Montreal Convention two-year limitation period not subject to tolling under local law

January 19, 2011

Duay v. Continental Airlines, Inc. (S.D. Tex. Dec. 21, 2010).  After arriving in Texas on a Continental flight from Switzerland, the plaintiff discovered at the baggage claim area that his custom-fitted wheelchair had been damaged.  Continental provided the plaintiff with a replacement wheelchair, which he used for the remainder of his trip in the United States.

In his complaint against Continental, the plaintiff alleged that the replacement wheelchair caused him to sustain a skin irritation injury that ultimately required surgery.  The plaintiff alleged causes of action for negligence, bailment and breach of contract.

Continental moved to dismiss on the grounds that the plaintiff had failed to perform the condition precedent of filing the lawsuit within the two-year period set forth in Article 35(1) of the Montreal Convention, which provides in part that “[t]he 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.”  The plaintiff’s flight had arrived in Texas on December 2, 2007, but he did not file his complaint until December 18, 2009.

In opposition, the plaintiff contended that his claims were not barred because Article 35(2) of the Convention allows tolling in accordance with Texas law, and because that state’s discovery rule functioned to toll the running of the two-year period.  Article 35(2) provides that “[t]he method of calculating that period shall be determined by the law of the court seised of the case.”

The court agreed with Continental.  First, citing numerous Warsaw Convention cases and that treaty’s drafting minutes, the court ruled that subjecting the Article 35(1) two-year period to the “various tolling provisions of the member states” would be contrary to the Montreal Convention’s policy goal of achieving uniformity of the rules governing international air transportation claims.  Second, the court rejected the plaintiff’s tolling argument on the grounds that the Texas discovery rule does not apply where the accrual of a limitation period is “specifically defined by law,” and that Article 35(1) “unequivocally prescribes” the accrual date as the date of the arrival of the flight.  Accordingly, the court granted Continental’s motion to dismiss.


DOT enforces consumer-friendly interpretation of Montreal Convention baggage liability provisions

January 4, 2011

As previously reported, on March 26, 2009 DOT issued a “Guidance on Airline Baggage Liability and Responsibilities of Code-Share Partners Involving International Itineraries” that states in part as follows:  “Although carriers may wish to have tariff terms that prohibit passengers from including certain items in checked baggage, once a carrier accepts checked baggage, whatever is contained in the checked baggage is protected, subject to the terms of the [Montreal] Convention, up to the limit of 1000 SDRs (Convention, Article 22, para. 2).”  (On December 30, 2009, the 1,000 SDR limit was increased to 1,131 SDRs, which is currently equivalent to about $1,750.)

Upon receiving a consumer complaint after the 90-day grace period for compliance with the Guidance, DOT initiated an enforcement action regarding Air France’s policies and practices with respect to items of checked baggage lost or damaged in transit to or from the United States.  DOT’s specific concern was over the airline’s General Conditions of Carriage, which disclaimed liability for “valuable, fragile or perishable items” in checked baggage and the reliance of the airline’s Customer Relations Department on such disclaimer to deny liability for the loss or damage of jewelry, electronic equipment and similar items.

By a Consent Order issued on December 23, 2010 (Order 2010-12-26), DOT announced that it and Air France had reached a settlement.  Under the settlement, Air France agreed to modify its policies and practices in order to comply with the Guidance and to pay a compromise assessment of $50,000 (and an additional $50,000 should it violate the Order within a year).

Note:  In a November 18, 2010 ruling, the Canadian Transportation Agency struck down an airline’s tariff rule, as well as a proposed revised version of such rule, that purported to preclude an airline’s liability for fragile and valuable items in baggage checked in connection with carriage subject to the Montreal Convention.  See Lukács v. WestJet (Decision No. 477-C-A-2010).  On February 1, 2011, the Federal Court of Appeal denied WestJet’s application for leave to appeal the agency’s decision.


Passenger’s second visit to Fifth Circuit yields additional baggage damages but no attorneys’ fees

May 31, 2009

Muoneke v. Compagnie Nationale Air France (5th Cir. Tex. May 12, 2009).  In 2004, the passenger traveled from Texas to Nigeria on Air France’s flights.  During a change of aircraft in Paris, Air France personnel required that the passenger check the baggage she had carried onto the prior flight.  The passenger claimed that when she arrived in Nigeria, cash and a camera were missing from her baggage.

The passenger sued Air France in a Texas state court.  Air France removed the case and successfully moved for summary judgment.   As previously reported, the Fifth Circuit reversed and remanded the case in 2007 because a factual issue precluded summary judgment.

On remand, the district court determined that the passenger’s actual loss totaled $1,242 but that the Warsaw Convention limited her recovery to $134.  The passenger then applied for an award of attorneys’ fees and costs but the district court held that fees are not recoverable under the Warsaw Convention.

