invoked under 28

U.S.C. § 1257 (1988).

CONSTITUTIONAL, TREATY, AND STATUTORY

PROVISIONS INVOLVED

The Supremacy Clause, United States Constitution,

Article VI, clause 2, provides:

This Constitution, and the Laws of the United

States which shall be made in Pursuance thereof;

and all Treaties made, or which shail be made,

under the Authority of the United States, shall be

the supreme Law of the Land; and the Judges in

every State shall be bound thereby, any Thing in

the Constitution or Laws of any State to the

Contrary notwithstanding.

The Convention for the Unification of Certain Rules

Relating to International Transportation by Air, Oct. 12,

1929, 49 Stat. 3000, T.S. No. 876, 137 L.N.T.S. 11 (the

‘‘Warsaw Convention’’), Article 22, provides:

Article 22 (Official French Text!)

(1) Dans le transport des personnes, la re-

sponsibilité du transporteur envers chaque voya-

geur est limitée 4 la somme de cent vingt cing

mille francs. Dans le cas ou, d’apré la loi du

l««Because the only authentic text of the Warsaw Convention is in

French, the French text must guide our analysis.’’ Eastern Airlines,

Inc. v. Floyd, 499 U.S. 530, 535, 111 S. Ct. 1489, 1493, 113 L. Ed.

2d 569, 577 (1991).

tribunal saisi, l’indemnité peut étre fixée sous

forme de rente, le capital de la rente ne peut |

dépasser cette limite. Toutefois par une convention |

spéciale avec le transporteur, le voyageur pourra

fixer une limite de responsibilité plus élevée.

(2) Dans le transport de bagages enregistrés et

de marchandises, la responsibilité du transporteur

est limitée a la somme de deux cent cinquante

francs par kilogramme, sauf déclaration spéciale

d’intérét a la livraison faite par l’expéditeur au mo-

ment de la remise du colis au transporteur et

moyennant le paiement d’une taxe supplémentaire

éventuelle. Dans le cas, le transporteur sera tenu

de payer jusqu’a concurrence de ia somme décla-

rée, 4 moins qu’il ne prouve qu’elle est supérieure

a l’intérét réel de l’expéditeur a la livraison.

(3) En ce qui concerne les objets dont le

voyageur conserve la garde, la responsibilité du

transporteur est limitée a cing mille francs par

voyageur.

(4) Les sommes indiquées ci-dessus sont

considérées comme se rapportant au franc francais

constitué par soixante-cing et demie milligrammes

d’or au titre de neuf cents milliémes de fin. Elles

pourront étre converties dans chaque monnaie

nationale en chiffres ronds.

Article 22 (American English Translation)

(1) In the transportation of passengers the lia-

bility of the carrier for each passenger shall be lim-

ited to the sum of 125,000 francs. Where, in ac-

cordance 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 carrier and the passenger may agree to a higher

limit of liability.

ee

5

(2) In the carriage of checked baggage and of

goods, the liability of the carrier shall be limited to

a sum of 250 francs per kilogram, unless the con-

signor has made, at the time when the package was

handed over to the carrier, a special declaration of

the value at delivery and has paid a supplementary

sum if the case so requires. In that case the carrier

will be liable to pay a sum not exceeding the de-

clared sum, unless he proves that that sum is

greater than the actual value to the consignor at

delivery. \

(3) As regards objects of which the passenger

takes charge himself the liability of the carrier shall

be limited to 5,000 francs per passenger.

(4) The sums mentioned above shall be

deemed to refer to the French franc consisting of

65'4 milligrams of gold at the standard of fineness

of nine hundred thousandths. These sums may be

converted into any national currency in round

figures.

Article 26 of the Warsaw Convention provides:

Article 26 (Official French Text)

(1) La réception des bagages et marchandises

Sans protestation par le destinataire constituera pré-

somption, sauf preuve contraire, que les marchan-

dises ont été livrées en bon état et conformément

au titre de transport.

(2) En cas d’avarie le destinataire doit adresser

au transporteur une protestation immédiatement

aprés la découverte de |’avarie et, au plus tard,

dans un délai de trois jous pour les bagages et de

sept jours pour les marchandises a dater de leur ré-

ception. En cas de retard, la protestation devra

étre faite au plus tard dans les quatorze jours a

dater du jour ot le bagage ou la marchandise

auront été mis a sa disposition.

6

(3) Toute protestation doit étre faite par

réserve inscrite sur le titre de transport ou part un

autre écrit expédié dans le délai prévu pour cette

protestation.

(4) A défaut de protestation dans les délais

prévu, toutes actions contre le transporteur sont ir-

recevables, sauf le cas de fraude de celui-ci.

Article 26 (American English Translation)

(1) Receipt by the person entitled to the deliv-

ery of baggage or goods without complaint shall be

prima facie evidence that the same have been

delivered in good condition and in accordance with

the document of transportation.

(2) In case of damage, the person entitled to

delivery must complain to the carrier forthwith af-

ter the discovery of the damage, and, at the latest,

within 3 days from the date of receipt in the case

of baggage and 7 days from the date of receipt in

the case of goods. In case of delay the complaint

must be made at the latest within 14 days from the

date on which the baggage or goods have been

placed at his disposal.

