Air Disaster at Lockerbie, Scotland on Dec. 21, 1988, In re

Decision Date21 December 1988
Citation928 F.2d 1267
PartiesIn re AIR DISASTER AT LOCKERBIE, SCOTLAND ON
CourtU.S. Court of Appeals — Second Circuit

Lee S. Kreindler, Chairman, Plaintiffs' Committee (Steven R. Pounian, James P. Kreindler, Michael F. Baumeister, Richard E. Brown, Stanley M. Chesley, Nicholas Gilman, Frank H. Granito, Jr., Kreindler & Kreindler, New York City, of counsel), for plaintiffs-appellants in No. 269.

Richard M. Sharp, Washington, D.C. (Frederick C. Schafrick, Elizabeth M. Brown, Shea & Gardner, Washington, D.C., James M. Shaughnessy, Windels, Marx, Davies & Ives, Condon & Forsyth, New York City, of counsel), for defendant appellee in No. 269.

James E. Landry, George S. Lapham, Jr., David A. Berg, Air Transport Ass'n of

America, Washington, D.C., filed a brief amicus curiae in No. 269.

Lee S. Kreindler, Chairman, Plaintiffs' Committee, Lockerbie Disaster (Steven R. Pounian, James P. Kreindler, Michael F. Baumeister, Richard E. Brown, Stanley M. Chesley, Nicholas Gilman, Frank H. Granito, Jr., Kreindler & Kreindler, of counsel; Marc S. Moller, Lead Counsel, Plaintiffs' Steering Committee, Karachi Hijacking, Daniel C. Cathcart, Wm. Marshall Morgan, Kreindler & Kreindler, New York City, of counsel), for plaintiffs-appellees in No. 460.

Richard M. Sharp, Washington, D.C. (Frederick C. Schafrick, Elizabeth M. Brown, Shea & Gardner, Washington, D.C., James M. Shaughnessy, Windels, Marx, Davies & Ives, New York City, of counsel), for defendant-appellant in No. 460.

Before CARDAMONE and MINER, Circuit Judges and POLLACK, District Judge. *

CARDAMONE, Circuit Judge:

A single question of law is raised on appeals from two district court orders: one involves the crash of Flight 103 over Lockerbie, Scotland; the other a hijacking in Karachi, Pakistan.

The Lockerbie case arose from the terrorist bombing of Pan Am Flight 103 from London to New York on December 21, 1988. The surviving relatives and personal representatives of those who died sued Pan American World Airways, Inc. (Pan Am), two Pan Am subsidiary corporations that provided security services, and Pan Am's parent corporation. All actions were consolidated in the Eastern District of New York by order of the Judicial Panel on Multidistrict Litigation. On June 2, 1989 Pan Am moved for partial summary judgment on the punitive damages claims, asserting they were barred by the Warsaw Convention. 1 For purposes of Pan Am's motion, the district court presumed that the carrier committed willful misconduct, and that the applicable local law permitted the recovery of punitive damages. On January 3, 1990 the Chief Judge of the Eastern District (Platt, C.J.) granted partial summary judgment and dismissed the punitive damages claims. 733 F.Supp. 547. On February 26, 1990 Chief Judge Platt entered a second memorandum and order denying plaintiffs' motion for reargument, but granting certification under 28 U.S.C. Sec. 1292(b) for immediate appeal of the case to this Court as one involving a controlling question of law. 736 F.Supp. 18.

The Karachi case arose from a terrorist hijacking of Pan Am Flight 73 from Bombay, India, to New York, stopping at Karachi and Frankfurt on September 6, 1986. The surviving relatives and personal representatives of those killed sued Pan Am, and the actions were consolidated in the Southern District of New York by order of the Judicial Panel on Multidistrict Litigation. The district court (Sprizzo, J.) denied Pan Am's motion for partial summary judgment on the issue of whether Pan Am had committed willful misconduct, as well as Pan Am's later motion for partial summary judgment seeking to dismiss plaintiffs' claims for punitive damages. 729 F.Supp. 17.