In its opinion, the Fifth Circuit held that because the Montreal Convention had entered into force on November 4, 2003 and the events at issue had taken place in 2004, the Montreal Convention, not the Warsaw Convention, applied to the case.

Next, the appeals court rejected Air France’s argument that it had no liability to the passenger because its contract of carriage disclaimed liability for cash and cameras (and other valuable items) in checked baggage.  The court reasoned that the contract of carriage provision was inconsistent with Article 17 of the Montreal Convention, which subjected the airline to strict liability for baggage loss and damage (up to Article 22(2)’s limit of 1,000 Special Drawing Rights (“SDR”) per passenger).

The Fifth Circuit then held that Air France’s liability was capped at $1,580 under Article 22(2) of the Montreal Convention, which limits an airline’s liability for baggage loss, damage or delay to 1,000 SDRs per passenger (one SDR was equivalent to $1.58 at the time of the district court trial).  The appeals court then reversed the district court’s judgment and entered judgment for the passenger for $1,242, the amount of actual damages that the district court had determined that she had incurred.

Finally, the Fifth Circuit held that the passenger was not entitled to an award of attorneys’ fees but was entitled to recover her costs.  The court reasoned that, although the Montreal Convention does not prohibit the recovery of fees or costs, it does not provide an independent basis on which a court may award such amounts.  As to fees, the court held that they were not recoverable because the passenger had not identified any independent basis, such as a federal or state statute, for a fee award.  As to costs, the court held that they were recoverable under Federal Rule of Civil Procedure 54(d) and remanded the case to the district court for the sole purpose of calculating such costs (remarking that “[i]t is long past time for this litigation over $1,242.79 to end”).

Note:  The Fifth Circuit’s holding that the airline was liable for the loss of the cash and camera even though its contract of carriage purported to disclaim liability for these items is consistent with the “Guidance on Airline Baggage Liability and Responsibilities of Code-Share Partners Involving International Itineraries” that DOT issued on March 26, 2009.  The Guidance (which the Fifth Circuit did not cite) states as follows:  “Although carriers may wish to have tariff terms that prohibit passengers from including certain items in checked baggage, once a carrier accepts checked baggage, whatever is contained in the checked baggage is protected, subject to the terms of the [Montreal] Convention, up to the limit of 1000 SDRs (Convention, Article 22, para. 2).”  See 74 F.R. 14837-38 (Apr. 1, 2009).  In a ruling issued on November 18, 2010, the Canadian Transportation Agency reached the same conclusion, striking down an airline’s tariff rule, as well as a proposed revised version of such rule, that purported to preclude the airline’s liability for fragile and valuable items in baggage checked in connection with carriage subject to the Montreal Convention.  See Lukács v. WestJet (Decision No. 477-C-A-2010).  On February 1, 2011, the Federal Court of Appeal denied WestJet’s application for leave to appeal the agency’s decision.

Note:  On June 30, 2009, ICAO adjusted the liability limits set forth in Articles 21 and 22 of the Montreal Convention due to inflation.  Accordingly, effective December 30, 2009, the liability limit set forth in Article 22(2) was increased from 1,000 SDRs to 1,131 SDRs.  See U.S. Department of Transportation, Inflation Adjustments to Liability Limits Governed by the Montreal Convention Effective December 30, 2009, 74 F.R. 59017-18 (Nov. 16, 2009).


Passenger unable to break Montreal Convention baggage liability limit

July 27, 2008

Bassam v. American Airlines (5th Cir. (La.) July 14, 2008).  Four months after her international flight, American Airlines delivered the passenger’s missing baggage to her.  The passenger claimed that items were missing from the baggage, and she sued the airline in state court for over $5,000 for the value of the missing items.  The airline removed the case to federal court, where the passenger amended her complaint to add a claim for $15,000 for the “embarrassment and upset of not being able to dress and appear in public as was her prior practice.”

American moved for summary judgment on the grounds that (i) the passenger’s recovery for her baggage loss was limited to 1,000 Special Drawing Rights (approximately $1,540 at that time) under Article 22(2) of the Montreal Convention, and (ii) the passenger could not recover anything for her “embarrassment” claim because damages for emotional distress not caused by a physical injury are not recoverable under the Convention.

As to the liability limit issue, the passenger argued that the limit did not apply under Article 22(5) of the Convention; that provision removes the Article 22(2) limit “if it is proved that the damage resulted from an act or omission of the carrier, its servants or agents, done with intent to cause damage or recklessly and with knowledge that damage would probably result” and “it is also proved that such servant or agent was acting within the scope of its employment.”  The passenger contended that “[t]he four (4) month delay in recovery of the luggage, allowing [her] personal belongings to be ransacked and stolen, compounded with [American’s] refusal to take any meaningful steps to help [her] in an obvious time of need, makes [American’s] actions much more egregious, certainly rising to the level of what any impartial traveler would consider ‘willful misconduct’.”  In essence, the passenger argued that, by themselves, the delay in delivery and the losses she incurred eliminated any need for her to prove that the airline actually engaged in the type of conduct described in Article 22(5) that would result in the lifting of the liability limit set forth in Article 22(2).