(3) Every complaint must be made in writing

upon the document of transportation or by separate

notice in writing dispatched within the times

aforesaid.

(4) Failing complaint within the times afore-

said, no action shall lie against the carrier, save in

the case of fraud on his part.

Article 33 of the Warsaw Convention provides:

Article 33 (Official French Text)

Rien dans la présente Convention ne peut em-

pécher un transporteur de refuser la conclusion

d’un contrat de transport ou de formuler des régle-

ae! eS Pe oor SO yo *

7

ments qui ne sont pas en contradiction avec les dis-

positions de la présente Convention.

Article 33 (American English Translation)

Nothing contained in this convention shall pre-

vent the carrier either from refusing to enter into

any contract of transportation or from making reg-

ulations which do not conflict with the provisions

of this convention.

Sections 5001, 5002 and 5004 of the New York Civil

Practice Law and Rules (McKinney 1992) (‘‘CPLR’’) pro-

vide:

§ 5001. Interest to verdict, report or decision.

(a) Actions in which recoverable. Interest

shall be recovered upon a sum awarded because of

a breach of performance of a contract, or because

of an act or omission depriving or otherwise inter-

fering with title to, or possession or enjoyment of,

property, except that in an action of an equitable

nature, interest and the rate and date from which it

shall be computed shall be in the court’s discretion

(b) Date from which computed. Interest shall

be computed from the earliest ascertainable date

the cause of action existed, except that interest up-

on damages incurred thereafter shall be computed

from the date incurred. Where such damages were

incurred at various times, interest shall be com-

puted upon each item from the date it was incurred

or upon all of the damages from a single rea-

sonable intermediate date.

(c) Specifying date; computing interest. The

date from which interest is to be computed shall be

specified in the verdict, report or decision. If a

jury is discharged without specifying the date, the

court upon motion shall fix the date, except that

8

where the date is certain and not in dispute, the

date may be fixed by the clerk of the court upon

affidavit. The amount of interest shall be comput-

ed by the clerk of the court, to the date the verdict

was rendered or the report or decision was made,

and included in the total sum awarded.

§ 5002. Interest from verdict, report or decision

to judgment.

Interest shall be recovered upon the total sum

awarded, including interest to verdict, report or de-

cision, in any action, from the date the verdict was

rendered or the report or decision was made to the

date of entry of final judgment. The amount of in-

terest shall be computed by the clerk of the court

and included in the judgment.

§ 5004. Rate of Interest.

Interest shall be at the rate of nine percentum

per annum, except where otherwise provided by

Statute.

STATEMENT OF THE CASE

I. The Facts

Maro Leather Co., a New Jersey corporation, was the

consignee of an airfreight shipment of nine pallets of unfin-

ished leather carried by Aerolineas Argentinas, the Argen-

tine Airlines. Of the nine pallets, seven were received by

Maro’s trucker from Trans World Airlines, Aerolineas Ar-

gentinas’s cargo handler, on February 1 and 2, 1984, but

two were reported missing and were never thereafter found.

On February 10, 1984—eight days after receipt of the

goods— Maro’s agent filed a written notice of claim for the

partial loss with the airline. The value of the missing leath-

er was $23,024.90. The limitation on damages under Arti-

cle 22 of the Warsaw Convention, based on the weight of

the missing goods, was $24,000.

EEO”

9

The airline’s standard Cargo Tariff Rule No. 23, then

filed with the Civil Aeronautics Board pursuant to Federal

Aviation Act § 403, 49 App. U.S.C. § 1373 (1988), re-

pealed by Revision of Title 49, Transportation, United

States Code, Pub. L. No. 103-272 § 7(b), 108 Stat. 745,

1383) (current version codified at 49 U.S.C. § 41504),

provided:

No action shall be maintained in the case of

damage to or partial loss of cargo unless a written

notice, sufficiently describing the cargo concerned,

the approximate date of the damage, and the details

of the claim is presented to an office of Carrier

within 7 days from the date of receipt thereof, in

the case of delay, unless presented within 14 days

from the date the cargo is placed at the disposal of

the person entitled to delivery of the consignment,

and in the case of loss (including non-delivery) un-

less presented within 120 days from the date of is-

sue of the air waybill.

Maro’s claim was denied by the airline based on failure to

file a timely written notice of claim under this tariff and

under Article 26 of the Warsaw Convention.

II. The Proceedings Below

Maro brought suit against the airline in New York City

Civil Court in July 1985 (Complaint, Appendix K).

Defendant’s answer (Appendix L) raised defenses based,

inter alia, on Articles 22 and 26 of the Warsaw Convention

and on its tariffs. The First Complete Affirmative Defense

alleged that ‘‘proper written notice of claim concerning

[the] loss, damage, or delay [complained of] was not filed

with defendant within the applicable time limit’’ provided in

the contract of transportation, the tariffs, and the Conven-

tion. The Seventh Partial Affirmative Defense alleged that

10

under these same sources of law, ‘‘the liability, if any, of

defendant for any loss, damage, or delay is limited.”’

In July 1986 plaintiff moved for partial summary judg-

ment dismissing defendant’s affirmative defense of failure

to file a timely notice of claim, which was granted by deci-

sion-order of September 17, 1986 (Appendix I), the special

term judge noting a “‘trend’’ toward treating shortages as

‘‘losses’’ rather than ‘‘partial losses’’ (A-33).

