Fifth Circuit vacates summary judgment against passenger in baggage case

Muoneke v. Air France (5th Cir. Tex. Sept. 17, 2007).  The day after her flight from Texas arrived in Nigeria, the passenger went to the airline’s lost baggage office at the airport and claimed that several items were missing from her checked baggage.  The passenger alleged that she submitted a written claim regarding the missing items during her visit to the baggage office, but the airline alleged that it had no record of having received such claim.

The passenger filed a state court lawsuit against the airline, which removed the case to federal court.  The passenger moved that the case be remanded because the amount in controversy did not exceed $75,000.  The Fifth Circuit affirmed the trial court’s denial of the remand motion, holding that because the passenger’s complaint involved the interpretation and application of a treaty – the Warsaw Convention – the trial court had federal question jurisdiction, which has no dollar-amount requirement.

After the trial court denied the passenger’s remand motion, the airline moved for summary judgment on the grounds that the passenger had failed to submit a timely written claim under Article 26 of the Warsaw Convention and the airline’s contract of carriage, both of which required submission of a written claim within seven days of the passenger’s receipt of her baggage.  The Fifth Circuit vacated the trial court’s summary judgment for the airline, holding that the passenger’s submissions in opposition to the airline’s motion were sufficient to create a genuine issue of material fact as to whether she had submitted a written claim.

Note:  The Warsaw Convention and its successor, the Montreal Convention, impose time limits for submitting written claims for baggage and cargo damage and delay but not for loss.  However, neither Convention prohibits airlines from imposing their own time limits for submitting written loss claims (see, e.g., Khan v. Singapore Airlines, Ltd. (9th Cir. 1997)), and airlines typically impose such limits through their conditions of carriage.  Courts usually regard the delivery of baggage with some items missing, as occurred in the above case, as baggage damage rather than loss for purposes of Article 26.  See Maro Leather Co. v. Aerolineas Argentinas (N.Y.A.D. 1988).

Court enforces two year limit in baggage case

Onyekuru v. Northwest Airlines and KLM Royal Dutch Airlines (N.D. Ill. Sept. 14, 2007).  In August 2006, the passenger filed a lawsuit against the airlines seeking damages for the alleged theft of items from the baggage she had checked for her June 2004 flight from Nigeria to Chicago.  The airlines moved for summary judgment on the grounds that her claim was time-barred by Article 35(1) of the Montreal Convention, which provides as follows:  “The right to damages shall be extinguished if an action is not brought within a period of two years, reckoned from the date of arrival at the destination, or from the date on which the aircraft ought to have arrived, or from the date on which the carriage stopped.”

The court granted the airlines’ motion because the passenger had filed her lawsuit more than two years after her flight had arrived in Chicago.

Note:  The court described the two year limit imposed by Article 35 as a “statute of limitations” and noted that the passenger had failed to “offer any evidence to suggest that the limitations period was tolled.”  Because the two year limit is a condition precedent to suit, not a statute of limitation, it is not subject to tolling.

Passenger’s seating decision dooms her personal injury lawsuit

Zarlin v. Air France (S.D.N.Y. Sept. 6, 2007).  A flight attendant reseated the passenger during an international flight after she complained that the passenger in front of her had deliberately reclined his seat so that it touched her.  Without informing a flight attendant, the passenger returned to her original seat because the alternative seat was too close to a lavatory.  The passenger in front then reclined his seat again, this time “striking and injuring” the plaintiff’s knee.

The passenger sued the airline, seeking damages for “her medical costs, the value lost in a country club membership, and expenses incurred for pool membership and to resurface her tennis court.”  Air France moved for summary judgment on the grounds that the passenger’s injury was not the result of an “accident” with the meaning of Article 17 of the Warsaw Convention, arguing that (i) the reclining of the seat was not an “unusual or unexpected” event and thus not an “accident,” and (ii) the passenger’s decision to return to her original seat was the proximate cause of her injury.

The court granted the airline’s motion.  Although the court expressed “serious doubts” that the reclining of the seat was an “accident,” the court ruled that the existence of disputed facts made the granting of summary judgment on this issue improper.  The passenger was not so lucky with the airline’s proximate cause argument.  The court held that the passenger’s decision to return to her seat was the proximate cause of her injury, reasoning that if she had “remained in the new seat she was offered by Defendant’s flight crew, the incident in question could not have taken place.”  The court concluded that because no reasonable jury could find that the airline’s conduct was the proximate cause of the passenger’s injury, the passenger had failed to establish that an “accident” within the meaning of Article 17 had taken place.  Since the Warsaw Convention provided the passenger’s only possible remedy, her claim failed.

