IN RE KOREAN AIR LINES DISASTER OF SEPT. 1, 1983

• Decision Date: 25 July 1985
• Docket Number: 83-3901 to 83-3903,83-3889,83-3792,83-2941,MDL No. 565. Misc. No. 83-0345. Civ. A. No. 83-2793,83-3891,83-3204,83-3898,83-3445,83-3441,83-3177,83-3793,83-3473,83-3587,84-0029,83-3154,83-3448 to 83-3470,83-3588,84-0030 and 8,83-3474
• Parties: In re KOREAN AIR LINES DISASTER OF SEPTEMBER 1, 1983
• Court: U.S. District Court — District of Columbia

664 F. Supp. 1463

In re KOREAN AIR LINES DISASTER OF SEPTEMBER 1, 1983

MDL No. 565. Misc. No. 83-0345. Civ. A. Nos. 83-2793, 83-2941, 83-3154, 83-3177, 83-3204, 83-3441, 83-3445, 83-3448 to 83-3470, 83-3473, 83-3474, 83-3587, 83-3588, 83-3792, 83-3793, 83-3889, 83-3891, 83-3898, 83-3901 to 83-3903, 84-0029, 84-0030 and 84-0402.

United States District Court, District of Columbia.

July 25, 1985.

MEMORANDUM AND ORDER

AUBREY E. ROBINSON, Jr., Chief Judge.

INTRODUCTION

Before the Court is a motion for summary judgment on the sole issue of the enforceability of the limitation on damages established by the Warsaw Convention (Convention)¹ and asserted by Defendant Korean Air Lines Co., Ltd. (Korean Air Lines) in the above-captioned multidistrict litigation. These Plaintiffs argue that, as a matter of law, Korean Air Lines is liable to them to the full extent of their damages for having delivered defective tickets to their decedents, passengers killed when a commercial airliner (KAL 007) owned and operated by Defendant was tragically destroyed by Soviet military aircraft over the Sea of Japan.

The material facts are undisputed. Defendant delivered tickets to Plaintiffs' decedents before their "international transportation" began. The tickets contained notice of the applicability of the Warsaw Convention's rules limiting Korean Air Lines' liability. The notice was printed in 8.0 type size. Since the passenger tickets at issue included a point of origin, destination or stopping place within the United States, the provisions of the Montreal Intercarrier Agreement, (Montreal Agreement),² are also relevant. The question before the Court is whether the failure to print notice to passengers of the applicability of the Warsaw Convention in 10-point modern type size, as required by the Montreal Agreement, strips the carrier of the Convention's liability limitation. Having considered the treaty, its history and development, and all evidence presented the Court concludes that the carrier cannot be prevented from availing itself of the limitation; Plaintiffs' motion shall be denied.

HISTORY OF THE WARSAW CONVENTION

Before considering this motion, it is necessary to clearly understand the Warsaw Convention. It is a multilateral treaty intended to uniformly regulate international airline transportation. Today, more than 120 nations adhere to the rules contained in the Convention. Originally negotiated at two international conferences, the first in Paris in 1925 and the second in Warsaw in 1929, the Convention had a dual purpose. In recognition of the fact that the newly emerging air industry would link many nations of divergent systems and laws, the first goal was to establish some degree of uniformity as to documentation for tickets and the like and as to the procedure and substantive rules of law which would govern claims arising out of international transportation by air. Lowenfield and Mendelsohn, The United States and the Warsaw Convention, 80 Harv.L.Rev. 497, 498-499 (1967) (hereinafter referred to as Lowenfeld & Mendelsohn). In order to help the then fledgling air industry to attract needed capital, the second goal was to limit the potential liability of the air carriers in the case of accidents. Clearly recognized as the more important goal of the Convention, in Article 22(1), the limitation on liability was set at 125,000 Poincare francs, or approximately 8,300 United States dollars.³ In exchange, for the limitation, the Warsaw Convention, in Article 20, created a rebuttable presumption of air carrier liability unless "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 then provided that, in cases where a plaintiff is able to prove "willful misconduct" the carrier will not be entitled to avail himself of the limitation on liability.