That determination was reversed on defendant’s appeal

to Appellate Term, and the action was ordered dismissed

upon such defense, by order of October 21, 1987 (Appen-

dix H), the court noting that it had recently examined the

law when it had reversed one of the ‘“‘trend’’ decisions re-

lied on below, in which it had noted:

Significantly, in cases of ‘‘damage to or partial

loss’’ of cargo, unlike the case of a total loss where

no shipment ever arrives (a total failure to deliver),

the consignee is immediately aware of the carrier’s

breach and, thus, the short notice of claim require-

ment should not be relaxed.

Leather’s Best Inc. v. Aerolineas Argentinas, 136 Misc. 2d

797, 799 (App. T. Ist Dep’t 1987) (citations omitted),

rev’2 131 Misc. 2d 426 (Civ. Ct. 1986).

The Appellate Term decision in turn was reversed and

the action reinstated by the Appellate Division in December

1988 (Appendix G). After an extensive review of the exist-

ing precedents, and largely influenced by the District

Court’s and Second Circuit’s decision in Denby v. Seaboard

World Airlines, Inc., 737 F.2d 172 (1984), rev’g 575 F.

Supp. 1134 (E.D.N.Y. 1983), the Appellate Division con-

cluded that the term ‘‘partial loss’’ in the Aerolineas Argen-

tinas tariff must be limited to a shortage from a package and

not extended to the loss of one or more whole packages, on

the theory that (A-27):

11

‘*loss (including non-delivery)’’ of an entire con-

tainer or pallet must be distinguished from pil-

ferage or theft from a sealed container. The for-

mer is readily brought to the carrier’s attention,

just as if the whole shipment were lost, when the

consignee does not receive delivery of all goods on

the manifest. The latter loss from theft, etc., how-

ever, is not readily noticeable and requires prompt

notification to ensure investigation.

Leave to appeal to the New York Court of Appeals was

thereafter denied by the Appellate Division? in March 1989

(Appendix J).

Following a bench trial, decision was issued in favor of

plaintiff (Appendix B), in the course of which defendant

reasserted its position that Article 22 of the Warsaw Con-

vention limited prejudgment interest as well as the principal

amount of damages, and that the Supremacy Clause re-

quired that this override local-law prejudgment-interest pro-

visions of N.Y. CPLR 5001 & 5002.° The trial judge, re-

2Under N.Y. CPLR 5602 (McKinney 1978), further appellate

review of such a nonfinal order by the Court of Appeals may be allowed

only in the discretion of the Appellate Division on motion; otherwise

the issues may be reviewed by the higher court (if at all) only upon ap-

peal from a final judgment, under id. 5501(a)(1).

3Mr. Sadowsky, for defendant, argued (A-9 to A-10):

I ask The Court to pay judicial notice of The Warsaw Convention

The purpose of The Warsaw Convention was to establish a

sense of stability when The Warsaw Convention was promulgated

many, many years ago. The Warsaw Convention did not address

the issue of pre-judgment of interest as it felt that without having

interest airlines and air carriers would be more disposed to settling

their cases. The United States is a signatory to this Warsaw Con-

vention and this is the supreme law of the land as a treaty of The

United States as ratified by the congress and signed by the presi-

12

lying on Eli Lilly Argentina, S.A. v. Aerolineas Argentinas,

133 Misc. 2d 858, 508 N.Y.S.2d 865 (Civ. Ct. 1986),

overruled defendant’s objections and ordered that the judg-

ment include prejudgment interest from the date of loss

regardless of the Warsaw Convention limitation.

The resulting final judgment (A-12) for $41,182.40 in-

cluding CPLR 5001 & 5002 interest at the CPLR 5004 rate

was appealed to Appellate Term and affirmed (A-1) upon

authority of Domangue v. Eastern Air Lines, Inc., 722 F.2d

256, 262 (Sth Cir. 1984), Mahfoud v. Eastern Airlines,

Inc., 17 Av. Cas. (CCH) 17,714 (W.D. La. 1982), aff’d

mem. , 729 F.2d 777 (Sth Cir. 1984), aff’d by an equally di-

vided court, 474 U.S. 213, 106 S. Ct. 586, 88 L. Ed. 2d

522 (1985), and Boehringer-Mannheim Diagnostics, Inc. v.

Pan American World Airways, Inc., 737 F.2d 456 (Sth

Cir.), cert. denied, 469 U.S. 1186, 105 S. Ct. 951, 83 L.

Ed. 2d 959 (1985) —a line of Fifth-Circuit cases that estab-

lished discretionary prejudgment interest exceeding the

Warsaw Convention weight limitation, as a matter of fed-

eral common law. The Appellate Term affirmed despite the

trial judge’s holding imposing interest under the mandatory

terms of New York CPLR 5001, without making the find-

dent. Whether we like it or not, state courts must abide by this

precedent in the nature of the statute, in the nature of the Deere

case and O’Rourke and other authorities which my opposing

counsel has cited.

I would ask The Court to not follow this Eli Lily case as I do

not think, and I say this as an officer of the court, that it is good

law. It has not been followed by any single state court in a Second

Circuit or cited with approval. I think it is vulnerable to attack.