Southwest persuades court to shut down boarding pass company’s operations

Southwest Airlines Co. v. BoardFirst, L.L.C. (N.D. Tex. Sept. 12, 2007).  BoardFirst went into business in 2005 to assist Southwest passengers in obtaining the coveted “A” group boarding passes.  “A” boarding passes are obtained by the first 45 passengers to check in, and “A” passengers are the first to board the aircraft.  A BoardFirst customer authorizes the company to act as the customer’s agent.  When the customer’s boarding pass becomes available, a BoardFirst employee uses the customer’s personal information to log onto southwest.com and attempt to obtain an “A” boarding pass for the customer.  BoardFirst notifies its customer if it was successful; if so, BoardFirst collects a $5 fee from the customer, who prints the boarding pass via southwest.com or at an airport kiosk.

Southwest sent BoardFirst cease and desist letters, but BoardFirst continued to operate.  So Southwest sued BoardFirst, alleging causes of action for breach of contract, violation of the federal Computer Fraud and Abuse Act and for violation of a Texas statute prohibiting harmful access to a computer.  Southwest sought damages as well as a permanent injunction against BoardFirst’s operations.  Southwest moved for partial summary judgment on its causes of action and on BoardFirst’s counterclaims for tortious interference with contractual relations.

The court granted Southwest’s motion as to its breach of contract cause of action, holding that BoardFirst had breached the parties’ “browsewrap” agreement.  A browsewrap agreement is entered into between a web site owner and a user of the site when the user accesses the site after having received actual or constructive knowledge that such access constitutes acceptance of the site’s terms and conditions.

Southwest.com’s home page displayed a notice stating that use of the site constitutes acceptance of Southwest’s terms and conditions, one of which was that site use was only permitted for “personal, non-commercial purposes.”  The court held that BoardFirst had actual knowledge of the prohibition against commercial use of the site since at least the time it received Southwest’s first cease and desist letter.  BoardFirst argued that it did not breach the contract because its use of the site was authorized by its customers.  The court rejected this argument, holding that BoardFirst’s authorization to act for its customers “does not make its conduct any less of a violation of the Terms.”

The court then considered whether Southwest had suffered damages due to BoardFirst’s conduct.  Southwest argued that it had incurred damages because BoardFirst’s activities had decreased traffic on its site, thereby depriving Southwest of selling and advertising opportunities, and because BoardFirst’s activities had interfered with Southwest’s effort to build an “egalitarian” image by creating a “de facto first class” for its flights.

The court held that Southwest was entitled to damages but that its damages were impossible to quantify, thus making the remedy of a permanent injunction “particularly suitable.”  The court permanently enjoined BoardFirst “from using southwest.com in a way that breaches the Terms posted on the site.”  The court denied Southwest’s motion as to its federal and state computer-related causes of action and as to BoardFirst’s tortious interference counterclaims.

Note:  This opinion is significant because many web site owners, such as Ticketmaster in its lawsuit against Tickets.com, have failed to persuade courts to enforce their sites’ terms and conditions.  The opinion provides an effective road map for airlines that wish to make sure that users of their sites comply with the sites’ rules.

Second Circuit enforces cargo waybill’s liability limitation clause

Eli Lilly Do Brasil, Ltda v. Federal Express Corp. (2d Cir. N.Y. Sept. 11, 2007).  While in FedEx’s custody in Brazil, the shipper’s cargo was stolen.  The cargo was worth about $800,000, but FedEx’s waybill limited the carrier’s liability for stolen goods to $20 per kilogram, or about $28,000 if the limitation applied.  The shipper had declined to exercise its option to declare a higher value for the cargo and pay for additional coverage.

The shipper, a Brazilian company, sued FedEx in the Southern District of New York and the parties filed cross-motions for partial summary judgment.  FedEx contended that the waybill limited its liability, while the shipper contended that Brazilian law applied.  According to the shipper, the waybill’s liability limitation would be unenforceable under Brazilian law if it could prove that FedEx had acted with gross negligence.

