Dazo v. Globe Airport Seccurity Serv.

• Decision Date: 16 May 2001
• Docket Number: No. 00-15058,PLAINTIFF-APPELLANT,DEFENDANTS-APPELLEES,00-15058
• Citation: 268 F.3d 671
• Parties: (9th Cir. 2001) ESTER DAZO, AN INDIVIDUAL,, v. GLOBE AIRPORT SECURITY SERVICES, A DELAWARE CORPORATION; TRANS WORLD AIRLINES, INC., A DELAWARE CORPORATION; CONTINENTAL AIRLINES, INC., A DELAWARE CORPORATION; AMERICA WEST AIRLINES, A DELAWARE CORPORATION,
• Court: U.S. Court of Appeals — Ninth Circuit

Page 671

268 F.3d 671 (9th Cir. 2001)

ESTER DAZO, AN INDIVIDUAL, PLAINTIFF-APPELLANT, v. GLOBE AIRPORT SECURITY SERVICES, A DELAWARE CORPORATION; TRANS WORLD AIRLINES, INC., A DELAWARE CORPORATION; CONTINENTAL AIRLINES, INC., A DELAWARE CORPORATION; AMERICA WEST AIRLINES, A DELAWARE CORPORATION, DEFENDANTS-APPELLEES.

No. 00-15058

UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT

Submitted May 16, 2001^*

Filed October 11, 2001

[Copyrighted Material Omitted] Christopher Ashworth, San Jose, California, for the plaintiff-appellant.

Thomas P. Gmelich, Barry A. Bradley, Glendale, California, for defendant-appellee Globe Airport Security Services.

Bonnie R. Cohen, Kymberly E. Speer, San Francisco, California, for defendants-appellees America West Airlines, Inc., Trans World Airlines, Inc., and Continental Airlines, Inc.

Appeal from the United States District Court for the Northern District of California; James Ware, District Judge, Presiding. D.C. No. CV-99-20548-JW.

Before: O'Scannlain, Tashima, and Thomas, Circuit Judges.

Opinion by Judge O'Scannlain; Dissent by Judge Tashima

O'Scannlain, Circuit Judge:

We must decide whether the Warsaw Convention relating to international air transportation preempts state law claims for damages from the theft of a carry-on bag from an airport security checkpoint.

I.

On May 12, 1999, Ester Dazo ("Dazo") entered Terminal C at the San Jose International Airport, where she intended to board an 11:50 a.m. flight to Toronto, connecting in St. Louis. To enter the secured area of the terminal, persons must pass through a security checkpoint, where they are examined by metal detectors and their possessions are x-rayed. Globe Airport Security Services ("Globe") operates the security checkpoints at San Jose International. Both ticketed passengers and the general public may enter the secured area, which contains both embarking gates and retail establishments.

At 10:00 a.m., Dazo approached the terminal's security checkpoint. She placed her carry-on baggage on the x-ray machine conveyor belt, which carried her bags through the x-ray machine and for an additional distance of ten to fifteen feet. By the time Dazo passed through the metal detector, an unknown person or persons had taken her carry-on baggage and disappeared. According to Dazo's complaint, one of the stolen carry-on bags contained jewelry with a wholesale value of approximately $100,000 in the Philippines, and considerably more in the United States.

On June 18, 1999, Dazo filed a complaint in the Northern District of California, naming Globe and America West Airlines, Inc., Trans World Airlines, Inc., and Continental Airlines, Inc. (collectively, "the Airlines"), as defendants. Dazo asserted claims for negligence and breach of the implied contract of bailment, and prayed for punitive damages based on the defendants' wilful misconduct.¹

On August 31, 1999, Globe filed a motion to dismiss Dazo's complaint for failure to state a claim upon which relief can be granted. In its motion, which the Airlines joined, Globe argued that Dazo's state law claims were preempted by the Warsaw Convention. In an October 19, 1999 order, the district court granted the defendants' motion to dismiss Dazo's complaint, holding that the theft occurred while Dazo was in the "operations of embarking," and therefore, that the Warsaw Convention preempted her claims. The court also held that Dazo's allegations of wilful misconduct were insufficient to escape Warsaw Convention preemption. The district court granted Dazo leave to file an amended complaint in conformity with its ruling, but entered judgment in the defendants' favor on December 9, 1999 after Dazo informed the court that she did not wish to file an amended complaint. Dazo then filed this timely appeal.

II.