Perhaps in today’s mode of transportation the Warsaw Convention

should be modified or changed in some way, but that scenario is

not presented to this court. We can only go by what The Warsaw

Convention says.

There is no indication that interest is applicable and I would

advise that interest should be denied.

13

ings required by Domangue to support the court’s exercise

of discretion.

The Appellate Term thereafter denied defendant’s mo-

tion for leave to appeal to the Appellate Division (Appendix

C), as did the Appellate Division (Appendix D). Although

defendant filed a notice of appeal to the Court of Appeals of

New York (Appendix E), upon the premise that a construc-

tion of the Supremacy Clause of the U.S. Constitution was

directly involved, the Court of Appeals on its own motion

dismissed the appeal for lack of jurisdiction (Appendix F),

evidently upon the theory that the decision below represent-

ed judicial construction of the treaty rather than a conflict

between the terms of the treaty and the state prejudgment-

interest statute, which would directly implicate the Suprem-

acy Clause.4 The dismissal of the appeal made final the

decision of Appellate Term of July 19, 1994 as well as the

Appellate Division decision of December 20, 1988.

The federal claims now pursued were thus raised at the

earliest stage of the pleadings and have been continually re-

asserted throughout the proceedings below.

REASONS FOR GRANTING THE WRIT

I. There Is Conflict Among State and Federal Courts

and Courts Abroad as to the Rule Requiring a No-

tice of Claim Under the Warsaw Convention for

Partial Loss of Air Cargo

Article 26 of the Warsaw Convention requires written

notice of claim as a condition precedent to suit based on

‘‘damage’’ (‘‘avarie’’) to air cargo, but whether this term

4CPLR 5601(b)(1) provides that an appeal lies as of right to the

Court of Appeals ‘‘from an order of the appellate division which finally

determines an action where there is directly involved the construction of

the constitution of the state or of the United States.’’ Clearly the Appel-

late Division disposition was final. No written decision was issued ex-

plaining the rationale for the Court of Appeals dismissal; the explana-

tion here given was the argument made by plaintiff by letter-submission

=

should be interpreted to require such notice where part of

the goods never arrives has been subject to conflicting

rulings.

The definitive analysis of this question was undertaken

in the British decision of Fothergill v. Monarch Airlines

Ltd. , [1981] A.C. 251, 274-75 (H.L. 1980), a case where a

passenger timely complained of damage to his suitcase but

not of partial loss of its contents. Lord Wilburforce noted

that the term ‘“‘avarie’’, like ‘‘damage’’, was susceptible to

a narrow interpretation—physical damage alone—or a

broader sense which would include ‘‘physical damage, or

loss, including partial loss’’. He noted that the latter inter-

pretation would better accord with the purposes of Article

26, and as well accorded with French, Argentine, Belgian,

and Swiss jurisprudence, and held the partial-loss claim un-

timely.

In Great Britain, independent of the Fothergill case,

Parliament enacted the Warsaw Convention into positive

law through the Carriage by Air Act 1961, 9 & 10 Eliz. 2,

ch. 27, amended by Carriage by Air and Road Act 1979,

1979 ch. 28, to which the Convention as amended is an-

nexed as Schedules. This latter amendment specifically

provided, as regards art. 26:

In Article 26(2) the references to damage shall

be construed as including loss of part of the bag-

gage or cargo in question and the reference to the

receipt of the baggage or cargo shall, in relation to

loss of part of it, be construed as receipt of the re-

mainder of it.

Carriage by Air and Road Act 1979, 1979 ch. 28, § 2.

Thus in Great Britain the Fothergill holding has been broad-

ly implemented for all cases of partial loss.

An identical result was obtained by the supreme court

of the Netherlands in Affretair (Compagnie Gabonaise d’Af-

during the court’s sua sponte review of the jurisdictional issue.

‘

4

‘)

a

15

frétement Aérien) v. VOB (Versicherungsanstalt der Oster-

reichischen Bundeslander Versicherungsaktiengesellschaft),

RW 1982,50 (HR 1982) (reprinted in 7 J. Air L. 173

(1982)), holding that where three cartons from a consign-

ment of twenty were lost, this constituted “‘damage’’ within

the meaning of art. 26 of the Convention. This decision

was described in an accompanying commentary as ‘‘more

than an affirmation of the ruling of the House of Lords,’’ in

Fothergill, since it applies to the total loss of a discrete

number of packages rather than shortage from one or more

packages. Note, Supreme Court of the Netherlands: Af-

fretair v. VOB or Fothergill’s Dutch Treatment: decision

of 12 February 1982, 7 J. A L. at 176.

In the case of losses of cartons from a containerized

shipment, Fothergill was followed in the U.S. by Denby v.

Seaboard World Airlines, Inc., 575 F. Supp. 1134, 1138-44

(E.D.N.Y. 1983) (Weinstein, C.J.), but this was reversed

by the Second Circuit, 737 F.2d 172, 179-80, 182-83

(1984), because the factual record was unclear as to whether

the shipment should be treated as of a single container or of

multiple cartons, assuming but not deciding that this might

affect the result.” The Second Circuit’s sole authority for

thinking that a different result might be had if individual

cartons were lost was Dalton v. Delta Airlines, Inc., 570

F.2d 1244 (5th Cir. 1978), rev’g 14 Av. Cas. (CCH)

17,219 (S.D. Fla. 1974). Dalton held that where racing

dogs arrived dead at the airport of destination, they were

‘‘destroyed’’ goods rather than ‘‘damaged’’ goods within

the meaning of art. 26(1), and thus no notice was required.