The trial court rejected the passenger’s arguments and was affirmed by the Fifth Circuit.  On the liability limit issue, the appeals court held that, to break the limit under Article 22(5), a passenger must prove facts showing that airline personnel either (i) intended to cause damage, or (ii) acted recklessly with the subjective knowledge that damage would probably result from their conduct.  The Fifth Circuit held that the passenger had failed to meet this “heavy” burden by merely resting on the allegations in her pleadings regarding the delay in delivery of her baggage and the losses she incurred.  It also affirmed the trial court’s ruling with respect to the passenger’s emotional distress claim.

Note:  Before the trial court, the passenger had also argued that the Article 22(2) limit did not apply because she had not been notified of the limit before her flight.  She cited Article 3(4), which provides that “[t]he passenger shall be given written notice to the effect that where this Convention is applicable it governs and may limit the liability of carriers in respect of death or injury and for destruction or loss of, or damage to, baggage, and for delay.”  The trial court cited the plain language of Article 3(5) in rejecting her argument; that provision states that “[n]on-compliance with the provisions of the foregoing paragraphs shall not affect the existence or the validity of the contract of carriage, which shall, nonetheless, be subject to the rules of this Convention including those relating to limitation of liability.”  The passenger did not raise this issue on appeal.

Note:  On June 30, 2009, ICAO adjusted the liability limits set forth in Articles 21 and 22 of the Montreal Convention due to inflation.  Accordingly, effective December 30, 2009, the liability limit set forth in Article 22(2) was increased from 1,000 SDRs to 1,131 SDRs.  See U.S. Department of Transportation, Inflation Adjustments to Liability Limits Governed by the Montreal Convention Effective December 30, 2009, 74 F.R. 59017-18 (Nov. 16, 2009).


Court denies passenger recovery against airline for loss of itinerant robot head

June 30, 2008

Hanson v. America West Airlines, Inc. (C.D. Cal. Mar. 29, 2008).  Sometimes the truth is stranger than fiction or even science fiction.  The passenger in this case, a roboticist, sued the airline for the loss of “an artistically and scientifically valuable robotic head modeled after famous science fiction author Philip K. Dick.”  According to the court, “Dick’s well-known body of work has resulted in movies – such as Total Recall, Blade Runner, Minority Report, and A Scanner Darkly, and a large group of admirers has grown following his death in Orange County, California, in 1982.”

The passenger was traveling from Texas to San Francisco with a connection in Las Vegas.  He lost his head by leaving it in an overhead compartment when he departed the aircraft in Las Vegas to catch his flight to San Francisco.  According to the passenger, the airline found the head and promised to deliver it to him San Francisco, but the head never showed up.  The passenger claimed that he and his head have never come face to face again.  As damages, the passenger sought the value of the head, which he put at $750,000.

The airline moved for summary judgment on the grounds that its contract of carriage, which provided that the airline “assumes no responsibility or liability for baggage, or other items, carried in the passenger compartment of the aircraft,” barred any recovery by the passenger.  The court agreed with the airline, rejecting the passenger’s arguments that (i) the airline materially deviated from the original contract of carriage, and (ii) the airline employee who promised the passenger that the head would be delivered to him in San Francisco had altered the original contract of carriage, causing the airline to become liable for the loss of the head.  The court also held that even if the airline employee had had the authority to alter the contract of carriage, the passenger had presented no evidence that the airline had breached the altered contract, pointing out that the airline “may have done everything as promised, only to fall victim to a head hunting thief or other skullduggery.”

Obviously having fun, and clearly unable to restrain himself, the judge concluded the opinion as follows:  “The Court must GRANT Defendant’s Motion.  But it does so hoping that the android head of Mr. Dick is someday found, perhaps in an Elysian field of Orange County, Dick’s homeland, choosing to dream of electric sheep.”


Warsaw Convention preempts passenger tort claim against airline

December 24, 2007

Small v. America West Airlines, Inc. (D.N.J. Oct. 30, 2007).  The passenger alleged that the airline was liable under the New Jersey Consumer Fraud Act because it had tortiously denied losing his baggage, thereby preventing him from filing a claim against his insurance company.  The airline argued that the passenger’s state law claim was preempted by the Warsaw Convention.  In response, the passenger contended that his claim was not preempted because he was seeking tort damages, not lost baggage damages, due to the airline’s misrepresentation that it had not lost his baggage.

The court did not buy the passenger’s creative argument.  It held that the passenger’s claim was preempted because the Convention requires that all baggage-related claims arising from international air carriage, sounding “in contract or in tort or otherwise,” be brought exclusively under the Convention.


Fifth Circuit vacates summary judgment against passenger in baggage case

September 30, 2007

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).


Follow

Get every new post delivered to your Inbox.