"The Warsaw Convention is an international treaty governing the liability of air carriers engaged in the international transportation of passengers and cargo. The Convention creates a presumption of air carrier liability but, in turn, substantially limits that liability." Insurance Co. of N. Am. v. Fed. Express Corp., 189 F.3d 914, 917 (9th Cir. 1999). See generally Convention for the Unification of Certain Rules Relating to International Transportation by Air, Oct. 12, 1929, 49 Stat. 3000, T.S. No. 876 (1934), reprinted in note following 49 U.S.C. § 40105 (the "Warsaw Convention" or the "Convention"). The Convention preempts state and federal claims falling inside its scope. See Warsaw Conv., Art. 24 (stating that claims for personal injuries; for damage to, or loss of, baggage or goods; and for damages occasioned by travel delays, "however founded, can only be brought subject to the conditions and limits set out in this convention."). The Convention's liability limit for carry-on baggage is 5,000 francs per passenger, and the United States has converted this sum to $400 pursuant to the Convention's provision authorizing signatories to convert the liability caps to their national currencies. See Warsaw Conv., Art. 22(3), 22(4); 39 Fed. Reg. 1526 (1974); see also Baker v. Lansdell Protective Agency, Inc., 590 F. Supp. 165, 167 (S.D.N.Y. 1984).

The Warsaw Convention applies to "all transportation of persons, baggage, or goods performed by aircraft for hire." Warsaw Conv., Art. 1(1). It defines "international transportation" in part as "any transportation in which, according to the contract made by the parties, the place of departure and the place of destination, whether or not there be a break in the transportation or a transshipment, are situated . . . within the territories of two High Contracting Parties." Warsaw Conv., Art. 1(2). Therefore, Dazo was boarding an "international flight" at the time of the theft of her carry-on baggage, even though she was traveling first to St. Louis, and only then to Toronto. Cf. Insurance Co. of N. Am., 189 F.3d at 917-19 (holding that the Convention governs claims arising from the theft of computer modules from a Memphis warehouse, because the modules were in the course of shipment from Canada to the United States).

A.

We must first decide whether the Convention applies to claims brought against Globe, a company functioning as the Airlines' agent at the time of the theft.² The Convention caps the liability of "carriers," but does not define that term. See Warsaw Conv., Art. 22(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."). See also Warsaw Conv., Art. 22(1) ("carrier" liability to passengers); Art. 22(2) ("carrier" liability for checked baggage and goods).

The application of the Warsaw Convention to an airline's agents is a question of first impression in this circuit, but other courts have consistently and almost uniformly extended the Convention's coverage to an airline's agents and employees. See, e.g., Reed v. Wiser, 555 F.2d 1079, 1089-92 (2d Cir. 1977) (holding that employees of an airline are governed by the Warsaw Convention and are protected by its liability limitations); Kabbani v. Int'l Total Serv., 805 F. Supp. 1033, 1039-40 (D.D.C. 1992) (same, in a case involving the theft of carry-on baggage); In re Air Disaster at Lockerbie, Scotland on Dec. 21, 1988, 776 F. Supp. 710, 712-14 (E.D.N.Y. 1991) (holding that a security company was covered by the Convention because it was operating as the airline's agent); Baker, 590 F. Supp. at 170-71 (holding that a security company operating as the airline's agent is covered by the Convention's limits on liability for stolen carry-on baggage). But see Pierre v. Eastern Air Lines, Inc., 152 F. Supp. 486 (D.N.J. 1957) (holding that the Convention did not apply to an airline's agents), declined to follow by Croucher v. Worldwide Flight Serv., 111 F. Supp.2d 501, 504-06 (D.N.J. 2000) (holding that the Convention applied to a company performing cleaning services in furtherance of the contract of carriage).

In concluding that Article 22's liability caps should apply to airlines' agents, these courts have noted that while Article 22 only speaks of "carriers," other Convention sections are broader in scope. For example, Article 20(1) states that "[t]he carrier shall not be liable if he proves that he and his agents have taken all necessary measures to avoid the damage or that it was impossible for him or them to take such measures." Article 25, which addresses wilful misconduct, states in part that "the carrier shall not be entitled to avail himself of the said provisions, if the damage is caused under the same circumstances by any agent of the carrier acting within the scope of his employment." Warsaw Conv., Art. 25(2). In addition, there is strong evidence to suggest that the Convention text, which refers to "transporteurs" in the original French, covers both airlines and their agents. The Second Circuit drew on this ambiguity, and the absence of authority and evidence to the contrary, to hold in Reed that the Convention applied to carrier's employees. As the Reed court explained, "the plain language of the original Convention, read according to the meaning that would ordinarily be given to the pertinent official French-language text, tends to support appellants' contention that its liability limits were intended to apply to a carrier's employees, with little or no further light on the issue being contributed by its legislative history, subsequent events, or decided cases. That interpretation . . . reflect[s] the legal principles of many civil law states, which treat the corporation and its employees as one." 555 F.2d at 1087-88 (footnote omitted).

These courts have also cited the need to avoid interpretations of the Convention which would permit plaintiffs to avoid its strictures by suing an airlines' employees or agents, or which would permit carriers to contract out all of their responsibilities, thereby avoiding the Convention's presumption of liability. See, e.g., Reed, 555 F.2d at...