5 Although the case was remanded, it was settled prior to trial, and

no further findings were made. It may be questioned, however, whether

the distinction proposed by the Second Circuit might well be

‘‘incompatible with the language of the Convention.’’ Chan v. Korean

Airlines, Ltd., 490 U.S. 122, 130, 109 S. Ct. 1676, 1681, 104 L. Ed.

2d 113, 124 (1989): If the meaning of avarie includes partial losses,

why should it include some partial losses but not others?

16

In the wake of the Second Circuit’s Denby decision, a

multiplicity of results have developed within the United

States, with most courts not bothering to examine the

language of the treaty or its analyses in Fothergill.

One line of cases, e.g., Butler’s Shoe Corp. v. Pan

American World Airways, 514 F.2d 1283, 1285 n. 2 (Sth

Cir. 1975), draws the obvious conclusion that where no part

of the shipment is delivered at all, no notice is required

under art. 26. This is logically consistent with the text of

the treaty, since there is no ‘‘receipt’’ of goods from which

to measure the seven-day period.

Another line of cases holds that any kind of partial loss,

as by pilferage, is ‘‘loss’’ rather than ‘‘damage’’ within the

meaning of art. 26, and thus no notice is required: St. Paul

Insurance Co. v. Venezuelan International Airways, Inc.,

807 F.2d 1543, 1546 (11th Cir. 1987) (loss of 24.5% by

weight of tractor parts in two shipments; art. 26 held not to

apply); cf. Schwimmer v. Air France, 87 Misc. 2d 147,

149, 384 N.Y.S.2d 658, 659 (Civ. Ct. 1976) (art. 26 notice

held required for 4 damaged cases of personal goods but not

for 7 cases not delivered; ‘‘Damage is damage and loss is

loss’’).

The Dalton line of cases has since been limited to in-

stances of dead livestock, rather than other types of

‘‘destruction’’. Compare Hughes-Gibb & Co. v. Flying Ti-

ger Line, Inc., 504 F. Supp. 1239 (N.D. Ill. 1981) (Dalton

rule applied to breeding swine dead on arrival but not to

those dying after delivery) with Highlands Insurance Co. v.

Trinidad and Tobago (BWIA International) Airways Corp.,

739 F.2d 536 (11th Cir. 1984) (electronic parts dropped 18

ft. to floor not ‘‘destroyed’’ within meaning of Dalton) and

Maschinenfabrik Kern, A.G. v. Northwest Airlines, Inc.,

562 F. Supp. 232 (N.D. Ill. 1983) (notice held necessary

for ‘‘total destruction’’ of duplicating machines).

A further split has developed between cases that make a

distinction between partial losses that involve shortage of

contents from one or more packages and those that involve

17

one or more complete packages, as the case here below.

Since these almost always involve consideration of tariff

provisions, they will be discussed below.

To sum up, there is no uniformity of interpretation of

art. 26 of the Warsaw Convention in this country as applied

to the broader sense of ‘‘damage’’(‘‘avarie’’) recognized in

Fothergill as the best interpretation of these critical terms

and implemented in Great Britain at least by legislative

enactment. In a situation where international uniformity is

paramount, the need for a consistent standard is evident.

II. There Is Conflict Among State and Federal Courts

and Courts Abroad as to the Rule Requiring a

Notice of Claim Under Tariffs for Partial Loss of Air

Cargo

Article 33 of the Warsaw Convention allows air car-

riers to promulgate regulations covering situations not

covered by the Convention provided they do not ‘‘conflict

with’’ the Convention. Cargo Tariff Rule 23(b) adds two

new categories to the Convention’s two categories of

‘‘damage’’ and ‘‘delay’’ in art. 26—that of ‘‘partial loss’’

(requiring, as for damage, notice within seven days of re-

ceipt of the cargo) and of ‘‘loss (including non-delivery)’’

(requiring notice within 120 days of the issuance of the air

waybill). The obvious intent of this tariff is to clarify the

treatment of partial losses of baggage or cargo, and to fix a

notice provision for the Butler’s Shoe situation where no de-

livery ever takes place. This rule has been upheld as a per-

missible regulation under art. 33. E.g. Famolare v. Sea-

board World Airlines, 15 Av. Cas. (CCH) 17,287 (N.Y.

Sup. Ct. 1978).

The term ‘‘partial loss’’ has traditionally been inter-

preted under maritime law to mean any loss that is not an

actual or constructive total loss of an entire cargo, and

specifically including the total loss of a part of a shipment.

See, e.g., American Insurance Co. v. Griswold, 14 Wend.

18

399, 472 (N.Y. 1835) (giving example of one hogshead of

sugar washed overboard out of a shipment of twenty).