None of the parties dispute that these cases are governed by the Warsaw Convention and by the Montreal Accord. 2 The issue presented is independent of any factual situation. We must decide whether a plaintiff may state a claim for punitive So much has been written concerning the Convention since its adoption over 50 years ago that we must take care not to get lost in a wilderness of words. To that end we think it helpful to set forth the analytical framework for the discussion that follows. We discuss first the Convention's purposes, structure and history. (I). Then, in order to clearly identify what the term "punitive damages" means in the context of our consideration of the Convention, we focus analysis by exploring initially the role of punitive damages in American law generally, examining the nature of the recovery permitted under state and federal law; and, after that, by deciding whether the Convention provides an exclusive cause of action or whether it permits separate state law actions claiming punitive damages. (II). We conclude that the Convention preempts state causes of action because differences in the various state laws--some of which view punitive damages as penal in nature, some compensatory, and some both--would introduce such great confusion into this subject as to destroy any hope of uniformity in applying the Convention. The Convention therefore bars state wrongful death actions in cases arising under it. (III).

damages in a wrongful death action governed by the Warsaw Convention, assuming the carrier committed willful misconduct. Although the Convention is silent on this subject and the lack of legislative materials addressing the issue makes interpreting the Convention's effect on punitive damages claims difficult, we are persuaded that the purposes for which the Convention was created are not consistent with an award of punitive damages. Thus, we hold that these plaintiffs may not recover such damages.

We next hold that because air carrier liability is a uniquely international problem requiring uniform interpretation, the Convention must be interpreted according to federal common law. We adopt the federal common law of torts to construe the Convention and determine that federal common law does not contemplate a compensatory element in a punitive damages claim. (IV). Having identified the governing law and the nature of punitive damages potentially available under that law, we turn to the Convention to see whether it allows for the kind of punitive damages available to plaintiffs under federal law. Our analysis of the Convention reveals that Article 17 did not contemplate air carrier liability for that type of punitive damages; Article 24 does not preserve such liability under local law; and the Convention does not permit the sort of punitive damages available under federal law to be awarded, even when the liability limitations are lifted under Article 25 in cases of willful misconduct. (V). Finally, we believe policy considerations that led the various contracting parties to adhere to the Warsaw Convention strongly militate against recognition of punitive damages. (VI).

I PURPOSES, STRUCTURE AND HISTORY OF THE WARSAW CONVENTION

The Warsaw Convention was drafted when the airline industry was in its infancy. It was the product of two international conferences--the first held in Paris in 1925 and the second in Warsaw in 1929--and four years of work by the interim Commite International Technique d'Experts Juridique Aeriens (CITEJA) formed at the Paris Conference. The Convention had two primary goals: first, to establish uniformity in the aviation industry with regard to "the procedure for dealing with claims arising out of international transportation and the substantive law applicable to such claims," as well as with regard to documentation such as tickets and waybills; second--clearly the overriding purpose--to limit air carriers' potential liability in the event of accidents. Lowenfeld & Mendelsohn, The United States and the Warsaw Convention, 80 Harv.L.Rev. 497, 498-99 (1967) (Lowenfeld & Mendelsohn); Block v. Compagnie Nat'l Air France, 386 F.2d 323, 327 (5th Cir.1967), cert. denied, 392 U.S. 905, 88 S.Ct. 2053, 20 L.Ed.2d 1363 (1968).

The liability limit was believed necessary to allow airlines to raise the capital needed to expand operations and to provide a definite To effect these purposes, the Convention adopted a trade-off between carriers and their passengers: passengers would have the absolute right to compensation for injuries up to 125,000 Poincare francs, (Articles 17, 22(1)), unless the carrier could prove it had taken all necessary measures to avoid the damages (Article 20(1)). Passengers could claim no damages above the 125,000 franc limit unless they demonstrated that the carrier had engaged in willful misconduct, in which case the Convention's limits on carrier liability would be lifted (Article 25). While later agreements such as the 1966 Montreal Accord somewhat modified this scheme, so that in some cases the liability limit is higher and the carrier may no longer raise the defense that it took all necessary measures, see Lowenfeld & Mendelsohn at 596-600, the basic structure of the Convention remained the same.

basis upon which their insurance rates could be calculated. Lowenfeld & Mendelsohn, at 499-500; H. Drion, Limitation of Liabilities in International Air Law 16 (1954) (Drion, Limitation of Liabilities ); Floyd v. Eastern Airlines, Inc., 872 F.2d 1462, 1467 (11th Cir.1989), cert. granted, --- U.S. ----, 110 S.Ct. 2585, 110 L.Ed.2d 266 (1990). The nations drafting this provision had a direct interest in establishing liability limits since nearly all existing airlines were either owned or heavily subsidized by the various...

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