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

> Briefs, arguments, decisions, and more.

URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386012_1407%3A1

## Record

- **Collection:** Supreme Court brief
- **Document type:** Petition for Writ of Certiorari
- **Published:** January 1, 1995
- **Citation:** 514 U.S. 1108

## Text

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

Go

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

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386012_1407%3A1. Public record. Not legal advice.