Some earlier aviation cases interpreted this tariff

langage to apply to the total loss of one or more packages

from a shipment, e.g., Travelers Indemnity Co. v. Alia Air-

lines, 18 Av. Cas. (CCH) 17,687 (N.Y.C. Civ. Ct. 1984),

aff'd without opinion, No. 84-630 (App. T. 1st Dep’t April

2, 1985), as well as where part of the contents of a package

were missing, e.g. Hartford Fire Insurance Co. v.

Aerolineas Argentinas, 16 Av. Cas. (CCH) 17,940 (N.Y.

App. T. 1981). The rule was, as the Appellate Term noted

below in the present case, “‘the loss of one of a number of

pallets constitutes a partial loss of the total shipment, not a

total loss of part of the shipment, within the meaning of

defendant’s tariff’’ (A-31).

The Second Circuit’s Denby decision, however, again

introduced a note of confusion. Even though tariff inter-

pretation of Rule 23(B) was not there involved,© subsequent

courts used Denby as authority for holding that ‘‘partial

loss’? could be applied only in the Hartford Fire Insurance

situation. Both Siemens Corp. v. KLM Royal Dutch Air-

lines, 19 Av. Cas. (CCH) 18,502 (N.Y. Civ. Ct. 1986),

and the Appellate Division below (A-25 to A-28) relied on

Denby to hold that partial loss of a discrete number of pack-

ages was not a ‘‘partial loss’’ under the tariff but a “‘loss

(including non-delivery)’’. Such holdings were buttressed

by the observation that missing packages should be obvious

to the carrier (while missing contents from a package might

not be), even though earlier cases firmly established that a

carrier's actual knowledge of damage does not excuse a

consignee’s noncompliance with a tariff notice requirement,

e.g., Stud v. Trans International Airlines, 727 F.2d 880,

883 (9th Cir. 1984); Amazon Coffee Co. v. Trans World

Airlines, Inc., 18 Av. Cas. (CCH) 17,264, 17,264 (N.Y.

Seaboard’s filed tariff was ambiguous as to whether Rule 23 ap-

plied to it, allegedly due to a clerical error. This was a factual issue to

be explored on remand. 737 F.2d at 186-87.

Pe hee ee

19

Sup. Ct. 1983) (citing non-aviation cases), modified on

other grounds, 111 A.D.2d 776, 490 N.Y.S.2d 523 (1985).

The purpose of a notice requirement, as noted by Lord

Wilburforce in Fothergill, is *‘reasonably clear’’:

It is: (1) to enable the airline to check the nature of

the ‘‘damage’’; (2) to enable it to make inquiries

how and when it occurred; (3) to enable it to assess

its possible liability, to make provision in its ac-

counts and if necessary to claim on its insurers; (4)

to enable it to ensure that relevant documents (for

example, the baggage checks or passenger ticket,

or the air waybill) are retained until the issue of li-

ability is disposed of.

[1981] A.C. at 272 (quoted with approval in Denby, 737

F.2d at 177 n. 7). See also Stud v. Trans International Air-

lines, 727 F.2d at 883-84 (‘‘One reason for the written no-

tice requirement is to avoid endless speculation about who

knew what and when they allegedly knew it.’’). None of

these purposes is served by excusing a consignee from a

short notice requirement by giving an artificial construction

to the term ‘‘partial loss’’. This is especially the case

where, as here, actual delivery to the consignee may be

made by a contracted cargo handling company rather than

the carrier itself. Rather, as a commercial reality, it is the

consignee who is in the best position, if not the only posi-

tion, to examine its shipment to determine whether it actual-

ly received all it was supposed to and in the condition it was

supposed to be in. If not, it can best work to correct the

situation or obtain recovery against the responsible party by

filing its notice to the carrier and starting the claims proc-

ess.

The existing multiplicity of interpretations serves no

commercial purpose and, by doing violence to the plain

language of the tariff provisions, only invites confusion.

Only this Court can resolve this mishmash by accepting this

case for review.

20

III. There is a Clear Three-Way Conflict Among Two

Federal Circuits and New York State Courts as to

Awarding Prejudgment Interest in Excess of the

Warsaw Convention Weight Limitation

There is a conflict among federal courts and New York

State courts as to the question of prejudgment interest in

Warsaw Convention cases where the damages with interest

would exceed the amount of liability prescribed under art.

22 of the Convention. This is a question unaddressed in

this Court’s consideration of Trans World Airlines, Inc. v.

Franklin Mint Corp., 466 U.S. 243, 104 S. Ct. 1776, 80 L.

Ed. 2d 273 (1984), and presented to this Court but likewise

unresolved by Eastern Airlines, Inc. v. Mahfoud, 474 U.S.

213, 106 S. Ct. 586, 88 L. Ed. 2d 522 (1985), aff’g by an

equally divided court 729 F.2d 777 (Sth Cir. 1984), mem.

aff’g 17 Av. Cas. (CCH) 17,714 (W.D. La. 1982). The

question has received three different answers to date.

One view takes the plain wording of the Convention,

informed by the drafters’ primary intentions, as controlling.

O’Rourke v. Eastern Air Lines, Inc. , 730 F.2d 842 (2d Cir.