On July 31, 1934, the United States deposited its instrument of adherence to the Warsaw Convention in the archives of the Ministry of Foreign Affairs of Poland in accordance with the procedure set forth in Article 37 of the treaty. At the time the Senate ratified the treaty, notably during the time this country (and the world) was in the midst of the Great Depression, the $8,300 amount of the limitation was thought to provide some benefit to both passengers and carriers. Indeed, Secretary of State Cordell Hull transmitted the Warsaw Convention to the Senate with the following statements:

It is believed that the principle of limitation will not only be beneficial to passengers and shippers as affording a more definite basis of recovery and as tending to lessen litigation, but that it will prove to be an aid in the development of international air transportation, as such limitation will afford the carrier a more definite and equitable basis on which to obtain insurance rates, with the probable result that there would eventually be a reduction of operating expenses for the carrier and advantages to travelers and shippers in the way of reduced transportation charges.

Senate Comm. on Foreign Relations, Message from the President of the United States Transmitting a Convention for the Unification of Certain Rules, Sen. Exec. Doc. No. G, 73d Cong., 2d Sess. 3-4 (1934). Therefore, at the time of ratification, the principle and amount of limitation were assented to by the United States. Since that time and especially with the growth of the air industry to its present proportions, the limitation has become an increasingly uncomfortable and unpopular proposition.

While the limitation was once accepted, it has constantly been the focus of debate and disagreement. The United States, although adhering to the uniform rules relating to international transportation, has not been satisfied with the low limits placed on air carrier liability. As early as 1935, one year following United States adherence, there was discussion of possible amendment to the Convention. Lowenfeld & Mendelsohn at 502. As a result of the alarm expressed by the United States and other nations where full recovery for personal injury and wrongful death had become the rule, discussions and proposals for change continued until another conference met in September 1955. Convened this time at the Hague, the stated goal was to resolve the debate concerning whether the liability limits had been set at an appropriate level. Lowenfeld & Mendelsohn at 504. The Hague Conference, therefore, had a limited purpose with the intent being to retain uniformity in the rules and conditions expressed in the Warsaw Convention while resolving the dissatisfaction with the low limits of liability. S. Speiser & C. Krause, 1 Aviation Tort Law, § 11:18 (1978).

Through much negotiation and debate the Hague Protocol did, among other things, double the limitation to $16,600. Nonetheless, the outcome of the Hague conference failed to resolve the dissatisfaction; the United States never ratified the Hague Protocol. In fact, the amendments to Warsaw were never presented to the Senate for ratification, since even the increased limitation faced an unpleasant political climate. Lowenfeld & Mendelsohn at 515. The limitation amount therefore remained at $8,300 in this country.

Discontent continued for another decade. Then, in 1965, the United States determined that the Warsaw limitation could no longer be tolerated and decided to denounce the treaty. Deposited November 15, 1965 and in accordance with Article 39, set to become effective six (6) months later, the Notice of Denunciation stated that "the United States wishes to make clear that the action to denounce the Warsaw Convention is taken solely because of the Convention's low limits of liability for injury or death to passengers, and in no way represents a departure from the long-standing commitment of the United States to the tradition of international cooperation in matters relating to civil aviation." (emphasis added). The Notice continued to state clearly that the threat of denunciation would be withdrawn if the limitation were raised, by special contract or otherwise, to preferably $100,000 but not less than $75,000.

The Montreal Agreement was adopted in response to the United States' decision to withdraw from the Warsaw Convention. Unlike the Hague Protocol, the Montreal Agreement did manage to calm the din of criticism of the low limits which had, by 1965, "reached a crescendo." Speiser & Krause at 674. In order to avert United States denunciation of the treaty, air carriers agreed to raise the limitation amount to $75,000 and to submit to virtual strict liability; the Montreal Agreement provides that an air carrier "shall not ... avail itself of any defense under Article 20(1) of said Convention or said Convention as amended by Hague Protocol." In addition, the Agreement provided that the "Montreal Advice" would be printed in 10-point modern type and in ink contrasting with the ticket stock. However, The Montreal Agreement is completely silent with respect to sanctions to be imposed for failure to comply with any of its three provisions.

Absolutely nothing is said to indicate that waiver of the limitation was contemplated, the Montreal Agreement was entered into to preserve the limitation. Intended only as an interim agreement until the treaty could be amended, the Montreal Agreement achieved a stand-off on the issue of the level of the limitation. By its very terms, the Agreement is only a "special contract" under the Warsaw Convention. It applies to "international transportation" as defined in Article 1(2) which includes a point in the United States as a point of origin, point of destination, or agreed stopping place. While leaving air carriers liable without fault, the Agreement permits air carriers to avail themselves of the liability limitation found in Article 22(1); however, the amount of the limitation is increased to $75,000 and the defenses found in Article 20(1) have been...