The Second Circuit affirmed the trial court’s ruling in FedEx’s favor.  Like the trial court, the Second Circuit performed a choice of law analysis to determine whether U.S. federal common law or Brazilian law applied.  The court recognized that Brazil had significant contacts with the parties and the contract but held that such contacts were trumped by U.S. federal common law, which would apply the contract as written, thereby protecting “the parties’ justified expectations” that their “freely undertaken contractual obligations” would be enforced.  In making this ruling, the court was influenced by the facts that both parties were “sophisticated commercial entities” and that the shipper had passed on its option to declare a higher value for the cargo.

Court analyzes “accident” location in ruling on passenger remand motion

Bunis v. Israir GSA, Inc. and Israir Airlines & Tourism, Ltd. (E.D.N.Y. July 30, 2007).  The passenger arrived at JFK on an international flight and deplaned.  At the arrival gate, the passenger asked an airline employee for a wheelchair.  After waiting 20 minutes, the passenger started walking toward the baggage claim area.  In the international arrivals area, but beyond the arrival gate, the passenger began to have chest pains.  The passenger made it to the baggage claim area, where he asked for medical assistance.  He was taken to a hospital by ambulance.

The passenger filed a state court lawsuit against the airline alleging negligence causes of action.  The airline removed the case to federal court on the grounds that the court had original jurisdiction under the Warsaw Convention.  The passenger moved to remand the case to state court, arguing that the Convention did not apply because he had not been in the process of “disembarking” when he sustained his injuries.  Article 17 of the Convention provides that “[t]he carrier shall be liable for damage sustained in the event of the death or wounding of a passenger or any other bodily injury suffered by a passenger, if the accident which caused the damage so sustained took place on board the aircraft or in the course of any of the operations of embarking or disembarking.”  If the passenger had been in the process of “disembarking” when the “accident” occurred, Article 17 would apply and the court would have jurisdiction under the Convention.

In analyzing this issue, the court rejected both parties’ contention that the “accident” had occurred in the baggage claim area, i.e., where the passenger had asked for medical assistance.  The court ruled that the accident in this case was the airline’s failure to provide the requested wheelchair, and that this failure had occurred while the passenger was at the arrival gate.  Given the proximity of the arrival gate to the aircraft, the court held that the accident had occurred while the passenger was in the course of disembarking.  Accordingly, the court denied the passenger’s remand motion.

Injured passenger prevails on issue of whether “accident” occurred

Wipranik v. Air Canada (C.D. Cal. May 15, 2007).  During a flight from Canada to Israel in 2004, the passenger asked a flight attendant for a cup of hot tea.  After the passenger had placed the cup on her tray table, the seat in front of her moved, causing the cup to slide off the tray table and onto her lap.  The passenger claimed that she suffered injuries as a result of this incident.

Air Canada moved for summary judgment on the grounds that the cause of the passenger’s injuries was not an “accident” under Article 17 of the Warsaw Convention.  That article provides that “[t]he carrier shall be liable for damage sustained in the event of the death or wounding of a passenger or any other bodily injury suffered by a passenger, if the accident which caused the damage so sustained took place on board the aircraft or in the course of any of the operations of embarking or disembarking.”  Where the Warsaw Convention (or the Montreal Convention, its successor) applies, it provides the only remedy for the passenger.  Thus, if there has been no “accident,” even a seriously injured passenger has no remedy against an airline.

The U.S. Supreme Court has defined an “accident” under the Warsaw Convention as “an unexpected or unusual event or happening that is external to the passenger.”  Applying this definition, the court held that the incident was an accident; it reasoned as follows:  “The slide of the tea off of the tray table and its fall onto Plaintiff’s lap were events ‘external’ to Plaintiff.  Moreover, those events were unusual and unexpected.  Although it may be common for an airline seat to shake when its occupant moves around, it is not common for beverages placed on the tray table behind that seat to be so jolted by the movement that they fall onto another passenger.  It is the failure of the tray table to hold beverages securely despite passenger movement in the seat in front that is unexpected.”  Accordingly, the court denied the airline’s motion.

The court granted the plaintiff’s cross-motion for summary judgment that the airline was liable for her injuries.  However, the court also held that the airline had the opportunity, pursuant to Article 21 of the Warsaw Convention, to prove at trial that the passenger’s damages should be reduced by her contributory negligence.  Article 21 provides that “[i]f the carrier proves that the damage was caused by or contributed to by the negligence of the injured person the court may, in accordance with the provisions of its own law, exonerate the carrier wholly or partly from his liability.”