1984), was a passenger death case governed by the Conven-

tion as modified by the Agreement Relating to Liability

Limitations of the Warsaw Convention and the Hague

Protocol, Agreement C.A.B. No. 18900, approved by order

E-23680, May 13, 1966 (Docket 17325), 31 Fed. Reg.

7302 (1966), commonly known as the Montreal Agreement,

a private agreement among airlines and the Civil Aeronaut-

ics Board which raised the passenger-injury liability limit to

$75,000, inclusive of legal fees and costs, while eliminating

‘*fault’’ as an issue to be litigated. Since the Montreal

Agreement was silent as to prejudgment interest, the admin-

istrator of a deceased passenger sought prejudgment interest

in addition to the $75,000 maximum award. The Second

Circuit focused on the ‘‘liability of the carrier . . . shall be

limited’’ language of art. 22 of the Convention, which is

likewise silent as to interest, as well as fees and costs. The

21

court recognized the prime underlying purposes of the Con-

vention was to limit air carriers’ liability for damages to a

fixed and definite sum and to provide a fixed and uniform

body of international law to govern such determinations.

While it noted that the objects of the Montreal Agreement

were to increase compensation to passengers above the ori-

ginal Warsaw limit and to speed the resolution of claims, it

could find no intention by the parties to that Agreement to

modify the original Warsaw principles. 730 F.2d at 852.

Although the Convention provided for application of local

law in some of its articles, there was no such provision in

art. 22; accordingly, interest above the revised $75,000

limit was denied. Jd. at 853.

While O’Rourke was pending, the Fifth Circuit decided

the issue differently. Domangue v. Eastern Air Lines, Inc..,

722 F.2d 256 (Sth Cir. 1984), also a wrongful-death case,

arose out of the same airplane crash as did O’Rourke. Con-

centrating on the speedy-compensation objectives of the

Montreal Agreement in the context of a no-fault claim

against an airline where there was no question that the

$75,000 damage limit could be proved, the court held that

equitable principles could support an award to a passenger

of prejudgment interest ‘‘under the Warsaw/Montreal body

of law’’. Jd. at 262-63. In considering such a discretionary

award, a judge would be bound neither by traditional com-

mon-law restrictions nor by state statutes, but should take

into account such equitable factors as the span of time from

the tort to the judgment, responsibilities for any delay, and

achieving the goal of facilitating the disposition of bona fide

claims. Jd. at 262, 264.

The O’Rourke court acknowledged the Domangue deci-

sion in a footnote, 730 F.2d at 853-54 n.20, offering three

reasons why it would not follow it: (1) establishing dif-

ferent rules in different countries (and the O’Rourke

plaintiff sought interest under a state statute) would defeat

the Warsaw Convention’s purpose of international

uniformity, (2) the speedy-disposition objective was not

22

supported by the history of the Montreal Agreement, ’ and

(3) the Domangue rationale had no application in a case

where, as in O’Rourke, full liability was not conceded by

the defendant.

The Fifth Circuit has alone persisted in its Domangue

holding, following it in Mahfoud v. Eastern Airlines, Inc. ,

729 F.2d 777 (Sth Cir. 1984, mem. aff’g 17 Av. Cas.

(CCH) 17,714 (W.D. La. 1982), aff’d by an equally

divided court, 474 U.S. 213, 106 S. Ct. 586, 88 L. Ed. 2d

522 (1985), and even extending it without comment to a

cargo case —a Claim wholly outside the subject-matter of the

Montreal Agreement, Boehringer-Mannheim Diagnostics,

Inc. v. Pan American World Airways, Inc., 737 F.2d 456

(Sth Cir.), cert. denied, 469 U.S. 1186, 105 S. Ct. 951, 83

L. Ed. 2d 959 (1985).

The Second Circuit has meanwhile extended the

O’Rourke holding to cargo cases, Exim Industries, Inc. v.

Pan American World Airways, Inc., 754 F.2d 106 (2d Cir.

1985), and later cases have clarified that prejudgment inter-

est would be freely available in Warsaw cases where the

damage limitation was otherwise unavailable to the carrier,

e.g., Hollie v. Korean Air Lines Co., 834 F. Supp. 65

(S.D.N.Y. 1993) (using an average of Treasury Bill rates to

determine interest).

Moreover, all other courts which have considered the

question, other than New York state courts, have, upon

considering both lines of decision, followed the Second Cir-

cuit: e.g., Deere & Co., v. Deutsche Lufthansa Aktienge-

sellschaft, 855 F.2d 385 (7th Cir. 1988); Corio Brothers In-

vestment Corp. v. Fast Air Carrier, S.A., 24 Av. Cas.

(CCH) 17,719 (S.D. Fla. 1993); The Limited Stores, Inc. v.

Pan American World Airways, Inc., 65 Ohio St. 3d 66, 600

Moreover, as noted by this Court in Air France v. Saks, 470 U.S.

392, 407, 105 S. Ct. 1338, 1346, 84 L. Ed. 2d 289, 301 (1985), the

parties to the Montreal Agreement waived defenses otherwise available

under art. 20(1) of the Convention, but ‘‘they did not waive other

provisions in the Convention that operate to qualify liability.’’

23

N.E.2d 1027 (1992). The Second Circuit rule is likewise

the holding of decisions abroad, in England, Swiss Bank

Corp. v. Brink’s M.A.T. Ltd., [1986] 1 Q.B. 853, and

Australia, S.S. Pharmaceutical Co. v. Qantas Airways Ltd.,

[1989] 1 Lloyd’s Rep. 319 (Sup. Ct. N.S.W., Austl.,

Comm. Div. 1988), aff’d, [1991] 1 Lloyd’s Rep. 288, 297

(Austl. Ct. App. 1990). No court outside the Fifth Circuit

has followed Domangue in allowing discretionary interest

beyond the Warsaw weight limitation.

The trial court and Appellate Term below, and one

other New York state lower court, have claimed to follow

Domangue, but have held otherwise and established a third

line of decisions. Eli Lilly Argentina, S.A. v. Aerolineas

Argentinas, 133 Misc. 2d 858, 861, 508 N.Y.S.2d 865,

867 (Civ. Ct. 1986), was an action for damage to chemical

drums during loading. The parties stipulated that the

amount of loss was the Warsaw Convention weight limita-

tion of $18,360; the sole question presented for decision

was whether plaintiff was entitled to prejudgment interest in

excess of this amount. The court noted Domangue’s recog-

nition that prejudgment interest constitutes payment for the

use of money to which a plaintiff may be entitled, but ig-

nored its holding that the Convention preempts state law on

prejudgment interest, declaring: ‘‘The law of the State of

New York is in accord. CPLR 5001 provides for interest in

an action for property loss or damage from the earliest as-

certainable date upon which the cause of action arose.’’ Jd.

at 861, 508 N.Y.S.2d at 866-67. Without citation of fur-

ther Warsaw authority, the court concluded: ‘‘Article 28 of

the Warsaw Convention® may be interpreted to allow the

8Warsaw Convention art. 28(1) provides for venue in Warsaw

cases; art. 28(2) states: ‘‘Questions of procedure shall be governed by

the law of the court to which the case is submitted.’’ 49 Stat. at 3020-

21. The O’Rourke court noted this as one of the five instances in the

Convention where application of the law of the forum was permit-

ted—none of which, it noted, allowed for prejudgment interest under

local law. 730 F.2d at 853.

24

law of the forum on prejudgment interest,’’ id., and

awarded prejudgment interest under CPLR 5001.

The decision of the trial judge in the instant case was

expressly premised on the “‘decision and the reasoning of”’

Eli Lilly and awarded prejudgment interest —not according

to the discretionary equitable principles espoused by the

Domangue court—but under the mandatory provisions of

CPLR 5001 (A-11). The Appellate Term affirmance did

likewise (A-2). This is clearly a third road, awarding inter-

est under state law in excess of a limitation unambiguously

set forth in the treaty, justified under the rubric of treaty in-

terpretation.

Thus again, under a multilateral treaty whose goal was

internaional uniformity of law, a situation has developed

where in one country alone multiple disparate rules are

maintained. International air carriers face widely differing

amounts of judgments on identical claims, depending upon

venue of suit, depending on local interest rates, and even

depending on the mood of the judge to whom the case is as-

signed, under a treaty whose original purpose was to estab-

lish a uniform rule of liability. Commercial realities, and

the fulfillment of the expectations of the international com-

munity, require a more uniform rule, which this Court

alone can provide.

25

CONCLUSION

As recently as this Court’s decision in Eastern Airlines,

Inc. v. Floyd, 499 U.S. at 546, 111 S. Ct. at 1499, 113 L.

Ed. 2d at 584, it recognized that the original parties to the

Warsaw Convention ‘‘were more concerned with protecting

air carriers and fostering a new industry than providing full

recovery to injured passengers’’ or consignees of cargo, and

that the Convention must be construed to effect such pur-

poses. Although changes in domestic law since 1929 in-

creasingly favor consumers of goods and services, neverthe-

less the Convention, as “‘the supreme Law of the Land,’’ is

entitled to construction and recognition of its plain language

in the light of its originally intended purposes. Commer-

cially reasonable tariffs promulgated consistently with the

Convention should be accorded like construction.

Petitioner respectfully submits that those purposes have

not been recognized by the decisions of the New York state

courts below, and moreover that such decisions are in stark

conflict (a) in the case of partial losses of air cargo, with

Judge Weinstein’s decision in Denby and the internationally

consistent rule of Fothergill, the British Carriage by Air and

Road Act, and Affretair, and (b) in the case of prejudgment

interest, with each of the O’Rourke and the Domangue lines

of authority.

With the current multiplicity of rulings, international

air Carriers cannot predict the amount of interst on a bag-

gage or cargo claim, nor can consignees predict whether

they need to file a notice of claim for short shipments, since

the answers to these issues largely depend on the forum

where the claim may be heard.

Further, the judicial construction both of a multilateral

treaty to which the United States is a party and of air tariffs

filed with a federal agency, are peculiarly federal questions

upon which a uniform national rule is needed, and which

only this Court can provide.

26

For all the foregoing reasons, the present petition for a

writ of certiorari should be granted.

March 13, 1995

Respectfully submitted,

FRANCIS A. MONTBACH

Counsel of Record

PAUL AMBOS

BIGHAM ENGLAR JONES & HOUSTON

Counsel for Petitioner

14 Wall Street

New York, New York 10005

(212) 732-4646